Dear Chuck,

I’m in a pickle. My wife and I both drive very nice cars. The problem is that I’ve fallen behind on payments, and my wife doesn’t know it. Should I sell the car? 

Behind on Car Payments 

Dear Behind on Car Payments, 

Open up to your wife—sooner is better than later. Ask for her counsel and help before you make a rash decision. Transparency builds trust. Having both of you praying, talking, and seeking the best solution together is a double win. 

Without knowing more about your overall financial picture, my sense is you need to sell one or both as soon as possible. Then buy something used and dependable that you can afford by paying all cash. Or try doing what my wife and I did. We got by with one vehicle for an entire year by simply planning ahead. It took some effort, but it was worth the challenge. If public transportation is an option for you, try doing without two vehicles as you work to get your finances healthy. 

Understanding the Cost of Owning Your Car 

GOBankingRates Survey: 

The typical cost of owning a car comes to $762 a month. That adds up to $9,144 per year, including payments, insurance, taxes, repairs, and gasoline. 

MarketWatch Guides Survey: 

• On average, drivers spend 20% of their monthly income on cars. 
• One in ten spend over 30% of their monthly income paying auto loans. 
• Nearly two in five can’t afford necessary repairs and upgrades for their cars. 
• Two in five feel their car expenses have impaired their ability to afford other essentials. 
• Nearly one in two feel they can’t save or invest due to car-related costs. 
• 25% admit to owning a car outside of their budget. 
• One in eight live paycheck to paycheck due to the financial strain of cars. 

Four Reasons Owning a Car Can Make You Poor:

From a GOBankingRates article published at yahoo!finance:

• You’re spending more than you can afford.
  Most financial experts limit car payments to 10% of take-home pay. Total car expenses should not exceed 20%.

• You purchased a car out of your price range.
  One in ten drivers spend 30% of their monthly income just paying down auto loans—three times the recommended figure. Just because you qualify doesn’t mean you should spend that much. Know what you can comfortably pay before shopping in order to achieve your financial goals. Dealerships make money financing their cars.

• You keep having to pay for repairs.
  Either you bought a lemon or you’re not maintaining it. Unexpected expenses, like major car repairs, threaten financial security.

• You can’t achieve your financial goals because car expenses take priority over saving and investing. Any unexpected event can push you over the financial cliff. 

A $69/Month Car Payment?

Buying and driving good used cars has many financial benefits:

• Insurance costs less.
• Maintenance and repairs are often less.
• Depreciation results in a much lower purchase price.

I had been driving a 2007 Toyota that I purchased in 2009 during the “cash for clunkers” initiative implemented by the federal government. They incentivized dealers to overvalue trade-ins in an effort to get older cars off the road due to their higher contributions to air pollution. This drove the price of used cars down significantly. I was able to buy the vehicle I wanted for $3,000 under full retail value at that time. Follow me here. After driving the vehicle for 15 years, the used car market had completely changed. COVID caused a shortage of new cars which drove the price of used cars much higher. The value of my 2007 Toyota, now 17 years old, was now only $5,000 less than I originally paid for it!  

I never paid any interest on a loan or any major repairs. My cost per mile driven over 15 years was very, very low. Consider this. Driving the same car for 180 months that only cost me $5,000 would be the equivalent if I had financed the car at zero percent interest for $69/month for 72 months. My cost per month over the period of ownership would be the equivalent of paying $27 each month besides gas and maintenance. 

Avoid Becoming “Car Poor” 

Rebecca Lindland, Cars Commerce auto data and insights director, thinks consumers should focus on the total cost of a vehicle instead of just the sticker price. “Go into your car shopping journey understanding what payment you’re comfortable with, understanding what size vehicle you need, really knowing your requirements and then not overspending, because just like, there’s nothing worse than being house poor, there’s nothing worse than being car poor,” she advises.

She says that because trade-ins are in short supply, shoppers may receive great offers. The downside is that buyers are looking at higher prices for used cars or trucks.  

“There’s a shortage of specifically one to five-year-old vehicles. But the silver lining is that if people are trading in a vehicle from one to five years old, it’s actually worth almost 23% more than it would have been in 2020,” she adds.

Strategy for Eliminating Car Payments

Many cannot imagine paying cash for a car, so here are some tips. 

If you’re currently making payments on a car: 

• Accelerate payments so that you can own the car as quickly as possible and eliminate the cost of interest payments. If there’s a prepayment penalty, see if it is less than your remaining interest payments.
• As soon as you pay off your loan, continue to make payments to your own bank account, as if you still had car payments. 
• Do this until you accumulate the cash needed to make your next purchase without borrowing.  
• This plan will save you lots of money and create more financial margin in your budget.  

If you have no payments but want/need to buy a newer/different vehicle: 

• Direct automatic payments into a savings account.
• Do this until you accumulate the cash needed to make your next purchase without borrowing. 

Set and achieve your goals with the help of a personal business coach. Crown’s online Budget Coaching program matches you with a certified coach who will work with you to develop a customized plan to put you on the road to financial freedom. 

This article was originally posted on The Christian Post on

July 5, 2024. 

Dear Chuck,

We want to renovate our home by using some of the equity we’ve accumulated. Our home is in a highly desirable area and has tripled in value. We have several years left on our current mortgage. How can we be good stewards of this renovation?

Renovation Without Regrets

Dear Renovation Without Regrets, 

I take it you are considering a 2nd mortgage for the renovations. Let’s focus on what it looks like to be a wise steward if you choose that financing option.  

Understanding 2nd Mortgages

Home equity increases with each mortgage payment, certain home improvements, the location of the home, and inflation. It is the difference between what a home is worth and how much is still owed on it. If a house is worth $400,000 and $200,000 is still owed, the equity is $200,000. Most lenders will allow you to borrow 85% of a home’s value (including the 1st mortgage).

