Dear Chuck,
I’ve been inspired by Washington Redskins quarterback, Kirk Cousins’ frugality. Don’t you think more professional athletes and musicians should set his kind of example?
Big Fan of Kirk’s
Dear Big Fan,
I not only wish more athletes followed his example, I think all of us could learn from him!
Cousins is a quarterback for the Washington Redskins and could buy whatever he wants. He made nearly $20 million last year and this year he could make around $24 million. Know what he drives? His grandmother’s GMC Savana van, with more than 100,000 miles, that he purchased from her three years ago for $5,000. He calls it “The Gray Ghost,” or “Gandalf, the Grey”.
He knows it’s not a smart financial decision to buy new even if you have millions of dollars in the bank. Why? New cars depreciate nearly 20% the minute you drive them off the lot.
He always wanted a nice, fast car. So, last offseason, he bought a “new” 2006 Mercedes S65 AMG, because he couldn’t justify a new one.
Cousins is the frugal son-of-a pastor who lived with his pregnant wife in a basement “apartment” of his childhood home. Some months, they’ve lived in the basement of his wife’s childhood home. They don’t pay rent. He and his wife just celebrated the birth of their first son in October. So their housing situation may change with their growing family.
But, one thing is certain. He does not know how long he’s going to play football. And, based on that certainty, he recognizes the importance of saving.
The career of a pro football player tends to be short. It is extremely competitive and players have to work hard to keep their jobs. Careers are cut short when players cannot perform at an expected high level. One serious injury and it’s over.
In fact, a paper published by the National Bureau of Economic Research in July, 2016 stated that, according to the NFL Players’ Association, the average career lasts 3.3 years. Injury, retirement or being cut by the team make it a very high risk career choice.
Sadly, “78 percent of players go broke within three years of retirement and 15.7 percent file for bankruptcy within 12 years of leaving the league.”
Instead, Cousins handles money based on an analogy he learned from a pastor. Imagine a FedEx delivery man, who stores packages in his basement, rather than shepherding them to their proper recipients. Can you imagine? But that’s what we do when we fail to steward what God provides. He wants us to steward well all that He gives in order to impact others. As Cousins says, “We’re all going to have to give an account for what we did with what we were given.”
Cousins doesn’t want to play football thinking about money. “I think that you get in trouble doing that. I put my confidence in the Lord, in my faith. If I’m gonna build my life [based] on money – shame on me. That’s not where I draw my security from, never should be. My parents didn’t raise me that way.”
Humility and meekness are not the first things that come to mind when I think of most professional athletes or celebrities. Kirk Cousins is an exception.
The kingdom of this world equates success with possessions and celebrities are known to enjoy flashy, expensive tokens of their wealth. But God’s kingdom sees success totally differently. God looks at what is in the heart and character as more important than money (1 Samuel 16:7).
Cousins exemplifies meekness, a characteristic Paul addressed when he told the Colossians:
“Put on then, as God’s chosen ones, holy and beloved, compassionate hearts, kindness, humility, meekness, and patience…” (Colossians 3:12 ESV)
Meekness is a character quality that gives us the ability to control excess power or strength. It also applies to how we manage resources. When we are meek with what we have, we can have more in storage than we put on display. Flashiness and extravagance are not necessary to build our ego.
I like this definition of meekness: “Meekness, according to the Bible, is being humble and gentle towards others and willingly being submissive and obedient to the Lord. It is not being selfish and arrogant, loud or obnoxious. Rather, it’s having a quiet but confident trust in the Lord and being willing and able to do whatever it is He commands. In regards to how a meek person would treat others, they would definitely be humble and gentle both in their words and in their actions.”
You see, stewardship is more than an external budget. It’s an internal attitude, a value of the heart that influences all of our decision making.
Things will not bring lasting happiness. In fact, those often bring much stress and grief.
Jesus said, “I came that they may have LIFE and have it abundantly.” (John 10:10 ESV)
Kirk Cousins understands that life.
Our actions reveal what’s in our hearts. He who desires to steward well should desire this attribute, for it is one that defines our Savior. He willingly laid down His life to give us ours. He used His power to rescue us from the domain of darkness. He was not shy or passive, but He was fully submissive to the will of the Father.
May we each submissively steward all that our Father provides. Whether time, talents or money, may we use it all to glorify God and offer hope to the hopeless. Our days are numbered. Let us consider how we can share the “abundant life” with others this holiday season and until He calls us home. Thank you Kirk Cousins for showing us what this looks like.
If you want to pursue God’s plan for your finances, sign up for our online MoneyLife Personal Finance Study. It’s focused on aligning your beliefs and behaviors with Scripture, to help you live a meaningful, purposeful life. The course is just 7 lessons and you can complete them at your own pace! It’s the perfect way to get your finances in order for the New Year. Click here to learn more!
Originally published on the Christian Post, December 1, 2017
Dear Chuck,
According to the retirement calculator, I am way behind. My wife says we’ll never be able to retire, and we are both suddenly fearful of what our financial future holds. What can we do?
Sincerely,
Scared Senior!
Dear Scared Senior,
Regardless of whether you’re ahead or behind according to the retirement calculators, there are a number of options that will help alleviate your fears.
