The Costly Use of Credit Cards – a real life example

Credit cards are an important part of transacting business.  Without a credit card, you may find it difficult to rent a car or reserve a hotel room.  Credit cards can simplify life and make it easy to buy online, pay for gasoline, and get in and out of a store quickly.  For those of us who pay our balances in full each money, credit cards extend free credit and provide the ease of making one monthly payment.  Yet, for those who do not pay their balance in full each month, credit cards usage will result in interest payments and late fees.

Credit card companies make money on (1) transaction fees when you charge a purchase and (2) interest and late fees on accumulated balances. They are incentivized to lend borrowers more than they can repay in order to earn interest, and they encourage borrowers to carry balances by setting low monthly minimum payments.   In fact, many companies set the minimum payment so low that it could take as long as 6 – 9 years to pay off one debt even if you did not charge anything else on that account.  The interest that would accumulate during this time adds significantly to the cost of the item purchased.

The following example is based on a close friend’s true experience; for this illustration I will refer to him as John.  John purchased a riding lawn mower for $3,600 from a well-known retail chain.  John charged the mower on a store card at an interest rate of 21 percent.  The minimum monthly payment of $98 was calculated so the loan would be repaid in 5 years.  Had John made only the minimum payment and made all the payments on time, the mower’s total costs would have been $98 * 60 = $5,880. So the mower was $3,600 at the store but he would pay a total of $5,880 if he made the minimum payment of $98 each month to the card. The total interest paid would have been $2,216, which is more than 60 percent of the original purchase price.

When I met with John, he had been paying on the mower for 24 months.  His payment record looked like this:

MonthPaymentInterestLate FeeBalance
5$196.00$62.64 $3,446.11
6$98.00$60.31 $3,408.42
7$98.00$59.65 $3,370.06
8$98.00$58.98 $3,331.04
9$98.00$58.29 $3,291.33
10$98.00$57.60 3,250.93
11$98.00$56.89 $3,209.82
13$98.00$55.96 $3,155.96
15$98.0055.01 $3,100.19
16 54.25$30.00$3,184.45
18$196.0055.51 $3,031.69
19$98.0053.05 $2,9786.74
20$98.0052.27 $2,941.01
21$98.0051.47 $2,894.48
22$98.00$50.65 $2,847.13
23$98.00$49.82 $2,798.96
24$98.00$48.98 $2,749.94

Through a misunderstanding of when the first payment was due, John’s first four payments were considered late.  Eventually, he reviewed his bill and made a catch-up payment in month 5.  He made the next 7 payments on time but then made several more payments late before getting back on track.  At this point, John had been assessed $240 in late fees and increased his expected accumulated interest on the loan by $145.  The lawn mower’s total expected cost was now $6,265, which was 74 percent more than the original purchase price.

Ironically, at this time, John had some money in savings.  We determined that he could use his savings to make an additional payment of $1,000.  This payment reduced his expected interest on the loan by $659, making the lawn mower’s total cost $5,606.  After making the additional payment, John called the credit card company and asked that his interest rate be reduced.  His interest rate was lowered from 21 percent to 12 percent, saving even more in interest.

John learned some expensive lessons about credit card debt, including:

  1. Make sure you understand the terms of any debt you take on.  Ask questions and read the sales agreement carefully.  Make sure you know the total costs of the debt and when the first payment is due.
  2. Never pay late, and never skip a payment.  Interest and late fees will apply and will add significantly to the total costs of the debt.  Some companies will increase your interest rate if you have two or more late payments.
  3. Make more than the minimum payment whenever you can.  If John had simply rounded his payment up to $100, he would have saved $83 in interest and paid off the lawnmower 2 months earlier.  If he had paid an extra $15 per month, he would have saved $503 in interest and cut out 13 months of payment.
  4. If you find yourself in over your head, call the credit card company and try to renegotiate the debt. 

This example is a good illustration to use with your children as they start to earn money and establish their own credit. It will show them the true costs of using credit unwisely and help them to get started on the right path to credit card usage.

To learn more about how to manage your money and improve your credit score, please read my other blogs on finance and money management. My book, Honoring God with Your Money, is a great resource to learn how to manage your money according to godly principles.

