Dear Chuck,
I know I’m supposed to save, but I really don’t know how I can or even why I can’t seem to make progress!
No Savings
Dear No Savings,
Well, you are not alone. Saving money is becoming a bigger and bigger challenge for many. According to MarketWatch, nearly one-in-five Americans saved no money in 2021. 18% contributed $0 to savings, while 48% contributed less than $5000. A December 2022 Bankrate survey reported that only 43% could cover a $1000 emergency expense from savings. 68% admitted concern about having enough emergency savings to cover one month of living expenses.
Most people say they want to save but do not stay motivated long enough to make real progress. Because they have not practiced it, they do not realize the advantages it brings. Ultimately, money in the bank provides greater security and contentment, but it takes desire and discipline to get there. It requires trading the visible (worldly luxuries) for the invisible (savings, retirement, and investment accounts.) God’s Word encourages all of us to be consistent savers!
Become a Saver
“Precious treasure and oil are in a wise man’s dwelling, but a foolish man devours it.” (Proverbs 21:20 ESV)
“Go to the ant, O sluggard; consider her ways, and be wise. Without having any chief, officer, or ruler, she prepares her bread in summer and gathers her food in harvest.” (Proverbs 6:6–8 ESV)
“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.” (Proverbs 21:5 ESV)
Saving gives you the confidence to cover emergencies and the freedom to make choices in life. I believe it helps you to become more generous as well.
Saving Gives Confidence
Saving Provides Freedom
Make Choices Today for What You Need for Tomorrow
Worldly things do not compare to the advantage of time and choice that comes with money in the bank. People are burdened with consumer debt because they are spending more than they earn. More things are causing more stress. More stress often leads to more spending! Yet most people don’t stop long enough to think through their spending habits. They do what everyone around them does, hoping to be accepted and admired.
The ability to save boils down to spending less than you earn. Don’t waste your money on things you don’t need! How? Care more about what God says about you than man.
Choose to live contra mundum (going against what the world says or does):
Imagine What Saving Can Do for You
Most of us struggle with thinking beyond today or tomorrow. Credit cards have enabled us to do what we want, whenever we want. Delayed gratification is foreign to many, and the thought is even painful. Children are growing up in homes where they want for nothing. Meanwhile, parents are often buried in debt and stress, while some remain hopeful that their ship will come in.
The key to saving is to develop the habit. See what the discipline can do for your life:
And this is all before compounded interest is added in. Add up years and years of saving, and you will see how much financial discipline really pays!
For more help, here are some links to a few of my previous articles:
https://www.crown.org/blog/ask-chuck-how-to-save-1k-on-a-limited-income/
https://www.crown.org/blog/13-money-saving-hacks/
https://www.crown.org/blog/ask-chuck-how-to-build-emergency-savings/
I hope this helps you get started and remain motivated until you have truly become a saver. The key to financial management is spending less than you earn. Once you have saved $1,000 in an emergency account, add to it until you have 3–6 months of your expenses set aside.
If credit card debt is preventing you from saving, get out of debt as soon as possible! Christian Credit Counselors is a trusted source of support. They specialize in assisting people with getting on the road to financial freedom.
This article was originally published on The Christian Post on February 3, 2023
Dear Chuck,
I have lost $300,000 in my 401k in the past 12 months, and things appear to be getting worse. I plan to retire in 5 years. Should I get my money out of the market or try to ride out the economic storms?
Worried
Dear Worried,
This question came just last week from someone I met in the airport while traveling to California. I tried to quickly summarize my view: “All other important investment factors being equal, I believe it is generally good to be optimistic and weather the storms.” She looked at me with shock because I think her mind was already made up that she wanted to cash out.
I replied that I believe that “time in the market is far more important than timing the market.” Since you may be asking the same question she asked me in a fleeting moment, I decided to make a case for remaining optimistic when it comes to managing your investments.
Is the Glass Half Full or Half Empty?
I recently read The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness by Morgan Housel. A partner at The Collaborative Fund (a network of fund managers), Housel believes that doing well with money has a lot to do with how we behave. His insight on the seduction of pessimism is excellent:
“Pessimism isn’t just more common than optimism. It also sounds smarter. It’s intellectually captivating, and it’s paid more attention than optimism, which is often viewed as being oblivious to risk. . . . Optimism is a belief that the odds of a good outcome are in your favor over time, even when there will be setbacks along the way. . . . It’s easier to create a narrative around pessimism because the story pieces tend to be fresher and more recent. Optimistic narratives require looking at a long stretch of history and developments, which people tend to forget and take more effort to piece together. . . . The short sting of pessimism prevails while the powerful pull of optimism goes unnoticed. . . . In investing you must identify the price of success—volatility and loss amid the long backdrop of growth—and be willing to pay it.”
