Dear Chuck,
We are senior citizens. My wife thinks we need to start stocking up on some gold. I am not so sure; plus, I would not know how to do it without getting ripped off. Any advice?
Gold for the Golden Years
Dear Gold for the Golden Years,
The Bible speaks to a number of the issues raised by your question. Let’s look at the market for gold and then some advice.
Insurance or Investment
People buy gold for two primary reasons: insurance or investment. Typically, when the value of the dollar goes down, gold prices go up. When demand goes up, prices rise, and vice versa. Owning some gold helps as a hedge against the falling value of the dollar. Trouble happens when people rush in thinking they will get rich quickly or hastily liquidate other assets that are losing value in order to buy gold. This dangerous mindset leads people to make poor decisions about things they do not understand. As a result, many suffer significant losses. Truly, “The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty.” (Proverbs 21:5 ESV)
Be On Your Guard against Gold Fever
History is filled with stories of people who got “gold fever” and were subsequently scammed. The Bre-X gold mining fraud occurred in 1997. An initial private offering at 30 cents per share jumped to more than $250 on the open market. J.P. Morgan, Lehman Brothers Inc., Fidelity Investments, Invesco Funds Group, and other companies jumped in, believing Egizio Bianchini, one of Canada’s top gold analysts, who said, “Bre-X has made one of the great gold discoveries of our generation.” What they did not know was that the project manager was tampering with core samples. All that glitters is not gold! He mysteriously fell to his death from a helicopter, Bre-X collapsed, and the shares became worthless. Here is more on the bizarre story.
Fast forward to today. Tyler Gallagher was recently CEO of Regal Assets, a company that let customers convert retirement accounts into metals like gold and silver. The company claimed that the program was a hedge against downturns in the stock market and inflation. Many who feared recession invested with Regal between 2020 and 2022. Most were in their 60s or 70s and trusted Gallagher with their life savings. He appeared very successful and talked the talk. They gave him their money but have yet to get the gold. Not only can the gold not be found, but neither can Gallagher. He has vanished. For more on this crazy story, read this.
Unfortunately, other scams exist, and seniors tend to be the most vulnerable.
Central Bank Holdings of Gold on the Rise
On January 27, 2023, the International Monetary Fund released a working paper entitled: “Gold as International Reserves: A Barbarous Relic No More?” Here are some notes:
Here is an excerpt from David McAlvany’s weekly commentary on February 8, 2023, titled “Why Are Central Banks Buying So Much Gold”: “For the global central bank community, gold maintains a 10% allocation of total reserves. That’s an average, and it’s a bit misleading because as an average, that includes the US, Germany, Italy, and France that keep a range of 58 to 66% of all their reserves in gold. . . . When you have slowing GDP, you have an increased interest in gold, the acquisition of it. When you have a weakening fiscal position in a country, the central bank says, ‘I think we should have some gold.’”
On February 1, 2023, the Financial Times featured a commentary on the increase of central bank gold holdings in 2022. Total demand across all categories came in at 4,741 tons—an increase of 18% from the previous year.
Invest, but Wisely
Gold bars (bullion) are sold by gram or ounce and should be stamped with purity, manufacturer, and weight. Bars that are investment quality must be at least 99.5% pure gold, especially if storing them in a gold IRA. Smaller-sized bars and coins offer greater liquidity and are common among those who own gold. Storage must be seriously considered, as well as insurance. Gold exchange-traded funds (ETFs) and mutual funds can be purchased and sold like other stocks. Many consider it the easiest and safest way to diversify one’s portfolio.
Avoid Craigslist, Facebook marketplace, dealers offering massive discounts, pawnshops, telemarketers, pushy salespeople, or dealers without a physical building. Avoid offers of free storage or delayed delivery. In addition:
Key Biblical Principles
To gain more wisdom and insight into how you can effectively steward God’s resources—both time and money—the Crown Stewardship Podcast can be valuable. You can subscribe for alerts of new episodes. I hope you find it beneficial.
This article was originally published on The Christian Post on March 3, 2023.
Dear Chuck,
I thought car prices were going to drop when chips reentered the market. I’m not seeing a drop where I live, and I really need to replace a vehicle. What should I do?
Waiting for a Deal on a Car
Dear Waiting for a Deal on a Car,
Most of us have never seen a car market that is so upside-down. Instead of negotiating for a price lower than the MSRP (Manufacturer’s Suggested Retail Price) for a new car, dealers are now setting the price they want above the MSRP. And in some cases, used cars are bringing more than what was paid for them new. Whew!
Let’s look at some key trends to help you with your question about timing.
Trends in the US Car Market
Car ownership is becoming more and more expensive due to the higher costs to insure and finance them. However, inflation and higher interest rates have resulted in fewer sales, so demand has dropped, which may bring prices down.