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Honoring Someone You Lost

Years ago, my husband and I owned a pizza restaurant.  Over time, many of our regular customers turned into friends.  One couple had suffered the loss of their son in an automobile accident.  At the time of his accident, he was a high senior planning to attend college.  His parents wanted to honor him and keep his memory alive, so they created a scholarship fund named after their son.  Each year, a local student would be awarded the scholarship to cover one year’s tuition at the college their son wanted to attend.

Flowers and the words Honoring Someone You Lost and Ideas to Avoid

The first year it was easy for them to raise money to fund the scholarship.  As the years passed, the challenge grew to fully fund the endeavor.  When we first met them, their son had been dead for several years.  His high school friends had graduated from college and moved on with their lives.  Fewer people were donating to his fund, so the parents held several events each year to raise the  scholarship money. The ongoing efforts to raise the funds consumed more and more of their time and prevented the parents from moving forward with their lives.  What began as a beautiful gesture to honor their son and bless a student in his name, ended up being a weighted burden to fund raise to meet the obligation.

In my job as a business consultant, I occasionally meet with a client who wants to establish a foundation to provide a scholarship in honor of a deceased loved one.  I educate my client on the process of establishing a foundation while stressing the difficulty of sustaining a scholarship over many years.  If an individual is independently wealthy, a trust can be set up and the interest used to fund the scholarship.  Otherwise, it is an endless process of holding fund raising events and soliciting donations.  In these instances, I think back to the family who frequented our pizza restaurant.

Over 50 years ago, my seven-year-old brother passed away due to a congenital heart condition.  While my parents were heartbroken over the loss of their first-born son, they were also thankful to God for sending John into our family.  John’s life and death drew many of our family members into deeper relationships with God. My parents wanted to honor John’s memory in a way that would glorify God. So, we sold vegetables that we grew and donated the money to build seven churches in Africa and India.   The money we raised paid for the building materials, and the members of the churches provided the labor.  I will never know the impact of those churches made in the lives of others until I am in Heaven; however, I am quite confident that the church members were blessed and that these churches  helped to spread the gospel and point people to Jesus.

I believe my parents’ example offers structure for others who strive to remember their loved ones.  The following suggestions will help you step through the process of finding a way to honor someone you have lost.

  1. Set a fixed goal, rather than a scholarship that will go on into perpetuity.  This allows you to have a natural end to your efforts.  Our family built one church for each year of my brother’s life.
  2. Be prepared to work hard.  Raising money is hard work, no matter how you raise it. In our case, we grew vegetables and we went door-to-door selling them over two summers.  Even if you write letters or hold a GoFund me campaign, you will have to put forth quite a bit of effort to accomplish your goal.
  3. Raise money by offering a product or service people actually want.  The number of people who cared about your loved one, like you did, is not often large enough to annually sustain a revolving fund. Those who did may donate cash, but you will likely have to hold fundraising events and/or sell products to reach your goal.
  4. Select a memorial that will be long lasting and in line with your loved one’s passions.  I know another set of parents who honored their son’s memory by donating a scoreboard for his high school baseball field. Their son was on the baseball team, a scoreboard was within their means without having to raise funds, and his name will be read by all who attend the games for as long as the scoreboard lasts.

It is correct and proper to mourn the loss of your loved one, and it may be right to do something tangible to honor their memory. The first thing you should do is pray.  Ask God how He would have you honor your loved one.  Then follow these steps to honor them in a way that does not become a burden to you emotionally or financially.

Letters to Mother from College

Title of book, Letters to Mother from College, and a picture of a college dorm on a southern campus

New Book—just published 

My newest book, Letters from Mother from College, is now available on Amazon. 

Will Polly discover God’s plan for her life in a small southern college?

Letters to Mother from College was inspired by the letters my mother wrote home during her first two years of college.  Mom was the only child of a single mother, and they were very close.  At 17 years of age, Mom left her home in Pennsylvania to attend a small college in a small Southern town.  Everything was new and different, and Mom wrote about her experiences in frequent, lengthy letters.  It appears that my grandmother kept every letter my mother ever wrote to her.