There’s proof on the side of optimism. In 2019, Michelle Gielan wrote “The Financial Upside of Being an Optimist” for The Harvard Business Review. She conducted a study in partnership with Frost Bank, and after surveying more than 2,000 Americans, she found that when it comes to money, optimists were more likely to make smart moves and reap the benefits. In addition, optimists make more money over their careers and are more likely to be promoted. Here is an excerpt followed by some findings:
“After controlling for wealth, income, skills, and other demographics to level the playing field, the data clearly showed that optimists were significantly more likely to experience better financial health than pessimists, and engage in healthier habits with their money. For instance, we found that 90% of optimists have put money aside for a major purchase, compared to 70% of pessimists. Nearly two-thirds of optimists have started an emergency fund, while less than half of pessimists have. Additionally, optimists are more likely to seek out and follow advice from someone they trust. In my opinion, the most compelling finding was how optimists felt, reporting that they stressed about finances 145 fewer days each year as compared to pessimists.”
How to Become More Optimistic about Money
Biblical Optimism
We, who are believers in Christ, can be optimistic because of the character of God. We can place full confidence in Him, regardless of our circumstances. We do our part in stewarding the resources He provides, and we trust Him to do His part, which is to work all things for our good.
“And we know that for those who love God all things work together for good, for those who are called according to his purpose.” Romans 8:28 ESV
Nobody knows if the market will go up or down over a 5-year period or a 24-hour period—whether there will be a market boom or a market bust. However, we know that optimism is good for us and those around us, regardless of whether the outcome we hoped for is achieved.
While trusting God in challenging times, remember to practice the following to develop a more optimistic worldview:
The Crown God Is Faithful devotional offers inspiring and practical Biblical wisdom. You can sign up to receive the devotionals daily to help transform your finances and provide some much-needed encouragement.
This article was originally published on The Christian Post on January 27, 2023.
Dear Chuck,
We’re considering hiring a financial advisor to help us develop an estate plan. We want to protect and pass down our assets and possibly set up a giving fund that the children will jointly manage. Any suggestions on how to do this right?
Stewarding Our Estate
Dear Stewarding Our Estate,
It is encouraging to know that you are being faithful with the stewardship responsibilities of the resources God has entrusted to your care. The reality is that we all have an estate plan: either we are intentional about directing our resources to the stewards we desire to have the funds, or the government will decide for us. Far too many people overlook the careful transfer of their estate. The temporalness of our lives makes these decisions highly important.
How to Choose the Right Advisor
Here is a very helpful article from Ron Blue Trust that is the beginning point: Five Questions to Ask When Receiving Financial Advice. Hopefully, you already have a will in place. Why? See here.
Choosing the Who and What of Your Estate Gifting
Speaking of wills, my good friend David Wills, president emeritus of NCF, the National Christian Foundation, says everyone needs a process to think through the details of an estate plan. He and his wife thought through their legacy using a framework of who, what, and when. David also says we should live in such a way that we pass down more than just money. There are three transferable capitals: spiritual, character, and financial.
David stresses the importance of passing on wisdom before passing on wealth, based on King Solomon’s advice in Ecclesiastes 7:11–12:
“Wisdom is good with an inheritance, an advantage to those who see the sun. For the protection of wisdom is like the protection of money, and the advantage of knowledge is that wisdom preserves the life of him who has it.” (ESV)
You can listen to an interview with him here.
This helpful verse may assist you in preparing your children to be wise stewards of the assets they may receive and place value in the sacred trust that is needed to make wise giving decisions jointly:
“If any of you lacks wisdom, let him ask God, who gives generously to all without reproach, and it will be given him.” (James 1:5 ESV)
Ask in faith, receive His answer, then act in faith.