Far too often, people borrow against the equity in their home and use it for unwise purchases, like an RV, a vacation, or a business startup. Keep in mind that it is called “2nd” because if a bankruptcy or foreclosure occurs, it is paid off after the original mortgage. If the sale of the home only covers the payoff of the 1st mortgage, the 2nd mortgage is viewed as a personal loan that you are responsible for paying. Although the cash given in this kind of loan can be used for anything, it is safest to use equity to build more equity.

What Is a 2nd Mortgage?

• It is cash given and secured by equity in your home.
• It is a completely separate loan from your primary mortgage.
• Monthly mortgage payments will be required on both loans. 
• Typically, they have higher interest rates than primary mortgages.
• They cost less than a credit card, and customers may be able to borrow more than with a credit card.
• They’re helpful if cash is needed in an emergency and the borrower knows he/she can sell the house to cover both mortgages. 

According to Bankrate.com:

• The home equity stake of the average American homeowner with a mortgage is worth $299,999, $193,000 of which is “tappable” (able to be withdrawn while still maintaining a healthy 20% equity stake).
• The average homeowner has gained $24,000 in equity since Q4 of 2022. 
• Over 46% of mortgage residences are “equity rich,” meaning their outstanding loan balance is less than half the home’s value (meaning the owner owns at least 50% of the home outright).
• Underwater properties represent 2.1% of all residential mortgages.
• Home equity lending has decreased. Home equity loan originations were down 8% year-over-year in Q4 2023, and HELOC originations fell 29%. This is due to the increase in interest rates or borrowing costs. 

Types of 2nd Mortgages 

• “Piggyback loan” (80-10-10):
  A 2nd mortgage is taken alongside a primary mortgage, so borrowers avoid paying mortgage insurance by combining a 2nd mortgage for 10% of the home’s cost with a primary mortgage, for 80% of the cost of the home.

• Home equity loan (HEL):
  A lump sum is given and repaid at a fixed rate over a set term.

• Home equity line of credit (HELOC):
  These are open-ended with the borrowing limit and draw period; money is withdrawn as needed and repaid over time at an adjustable rate. They are popular for home repairs and renovations because the interest rate is lower than credit cards and some other types of financing.

Wise Stewardship of the Renovation

First, determine if you can afford this project. Establish a budget for what the total renovation will cost. Next, look at your budget. Apply your debt-to-income ratio (debt payments divided by monthly income) to determine how much of your monthly income should go to housing. Lenders like a ratio of less than 43%. You should be comfortably beneath this ratio for the 1st and 2nd mortgages combined. Otherwise, abandon the idea of using any type of 2nd mortgage, and wait until you have saved enough to pay cash. Because you may be close to paying off the 1st mortgage completely, consider waiting until you own the home without a 1st mortgage. 

If you are comfortable increasing your debt with a 2nd mortgage, consider contacting the lender of your original mortgage since they’ve got your record of payments. Compare rates, upfront and closing costs, and annual fees (for HELOCs) with other companies. Avoid prepayment penalties. If you’re offered a lower rate for a HELOC with higher borrowing limits, use constraint, or you’ll drain the equity. 

You can also use your equity to purchase a 2nd home—details here. With a home equity loan, you can put the money toward the down payment and closing costs.

The interest paid may be tax deductible, depending on how the funds are used. “The IRS stipulates that for the interest to be deductible, the loan must be used to buy, build, or substantially improve the residence that secures the loan.” Dennis Shirshikov, head of growth at Awning.com, said, “If buying property adjacent to you that enhances the primary home, you may get a tax break.”

My Suggested Steps

• Get an official home appraisal.
• Calculate your home equity.
• Know your credit score—it must be at least 620. 
• Get a solid estimate of renovation costs. 
• Review your budget.
• Provide proof of current income and debts.
• Research legitimate lenders: reviews, rates, fees, and closing costs.
• Complete an application.
• Read the documents thoroughly. Question anything you don’t understand before signing.
• Close.

Yellow Flags

The risks of a 2nd mortgage include added debt, the risk of foreclosure, and variable interest rates with HELOCs. Consider the following:

• Can you realistically manage both payments—not just today but in years to come?
• Have you thought through the “what-ifs” that might impact your income? 
• Do you have a solid emergency fund?
• Have you considered a cash-out refinance should mortgage rates drop in the future? Though closing costs can be higher, the rates are usually lower than HELs or HELOCs.

Consider the times, pray, and seek wise counsel. If you’re married, make sure you are united in the decision. Ask God for wisdom; He gives it generously without reproach. 

“By wisdom a house is built, and by understanding it is established;
by knowledge the rooms are filled with all precious and pleasant riches.”

Proverbs 24:3–4 (ESV)

For extra guidance and support, Crown’s online Budget Coaching program matches you with a certified coach who will work with you to develop a customized plan. 

This article was originally published on The Christian Post on June 28, 2024.

Dear Chuck,

My wife is miserable with her job, but unfortunately, her income is needed at this time to pay off a lot of debt. We need some guidance for a career transition, as her nerves are frayed every day. 

Looking at Career Options 

Dear Looking at Career Options, 

It is very painful to be miserable at work—been there, done that. However, my first reaction was not about the job but the statement that you have a lot of debt. It is time to launch an aggressive effort to pay down your debt so that you eliminate the pressure you are under regarding her career and income. It sounds as if she is working just to keep the family finances afloat. Once that pressure is removed, career changes take on an entirely different perspective. 

Don’t jump out of this job too soon. Be patient as you work together to put your plan in place. 

“Do not be anxious about anything, but in everything by prayer and supplication with thanksgiving let your requests be made known to God. And the peace of God, which surpasses all understanding, will guard your hearts and your minds in Christ Jesus. (Philippians 4:6–7 ESV)

Here is some general advice for anyone making a career change.