We discovered the letters after my grandmother passed away.  Mom wanted to toss the letters, but I took them and kept them for “safe keeping”.  Occasionally, I considered ways to share the letters with my siblings.  I began reading them in order a few years ago, after my own mother had passed,  and they were enlightening and engaging.  The letters inspired me to write at story, and I simply needed to add some details.

The letters provided the framework for the novel.  Many of the details were added from family stories that my mother told us or were fabricated from my imagination.  However, the primary elements of the story are the actual experiences my mother had as she adjusted to college life and being away from her family for the first time.

I hope that you will enjoy this look at college life in the 1950’s.  Polly discovered that God was directing her path and had a wonderful plan for her life.  God also has a wonderful plan for your life.  I pray that you will open your heart to the Lord and allow Him to direct your footsteps.

“And we know that in all things God works for the good of those who love him, whohave been called according to his purpose.”  Romans 8:28

If you have never considered that God loves you and created you for a purpose, you may not have experienced the joy of knowing Jesus Christ as your Savior and having your sins forgiven. Please click on Basics of Salvation in the tool bar above to learn how you can invite Jesus to be your Lord and Savior.

Celebrating Motherhood and the Creation of New Life

Tomorrow, we celebrate motherhood.  All across our nation, people will take time out of their busy schedules to recognized the sacrifice their mothers made in giving them life and in raising them.  A common denominator across people is that everyone has, or had, a mother.  Someone gave life to each of us.

Expectant mother nearing full-term
Photo by Caleb Oquendo on

When my husband and I decided that we ready to have children, we waiting anxiously each month for the first signs that we had conceived a baby.  It took a few months, and we were disappointed in each of those months when it became evident that I was not pregnant.  Our hearts soared with joy when a pregnancy test confirmed that a baby was on the way.

Like many expectant parents, we began immediately to consider possible names for our newly-conceived child. We went shopping for baby furniture and paraphernalia, decorated the nursery, and childproofed our home.  But the first thing we did was call our parents to announce that a new family member was on the way.  “We are having a baby,” we exclaimed with great joy.

As great as our joy was, however, it dimmed in comparison to God’s joy at the creation of a new life.  God knew about our child that moment he was conceived, and God already had a plan for his life.  Psalm 139: 13 – 16 tells us,

“For You formed my inward parts; You covered me in my mother’s womb.
I will praise You, for I am fearfully and wonderfully made; Marvelous are Your works, And that my soul knows very well.
My frame was not hidden from You, When I was made in secret, And skillfully wrought in the lowest parts of the earth.
Your eyes saw my substance, being yet unformed. And in Your book they all were written,
The days fashioned for me, When as yet there were none of them.”

God knew our child upon the moment of conception.  God knew him, and God had a plan for his life.  Ephesians 2:10 says, “For we are God’s handiwork, created in Christ Jesus to do good works, which God prepared in advance for us to do.”  My child, and every child, was born with a God-designed destiny in mind.  My job and my husband’s job, as our child’s parents, was to raise him up to fulfill God’s plan for his life.

In recent years, technology has advanced to where scientists can detect the creation of new life the instant a sperm penetrates an egg.  At the exact moment, a zygote is formed.  The zygote is a new organism with a combination of the DNA of the two gametes (sperm and egg) that created it. That DNA contains all the genetic material form the new child. A new life is created in the moment of conception.

Another technological advance has allowed scientists to detect the emission of zinc sparks when new life is created. In his book Whisper, author Mark Batterson describes this event, “At the exact moment a sperm penetrates an egg, the egg releases billions of zinc atoms that emit light.  Sparks fly, literally!” (Mark Batterson, Whisper, Page 20, Multnomah Press)

Fireworks exploding in air
Photo by on

I like to think of these zinc sparks as fireworks that God is shooting off to celebrate the creation of a new life.  The joy that Steve and I felt at the realization that we were going to be parents was akin to the explosion of fireworks.  I hope that your parents felt that same ecstasy upon learning of your impending arrival as part of their family.  Every life should be celebrated as a gift from God.