Ron Bare, another good friend and the founder of Bare Wealth Advisors, knows that money is an important part of everyone’s story. Capturing the story helps prepare the next generation for successful stewardship. It will also help the advisors you choose to understand you better. Ron gives the following advice in telling your story. I’ve pulled a few excerpts from the article here:
Preparing Yourselves for That Day
The great German reformer Martin Luther once said, “I have only two days on my calendar: today and that Day.” He was referring to the day that he would appear before the Lord Jesus Christ. None of us know when that Day will come, so it is good to live in the present fullness of today while being very intentional for the date the Lord calls us to our eternal home. Everything that we can claim as ours now will be left behind. Pour yourselves out by helping the next stewards of temporary money and possessions to live in a similar way.
Learn what the Bible says about money at Crown.org. We have online classes, budget coaches, a library of articles, tools, and more to assist you in stewarding money wisely.
This article was originally published on The Christian Post on January 20, 2023.
Dear Chuck,
We usually pay down Christmas debt with our tax refund, but I am worried we will not get as much back this year. What can we expect?
Waiting for Our Tax Refund
Dear Waiting for Our Tax Refund,
You are correct; changes to the tax laws are underway, so resetting expectations for a refund is in order. Last year’s average tax refund was almost $3,200. Unfortunately, the typical tax refund this year could drop to $2,700, which is approximately what taxpayers received in 2021 for their 2020 taxes. Many tax filers will be disappointed. Do not assume that last year’s refund is what you will receive this year.
Changes in filing 2022 return:
These changes may surprise many who expect a refund or those who received refunds last year. The Coronavirus Aid, Relief and Economic Security Act (Cares Act) was not renewed in 2022. As a result, some tax credits and deductions are reverting back to pre-2021 levels. This may negatively impact portions of the population.
40% of households will pay no federal income tax for 2022. Basically, they are anyone whose income is less than the standard deduction—those whose gross income for 2022 is less than $12,950 for single filers, $19,400 for heads of households, or $25,900 for married couples filing jointly. Filing is required for those who have $400 or more in net self-employment income. Standard deductions are limited for those claimed as dependents on someone else’s tax return. Those who are at least 65 or blind get to claim an extra standard deduction of $1,400 or $1,750, depending on filing status.
Prepare Now to Maximize Your Return
Results of Failing to Pay Income Taxes
Why Pay?
We pay taxes to help fund all levels of government. Federal income tax is our national government’s largest single source of revenue. This chart compares federal spending with revenue. We may not agree with the way tax money is spent. However, as disciples of Christ, we can look to His example. Matthew 22 records a time when the Pharisees tried to trap Jesus with a question about taxes:
“‘Tell us, then, what you think. Is it lawful to pay taxes to Caesar, or not?’ But Jesus, aware of their malice, said, ‘Why put me to the test, you hypocrites? Show me the coin for the tax.’ And they brought him a denarius. And Jesus said to them, ‘Whose likeness and inscription is this?’ They said, ‘Caesar’s.’ Then he said to them, ‘Therefore render to Caesar the things that are Caesar’s, and to God the things that are God’s.’ When they heard it, they marveled. And they left him and went away.” (Matthew 22:17–22 ESV)
Likewise, the Apostle Paul said to submit to authorities and pay taxes to whom they are owed in Romans 13:1–7.
Paying Off Debt with a Tax Refund
Paying down consumer debt is a good use of income tax refunds. Besides paying off your Christmas debt, why not make 2023 the year you decide to avoid consumer debt altogether? If you pay your credit card bills every month, you can avoid the expense of high interest. By intentionally cutting your spending now, you can chop away at holiday debt and use the refund (if you get one) to save or invest.
Have you considered starting a Christmas fund? You can make automatic deposits to an account specifically designated for Christmas 2023, or you can deliberately adjust your gift-giving to avoid spending more than you earn. This is possible by drawing names, planning ahead to make your own meaningful gifts, or buying them when on sale. Do you have an emergency fund? This should take priority over a Christmas fund.
Don’t forget to check with Christian Credit Counselors if you cannot manage your debt repayment this year. Thanks for the question!
This article was originally published in The Christian Post on January 13, 2023.
Dear Chuck
My husband and I have generous hearts, but in reality, our actual giving is not so great. Do you have a plan to help people be more generous?
Generous But Average Giving
Dear Generous But Average Giving,
Your honesty is very refreshing! I think most believers would likely say the same. They have a willing heart but are not very good at increasing their generosity from year to year.
For twenty-one years of our marriage, Ann and I were average givers. At that time, Christians were giving about 2.6% of their gross annual income charitably. So were we. That includes all donations: church, school, hospital, or favorite charities. I was very content about this—but not Ann. Like you, she wanted to do more. Following our graduation from the Crown Small Group Study, she put her foot down and asked me to start giving a minimum of 10% of our gross annual income to God’s causes.