The first option: maybe you shouldn’t plan on retiring or at a minimum, postpone until it until past 70!
Some surveys indicate that 75% of Americans are reaching retirement age with $100,000 or less in savings. Baby boomers and seniors say their number one regret is failing to prepare adequately. Because of this, we’re seeing a trend in Americans working past age 65. And, because more and more Japanese are now living beyond 90 years of age, many in the nation are calling for the official retirement age to be moved up to 75.
I recently had the privilege of interviewing two men who lead organizations that provide wise counsel for many Christians who seek retirement advice: Brad Hewitt, CEO of Thrivent Financial, and Russ Crosson, Executive Vice Chairman, EVP, and Chief Mission Officer for Ronald Blue Trust.
Both help their members wisely handle money and live generously. And, both agree that the concept of retirement in America has been skewed by marketers. They note that an unrealistic, idealized idea of retirement (what they refer to as “financial pornography”) is being promoted that clearly violates God’s word. They offer a number of good options to reduce your fear of retirement.
Here are a few of the highlights of our discussion.
Retirement did not exist in America until after Social Security payments began in the 1940s. Now, citizens hurry to quit work so they can “enjoy the good life.” As a result, many fail to enjoy the trip and miss out on life because they’ve adopted a non-biblical attitude toward work.
A biblical perspective is one in which men and women live out the vocations to which they are called. Glorifying God and enjoying Him each day, they experience the abundant life. They are focused individuals with an attitude of thanksgiving for all He’s provided and much happier than those who are focused on stopping “work” to live out extended vacations.
So what should a Christian do when the time has come to transition out of their career? I like to recommend “repurposement” rather than retirement. Your skills and talents don’t stop at age 65; in fact, you have immensely more wisdom and experience later in life that makes you a valuable asset in many ways. God will have a new mission for you if you allow yourself to be used by Him for God’s kingdom.
Moving from success to significance motivates people to work. Even a small income helps them look at their investments differently and reduces stress. Working with purpose keeps them active and healthy – physically, mentally, and spiritually.
Approximately 30% are afraid without reason. Others max out their 401Ks but borrow to cover their children’s braces or to buy a large home. Some reduce giving because they’re afraid their money won’t last. All because they haven’t taken a biblical approach to their finances.
Lifestyle controls will significantly alter calculator numbers. Adjusting expenses, reducing debt and planning to work more years have long-term benefits. For those in their 20s, 30s, and 40s, do not buy too much house or carry much debt. Rather, fund your retirement, keep some cash in the bank, and pay off debt simultaneously.
Brad Hewitt thinks a zero payback is unlikely. He believes the worst-case scenario would be a bankrupt system that pays 75-80% of benefits. For those over 50, he says don’t worry about it. Those under 50 should plan for less than 100% return.
One solution is to “play banker” for your children and allow them to leverage their future inheritance. They pay you a higher percent than your savings earn for loans, like a mortgage, at a better interest rate.
Approximately 96% of American estates are passed down in families. When we prepare our wills, we must also prepare our heirs to wisely manage financial blessing. Family meetings are vital. Err on the side of less rather than more so as not to ruin your beneficiaries.
Although you can test your children with a financial gift to see how they steward it. Age of inheritance can be stipulated. Plan a charitable legacy and continue to give during your lifetime.
Solomon told us, “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.” (Ecclesiastes 7:11-12)
We don’t know whether Social Security will be available for us, or whether our savings and investments will provide, but we can depend on God. We must not worry about what we cannot control, but act on what we can.
David said, “I have been young, and now am old, yet I have not seen the righteous forsaken or his children begging for bread.” (Psalm 37:25)
So, don’t beat yourself up for not being prepared. Pray, act, and keep an eternal perspective!
If you want to learn more about retirement and hear my entire conversation with Brad Hewitt and Russ Crosson, click here.
Originally published on the Christian Post, November 24, 2017
Dear Chuck,
I want to take advantage of all the good sales happening for Black Friday but I can’t afford to pay for it all in cash right now. Is it ok to put it on the credit card and pay it off when I get my Christmas bonus? It seems like a waste to not get a good deal!
Sincerely,
Santa’s Helper
Dear Santa’s Helper,
Thanks for asking a great question that will hopefully help many others with the same dilemma.
Your motives are correct in that you want to take advantage of a sale and save money, but let’s slow down and look at the bigger picture.
Borrowing and presuming on a year-end bonus is a mistake. Just because something is on sale does not mean you need it or that it won’t be there in January! It’s important to exercise self-control and patience by avoiding the use of credit cards when you don’t have the option of paying with cash.
I have traveled the world and seen sincere joy and gratitude in those with very few “things”.
I wonder if perhaps you are confusing wants with needs? It’s easy to succumb to the constant bombardment of advertising and think we need “things” to be happy, accepted, or content or that our children need the latest and greatest gadget.