If you are a mother, I pray that your children recognize the love, time, and energy you have poured into their lives and that they celebrate you tomorrow.  I also pray that you recognize the wonderful joy and privilege of conceiving, birthing, and raising a child. Every child is a blessing, and every child has a divine purpose for his or her life.  As a mother, I pray regularly that my children and grandchildren will allow the Lord to reveal to them to His plan and that they will follow it. There is no greater joy in life than to be on the path that God has chosen for us.

Happy Mother's Day card, purple flowers, macrons, and gift
Photo by George Dolgikh @ on

Lessons in Money Management

My parents raised nine children on a single income, so careful money management was a priority.  I don’t recall them ever formally sharing money management lessons. Rather, they instilled good money management habits through their example and casual conversations.  One of the ways they taught us good money management skills was by a allowing my sisters to make some of our spending decisions at an early age. The lessons I learned include:

  1. Spending for one thing means less money for something else.  When I was about 13, my parents decided to give us each $20 per week allowance.  In 1972, $20 was a significant amount of money. In fact, it is equivalent to about $130 today.  The catch was that the money had to cover all of our discretionary spending.  We were free to pack lunches for school, but if we wanted to buy lunch, it came out of our allowance.  We were also responsible for buying our own clothes and paying for movie tickets and other recreation.  We learned to manage money and make hard decisions.  If I wanted a new pair of shoes, I might have to pack my lunch for a whole week.
  2. Shop the sales.  My mother was a master shopper.  She watched sales and clipped coupons.  I have seen her leave a department store with multiple shopping bags of clothes for which she paid less than $20 in total.  She loved to search the clearance racks for a blouse or sweater that everyone else had overlooked, and she loved the challenge of finding the perfect skirt or pair of slacks to go with it.  She would go to every clothing store in the mall in search of what she needed to ensure that she got the best bargain. Mom knew what month to shop for appliances or furniture, and she knew when the “white” sales (linens) would be going on.  She loved to shop the after-Christmas sales, and she often bought outfits in January which she would give to us the following Christmas. With four daughters born in a 4 ½ year span, she knew one of us would be able to wear the skirts and sweaters she bought.
  3. Buy quality and keep belongings until they wear out.  My mother believed it was worth spending a bit more to get better quality.  She bought traditional styles that would not go out of fashion, and she wore her clothes until they were worn out.  Similarly, Dad taught us to keep cars until the costs of repairs exceeded the car’s value.  He and Mom purchased a car when they married in 1955; my middle school principal purchased the car from them in 1974.  They added a second car in 1965, as I was starting first grade.  I drove that car until my junior year of college, when I was rear ended while driving it.
  4. Save up for major purchases.  I don’t recall my parents ever taking out a loan to purchase a car.  Of course, a new car was a true rarity in our household.  I do recall, however, a couple of occasions when my father borrowed cash from his life insurance policy to cover a major purchase.  He explained that the interest rate was very low, and he was, in essence, paying it back to himself.
  5. Balance your checkbook regularly and know where your money is going.  Balancing the checkbook before we had computers could be a time-consuming activity.  My mother always sat at the kitchen table to balance the checkbook.   Canceled checks were returned to the payer in those days. Mom would tape the canceled checks to the check stubs in a large, three-ring binder.  She would mark them off on the bank statement and determine what checks she had written that had not cleared.  Mom balanced the checking account to the penny, and she was never satisfied until it balanced.
  6. Count the true cost of debt.  My parents bought their final home in 1971 for about $35,000.  The monthly payment of $238.  I believe the interest rate was 7 ¼%.  Mom marked off each payment on an amortization schedule. When there was sufficient money, she would make an extra principal payment or two.  I remember her explaining to me that when she paid extra money toward the principal, she was saving more than one payment, as the balance went down and less interest accrued from then on.  I also recall multiplying $238 by 360 payment and realizing that, if they made each payment as scheduled, the $35,000 house would cost them about $86,000.  This was an eye opener and provided an ideal opportunity for us to talk about homes as investments that would increase in value, whereas a car would lose value over time.  My mother paid off the house in about 13 years.  While my father appreciated not having a mortgage payment, he did fuss more than once over losing the tax deduction of the interest.
  7. Establish credit early and manage it well.  When I graduated from high school, my parents bought me a sewing machine.  Mom then declared that I needed a sewing cabinet, which I would have to buy myself. We went together to the Singer store and picked out a cabinet.  I believe the price was $125.  She instructed me to put $25 down and helped me apply for a credit card.  When the bill came, I paid off the balance in full.  At the age of eighteen, I had established some credit of my own.  I never used that credit card again, but it was the key to allowing me to get a Sears card a few years later.
Calculator, currency, and note pad.
Photo by Karolina Grabowska on