I remember asking her, “What decade would you like to begin?” I thought it would take at least 10 years to adjust our budget to such a dramatic change.
She replied, “I want to start now.”
I replied, “We would have to change everything regarding our lifestyle to be able to afford that.”
She looked at me with resolve and said, “Exactly!”
Meditate on God’s Word Together
“On the first day of every week, each one of you should set aside a sum of money in keeping with his income, saving it up, so that when I come, no collections will have to be made.” (1 Corinthians 16:12 NIV)
We can take several lessons from this passage:
Make Giving Your Priority
Proverbs 3:9 says, “Honor the Lord with your wealth and with the firstfruits of all your produce.”
This verse challenges me to ask myself, “Who am I honoring first with my income?” or “What is my first priority with the money that I earn?” Giving is a way of acknowledging that everything we have belongs to God, and we trust Him by giving away the first of our provisions, not the last.
We are not to tip God from our leftovers but to honor Him as first and foremost in our lives.
A Simple Plan for Becoming More Generous
If you and your husband will practice this very simple habit anytime you receive income, you will become far more generous in the years to come: give first, save second. No matter how or when you receive any form of income, the first portion goes towards giving. After that, you save a portion. What remains can be spent or invested, but this will establish the right order for managing money as God’s faithful stewards. Giving first honors Him, and saving second prepares you for the future. They go hand in hand and in that order.
When we began to put this into practice, our hearts changed from focusing on the temporal kingdom of Earth to investing in the eternal Kingdom of God. We experienced more joy, more freedom, and more excitement from the promises of treasures in Heaven.
We have many courses and free resources to help you at Crown.org, such as the Crown Stewardship Podcast. I also recommend any book by Randy Alcorn on this topic.
This article was originally published on The Christian Post on January 6, 2023.
Dear Chuck,
Since the FTX debacle, do you think the crypto market has been ruined?
Cautious Investor
Dear Cautious Investor,
I don’t think cryptocurrencies are ruined, but the idea that they are a trustworthy asset is severely damaged. Let’s look at a few details of FTX’s collapse and then some biblical principles for investors.
A Historic Destruction of Wealth
30-year-old Sam Bankman-Fried (SBF) lost a $16 billion fortune in less than a week. He resigned as chief executive on November 11th, the same day the cryptocurrency exchange FTX filed for bankruptcy. The entire staff of the FTX Future Fund resigned as well.
Before SBF’s empire collapsed, he spent millions in the Bahamas to fund a lavish lifestyle. He purchased a $40 million penthouse and a 52-foot yacht and spent tens of thousands of dollars every week to feed his staff and guests. FTX supposedly employed 300 people on the island. Interestingly, SBF received a $1 billion personal loan from one of his own firms.
Bloomberg called this debacle “one of history’s greatest-ever destructions of wealth.” SBF’s belief in “effective altruism,”the theory of making as much money as possible in order to do as much good as possible, is contrary to what the Bible teaches. It places man as the solution to man’s problems, as opposed to focusing on man’s need for a Savior and Redeemer. In SBF’s case, money was used as a guise for greed, selfishness, and virtue signaling.
Money Flows Toward Trust
Confidence is the most important aspect of any investment decision. We choose banks, advisors, investments, and even our relationships based on the intangible yet irreplaceable value of trust. I have often said that money flows toward trust just as water rolls downhill. That is the basis of how you and I manage money. Let me explain with a simple example.
You ask your teenage son to run to the grocery store to pick up a gallon of milk, a loaf of bread, and a dozen eggs, so you give him a $100 bill and ask him to bring you the change. (My illustration is before the recent rash of inflation.) He is eager to run the errand because he can drive the family car. It takes a while, but he finally returns with the milk, bread, and eggs. However, when you ask for your change back, he says there isn’t any. He explains that he is not sure what happened, but it was more expensive than his mom thought. While there would be some debate about what really happened, one thing is for sure. She will not give him a $100 bill to go to the grocery store for her the next time she needs milk, bread, and eggs!
In his piercing admonition in Luke 16:10–12, Jesus taught us that He manages funds based upon trust as well:
“Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much. So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches? And if you have not been trustworthy with someone else’s property, who will give you property of your own?”