Guidance for a Career Transition

Make a list of the things you like and dislike about your job. Perhaps you are working outside of your gifts and talents. Crown has a career assessment that helps people understand their unique design by analyzing personality, skills, interests, and values. It is an excellent tool for giving hope and direction to those who are bored, frustrated, or seeking the right field or career direction. 

Develop a Resume

Do you have a current resume? If not, begin the process of developing one. It is generally the first impression someone hiring gets to see and is extremely important for any successful job search. For help writing one, check out these articles: “Writing a Resume” and “Creating a Resume That Best Reflects You.”

Tap into Your Relationships

The most effective method of finding a new job is through your contacts. These could include family members, friends, business relations, business contacts, and your church family. Summarize your job search in a few sentences so they can do more than just wish you well. For example: “I am looking for a job in advertising sales with an online company. I need a base salary plus commissions. I’m willing to relocate but prefer to work from home. See the Tap the Hidden Job Market Through Networking section of the linked article.

Compile a Reference Pool

This is a list of people who know your work ethic, habits, experience, performance, and history. Choose a variety of people—clients, competitors, managers, or high-level colleagues who will feel comfortable speaking positively about you. 

Transform Your Job or Look Elsewhere

Seek the possibility of finding a more preferable position within the company. If you are bored, ask for a new challenge, or request a transfer to an area you desire. If additional skills or training are required, management may offer to pay for it. If the problem is working with difficult people, attempt to be a peacemaker to transform the work environment. If this does not help, make a plan to find a new job. If asked to compromise your integrity, find a new job. 

Look While Employed

I believe that the best time to look for a job is when you are employed. Most jobs today are found through personal referrals which is why relationships are so valuable. Check out this website’s list of the “9 Best Job Search Websites.” Many recruiters actively work with Linkedin.com. You may find this Forbes article helpful. 

In some rare cases, you may be able to discuss your desire to find a new job with your current boss or team. Avoid this, however, if you work in a hostile environment or in a company that is not built upon trust and mutual respect.

Pray 

While waiting, pray with and for your wife. Encourage her to consider implementing the following:

• Ask God to direct you and put you where He wants you to be. Open your heart and ask Him to counsel you as you read His Word. 
• Don’t presume upon God. You need to humble yourself and be open to where, how, and when He directs. 
• More is not always better or God’s will. Be open to options and alternatives to your own preferences. 
• Act on the God-given dreams and desires of your heart. When you hear God calling you to do something, obey.

If His will is not clear, a time of private prayer and fasting will be beneficial. He knows exactly what you need. Trust Him to open doors and move mountains to get you there. 

If credit card debt is a source of frustration, a valuable and trusted resource is Christian Credit Counselors. They can help consolidate debt to get you on the road to financial freedom.

This article was originally published on The Christian Post on June 21, 2024.

Dear Chuck,

I have the opportunity to buy a home from an older couple who needs to move to a retirement/assisted living situation. It’s a great house—one we can easily afford. The problem is that our home was foreclosed on in 2008 due to the Great Financial Crisis. Although we have recovered financially, I am occasionally plagued with fears of making another mistake. It was a major strain on my marriage… Should I go ahead and buy it?

Plagued by Financial Fear

Dear Plagued by Financial Fear, 

It may feel like you are the only one, but by some estimates, half of all Americans have experienced some sort of financial hardship or failure. I had both in my young adult years, related to mistakes with money. Before you and your spouse decide to buy this home, which, by the way, sounds like a great idea, let’s talk about your fears. 

A Priceless Lesson Learned

You and I both know that we can learn from our mistakes. Pain is one of our very best teachers. Judging from your description of your “recovery,” it sounds like you don’t plan on repeating your past financial mistakes. Unfortunately, even though we can become wiser through our mistakes, we can also become paralyzed by the fear of failure. Not until you are able to put the fear behind you can you say that you have “fully recovered” in all aspects of what you went through in the foreclosure of your home. 

Fear works against us. It prevents us from doing things that could bless our families and potentially have positive outcomes. Sometimes, we get so preoccupied with the past that we cannot see our own progress or present successes. We can even lose hope for the future. Fear keeps us in bondage. It is a stronghold that can stunt our spiritual maturity and keep us from experiencing an abundant life. 

God is aware of our limitations and the mistakes we make. Thankfully, He is greater than our weaknesses and our mess-ups. Nothing takes Him by surprise, and nothing is too hard for Him to redeem. 

Remember that the Apostle Paul was weak and tired of the thorn in his flesh. But he said it kept him from becoming conceited. Three times, he pleaded with the Lord to have it removed. But the Lord answered, “My grace is sufficient for you, for my power is made perfect in weakness.” Paul continued by saying, “Therefore I will boast all the more gladly of my weaknesses, so that the power of Christ may rest upon me. For the sake of Christ, then, I am content with weaknesses, insults, hardships, persecutions, and calamities. For when I am weak, then I am strong.” (2 Corinthians 12:9–10 ESV)

Overcoming Failure

To renew your mind, use the 3 R’s: Repent, Rest, and Rejoice.  

• Repent: Repentance is part of learning from mistakes. Come humbly before God to confess your failures and surrender your future. He’s slow to anger and abounding in love. God can always redeem your mistakes for His purpose. 
• Rest: Rest in the finished work of Christ who loved you and gave Himself for you. “There is no fear in love, but perfect love casts out fear. For fear has to do with punishment, and whoever fears has not been perfected in love. We love because He first loved us.” (1 John 4:18–19 ESV)
• Rejoice: Move forward in hope! “Trust in the Lord, and do good; dwell in the land and befriend faithfulness. Delight yourself in the Lord, and he will give you the desires of your heart. Commit your way to the Lord; trust in him, and he will act.” (Psalm 37:3–5 ESV)

No matter your failure, remember this: “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)

King David committed grievous sins, but the Psalms are filled with his praise of the Lord and heartfelt repentance. 