Jesus warned, “Take care, and be on your guard against all covetousness, for one’s life does not consist in the abundance of his possessions.” (Luke 12:15)
Likewise, “…do not be anxious about your life, what you will eat or what you will drink, nor about your body, what you will put on. Is not life more than food, and the body more than clothing? Look at the birds of the air: they neither sow nor reap nor gather into barns, and yet your heavenly Father feeds them. Are you not of more value than they? …And why are you anxious about clothing? Consider the lilies of the field, how they grow: they neither toil nor spin, yet I tell you, even Solomon in all his glory was not arrayed like one of these. But if God so clothes the grass of the field, which today is alive and tomorrow is thrown into the oven, will he not much more clothe you, O you of little faith? Therefore, do not be anxious, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ …But seek first the kingdom of God and his righteousness, and all these things will be added to you. (Matthew 6:25-33)
It’s easy to be tempted to spend money you don’t currently have to give your friends and family good gifts, or just to be done with the hectic Christmas shopping. But taking the easy route now will prove to be far more stressful for you come January when your credit card bill arrives. I’d guess you’ll enjoy this Christmas season and January much more if you’re free from the burden of credit card debt.
I will give you a few tips on how to avoid the crush of Black Friday sales but here a few general Do’s and Don’ts to help you keep your perspective.
Wendell Berry was right when he said, “Don’t own so much clutter that you will be relieved to see your house catch fire.” Worldly goods deceptively promise identity and security which only God provides. He desires us to be free to serve the body of Christ and advance His kingdom. Things that promise to make us “happier” or make life “easier” contradict the fact that God never promised us an easy life. But, He came that we may have life and have it abundantly – even if we don’t have all the hot deals being marketed to us on Black Friday. (John 10:10b)
And if you’re currently burdened by credit card debt, get in touch with our partners at Christian Credit Counselors. They’ll help you make a plan to pay off your debt and live in freedom.
Originally published on the Christian Post, November 17
Dear Chuck,
There seems to be an unending amount of “crazy” in the world. How can I keep my money, time and heart peaceful during the holidays?
Thanks,
Holiday Jitters
Dear Holiday Jitters,
My pastor, Ronnie Batchelor, describes this as the time of year when “…we all experience the familiar unnerving sense that we’re approaching the brink – something akin to the clack-clack-clack-clack ascent of the rollercoaster when couples instinctively grasp each other’s hands and exchange nervous looks that communicate, ‘Here we go!’ We just hang on and hold our collective breath because we’re in for quite a ride!
The next season will almost certainly be a jostling, frenzied blur of parties and baking and travel and pumpkin spice…and obscene amounts of food until (as the last strains of Auld Lang Syne fade), we all coast back into the station and exhale – sometime about mid-January.”
So, like you asked, we all need to consider…how do we, in fact, experience peace during the upcoming Christmas season? Can we find peace in being still, relishing the precious moments of the season, in quiet anticipation of each day? Yes, we can.
Christmas is a time to pause, ponder, and praise the gift of our Lord and Savior, Jesus Christ. Rather than succumbing to the unwanted burden of financial and social obligations, we must intentionally seek stillness to hear the voice of God and find strength to sacrificially serve and share His love with others. Much of our loss of peace comes with the financial pressures we feel when the emphasis of the season is on buying gifts.
Overspending is the opposite of how Christians should celebrate. It creates stress and robs us of the ability to save and give generously to our churches and those in need. Likewise, time, must be stewarded as carefully as money. The older I get, the faster it seems to fly. Don’t squander it on worthless endeavors – but seek ways to grow in faith, reduce distractions, and serve others.
This requires intentional planning. Just as Jesus had to get away from the crowds, so must we, to renew the heart, mind, and body.
He tells us to come to Him when weary and heavy laden, and He will give us rest. (Matthew 11:28)
We’re to cast all our anxiety on Him because He cares for us. (1 Peter 5:7)
He, who silenced the storm and hushed the sea is more than capable of calming our anxious hearts.
We can be still, and know that He is God. (Psalm 46:10)
For He satisfies the longing soul, and the hungry soul He fills with good things. (Psalm 107:9)
With complete dependence upon our mighty God, we can say “No” to the demands of the world and joyfully celebrate the birth of Him who fills us with His peace. Let’s honor Christ this Christmas season with sincere and humble hearts and experience the peace that He gives.
Pick the music that brings your focus back to Christ and His peace. My wife finds peace and joy in the words from the Sovereign Grace song, He Who is Mighty:
“Now my soul magnifies the Lord, I rejoice in the God Who saves, I will trust His unfailing love, I will sing His praises all my days.”
Thank you for the honest question. I hope these tips help you escape the madness of the season and truly enjoy your celebration this Christmas. And if you’re looking for a practical tool to help you stay focused on Christ this Christmas and in the year ahead, I’d encourage you to enroll in Crown’s online MoneyLife Personal Finance Study. The 7 week course is focused on being faithful stewards of all we have, no matter how much or how little. You can learn more here!
Originally published on the Christian Post, November 10, 2017
Dear Chuck,
I have 2 daughters that are only 2 years apart that are still in elementary school, but I’m concerned about the cost of college. When is the best time to start saving, and can you explain education savings accounts? I am thinking this is the way I want to help them get their degree without debt.
Thanks,
Mom of Future College Grads
Dear Mom of Future College Grads,
You are wise to be thinking ahead!
Solomon, the wisest man who ever lived, tells us that “Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.” (Proverbs 13:11 ESV) Saving a little every month will accumulate over the years and help your children avoid the burden of student loans.