In this teaching, we are the teenager with the $100 bill to run the errand. We are expected to be fully trustworthy with the Lord’s money if we expect to be trusted with true and better riches.
It is said that trust is the one thing in life that is the hardest to earn and the fastest to lose. The Lord calls us to be completely honest and trustworthy in all ways.
Future of Crypto Assets
FTX is not a crypto but a crypto exchange. However, the loss of trust in FTX and other exchanges that may have similar problems has had a contagious spread of fear among those who hold actual crypto assets. I appreciate John Mauldin’s perspective in his recent newsletter, Digital Shiny Objects. I recommend the entire article to you. Here is an excerpt:
I haven’t written much about crypto because, quite frankly, I’ve never felt the attraction. I’m not against the concept; I understand the philosophical libertarian argument. But I keep trying to find a “use case.” Yes, I can avoid public/government scrutiny of my financial activities but so can all kinds of bad actors. I trade the inherent problems of fiat currencies for a different set of problems.
Cryptocurrencies can be extraordinarily useful for people in emerging countries with problematic currencies. But if you are in most of the developed world, the volatility and risk of cryptocurrencies has so far been greater than that of your local currency. Yes, the dollar is depreciating due to inflation. I can manage that with reasonable planning. Using Bitcoin or another cryptocurrency simply changes my risk exposure.
Beware of the Lure
The Bible has much to say about the lure of riches and how easily we can be led astray. It is good to be a cautious investor not only to protect yourself from scams, rip-offs, and poor returns but also from being controlled by your own greed and covetousness.
“But godliness with contentment is great gain, for we brought nothing into the world, and we cannot take anything out of the world. But if we have food and clothing, with these we will be content. But those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs.” (1 Timothy 6:6–10 ESV)
“Do not be overawed when others grow rich, when the splendor of their houses increases; for they will take nothing with them when they die, their splendor will not descend with them.
Though while they live they count themselves blessed—and people praise you when you prosper—they will join those who have gone before them, who will never again see the light of life. People who have wealth but lack understanding are like the beasts that perish.” (Psalm 49:16–20 NIV)“Whoever trusts in his riches will fall, but the righteous will flourish like a green leaf.” (Proverbs 11:28 ESV)
The Crown Stewardship Podcast can be a valuable tool to provide wisdom and insight into how you can effectively steward God’s resources—both time and money. You can subscribe for alerts of new episodes. I hope you find it beneficial.
This article was originally published on The Christian Post on December 2, 2022.
Dear Chuck,
When it comes to our finances, we live with good intentions but put off budgeting and planning until we face another crisis. My husband and I want to break our cycle of procrastination, crisis, firefighting, and then back to procrastination. We need help to stay focused.
Painful Procrastination
Dear Painful Procrastination,
You have come to the right place! I became an expert procrastinator in college. Like you, I often ignored due dates and warnings. I nearly failed a language course because I put off going to the lab until it was almost too late. My professor scolded me for trying to cram all of my practice sessions into the final two weeks of the semester, but he showed mercy! I tend to have an optimistic view about everything, which makes me slack in planning. Most of my progress has come through learning from my wife, who is always thinking and planning ahead. The Bible also speaks to the issue!
Don’t be too hard on yourself. Procrastination is part of our fallen nature. We know taxes are due April 15th every year, but millions wait until the final days and hours to file tax returns. We know a car must have oil and gasoline to operate properly, but we tend to ignore the warning lights. We know Christmas comes every December, but the malls will be full of shoppers on December 24th. We know our bills are due on time every month, but we tend to wait until we are under pressure to take action.
Cost of Procrastination
Procrastination costs us in numerous ways. As you pointed out, it is stressful and leads to a self-inflicted crisis. Let’s examine just how much it costs to put off the discipline of careful planning.
Peace
Time
Quality
Money
Making temporary sacrifices in your lifestyle now will positively impact your future. Allow these verses to speak to your heart:
“The prudent sees danger and hides himself, but the simple go on and suffer for it.”
(Proverbs 22:3 ESV)“Know well the condition of your flocks, and give attention to your herds, for riches do not last forever; and does a crown endure to all generations?” (Proverbs 27:23–24 ESV)
Take Weekly Action
Invest in Your Future
The Bible says that where our treasure is, there our hearts will be as well. Investing in your training or a system to keep you on track makes you much more likely to follow through. Possibly, you can make Christmastime a turning pointfinancially. How about your husband and you give each other the gift of a Crown budget coach or take an online class together? We receive testimonies from couples at all stages of life who have finally overcome their lack of financial progress by simply hiring one of our coaches.