These money management principles have served me well. Steve and I have tried to instill them in our own children. I hope that they will help you to manage your money better and have less financial stress in your life.

For more money management tips and information on creating budgets, please check out my other blog posts under the Finance tab. For those desiring a better understanding of Biblical principles of money management, I have written a book Honoring God with Your Money. It is available on Amazon and from Barnes and Noble.

If you have money questions you would like me to answer, you may email me at or write your question in the Comment section.   Those who email me will be signed up to receive my free quarterly newsletter with money management tips, encouraging stories, and Scripture inspirations. 

An Open Letter to Target: Regarding your New Restroom Policy

This is a well-written blog in protest of Target’s policy to allow men in ladies’ restrooms and women in men’s restroom. We need to protect our children’s innocence and privacy.

Mary From Martha

To Whom It May Concern:

I am a woman. I am a frequent shopper in your stores. I am first and foremost a mother. Your recent change in policy of who you allow to use each restroom concerns me. You stated in your blog post, “We believe that everyone…deserves to be protected from discrimination and treated equally.” and “…you’ll always be accepted, respected, and welcomed at Target.” As a business owner, I do understand your right to make a stance as a company. As a parent, I will never understand why you would trade the safety of our women and children for the sake of not hurting  feelings.

I realize that everyone needs to feel accepted, loved, and wanted. I know the struggles of a person struggling to find their identity. I also know that as of September 2012, a Gallup poll showed that approximately 3.4% of Americans identify as

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A Cat Pinata for a Special Birthday

Cat piñata for our grandson's birthday
Cat piñata for our grandson’s birthday

My two year-old grandson is crazy about cats, or Meows as he calls them. So when I decided to make him a piñata for his birthday, it seemed natural to make a cat piñata. My husband Steve and our four year-old grandson Daniel got in on the fun. Steve and I made piñatas for our children when they were young, but it has been many years since our last one.

I used two balloons to form the head and body, and paper mached them using a mixture of flour and water. Daniel painted it orange, as his brother’s favorite stuffed animal is an orange tabby. I used batting to make a patch of white on the cat’s chest and face. Steve made the feet, eyes, and ears from construction paper, and I finished it with a fancy tail.

Daniel was very proud of the finished product.
Daniel was very proud of the finished product.

Daniel was quite proud of our efforts and dubbed it ‘cat yata.’ Joshua was thrilled. I am not sure that he will be quite so thrilled tomorrow when it is put into action at his birthday party.  What a delight it was to work together as a family on a creative project.  Our granddaughter is already wondering what kind of piñata grandma and papa are going to make her for her birthday in December.  I am certain that we will need Daniel’s help to make a very special piñata for his cousin.

I Got My Life Back

Have you ever had to give up a job, a project, or a dream that you really wanted, only to find afterwards that the sacrifice had given you your life back?  I have had the experience a few times.

The first occassion was about 20 years ago.  I was teaching part-time in the small private school my sons attended.  I had a wonderfully supportive principal and liked most of my fellow teachers.  The families of the students were encouraging and supportive.  Theoretically, my work day ended at noon, giving me three hours of ‘free’ time before my children got out of school. However, the free time was often taken up with grading, lesson planning, and filling in where needed.  Additionally, the school had some issues which I couldn’t overlook.  I struggled with these issues my last year before making the decision to not return.  I chose instead to homeschool my sons.  A friend questioned that decision.  She had homeschooled her son previously and she told me, “When I sent him back to school, I felt like I got my life back.”