There are numerous ways to save for college. The two most popular are the 529 college savings plan and the Coverdell Education Savings Account. Both are similar to a Health Savings Account (HSA) or retirement account. They are similar in that the money goes to investments like mutual funds, and withdrawals must be for qualified expenses like tuition, room, board, books, calculators, computers, printers and other approved items. It is also helpful to know some specifics about each one to help you make your best choice.
These offer benefits for parents and students, functioning like a Roth IRA. Accounts grow tax-free and distributions for qualified expenses are not taxed They are owned by the contributor, assessed at the 5.64% parental asset rate for the expected family contribution (EFC), and distributions are not counted as base year income on the FAFSA. This means they do not hurt you when applying for financial aid.
These tax-deferred investments offer the most flexibility and tax-advantages. Withdrawals must meet qualifications or a 10% penalty is charged. In addition, state and federal taxes on the earnings for your tax bracket will be applied.
Contributors can invest aggressively and catch up for any years missed because there are no contribution limits or income restrictions. They will move state to state, and from one child to another. In addition, the beneficiary can be a child or grandchild and can be established by friends or family.
Control of the account stays with the contributor. There’s no limit to the number of plans you can establish, but avoid exceeding the cost of education or the limit set by the state. All contributors need to keep each other informed of their plans. These can fund a broad range of post-graduate programs including qualified certificate programs and continuing education.
In a prepaid tuition plan, contributions are pooled with other investors to prepay the cost of a designated college at today’s prices for future use. There’s a limit on yearly contributions and they function like IRAs.
State-sponsored 529s allow investors to contribute after-tax money that grows tax-free for later withdrawal without federal taxes or penalties if used for qualified expenses. Beneficiaries are free to choose the college of their choice.
Any excess money in the account after college completion will be penalized and taxed by both state and federal governments. So underestimate what you need to save, and work to receive grants and scholarships! Advisors suggest aiming for total in-state public college costs. The limit for contributions is higher than the Coverdell and there’s no age limit for the beneficiary.
See SavingforCollege.com for more information.
After-tax dollars (not tax-deductible) can be distributed to private K-12 funding, college or grad school. Contributors must earn less than $220,000 a year per couple and are limited to yearly contributions of $2,000.
Once a student turns eighteen, contributions must end. The custodian controls the account, and the beneficiary may take over at the age of majority, which is usually 18. There’s no federal tax charge when money is used for qualified expenses. Earnings grow tax-free. The account must be closed before the beneficiary turns 30, but the money can be moved to a 529 for the same beneficiary or relative, or a regular brokerage account. Note, taxes and penalties may be owed.
Roth IRAs are another option. These are designed to be retirement-savings vehicles, so if not used for college, the account owner can use the money for retirement. There are contribution limits and no penalty for withdrawals prior to age 59½ if the money is used for qualified higher education costs. However, earnings may be taxed for early withdrawal. And, the entire withdrawal (principal and earnings) may be considered income and affect financial-aid applications.
The simple option, with fewer benefits but more flexibility, is to save in your own account and invest as desired, paying for expenses when they are due. With this approach, you can access your own money if you need it for retirement or an emergency. You miss out on potential tax benefits but penalties are avoided.
Research well. Know where the money’s being invested, compare fees, the level of risk, and the plan’s past performance. Seek the advice of wise people, pray, and move forward when you have peace in your decision knowing that, “The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.” (Proverbs 21:5 ESV).
I commend you for preparing now for their college education so you won’t have to borrow later! Crown’s Money Map is a visual guide that helps you make a plan for your finances, and saving for a college education is one of the key steps on the map. By stewarding your time and money well, you can avoid financial stress and find freedom! I hope this helps you make the best decision for your family.
Originally published on the Christian Post November 3, 2017
Dear Chuck,
Christmas is right around the corner, and I’m having a little bit of trouble shopping for Christmas presents. I want to buy meaningful, useful gifts, but it can just get so expensive so fast. Beyond just having a budget, what advice can you give on how to prepare for holiday spending?
Thanks,
Making a List and Checking it Twice
Dear Making a List,
I hope your list checking includes shopping carefully for the best price! My wife, Ann, bought our grandchildren their Christmas pajamas weeks ago. She looked and looked in stores and online. When the price was right, she pounced! I consulted with her for some practical tips to offer you.
To avoid the pressure of last minute shopping and the world’s materialism, take some time to pray and think through the meaning and purpose of the season. Center your celebration around Christ with a heart of gratitude. Treasure the words of John, the beloved disciple:
…the love of God was made manifest among us, that God sent his only Son into the world, so that we might live through him. In this is love, not that we have loved God but that he loved us and sent his Son to be the propitiation for our sins. (1 John 4:9-10)
Christmas is a time to share our love with others. We can do that without bringing undo stress upon ourselves. Simply plan and follow a few suggestions.
Make a list. Write (or type) out all the people you need to shop for, the amount of money you can spend on each, and the gift, or type of gift, you’d like to buy for them. This will prevent distractions and save you time. Of course, be sure to check it twice.