Letting failure consume your thoughts can prevent you from moving on and making yourself available for what God has in store ahead. We are prone to protect our pride, so we must take on an attitude of humility and admit that we will never always be right. Life is always going to be filled with both successes and failures. Once we accept this fact, knowing that the Lord will never leave us or forsake us, it’s easier to move forward and continue on with life.  

To Buy or Not to Buy?

Before making an offer, pray for unity with your spouse and guidance from God. Ask Him to bless the house for His purposes. Your mistake was more than 16 years ago; it is time to move ahead with faith in God and be wise stewards of what He has provided. 

Resist the urge to compare yourself to others. Choose to abide in Him; unite your heart with His so your desires align with His. When you follow God’s plan, you live without fear of failure. 

Crown’s Budget Coaching program can offer additional encouragement and support in analyzing your financial status. Your coach will work with you to develop a customized spending plan and debt elimination strategy to help overcome your fears and allow you to follow God’s plan.

This article was originally published on The Christian Post on June 14, 2024. 

Dear Chuck,

I heard “buy now, pay later” data will soon be reported to credit bureaus. I hope this is true! My daughter got into financial trouble during her first year out of college by getting sucked into these easy payment plans. How do I help her and her friends open their eyes to the dangers of this type of debt? 

Concerned Mom 

Dear Concerned Mom, 

Easy credit leading to financial challenges has been around for a long, long time. I grew up in the age of “layaway.” You could select what you wanted to purchase and make interest-free payments for a few weeks or months. However, the buyer was not allowed to take possession of their purchase until the final payment was made. Today, that plan has been modified to make it even more enticing and risky. 

Buy Now, Pay Later 

The use of buy now, pay later (BNPL) plans is growing fast. Sometimes, it is used to cover basic necessities. Total BNPL spending last year came to $75 billion, a 14% jump from the previous year. Experts expect usage to double or even triple over the next five years. 

More than one-third of U.S. adults are estimated to have used a BNPL service, where purchases are divided into several interest-free installments. With only a few questions to answer and flexible requirements, buyers are given a plan to split their payments over several weeks. 

Bankrate senior industry analyst Ted Rossman says, “BNPL terms vary widely. Sometimes it’s four interest-free payments over six weeks, other times the plan can stretch on for many months or even years. And while some of those longer plans charge a low interest rate — or no interest at all — other times there is an interest rate and it can be even higher than what a credit card would charge.”

Unfortunately, in a recent survey, 56% admit to overspending, missing payments, regretting purchases, or facing challenges getting a refund or returning items. The most common reasons people use BNPL services:

• 50% – Want to pay in installments to spread the cash flow
• 37% – Low or no interest rate
• 33% – Knowing what they owe and how long the plan will last
• 27% – Easy to obtain credit 
• 26% – Feel more responsible than using a credit card
• 20% – Retail promotion
• 20% – Recommended by friends/family
• 2% – Other

Pros/Cons of BNPL plans

• They come with fixed repayment schedules. 
• Purchases are attainable for those without access to credit cards.
• People lose track of what they owe and spend more than they should.
• There are late fees, deferred interest, and other penalties.
• Few protections and regulations are in place.

Discernment and Self-Control 

If used responsibly, BNPL can help in financing a large expense without interest charges. The key is discerning needs from wants and understanding the terms. Self-control is needed to avoid overspending and entrapment to debt. It goes without saying that couples must be transparent about their purchases so that they don’t get overwhelmed with multiple payments. 

Phantom or Shadow Debt

BNPL has been described as phantom debt, a term some economists use to describe debt that is not centrally monitored. 

A problem exists in regulating how data is given to the major credit bureaus: Equifax, Experian, and TransUnion. As a result, lenders may not know how many loans a consumer has outstanding. “It’s hard to know how much of this debt is out there,” says Ted Ross, senior industry analyst at Bankrate. “It’s this kind of shadow debt that’s hanging over people.” Tim Quinlan, senior economist at Wells Fargo, told CNBC, “Because no central repository exists for monitoring it, growth of this ‘phantom debt’ could imply total household debt levels are actually higher than traditional measures.”   

To see how they are currently reported and how it may impact credit scores, see here. 

A Problem of Fraud

BNPL can invite synthetic identity fraud. Cecilia Seiden, VP of market strategy at TransUnion says, “This is when fraudsters use a combination of legitimate but unconnected pieces of personally identifiable information (PII) to fabricate a person or entity and use it to apply for credit with a low bar to entry, like BNPL… Once a synthetic identity is established and begins to build credit, institutions often have no idea what their level of exposure is.” 

 “Buy now pay never” is how some have begun to refer to these programs as they look for ways to rip off the business that extended them the loan.

Protection for Customers and Businesses 

On May 22nd, The Consumer Financial Protection Bureau (CFPB) ruled that BNPL lenders are credit card providers and must provide consumers some protections and rights given under conventional credit cards, such as the ability to investigate disputed charges and pause payments during that time, get a refund for returned products purchased with a BNPL loan, and receive bills that disclose fees. Many lenders already conduct business in this way. 

Proper reporting would help reveal or thwart fraud in either direction. In addition, responsible BNPL consumers could improve their credit score which would enable them to gain access to other credit products, even securing a mortgage. 

Biblical Perspective on Debt

“The rich rules over the poor, and the borrower is the slave of the lender.”

(Proverbs 22:7 ESV)

Many are in debt today because they have not managed funds appropriately. Applying Biblical financial principles to everyday life and teaching others likewise will bring much-needed attention to the growing problem of excessive debt in our nation. Training in responsible spending, contentment, and constraint is necessary for people everywhere. When we begin to acknowledge that everything belongs to God, we will gain a mindset of wise stewardship. 

I hope this helps your daughter and you. 