I hope this helps you get going! Merry Christmas to you and yours.
This article was originally published on The Christian Post on December 9, 2022.
Dear Chuck,
I always thought a small diversification into cryptos would protect me from the collapse of fiat money, but now with the collapse of FTX, I am losing trust in the entire concept of currency. What should I do?
Losing Trust in Currencies
Dear Losing Trust in Currencies,
As painful as it is to be deceived and lose trust in an institution, an investment firm, or any form of currency, it was misplaced trust to begin with. The Bible warns us never to love money. Few that I have ever known have admitted to it. However, we often have to come to grips with the fact that placing our security, confidence, or trust in it is not too dissimilar to loving money.
Hebrews 13:5–6 is one of my favorite passages regarding money:
Keep your lives free from the love of money and be content with what you have, because God has said, “Never will I leave you; never will I forsake you.” So we say with confidence, “The Lord is my helper; I will not be afraid. What can mere mortals do to me?”
The implied message here is that money will leave you and forsake you, but only Jesus will never do that. We are to keep our hope, security, and confidence in Christ and His kingdom, even while seeking to be faithful stewards of the resources we temporarily manage on Earth.
The Crypto Debacle
Sam Bankman-Fried, who goes by SBF, was arrested earlier this week. His name and image will forever be an icon for the breach of trust. He is at the center of the unbelievable cryptocurrency scandal, leaving millions of people angry, fearful, and disillusioned—not just you. He faces federal criminal charges, including wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering.
The Securities and Exchange Commission (SEC) announced separate charges for violating the Securities Act and the Securities Exchange Act. The complaint says, “Throughout this period, Bankman-Fried portrayed himself as a responsible leader of the crypto community. He touted the importance of regulation and accountability. He told the public, including investors, that FTX was both innovative and responsible. Customers around the world believed his lies, and sent billions of dollars to FTX, believing their assets were secure on the FTX trading platform.”
SEC Chair Gary Gensler stated, “We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto.”
Ponzi scheme king Bernie Madoff was sentenced to 150 years in prison. It is possible that prosecutors will make an example of SBF’s crimes.
Expect More Government Regulation
Every time a disaster like this happens, government agencies seek to increase regulation in order to rebuild trust. Mike Novogratz, bitcoin bull and Galaxy Digital CEO, said, “The FTX debacle has created a ‘deficit of trust’ in the whole industry.” In an interview with CNBC, he shared, “This is about transparency and disclosure, in lots of ways. Our industry has failed to self-regulate. I think the money side of crypto, companies like ours that buy and sell and lend and do derivatives, are going to get regulated and should be.”
Dan Dolev, a Mizuho analyst, explains, “What FTX told you is that one day you could be worth the world, and the second day you could be worth nothing, and I think consumers are going to be very scared.” Market share gains by Coinbase will be “very minimal in the greater scheme of things” because of lack of trust.
Yesha Yadav, professor of law and director of diversity, equity and community at Vanderbilt University, said, “The level of disillusionment and disappointment and sense of feeling deceived by FTX is so deep because it was seen as one of the most compliance-friendly institutions in the crypto economy and one that would be leading the regulatory efforts.”
John J Ray III, the U.S. attorney who took over as CEO of FTX, has been stunned by the incompetence of SBF and his executive team. Ray declared that he has never seen “such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.” He told Congress Tuesday, “This is just plain, old-fashioned embezzlement, taking money from others and using it for your own purposes. This is not sophisticated at all.”
In October, cryptocurrencies stolen by cybercriminals set a new record of over $3 billion. This was prior to news of the FTX debacle released in November. Will regulation solve the problem? Was it not the lack of regulations that originally drew people to cryptocurrencies?
Who to Trust
According to Crown’s late founder, Larry Burkett:
Trickery, double-dealing, lying, cheating, and subterfuge are all the practices of one who deliberately deceives. The most devastating loss associated with deceit is the dulling of spiritual awareness. Guilt associated with a known deception will cause the Christian to withdraw from God’s presence. Once withdrawn, subsequent deceptions become easier, less conviction is felt, and life is full of defeat and frustration. Deception destroys trust and leads to hypocrisy and a critical spirit. No one is immune to the temptation to deceive, particularly when money is concerned. God’s Word gives us guidelines for making decisions in spite of our normal reactions.