Set your budget. Decide on a reasonable amount of money to spend on all the gifts, meals, and supplies (wrapping paper, Christmas lights, etc.) that you need to buy. It doesn’t need to be a big number for you to have a meaningful Christmas! Sticking strictly to your budget will allow you to enjoy the season without the stress of debt…and start the New Year off right.
We have an easy-to-use guide that can help you create a budget you love! Find it for free here.
Use cash. Research shows people spend less using cash. Use large bills. They’re psychologically harder to break. (If you don’t use actual cash, plan to pay all the items you charge to your card when or before your first bill arrives. DO NOT carry a balance into January!)
Some people prefer shopping by themselves because they can go faster with fewer temptations. They get their cash the day before, eat breakfast, pack a water bottle and lunch, and head out early in the morning with a list and mapped route.
Some love to shop with friends or family. Especially if you’re shopping on big days, like Black Friday or November 1, there can be strength in numbers. If you can stay focused and on budget, organize a team to divide and conquer. Just go over the plan before you get to the stores!
Consider strategically shopping in smaller towns to avoid the mall crowds.
I’ve heard of some families buying their children three gifts, since Jesus received three from the wise men. Other families give their children four items: a want, a need, a wear, and a read. I like both ideas and both can save you money!
Many sales begin November 1st, but the biggest shopping day is Black Friday, the day after Thanksgiving. While you can find great deals on items, many stores increase their prices to make the discounts look more significant. Be careful to not fall into one of these traps by doing your homework beforehand!
Cyber Monday (the Monday after Thanksgiving) is also a major shopping day, with major discounts on online stores everywhere. Sign up with your favorite online merchants now for sale alerts and pre-sale deals. Then find more great deals from the comfort of your own home, with some Thanksgiving leftovers.
A beautifully presented gift speaks volumes. You can do this at very little cost. Save paper bags to cut and wrap in twine, yarn or recycled ribbon. Decorate with herbs or old Christmas cards. Have your children color the paper prior to wrapping to make it even more special.
Ask live-chat associates for a discount. Never hurts to ask!
One of my favorite shopping tricks is to put items you want to buy in your shopping cart. (If you’ve shopped the site before, your email is in their system.) Then close the window or empty the cart (copy what you want for later). Within minutes or later that day you may get an email with a discount code. Simply reload your cart and buy!
Also be sure to check out Free Shipping Day or install Honey for automatic coupons.
Guard your credit cards, wallets, and purses when shopping. Park in protected areas when visiting stores. Only shop online with reputable merchants.
“Package pirating” is the theft of packages on porches. An estimated 23 million Americans have had packages stolen from their porch.
To keep your packages safe:
I don’t recommend giving gift cards for a variety of reasons. If you want to avoid spending money altogether, here are some ideas:
Research shows that experiences rather than things often give greater satisfaction. Take in a local event or plan a trip together.
Another idea is to gather friends to make gifts together: dividing perennials, planting bulbs in pots, cooking, crafting, chopping and delivering firewood, or choosing heirlooms to give.
Preparing extra food for special events adds up! Shop sales, and stock up now. Divide the food items among guests when possible. We have friends who host special dinners in their home throughout December. They decorate beautifully and prepare meals they only eat at Christmas.
As you celebrate the birth of Christ this year, do it with intentionality and joy without going into debt. A little planning and creativity can make this holiday one you will long remember!
Thanks for your question! I hope this will help you have a stress free celebration of His birth.
Christians, awake! Salute the happy morn wheron the Savior of the world was born;
Rise to adore the mystery of love, which hosts of angels chanted from above;
With them the joyful tidings first begun…. (John Byrom, 1749)
Originally published on the Christian Post, October 27, 2017
Dear Chuck,
We have been our first home for three years and want to refinance to lower our mortgage payments. Should we go with an ARM, 15 year or 30 year fixed?
Thanks,
Happy Homeowners
Dear Happy Homeowners,
There’s a hymn that goes: “This world is not my home, I’m just a passing through. My treasures are laid up somewhere beyond the blue…”
Our time here on earth is temporary. One day, we’ll leave behind our house and the things that fill it. But, in the meantime, we are to wisely steward what God has given us. Since I don’t know your overall financial picture I am going to give you lots of information about refinancing and ask you to do some math and homework to make the best decision.
Refinancing a home, the paying off one loan and replacing it with a new one, can be a smart use of funds. But, what you may not know could cost you.
If you want to reduce the total cost of your home (principal + interest), then your goal is to pay off the mortgage as quickly as you can.
Since more interest is paid in the early years of a mortgage, refinancing a home early can be helpful. Keep in mind the difference between refinancing and recasting a mortgage.
A couple factors to consider is the number of years you plan to keep the house and if there’s a penalty for early payoff.
Here are some problems to be aware of.
Refinancing can cost 2-6% of the loan’s principal (the amount borrowed). Remember, you have already paid these costs on your current loan. A simple rule of thumb is that a minimum savings of 1% drop in your interest rate is needed to make it worthwhile.
It will require most of the same closing costs you had in the original loan: origination fees, title insurance, appraisal, application fees and closing fees. The cost can be covered in three ways. The first and least expensive option is to pay with cash. The second, is to accept a higher interest rate for a “no-fees, no-costs” loan (you pay for it with the higher rate). The third, is to finance the cost, by adding it to the amount of the loan.