If credit card debt is holding your daughter, or anyone else you know, in bondage, a valuable and trusted resource is Christian Credit Counselors. They can help consolidate debt to get one on the road to financial freedom. 

This article was originally published on The Christian Post on June 7, 2024. 

Dear Chuck,

Our 11-year-old son was invited to try out for a competitive baseball travel team. We have three children, and I’m not convinced it’s the best use of our time and money. My husband and I are divided over the decision. Where do you fall on the issue?

Divided About Kids’ Sports 

Dear Divided About Kids’ Sports, 

This one hits close to home as I once coached one of our son’s competitive baseball travel teams. Before I share our experience, let’s look at the bigger picture of the growing trend of competitive sports programs for children as young as eight years old. 

Get on the Same Team

I can offer some data and perspective to assist you in getting united. Foremost is motive. Be sure your child (not the parent) is the one most interested in the sport. Too often, I have seen a parent wanting the child to excel far more than the child desires. Both parents should be on the same team—that is the team of what is truly best for your child and family.

Financial and Emotional Pressure

I don’t know your financial situation, but a 2022 survey by Lending Tree revealed that 60% of families say youth sports are a financial drain. Parents can easily spend $10,000 a year for a child to play on a travel team. For those who don’t know what a travel team is, it is typically a group of select players with advanced ability who play in local, regional, state, or national tournaments against other select teams. 

Some families feel the pressure to hire a private coach, which can be very expensive. Travis Dorsch, who played briefly in the NFL, found that kids in youth sports perceive more pressure when parents spend a greater percentage of the family income. The focus often shifts from fun, skill, and competency to winning. 

Besides the cost, competitive youth sports are time-consuming. Children may suffer burnout and risk injury. Parents can be influenced by the delusion of college scholarships and the dream that their child may one day become a professional athlete. Unrealistic expectations to perform and continually improve can add to already prevalent stress and anxiety in youth today. 

I suggest you read and use these helpful guidelines set by NATA (National Athletic Trainers’ Association). When children focus on one sport too early, they miss the experience of trying others that they actually may prefer. “Inside the High-Stakes, Zero-Sum Game of Youth Club Sports” is a revealing look into the life that some experience in club sports. 

Pros of Select Sports Teams:

• Fun
• Travel
• Skill and confidence-building
• New friends and expanded social network
• Potentially a time of family bonding
• Learn how to manage time and emotions
• Learn to work in a team setting with various personalities

Cons

• Time lost on other good opportunities
• The financial cost 
• Pressure to perform 
• Inflated self-image
• Meeting the needs of children in the family who do not play 
• Negative exposure to things from teammates or coaches
• Balancing sports, school, church, and religious activities
• Early specialization increases the chance of burnout and injury

Too Much Too Soon? 

Costs often exceed the expected, once uniforms, gear, private coaches, food, travel expenses, gifts, trophies, etc., are totaled. It is easy to get out of hand and lose all perspective. 

Some people postpone saving for retirement and investing to afford a club sport. Others forego family vacations and cut back on entertainment. Some parents admit to spending more on team sports than they did for a college education. Elite team sports can rob children from exploring music, ballet, theater, art, agriculture, robotics, debate, speech, etc. It is important to keep a healthy perspective on raising children. The major consideration for people of faith should be how it conflicts with regular worship and church activities. See “Why We Pulled Our Kids From Club Sports” at the gospelcoalition.org. 

Our Experience 

One of our sons played select baseball from ages 9–12. His team only lost five games over those four seasons. He had some championship trophies that were tall and impressive. Four of the players in the league (one teammate) went on to be drafted by professional baseball teams, although none of them were able to make a lasting career out of it. One pitched in the College World Series finals. Our son has fond memories of it; however, he was burned out by age 13. He dropped out of baseball and took up tennis and other outdoor activities that he enjoyed. Some of the boys on our team said it was their greatest memory of their formative years. None of our other three sons wanted to be on a select sports team. Those big trophies were later discarded, and only memories remained. 

What Are You Willing to Sacrifice?

Rather train yourself for godliness;
for while bodily training is of some value, godliness is of value in every way,
as it holds promise for the present life and also for the life to come.

1 Timothy 4:7b–8 ESV

Only you can decide what sacrifices you are willing to make for club sports. Take time to pray, study, and discuss the topic thoroughly. The invitation to try out is exciting, but do not compromise your family’s needs and beliefs. Prioritizing a relationship with Christ with regular corporate worship sets the course for life. It has eternal value. Be sure it is not lost in the midst of pursuing a sports dream. 

Do you want more tools and tips on financial stewardship? Are you interested in receiving ministry updates from around the world? Sign up to receive the Crown Newsletter emails by using the form on the homepage at Crown.org.

This article was originally published on The Christian Post on May 31, 2024.

Dear Chuck,

My husband has Alzheimer’s. Should I use my retirement to fund his care? It will go quickly due to his medical bills, and I won’t be able to leave my daughters anything. An alternative is to have him go on Medicaid should I pass away first. 

Struggling with Senior Care

Dear Struggling with Senior Care, 

I am very sorry you are having this painful trial. It would be so helpful to have more information related to your ages, your daughters, and your comprehensive financial picture. Regardless, I will do my best to give you counsel and point you to some helpful resources. Please consider me just one source, and seek the counsel of more trusted advisors. 

Financial Programs for Alzheimer’s Patients

Over 5.5 million Americans are affected by Alzheimer’s disease and dementia. Some require 24-hour supervision, which drains funds and caregivers. The cost, worldwide, of dementia care is nearly one trillion dollars. Supposedly, mid-to-late-stage Alzheimer’s patients commonly qualify for Medicaid benefits; but because the program is handled by each state separately, benefits vary by location. It pays only if income and assets are below certain levels. The following options are worth looking into and are explained more fully at the website: Paying For Senior Care.com: 

• Medicare Advantage Programs
• Medicaid and HCBS Waivers and Alzheimer’s Care
• Nonprofits and Foundation Assistance
• State Assistance Programs
• VA Assistance
• Respite Care
• Reverse Mortgages
• Life Insurance Conversions
• Assistance or Medications
• Alzheimer’s Care Loans

If not yet 65, your husband may qualify for Social Security disability benefits.