For me, the opposite was true.  As I adjusted to being a home-school mom, I realized I had gotten my life back.  I enjoyed teaching, but it was time-consuming and extracted a toil on my family.  Homeschooling allowed my children and I to sleep in and be better rested.  It allowed me to focus my ‘best energies’ on my husband and sons and to have more time to take care of my home and prepare more home-cooked meals.  An added benefit was the ability to travel and take vacations when everyone else was in school.  I never regretted my decision to be a full-time mother and homeschool teacher, even though that was not what prompted me to make the decision to my teaching job.

After six years of homeschooling, my husband and I decided to open a restaurant.  The boys were hold enough to work in the restaurant.  The plan was that my husband would run the restaurant in the mornings, while I home schooled the boys; the boys and I would cover the evening shifts.  It was a good plan, but needless to say, things did not work out exactly as planned.  Homeschool and family life soon took a back seat to the demands of business ownership.  After much soul-searching, we decided to sell the restaurant.  It was a difficult decison for me, as I felt we had worked so hard to make this dream a reality.  I was heartbroken that it hadn’t worked out as planned.  Yet, once it was sold, I again had the feeling that giving it up allowed me to get my life back.

Once the business was sold and we had moved back to our home town, our twins asked to enroll at the local Christian high school.  They needed a math teacher, so I found myself teaching again.  I loved being part of this wonderful Christian school, but it was demanding. I taught seven classes daily in addition to being a class sponsor and helping out with other clubs and projects.  I stayed for two years after the twins graduated and thoroughly enjoyed it. Yet, I felt God leading me to leave.  Again, it was a hard decision.  God led me to another job that allows me to use the skills I have honed through my past work experiences and through business ownership.  And, once again, I felt like I got my life back.  Teaching was very demanding and required many hours of grading and planning after school hours which took away from my family time.    It was also very rewarding, which made the decision to quit that much more difficult.

Since leaving teaching, I have had time again to engage in hobbies and try my hand at some new ones, including writing and blogging.  I have had two novels published and recently completed a Bible study on money and finances. God has opened doors that I would not have had the opportunity to walk through if I had remained a teacher.

Perhaps you are wrestling with making a change in your life, such as leaving a job you love or giving up on a dream.  Change is never easy, but it can lead to new and exciting opportunites that would never come if the change were not made.  Search your heart, pray, and allow God to lead you.  As a Christian, I know that God has a great plan for my life.  His plans and purposes are much more wonderful that the plans I would make for myself.  I have found that I am happiest and feel most like ‘I got my life back’ when I follow the path He lays out for me.

“‘For I know the plans I have for you’, declares the Lord, ‘plans to prosper you and not to harm you, plans to give you hope and a future.'”  Jeremiah 29:11 (NIV)

Have you ever made a change and felt like you got your life back?

Do you feel God is leading you to make a change now and you aren’t sure that you want to let go of your current job and/or dream?

Thirty-two Years and Counting

Today Steve and I celebrate thirty-two years of marriage.  We started dating as our high school graduation approached and married one week after graduating from college.

This is what we looked like in our dating days (circa 1980).

The boy I fell in love with
The boy I fell in love with

Me way back then
Me way back then

Our family grew in 1985 with the birth of our son Chris and expanded again in 1987 when our twins, Jon and Matt, were born.

The family in 1989
The family in 1989

We took our first cruise in 2006 to celebrate our twenty-fifth anniversary.  With us in the picture is our amazing server Virginia.

Celebrating our 25th anniversary with a Caribbean cruise
Celebrating our 25th anniversary with a Caribbean cruise

In recent years our family has grown rapidly as both twins married and became parents.

Our family today (Christmas 2012)
Our family today (Christmas 2012)

God has truly blessed us and our family.  We are grateful that God is the head of our household and that we can look back together on thirty-two incredible years as a family. We can’t wait to see what the coming years hold.  Through the good and bad, we will face all of life’s challenges together with God’s help.

Happy Anniversary, Steve.  I love you with all my heart!

Mom and Dad do not love each other anymore.

I wanted to share this blog written by our long-time friend Mike Patz, pastor of First Assembly of God church in Gainesville, FL.  Mike writes about what constitutes real, lasting love and provides words to inspire us all to love our spouses with the same commitment we love our children.

Mom and Dad do not love each other anymore..

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