Let’s assume your closing costs are $6,000 and the interest rate is 4%. Do you have the cash to pay upfront? If not, you’ll have to accept a higher interest rate. Or you can finance the $6,000 at 4% for 30 years, you’ll pay an extra $4,312 in interest making the total cost to refinance $10,312.
Determine your breakeven point or the length of time it will take your savings from a lower rate to exceed your closing costs. It equals the total closing costs divided by monthly savings. For example: a $6,000 cost divided by $250 monthly savings will take 24 months to breakeven. If you plan to stay in your home more than 2 years, refinancing likely can be justified. We have a refinancing calculator that will help you weigh your decision and find your breakeven point.
Shorter-term loans have lower mortgage rates. And, chopping off a few years may not increase your monthly payment significantly.
However, some want and need a lower monthly payment and choose to refinance at a lower interest rate. Just remember that extending the length of your loan will cause the overall cost of your home to increase, unless you budget in extra payments when your financial situation improves.
A 15-year fixed-rate mortgage at lower rates is tempting. But, monthly payments are higher than 30 year loans. Flexibility is forfeited when money gets tight so emergency savings is crucial. Choosing to make extra payments may be better than refinancing especially for those with variable income.
I think ARMs should be avoided. With the prospect of rates continuing to rise, a fixed rate mortgage prevents higher payments because of the locked-in rate. Moving from an adjustable-rate to fixed-rate mortgage is strongly advised.
This is a clear conflict of interest and not for your good. Choose your own appraiser, real estate attorney, survey company and any other professionals you need. Get references from those you trust.
Refinancing is simpler than taking out an original mortgage. If you can lower the mortgage payment enough to recoup your costs it can be a wise financial move but do the math and factor in the stability of your job and overall financial condition.
Some say better terms can be secured during the last half of the last month of the quarter. Especially consider the final two weeks of October and November or the first two weeks of December.
Include credit unions in your research. They pass on savings to their members whereas banks generate revenue for their investors.
Remember, “By wisdom a house is built, and by understanding it is established.” (Proverbs 24:3)
Do your research, ask God to help you make a decision that both honors him and allows you to live generously with the money He’s provided. For more practical help with your finances, download the Money Map. It’s a step-by-step guide that will help you find financial freedom and reach your goals. In fact, buying a house is one of the steps! Download your copy for free here.
Originally published on the Christian Post, October 20, 2017
Dear Chuck,
I have been in my current job for only two years since graduation and am starting to feel I made a mistake. I don’t like the hours I am required to work and the compensation is not keeping up with my needs. To make it worse, the outlook for this field is bleak. What career fields have a promising future and how can I make the transition?
Any advice?
Frustrated in Ohio
Dear Frustrated in Ohio,
So sorry to learn you don’t like your job or career path. Yes, I have lots of advice and have even done some research for you.
Finding a satisfying career that pays well is indeed challenging. There are so many choices today! Books, articles, counselors and podcasts are informative, but there’s one aspect in career planning that tends to be ignored.
When making a career choice you must consider how a specific job will fit. We each have a unique design that includes individual gifts, talents, and purpose. Our greatest satisfaction and success is found when putting these to use. Knowing how God has wired you will help you find a much better job fit and avoid unnecessary career changes in the future.
There are many websites that offer the latest statistics on job trends. LinkedIn’s list gives data for the most promising jobs of 2017 based on the potential for career advancement, job growth, and salary. The list is primarily composed of jobs in finance, technology and healthcare, but fails to give the personality traits that match the job.
Here are some trending jobs matched with key personality traits.
A nurse practitioner is an advanced registered nurse that provides health maintenance through diagnosis and patient focus. This career has been consistently growing, and is expected to continue.
This entire job focuses on the care of others, so it is extremely important to be compassionate and have a desire to help people. It’s detail-oriented, so one needs to be very organized. Not everyone has these characteristics, but if you do, it could be a great fit.
The field of therapy in general has grown steadily, but physical therapy specifically has seen rapid growth in recent years. Another career in the medical field which centers on the care and help of others, this role demands support and patience. It is about encouraging others to put forth effort into their own healing, and requires understanding and encouragement.
A personal advisor assesses the financial needs of clients and creates a plan that leads them in wise decision making. Daily tasks of this job require one-on-one interaction and planning for these individuals. People that are social, organized, and analytical could excel in this career. Working with numbers is essential, so if math was your least favorite subject in school, keep looking!
Data engineering is one of the newest and fastest growing careers. These engineers create and maintain databases in which they extract and analyze large amounts of data. This field requires workers who are analytical, objective, and independent. Many perceive that being distant or introverted is a weakness, but, in this job, it is an asset. This career demands a lot of independent working and objectivity is crucial to avoid any bias in data output.
Customer success managers develop customer relationships to promote retention and customer satisfaction. This job requires a people person with strong social skills. The extroverted, ambitious person could find fulfillment in this role. Those who are more reserved might not be as comfortable. Patience and tolerance are necessary, because they deal with all sorts of people.
A school psychologist is someone who counsels students on their ability to learn as well as listening to their needs and supporting their overall success. This job is all about being supportive and caring about what each student is saying. People high in compassion with strong listening skills may find this role a fit.