I do not know your situation, but you may benefit emotionally and financially by continuing to work. Caring for yourself is vital to avoid becoming overwhelmed or discouraged. Join a support group, or start one in your church or community. Make a list of those you can call on when needed. Notify neighbors of your situation. 

Next Steps

• Hold a family meeting to discuss the situation. Be open and transparent. 
• Get legal and financial documents in order. See estate planning for dementia.
• Research community resources. The Eldercare Locator may provide help. 
• Research long-term care. Ask for recommendations from trusted individuals, family, and friends. My wife’s aunt was well cared for in a small facility run by Mennonites outside a major city. Think outside the box, and seek your options before they are actually needed.
• Research hospice care. Medicare covers this. 
• Helpful website: Nine tips for caring for a spouse with early onset Alzheimer’s. 

Learn how to protect your assets when your husband needs additional care. Here’s an article on protecting them for your spouse should you die first. Planning for the future and end-of-life care is important for all stewards to implement sooner rather than later.   

According to alz.org, the health and long-term care costs for people living with Alzheimer’s and dementia are projected to reach $360 billion in 2024. This does not include the value of informal caregiving. Medicare and Medicaid are expected to cover 64% of the total cost. Out-of-pocket spending is an estimated 25%. For more detailed information see the link above.

Your Daughters’ Needs

Consider giving an early inheritance. You will experience the joy of blessing your girls and alleviate some of your concerns about the unknown future needs of your husband. Just make sure you have enough funds set aside for your future care so as not to be a burden for them. Some gifts impact Medicaid eligibility. The federal government has a five-year look-back period in which the transfer of assets is scrutinized. I cannot overemphasize the importance of knowing all the details before you take any steps. You might consider consulting with a professional Medicaid planner or talking with someone your church or a trusted individual recommends. At the very least, do some careful research.  

Another option is to pay off your home mortgage, do repairs and maintenance, and eliminate outstanding debt. From what I have read, this does not violate the look-back period. The benefit is that it makes your home more comfortable and marketable when it comes time to sell or pass it on to your daughters. Again, study the look-back-period rules and loopholes well. 

Remember to meditate on the promises of God. He knows your pain, and He is near to all who call upon Him. 

“Listen to me, O house of Jacob, all the remnant of the house of Israel,
who have been borne by me from before your birth, carried from the womb;
even to your old age I am he, and to gray hairs I will carry you.
I have made, and I will bear; I will carry and will save.”

Isaiah 46:4 ESV

I’d like to invite you to join a free Crown Bible study on the YouVersion app. We have several devotionals regarding money and stewardship that will help bring God’s Word into your daily life and provide some much-needed encouragement during this difficult time.

This article was originally published on The Christian Post on May 24, 2024.

Dear Chuck,

We’re a large family who vacations ten nights per year over spring break and summer. In your opinion, is a vacation club (like Marriott) a good purchase, or should we look at purchasing a timeshare resale?

Looking for Vacation Savings

Dear Looking for Vacation Savings, 

First, it is a joy to hear you are a large family that is intentional about spending time together on vacation. I can also appreciate your desire to find the best possible value for using the money that goes into your vacation budget. 

I assume that you currently select a desired location where your family would like to spend their vacation. Then you do your research and select the best value option for a hotel, Airbnb, VRBO, or campsite. Let’s discuss your interest in joining a vacation club or timeshare to save money.  

Know the Real Costs

There are several things to consider in your analysis. A good decision will be determined by your family’s needs. I’ve read that vacation clubs are a modern form of a timeshare. Typically points-based, members purchase points and then spend them at resorts within a company’s portfolio. Traditional timeshares are often a fixed week at the same resort. Then there are travel clubs, which offer a variety of services for free or paid memberships. This website offers a vast amount of information. We will look closely at each option. 

The initial offers to join a club or timeshare always appear to be great bargains. The key is doing your research and understanding the long-term costs. It is difficult to recover the initial buy-in costs unless you happen to find an incredible resale deal. Just remember that timeshares rarely appreciate over time like a home. They are not considered an investment because they have limited potential to grow in value and come with high costs and fees. There is limited marketability, and they should not be purchased with the expectation of gaining income or capital appreciation. In addition, owners are at the mercy of property management.

Vacation Clubs

Vacation clubs grant members access to their properties and resorts for an upfront fee. Many work on a points-based system for location, dates, and accommodation at resorts, villas, condos, or hotels. Exclusive privileges may include discounts, priority booking, member-only events and amenities, concierge assistance, and vacation planning. Some exchange programs allow the trading of points for stays at affiliated properties. Annual dues or maintenance fees cover operating costs, property maintenance, and ongoing services. Here are some key points on vacation clubs:

• Expect an upfront membership fee or purchase price.
• Plan for annual dues or maintenance fees. 
• You have flexibility of destination and timing.
• They appeal to the adventurous who like exploring new places.
• Resale can be challenging.
• Memberships can vary in length; some have long-term commitments.

Timeshare Resale

A timeshare resale can be purchased from an existing owner at a lower cost than purchasing from a resort or developer. It’s possible to find great deals, but you are limited to what is on the market. A property’s reputation, amenities, and quality are important. 