“It is better to take refuge in the Lord than to trust in humans.
It is better to take refuge in the Lord than to trust in princes.”
Psalm 118:8–9 ESV
Are we willing to put God totally in control of our finances? He promises to satisfy our needs, so are we willing to trust Him with everything? What about trusting Him with our losses?
“Trust in the Lord with all your heart, and do not lean on your own understanding.
In all your ways acknowledge him, and he will make straight your paths.”
Proverbs 3:5–6 ESV
My suspicion is that your crypto losses have been painful. We must all trust God regardless of what we have or do not have. That does not mean we stop working, giving, saving, spending, or investing. We do our part to be faithful with the temporal resources we have but only store up for ourselves treasures in Heaven.
The Crown Stewardship Podcast can be a valuable tool to provide wisdom and insight into how you can effectively steward God’s resources—both time and money. You can subscribe for alerts of new episodes. May we all be found faithful stewards of the Lord’s resources.
This article was originally published on the Christian Post on December 16, 2022.
Dear Chuck,
We’ve made financial mistakes in the past and want to improve our credit score in the New Year. What steps should we take, and what should we avoid?
Managing Our Credit Score
Dear Managing Our Credit Score,
This is a great goal for the New Year, and it will impact almost every area of your finances!
Recently, my 89-year-old father and I were comparing our credit scores. I was pretty proud of mine until he told me his. His was nearly perfect, which is a rare feat! I wondered, “How in the world was his score better?”
He knew a trick that I had not implemented: improving his credit utilization ratio. By reducing the limits of available funds on his credit cards, his credit utilization ratio proved better than mine. In other words, if you have very little debt and very reasonable limits on your available debt, your score improves. I knew that principle, but I had not acted on it yet.
Managing Your Credit Score
Your credit score is a three-digit number that grades your credit and bill payment history. Scores range from 300 to 850. These are calculated by the three major consumer credit bureaus—Equifax, Experian, and TransUnion—using information from lenders, credit card issuers, and other financial institutions. Higher scores demonstrate a lower risk to lenders. Scores of 800–850 are exceptional, 740–799 are very good, 580–669 are fair, and 300–579 are poor. My Dad’s score, by the way, was 842.
Your credit score is basically your financial reputation. Lenders determine the risk of repayment based on credit reports. Higher scores reduce borrowing costs over your lifetime because lower interest rates are granted. Scores affect a mortgage’s APR (annual percentage rate), interest rates on loans, and the cost of car and home insurance; they also determine whether a landlord will rent to you.
Some factors used in scoring include:
Emergencies can destroy credit scores. Business failure, job loss, or medical emergencies present costs that many cannot cover in a reasonable time. Unfortunately, your credit report can be damaged for years. Bankruptcies remain on record for seven years (Chapter 13) or ten years (Chapter 11). With time, you can improve your score, so do not lose hope. Follow these tips:
Canceling cards without reason can actually hurt your score. In some cases, an old card on file, even if not used anymore, demonstrates your experience in borrowing. Tuck it away in a safe place, and simply do not use it.
Check, Freeze, and Unfreeze Reports
Check your credit reports annually. Put a reminder on your calendar, and do not neglect to do it. Errors are common, and you must act to fix them. AnnualCreditReport.com grants access to a free report each year.
It’s important to freeze your credit reports to protect you from thieves opening new accounts in your name. When frozen, your information will not be given out for credit approval. You have to unfreeze it if you need to allow access to your report. You can do this yourself.
TransUnion (888-909-8872)
Experian (888-397-3742)
Equifax (888-298-0045)
Work to repair your credit score on your own. There are many credit repair companies and free credit report companies that are scams. Here are common red flags:
For Those with No Credit History
Those with no credit history should consider a secured credit card through a bank or credit union. A deposit is held as collateral until the account is closed. Try to avoid annual fees, and read the fine print to understand the contract.
Credit-builder loans are offered by credit unions, banks, and some online lenders. The money you agree to borrow (typically $300 to $1,000) is deposited into a bank account and held by the lender. Monthly principal and interest payments are required, which build a nest egg while also building credit. Once the loan is repaid in full, the funds are then yours. Make sure they report payments to the three major consumer credit bureaus before applying.
Truth and Borrowing
The Bible shows the way to an excellent credit score. Borrowing is not prohibited. God simply lays down clear guidelines for our protection: (1) credit should never be normal for God’s people; (2) credit should never be long-term; (3) never sign surety (an obligation to pay) without an absolutely certain way to pay.