Software developers handle the design and maintenance of software systems in computer programs. This career has been around awhile but still continues to grow. It requires people who enjoy technology and computation.
The person who can deal with change and develop new, up-to-date software will enjoy technology which is constantly changing. Someone who’s adaptable, precise, and enjoys working independently could find satisfaction in this field.
Everyone is unique. “We are His workmanship, created in Christ Jesus for good works, which God prepared beforehand that we should walk in them. (Ephesians 2:10 ESV) Your career satisfaction will only be maximized when you know what you are uniquely designed to do and then match that with the career that needs your skills, talents and personality.
Crown’s Career Direct assessment evaluates your personality, interests, values, and skills so that you can confidently see how your career choice aligns with your design. This investment in your personal growth will allow you to rejoice like David when he said, “I will praise You, for I am fearfully and wonderfully made.” (Psalm 139:14a ESV) Then, find the job that matches your personality. It’s a huge part in a successful career that will ultimately bring glory to your Designer and satisfaction with your career.
Originally published on the Christian Post, October 13, 2017
Dear Chuck,
Is fantasy football gambling? My oldest sons (14 and 17) and husband are really into it and I am wondering if it’s the right decision for them. Does the Bible say anything about something like this?
Thanks,
Concerned Mom
Dear Concerned Mom,
Fantasy football is big business and many do consider it gambling from a legal and moral perspective. Even though it can be played without gambling money, many “leagues” require an entry fee, which involves risking money in an attempt to gain more. Offline betting on leagues is illegal, but rampant. It has culturally been accepted as “entertainment” or “just a football contest” since some argue it is based on more controllable variables than simply random chance.
My understanding is that fantasy football involves compiling a group of players you expect to perform well in upcoming games. Some play for daily prizes, others for only a season, and some do both. You earn a certain number of points based on how well your chosen players perform in real-life games. You win by earning more points than your opponents. The winner of the league is then usually determined by the team with the best win/loss record for the season. Seems relatively harmless, right?
Fantasy sports is a multibillion dollar form of “entertainment” occupying the time of approximately 60 million players here and in Canada, according to the FSTA. That’s a lot of money, and a lot of time invested by a whole lot of people.
A poll of 500 fantasy football participants was recently commissioned by LendEDU.com. Respondents, on average, spent a little under an hour a day working on their fantasy teams while at work. Using the median wage for U.S. workers of $44,148 and assuming players spend 13 weeks researching and playing, then more than $1,100 is lost per player in productivity each season. If 60 million players are using their computer or phone to do research or lineup changes on company time, then employers are being silently robbed.
Whether players bet or not, and whether they use company time or not, the question that still begs to be answered is “why?” Knowing people are dying spiritually and suffering physically around the globe, is this the best use of a Christian’s time and money?
We are a society fixated on entertainment. Believers can get way off mission when distracted by things of this world. Sacrifice, service to others, and spiritual growth wanes when our attention is given to trivial things.
Entertainment appeals to the flesh, but it cannot satisfy man’s deepest longings. It is a temporary fix at best, but can actually be a vice or idol. Disguised in a way that offers fun and “fellowship”, it distracts God’s people from their true calling, demanding time that cannot be given back and money (for those who are betting) that would be better invested elsewhere, and can lead to a gambling addiction. And, unfortunately, statistics show that gambling promotes other vices.
To entice someone to gain money at the certain loss of another violates virtually every principle taught by Christ. It promotes selfishness, greed, and covetousness. It is not God’s way that others must lose their money so that I can win.
Furthermore, we’re setting an example to our families, friends, neighbors and church members. What does this say about what we value? Are we being conformed to the world if we are caught up by the entertainment it offers?
We’re responsible and accountable for our actions regardless of what others do. We’re to look beyond the temporary rewards of the world to the eternal rewards of living in the light.
As Paul proclaimed, “If then you have been raised with Christ, seek the things that are above, where Christ is, seated at the right hand of God. Set your minds on things that are above, not on things that are on earth.” (Colossians 3:1-2)
We don’t have time to waste! Our life on earth is fleeting and the impact, the legacy we leave must be seen through the eyes of faith.
For we ourselves were once foolish, disobedient, led astray, slaves to various passions and pleasures, passing our days in malice and envy, hated by others and hating one another. But when the goodness and loving kindness of God our Savior appeared, he saved us, not because of works done by us in righteousness, but according to his own mercy, by the washing of regeneration and renewal of the Holy Spirit, whom he poured out on us richly through Jesus Christ our Savior… (Titus 3:3-6)
Having this eternal perspective of our money does not come naturally to us. We have to learn what the Bible says about how we are to steward our time and money. Crown’s online MoneyLife Personal Finance Study was created to help you learn what the Bible says about stewardship. Through this online study, you’ll learn what God says about every area of your finances, and how to become a biblical steward. I would encourage you, your husband, and your sons to all enroll together.
Consider asking your men to evaluate their involvement with fantasy football by asking some pointed questions:
Are you preoccupied with this “entertainment”?
Are you honoring your employer by avoiding using your company time to check on your game?
Is it affecting your schoolwork?