Some resale companies offer exchange programs that allow you some flexibility. If the property has already been developed, you can begin using the timeshare immediately. However, the initial purchase price can be deceiving. You must factor in property taxes, maintenance fees, and exchange fees, which can all increase annually. Plus, if you decide to sell, restrictions and fees can be imposed, along with the risk of depreciation. Here are some key points on timeshare resales:

• Resales can be purchased at a significantly reduced price.
• Transfer fees and closing costs are incurred.
• There are annual fees.
• Be prepared for property taxes and other ownership expenses.
• There is less flexibility—you must use a specific property or properties.
• These appeal to traditionalists who desire familiarity. 
• There is usually, but not always, a market for resale. 
• Owners typically have a perpetual or long-term contract. 
• Maintenance fees may be required, even if you are no longer using the timeshare.

One drawback to purchasing a timeshare resale is the risk of dealing with fraudulent sellers. Deal only with a reputable broker or company before making any purchase. If the property sounds too good to be true, take special precautions! Here is an article on scams and how to avoid them.

CNBC reports that the timeshare industry is valued at more than $10 billion. One study found that 85% of buyers regret their purchase, and many go to the resale market to escape ownership. According to Brian Rogers, owner of Timeshare Users Group, a consumer advocacy and timeshare resale website, “Our general rule of thumb is most timeshares sell for between 0% and 10% of their original retail purchase price. And the majority of that focus is unfortunately on the 0%.” Watch this. 

Three thousand complaints were filed with the Better Business Bureau on two of the largest timeshare companies under Wyndham Destinations: Travel + Leisure and Hilton Grand Vacations.

Marriott’s Vacation Club

NerdWallet.com reports that ownership in Marriott’s vacation club starts at around $25,000. Maintenance fees include anticipated operating expenses, like repairs, insurance premiums, and real estate taxes. Points not used one year can be rolled over to the next, and borrowing points from the next year is allowed. There are family-oriented experiences through the Sheraton Vacation Club, which is just one of several clubs offered through Marriott. 

Ask yourself if this is the kind of vacation that will benefit the entire family in the long run. Can you afford the costs year after year? This website answers questions specifically about the Marriott Vacation Club. 

None of the Above

I, too, like saving money on a vacation, but I also like having the flexibility to vacation where I want during a time that fits my schedule. For that reason, I have never been interested in these. Although clubs and timeshares work for some people, I cannot recommend them. Consider working a loyalty program with a VRBO or Airbnb owner with a property in your family’s favorite destination. Ask if they will offer you discounts for your loyalty to their specific location each spring and summer. 

I’d like to invite you to join a free Crown Bible study on the YouVersion app. We have several devotionals regarding money and stewardship that will help bring God’s Word into your daily life.

The article was originally published on The Christian Post on May 17, 2024.

Dear Chuck,

Someone I care about routinely overspends with the justification it will help “grow his business.” The effort to give an impression of success is causing him significant financial stress: a new car, a Swiss watch, expensive clothes, etc. How would you address the situation?

Stressed for Success 

Dear Stressed for Success, 

I grew up hearing the term that some folks live “high on the hog.” It means a person is living in affluence and luxury or trying to convey an appearance of wealth when they don’t really have it.   

The source of this phrase dates back centuries and is said to come from the fact that the best cuts of meat on a pig come from the back and upper leg. The wealthy ate cuts from “high on the hog,” while the paupers ate belly pork and feet. 

I have a friend who refers to people trying to impress others by buying luxury brands they cannot really afford as “$1,000/Week Millionaires.” In other words, they make a middle-income wage but want others to think they are rich. The problem is the financial stress that accompanies that lifestyle. It reminds me of a saying I grew up with: 

“If your OUTgo exceeds your INcome, your UPkeep will be your DOWNfall.”

Advice to Escape the “Fake It Till You Make It” Lifestyle

While dressing for success may actually help the business grow in some professions, it is a poor way to manage money. If you ever study the financial habits of wealthy people, you will find that they often live with low-consumption lifestyles—think Warren Buffet. He lives in the first house he ever purchased yet is consistently considered one of the richest men in the world. 

Solomon addressed the issue of posturing in Proverbs 13:7: “One person pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth” (ESV). In other words, don’t live “high on the hog.” Resist the temptation to appear rich. Instead, place your identity in Christ and the peace that comes from resting in His everlasting love, not the world’s temporary appearances. Humbly work, give, spend, save, and invest money with a purpose far greater than self-indulgence. 

The Bible repeatedly addresses pride and the importance of keeping an eternal perspective. It’s easy to be deceived by the riches of this world. Jesus knew we would be tempted and said, 

“Do not store up for yourselves treasures on earth,
where moths and vermin destroy, and where thieves break in and steal.
But store up for yourselves treasures in heaven, where moths and vermin do not destroy,
and where thieves do not break in and steal.
For where your treasure is, there your heart will be also.” 

Matthew 6:19–21 ESV

Our identity in God’s Kingdom is not printed on a business card. It’s not related to our income, education, accomplishments, or failures. It’s not based on the color of our skin, the street where we live, the clothes we wear, or the cars we drive. Our true identity is given in John 1:12–13: “Yet to all who did receive him, to those who believed in his name, he gave the right to become children of God—children born not of natural descent, nor of human decision or a husband’s will, but born of God” (NIV).

The things of this world pale in comparison to who we are in Christ. When we truly understand this, we’ll make decisions based on that identity, not the temporary one the world gives us.

So, to be specific, money does not give us our true identity. It doesn’t make me a rich man, a poor man, a successful man, or a bankrupt man. 

My hope is that your friend will come to understand who he is and why he is here. Then he can pursue God’s purpose for his life and flourish without the stress of trying to impress others. Rick Barnes, The University of Tennessee basketball coach, tells his team that we have an audience of One. That One did not send Jesus to die a humiliating, tortuous death on a cross for us to live temporary lives of luxury. He so loved the world that He gave His only Son so that by faith, we could have eternal life. The way we live here and now is in preparation for our future in Heaven. 