Your stewardship score is much more valuable than your credit score. Paying off a lot of debt quickly can negatively impact your credit score. But it’s more important to live in the freedom of being out of debt than to have a perfect credit score. “You were bought at a price; do not become bondservants of men.” (1 Corinthians 7:23 ESV)
Do these things, and you likely will never really need to worry about your credit score. In the meantime, take care of your finances so if you ever do have to borrow, you can qualify for the very best repayment terms. Hopefully, one day you may have a higher credit score than my Dad.
If credit card debt is a source of financial pain for you, consider contacting Christian Credit Counselors. They are a trusted source of help toward financial freedom.
Note: Since I answered this question in a lengthy Lifeway article in 2021, I refer to much of that original content in my reply above.
This article was originally published on The Christian Post on December 23, 2022.
Dear Chuck,
We want to start the New Year right when it comes to our finances. Beyond a “get out of debt” resolution, what are the best moves to get us on track?
Looking for Financial Tips
Dear Looking for Financial Tips,
My best tip is to practice the simple but powerful act of daily discipline.
For example, years ago, I struggled to cut back on my sugar intake. I was frustrated with my physical state and knew that I could do better with a little discipline. So, on January 1st, I resolved to eliminate as much sugar as possible from my diet: no desserts, candy, or sugary beverages. Each day, I learned to say no to what I wanted (sugar) to gain what I needed for tomorrow (better health).
I renewed my resolution each morning for the entire year. This small victory brought great rewards and taught me to exercise self-control in other areas of my life. Let me repeat that daily formula:
Saying No to What I Want Today = Gaining What I Need for Tomorrow
Start Small
If you can be disciplined in just one area of your life, you can learn to be disciplined in all areas of your life—but it must start with one. This principle directly relates to your finances. To reach financial goals, you must start with a simple discipline that you faithfully practice one day at a time. This small daily effort exercised over a long period of time will enable you to achieve more than you can imagine when it comes to your financial goals. Stated another way, “Little habits have big results.”
Spiritual Discipline
“Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much. So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches?” (Luke 16:10–11 NIV)
“Commit your work to the Lord, and your plans will be established.” (Proverbs 16:3 ESV)
“But the fruit of the Spirit is love, joy, peace, patience, kindness, goodness, faithfulness, gentleness, self-control; against such things there is no law.” (Galatians 5:22–23 ESV)
What, Why, How, Celebrate
The ultimate purpose of a believer’s financial goals should be to glorify God. Goals will take on greater significance if you aim higher than simply keeping yourself afloat. Put your spending plan on paper (or in a spreadsheet or banking app) in order to view the state of your finances more clearly. Determine what you want to achieve in 2023. The “why” of your plans will keep you motivated. Write down your “why.” Good intentions become a plan only when written down and acted upon. Now write down how you will make progress every day. Next, plan to celebrate once you achieve each step of your goals. Remember, faithful steps will become lifelong habits.
What is the goal?
Why is the goal important?
How will you act on the goal daily?
Plan your favorite celebration once the goal is reached.
Financial Goals to Consider
Here is the step-by-step plan I recommend, in order of priority.
Practice this habit: give first, and save second. If you do this before spending, your finances will begin to dramatically improve.
Don’t Give Up!
Give yourself some grace to learn new disciplines and establish healthy financial habits. Imagine that you are flying a plane from point A to B. Even if you zig-zag or get off course, you don’t give up; you make course corrections and keep the plane flying!
Godliness with money requires sacrifices in order to act and grow in faithful stewardship. As you humbly depend on the Lord, you’ll experience a closeness to Him that will motivate you even more.
Keep an eternal perspective. This is not our home, and our mansions are not to be built on Earth. God promises true riches that money cannot buy and eternal rewards that we cannot fathom. Immerse yourself in Scripture, and renew your mind on Truth to overcome the temptations of this world. Focus on the Source of all strength, hope, and peace—He will be your greatest treasure in the new year.
Maybe it will encourage you to know that I am in a group of nine who have committed to another year-long fast from sugar. Disciplines are easy to lose, so I am back on the formula of saying no to what I want today in order to gain what I need for tomorrow.
Stay in touch, and let us know how we can help. We have great budget coaches if you need some extra support.
Happy New Year to you!
This article was originally published on The Christian Post on December 30, 2022.