Have you kept track of how much time it actually consumes in your day?
Are you borrowing money to play?
Are you chasing losses?
Are you giving more money to the church than you are spending on fantasy football?
Are you causing a weaker brother to stumble?
Does Christ deserve more of your heart?
Regardless of their motive or current fascination with fantasy football, I hope you will be able to make progress in directing their time and attention to the things that truly will matter when the stewardship of our time and money is ultimately evaluated.
I hope they will be able to say as Paul, “Indeed, I count everything as loss because of the surpassing worth of knowing Christ Jesus my Lord.” (Philippians 3:8).
Originally published on the Christian Post, October 6, 2017
Dear Chuck,
My sister’s home in Houston was seriously flooded during Hurricane Harvey. She and her family are fine, but in shock! They lost both cars, and his business is shut down until they can recover. What should they do now? Any advice?
Thanks,
Harvey and Irma
Dear Harvey and Irma,
I am so sorry to learn of the losses suffered by your sister and her family. We have witnessed so many lives lost or seriously disrupted by the onslaught of hurricanes, tropical storms and fires in the United States in the past sixty days, not to mention the devastating earthquakes in Mexico. This is a good question that I have answered privately for a few friends and am happy to share my response more broadly.
My parents were impacted with property damage by one of the most devastating tornadoes in American history that hit Wichita Falls, Texas in 1979. I understand how overwhelming these events can be!
In the middle of a crisis, people usually can’t think logically. But, there are several important things you need to do when disaster strikes. Your sister has probably already done a number of these steps but hopefully they will help guide her. It is also good for anyone to keep this information where you can find it in a hurry if a natural disaster strikes. We compiled all these points in a checklist to make it simple.
Immediately contact your family and network of close friends. Provide your location, condition, and how they can stay in contact with you. Social media, if available, can be beneficial. Ask for prayer, being honest about your needs and the financial implications. Some may be willing and able to help. Others may offer direction or connect you with people who can assist you.
As soon as possible, contact your church family and give them pertinent information. They will often be the first to mobilize local assistance. Tell them your needs and be willing to accept help. If the disaster is widespread in your community, find ways you can serve others. The Bible tells us that the Body is made up of many parts and each of us has a purpose. “If one member suffers, all suffer together; if one member is honored, all rejoice together.” (1 Corinthians 12:26) Use your gifts and talents to sacrificially support, serve and comfort one another.
FEMA (Federal Emergency Management Agency) is a government agency that supports citizens and first responders during times of emergency. You can find up-to-date resources and information on their website.
Notify your primary insurer(s) and ask about your coverage. Find out what assistance is available, if any, and inform them of your circumstance. Take pictures of the damage you or your property has sustained during the disaster.
You’ll need to reset your budget for the immediate short-term and focus on the essentials while you regroup. This budget is based on the same biblical principles as your normal one, but with key adjustments since your income may be temporarily disrupted. Do not fear or panic. Pray, remain calm and focus on basic necessities. Remember, God is the owner and provider of all things. “The earth is the Lord’s, and everything in it, the world, and all who live in it.” (Psalm 24:1 NIV). He will faithfully carry you through this crisis.
Often employers have plans for assistance or provisions for employees affected by disasters. Make your needs known and ask your employer to work with you while you get your life back to normal. Remain in contact. If self-employed or running your own business, communicate with your key customers and staff. Share plans you’re making to take care of your accounts.
Once you have all the information from relief organizations and your insurance company, make a plan for your future. How has your job or income been affected? Can you recover your losses? Are you going to rebuild? What are your short-term and long-term plans?
The Crown Money Map may be a helpful guide as you contemplate your future financial plans. Carefully make decisions. Be slow to make major financial changes while in shock or grief. Recruit a trusted friend or family member to help. Keep your guard up. Scammers, criminals and con artists prey on those most vulnerable or desperate. Be extra careful when hiring any labor, especially when rebuilding your home. Find helpful tips for hiring a reputable contractor here.
If your job or business is interrupted and extra income becomes necessary, consider a part time job to carry you through. Companies like Uber, Lyft or Upwork offer opportunities for part time, contract work. Many jobs arise during the cleanup and rebuilding following a disaster. It’s possible that an economic boom will occur in the area as relief funds pour in. Consider hiring out as a contractor via websites like TaskRabbit or Handy. Home-based businesses like making meals for workers and volunteers or childcare for families rebuilding their homes are possible ideas.
Job lost his business, his servants, his assets, his children and his health – one right after the other! Amidst the shock, horror and grief he proclaimed:
“Naked I came from my mother’s womb, and naked I will depart. The Lord gave and the Lord has taken away; may the name of the Lord be praised.” (Job 1:21 NIV)
Cast your cares upon the Lord for He cares for you. He will never leave you or forsake you. Don’t lose faith. He can deliver you safely through your darkest valleys.
Feel free to refer your sister and her family to Crown for financial coaching during this team. We have trained volunteers that would be very willing to help them work through the myriad of financial decisions ahead.
We have also compiled all these important steps in a checklist. Download it, print it, and keep it in a safe place. Feel free to share it with others and those trying to recover from these disasters around the world.
Originally published on Christian Post, September 29, 2017