May our lives be dedicated to living and glorifying Christ in all that we do. Stewarding our talents and treasures wisely not only grants meaning to our days here on Earth but also prepares us for Heaven. 

If credit card debt is holding your friend, or anyone else you know, in bondage, a valuable and trusted resource is Christian Credit Counselors. They can help consolidate debt to get on the road to financial freedom. 

This article was originally published on The Christian Post on May 10, 2024.

Dear Chuck,

We believe in helping the poor, and we actively support numerous organizations along with our church’s benevolence program. Help us know how to educate those who think guaranteed basic income is a compassionate way to help the hurting. 

Distressed over Guaranteed Income Programs

Dear Distressed over Guaranteed Income Programs, 

You are right in being concerned. Several cities across the United States give low-income families a guaranteed basic income. I wrote about this trend in my book Seven Gray Swans. It is my opinion these efforts will ultimately create more of the problem that they are intended to solve.  

Guaranteed Income Programs 

An article at msn.com, “One State’s Considering Giving People $9,000,” reports that Stanford University’s Basic Income Lab counted more than 150 guaranteed income programs in America’s history. Most took place in the past five years. 

Pilot programs are funded by the federal government (taxpayers), foundations, and state and local taxpayers. For one to three years, recipients will receive income with no strings attached. This is not a loan or wages for labor. The recipients have zero accountability for the use of funds. It amounts to a charitable gift to private citizens, so it is mislabeled as “income,” which is normally associated with compensation for a job or task. 

On April 9th, Business Insider reported several active and proposed plans:

• California: In 2021, a five-year, $35 million project was budgeted for LA, San Francisco, and Sacramento. Thousands have participated. 
• Michigan: Flint plans to give new and expecting mothers $1,500 followed by $500 monthly for the baby’s first year of life, funded by the government and grants. 
• Massachusetts: Somerville is giving 200 families $750 monthly for housing using ARPA funds. (ARPA is the $1.9 trillion American Rescue Plan Act signed by President Biden in 2021 for pandemic relief.)
• Illinois: Chicago used $31.5 million in ARPA funds for 5,000 residents.
• Texas: Harris County, which includes Houston, budgeted $20.5 million in ARPA funds to be given to low-income households: $500 for 18 months. (Attorney General Ken Paxton sued Harris County to block the program days before payments were to begin.)

Taxes upon Taxes

Bill SB3462 would require a guaranteed income of $1,000 to Illinois residents, regardless of immigration status, for those who provide care for a child or other specified dependent, for those who recently gave birth or adopted a child, or for anyone enrolled in an educational or vocational program. Certain eligibility determinants must be met, with implementation after the 2027 calendar year. 

Fox2Now reports that opponents fear that “the program could come with unintended consequences, like reducing work productivity or not directly addressing poverty within the state.” Funding will come through taxpayers. I should mention, “Illinois already levies the highest state and local tax rates in the nation, making increasing the state’s tax burden an untenable solution, particularly as hundreds of thousands of residents and major corporations flee the state each year.”

A Long List of Possible Problems

The concept of GBI (Guaranteed Basic Income) has been discussed for decades, but the cost and effectiveness of the programs are questioned. It is assumed that individuals know how to best spend the money: paying rent, buying groceries, or paying off debt. Yet after the pandemic fund fiasco, it does not take a PhD in economics to question that logic. 

Are these people not needed in the workforce? Would they rather be paid and make a contribution to society? What funds are being robbed to finance guaranteed income programs? How much will our taxes increase? What are the long-term consequences? Does the government simply print more money or go into debt to be able to afford this program? Will people move to another state just to receive these benefits? Who qualifies, and why do they need a guaranteed income? What if my city already offers programs for needy individuals? Who sets the amount that is distributed, and will it be capped? On and on…

While some cities are providing GBI programs and conducting research funded by government and/or private foundations, others have scrapped them. 

The Foundation for Government Accountability, FGA, cites several reasons why guaranteed or universal basic income is “a bad idea”:

• It is expensive. 
• Welfare programs have a proven track record of reducing labor force participation.
• Welfare expanded without strings during the pandemic, and many Americans earned enough money to not return to work. The result? A worker crisis from which we have not fully recovered, businesses closing, and rampant inflation.  
• Government spending can be devastating to family budgets, increasing the costs of food, housing, and clothing. After this administration increased food stamp benefits, grocery prices rose by at least 15%.

The Bible Offers a Better Way 

God made man to work—to be a creative, capable producer who can add value to any enterprise. In exchange for that labor, the needs of the worker will be supplied. This gives meaning to life and deep satisfaction for earned achievement. Encouraging work over welfare will raise incomes, rescue families from dependency, and create less government dependency than we have now. 

“Now we command you, brothers, in the name of our Lord Jesus Christ, that you keep away from any brother who is walking in idleness and not in accord with the tradition that you received from us. For you yourselves know how you ought to imitate us, because we were not idle when we were with you, nor did we eat anyone’s bread without paying for it, but with toil and labor we worked night and day, that we might not be a burden to any of you. It was not because we do not have that right, but to give you in ourselves an example to imitate. For even when we were with you, we would give you this command: If anyone is not willing to work, let him not eat. For we hear that some among you walk in idleness, not busy at work, but busybodies. Now such persons we command and encourage in the Lord Jesus Christ to do their work quietly and to earn their own living.” (2 Thessalonians 3:6–12 ESV)

GBI may lift or temporarily reduce poverty for some individuals. However, giving money with few constraints can result in fraud and fund negative habits, perpetuating the poverty cycle. I view this as a “Robin Hood Plan” to tax the rich and distribute to the poor. We should not forget that Robin Hood is a work of fiction. 

For more information, read these articles. 

I’d like to invite you to join a free Crown Bible study on the YouVersion app. We have several devotionals regarding money and stewardship that will help bring God’s Word into your daily life.

This article was originally published on The Christian Post on May 3, 2024.