On February 13th, Bloomberg published an interesting article: “New Cars Are Only for the Rich Now as Automakers Rake in Profits.” Apparently, manufacturers are intentionally keeping inventories low and prices elevated to gain higher profits. Despite the fact that fewer cars were sold, Ford’s gross profit rose over 4%, and GM’s adjusted earnings grew by some $200 million. In the past, automakers typically carried 60–100 days of inventory. Today, they target half of that in order to lower overhead. Ford CFO John Lawler said he expects new-car prices to fall 5% in 2023. Nissan’s Wheeler predicted prices will drop toward “a more normal level.” Even so, customers who finance vehicles face average new-car payments of $777 or used-car payments of $544.
Cox Automotive reports:
Many people use tax refunds as an opportunity to buy a car. Unfortunately, the higher demand during refund season drives prices up. Avoid these mistakes when using a tax return to purchase a vehicle.
Hope for Lower Used-Car Prices
If demand surpasses supply, prices will stay high or grow higher. The average price of a new car in the US has jumped 30% since 2019 to $50,000. Used-car prices unexpectedly jumped 2.5% in January but are down 12.8% from 2022.
On February 17th, AutoNation reported that it expects used-car prices to drop. CEO Mike Manley said, “You are going to see improved balance and level of inventory. You’ll see it progressively more once you get out of the first quarter.”
Nerdwallet reported in January that used-car prices are dropping but at different rates. Pickups and compact cars have had the smallest price change since January 2022. SUVs and luxury cars have had the largest price drops. Supposedly, customers wishing to trade in their cars should expect lower values than last year. However, trade-ins can be helpful in negotiations since dealers need used cars.
The Manheim Index is becoming recognized by financial and economic analysts as the premier indicator of pricing trends in the used-vehicle market. Used-car prices are up nearly 40% over last year, with the average used-car price reaching $27,000.
Increased Auto Insurance
If car prices come down, auto insurance will cost more as insurers attempt to catch up with higher costs of repair parts, labor, and claims. There has been an increase in the frequency and severity of crashes, along with record levels of personal injury judgments and vehicle thefts. Rates are expected to rise 8.4% across the country this year, with the average cost of full-coverage insurance at $1,780 per year. However, rates vary by state. Progressive received approval to raise their rates by 19% in California for new and renewing policies. Facts that determine auto insurance rates include location, driving record, credit score, type of vehicle, and years of driving experience (teens are expensive).
Consider Your True Cost Per Mile
I drove through several used-car lots this past weekend and was still shocked at the prices. I’ve always tried to buy cars that will retain value. In 2009, I bought a low-mileage, one-owner, 2007 Toyota 4-Runner. It seemed expensive at the time, but in the 14 years I’ve owned it, the value has only decreased by about $5,000! To date, it has not required a single major repair either. So if I look at it from a cost-per-mile-of-ownership standpoint, I have driven about 100,000 miles for only $5,000, or about $.05/mile, apart from maintenance. I encourage you to do a similar calculation on any purchase you are considering to understand your true cost.
Pray about Your Next Car
Ask God to find you a car. Ask Him to provide one for you. He knows what you need, what you can afford, and what is available. Trust Him, and wait patiently but expectantly while you do your part in searching. When that prayer is answered, rejoice and give thanks. Sometimes, He provides in truly miraculous ways. A friend of mine was praying for a car he needed and was invited to play in a charity golf tournament. He was stunned when he hit a hole-in-one, the first in his life. The prize was a brand-new SUV, like the one he had been praying for. You never know what God may do.
I would like to invite you to join us at Crown’s 2023 Reunion. We plan to gather October 12–15 at Ridgecrest Conference Center near Asheville, North Carolina. For more details and registration, go to Crown.org/reunion.
This article was originally published on The Christian Post on February 24, 2023.
Dear Chuck,
One step forward and two steps back seems to be the story that describes all my efforts to achieve any financial goals. No matter how hard I try, discouragement overtakes me, and I am back to square one with too much debt, too little savings, and not enough motivation to keep trying!
Discouraged and Done
Dear Discouraged and Done,
I can’t tell you how glad I am that you somehow found us to turn to in the midst of your pain. Do you want to know why? I have been there too! Yes, I know what it is like to have past-due bills, overdraft charges, collection notices, and more days in the month than money. I once lived with the frustration of being stuck in financial molasses. I also know the joy of finally getting out from under the cycle of one step forward and two steps back!
The secret is to pick yourself up, shake off the dust, and keep trying. The Bible calls this key—yet overlooked—virtue, diligence.
“The hand of the diligent will rule, while the slothful will be put to forced labor.”
(Proverbs 12:24 ESV)
Diligence is a constant, earnest effort to accomplish what is undertaken. It is the persistent exertion of body or mind and the constant performance of duty or the conduct of business.
Another way to think of it is to imagine the behavior of our cat, Ash. He doesn’t like to be put outside—at all! As soon as we put Ash on the back porch, he begins to scratch on the sliding glass door as if his life depends on getting back in! He only stops this exhausting work long enough to catch his breath before he is back at it! If it were possible for 100,000 strokes of his paws to cut through glass, I think Ash would be near that total within an hour!
God’s Word on Diligence
Results come from immersing ourselves in whatever we want to learn or improve in our lives. Larry Burkett, Crown’s founder, always shared that God’s principles were given for our good. Consider what the Bible teaches us about diligence.
Moses:
King Solomon:
Others’ Words on Diligence
Diligence Is a Virtue
Diligence, one of the seven virtues, is a means of developing godliness which leads us to delight in God and grow in the likeness of our Lord and Savior, Jesus Christ. Diligent behavior affects all areas of our lives. It prevents frustration and leads to satisfaction.
Check Out Free Resources
Benjamin Franklin said, “An investment in knowledge pays the best interest.” I invite you to learn to be diligent in stewarding the resources God has given you. Visit Crown.org for lots of free resources to get started today. Once I realized I was diligently doing the wrong things, I applied my energy to achieving financial goals in God’s way. And like my cat, Ash, I kept after it! Years later, I have days that seem like two steps forward and one step back, but I have the joy of knowing that God has given us more than we could ever dream or imagine in the true riches He promises those who are faithful. Don’t give up. He is there for you!
One way to make great strides in your financial health is to diligently pay off credit card debt. 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 at The Christian Post on February 17, 2023
Dear Chuck,
The Federal Reserve raised interest rates—again. I’m hearing murmurs of a recession, and though most think it will be mild, it creates fear and trembling. How can I prepare myself?
Recession Fears
Dear Recession Fears,
Raising interest rates is a means to try to tap the breaks on inflation. It does not necessarily lead to a recession—although it can. Let’s look at some of the data and expert opinions related to your fear of a recession; then I will offer my advice.
Interest Rates and Recession Fears
On February 1st, the Federal Reserve raised interest rates by 25 basis points (.25%) in an effort to reach a pre-pandemic level of 2% inflation. Fed Chair Jerome Powell said, “I don’t think anyone knows whether we’re going to have a recession or not. And if we do, whether it’s going to be a deep one or not, it’s just, it’s not knowable.”
Janet Yellen, Treasury Secretary, stated, “I’m reasonably satisfied by the data that I’ve seen so far, but I don’t want to minimize the risk of recession. The path that I see, to maintaining a strong labor market while bringing inflation down, does involve a slowdown in growth.” She agrees with Powell’s plan but also has concerns. On Monday, February 6th, she said, “You don’t have a recession when you have 500,000 jobs and the lowest unemployment rate in more than 50 years.” Kristalina Georgieva, International Monetary Fund managing director, remarked, “Based on the data we have today, we think the U.S. would be able to go through the year narrowly avoiding falling into recession. That means a possibility for a soft landing for the United States.”
Ryan Sweet, the chief economist at Oxford Economics, stated, “A recession will occur at some point. It doesn’t have to be next month or next year, but at some point, we will experience it.”
He believes the next recession will be mild.
Brian Moynihan, Bank of America CEO, explained that he expects a mild recession to hit the economy. Inflation and high interest rates could drag down corporate earnings and send the economy downward. In addition, he hopes our government does not default on its debt. “We have to be prepared for that, not only in this country but in other countries around the world. You hope it doesn’t happen, but hope is not a strategy – so you prepare for it.”
Fear Not
The comment above by Ryan Sweet at Oxford Economics is a sure bet: “At some point, we will experience it.” Of course, we will; recessions are part of the economic cycle of our nation. I’ve survived several, and you can too. The key is being prepared so you can ride it out without undue stress or fear.
“Fear not, for I am with you; be not dismayed, for I am your God; I will strengthen you, I will help you, I will uphold you with my righteous right hand.” Isaiah 41:10 ESV
How to Prepare for a Recession
The Dos:
The Don’ts:
Invest Wisely
Trying to time the market is a futile exercise. None of us know when or how long the next recession could last or the effect at large. Many, many experts recommend investing with a long-term approach and avoiding obsessively checking your portfolio. Yes, you may experience loss, but you could also profit in the recovery. Time and diversification are key. Consult a trusted financial advisor for more details.
Matthew Frankel, CFP at the Motley Fool, says to avoid speculating during a recession. Focus on top-quality companies in turbulent times. In addition:
Avoid Lifestyle Inflation
One of the greatest ways to build financial margin is to learn to be content with what you have. Lifestyle inflation (or lifestyle creep) occurs when people get pay raises and increase their overhead with expensive cars, homes, trips, etc., instead of increasing their giving, saving, and investing. I know people who have intentionally decided to raise their children in a small home or condo. The motivation is to avoid the costs of upsizing and then downsizing later. They are not afraid of the future because they have intentionally ignored the trappings of the world. Know what tempts you, then determine to guard your heart and mind. The more people spend on things that look like wealth, the less they have to build wealth.
I wrote about How to Recession Proof Your Finances last year.
A long-term perspective will make things of this world dim in significance. My hope is that Christians will influence others by the way they steward their lives. How we spend our time, money, and talents will prepare us for far more than just a recession; it will prepare us for our eternal future.
The Crown God Is Faithful devotional offers inspiring and practical Biblical wisdom. You can subscribe to receive daily devotionals that will help transform your finances and provide much-needed encouragement.
This article was originally published on The Christian Post on February 10, 2023.
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.
