Category: Stewardship

Save Money and Develop a New Mindset with a Financial Fast

If you’ve ever had surgery or bloodwork for your cholesterol levels, the test required you to fast for 8 hours or more. Many people also endeavor to fast for its health benefits to promote better digestion, weight loss, lowering cholesterol, and resetting appetite. Others may fast for spiritual reasons, like drawing closer to God for spiritual direction or increasing discipline.

Sack with bundles of cash falling out

However, eating is not the only item you can limit when fasting. I have “fasted” activities, such as crossword puzzles, computer games, and television, to gain more time to accomplish a goal or project. My time management fasts typically lasted until I achieved my goal or task.

A financial fast might be in order if you need to control your spending better. Whether you are just beginning to set up your budget or years into managing your money and want to reach a new goal, this plan might be the catalyst for your success. A total financial fast eliminates all unnecessary expenditures for a set period, whereas a partial fast eliminates specific spending categories. After you review your budget, decide which option works for you. During the period of the financial fast, you cut your spending. Fasting should increase your bank balance. However, you will likely experience other benefits.

Benefits of a Financial Fast:

One benefit is an increased awareness of how often you spend money on non-essentials. The ease of your purchases can hinder your realization of how much you spend. While shopping, a store offers multiple ways to pay for items. Pulling out a credit card or clicking the online “order button” distances the shopper from feeling their loss of money. Consider if you paid cash for every transaction. As the stack of bills shrinks in your hand, you connect the loss with the purchase. If you habitually charge $5 for breakfast and $10 for lunch every workday, you may not realize that those purchases add up to $330 each month (based on 22 workdays per month). The individual transactions are hardly worth noting when you examine your credit card bill, but the total makes a big dent in your bank balance. You will be surprised when you implement your fast. Those quick habits of taping your phone or swiping your credit card will lessen, and your bank account will grow.

A second benefit will be breaking bad habits and creating good ones. If you have been going through a drive-up for a coffee and breakfast sandwich, and now you skip that, you may begin to make coffee and breakfast at home. After a few weeks of this, making breakfast at home should be a regular habit, and going through the drive-up might become a once-in-while treat.

A third benefit is saving time. It takes time to get from your office to your car, drive to a restaurant, eat, and return to your office.   Packing a lunch takes much less time, and you can use that time savings to do something else, such as taking a walk, writing a letter, or engaging in a friendly conversation with a co-worker.

Finally, you are developing a new mindset of finding ways to enjoy life that do not require spending money. If you decide to fast spending money on recreation, you will work harder to seek free entertainment options. You will likely find many available to you and your family.

Action Plan for a Financial Fast:

  1. Decide on a goal for your financial fast. Possible goals might include:
    a. Paying off some debts
    b. Saving for a vacation
    c. Developing an appreciation of “free” activities and habits
    d. Demonstrating to your children that you have the self-control to delay a purchase until you have ended your spending fast.
  2. Set a time frame. Many financial experts recommend a 21-day fast, which is based on estimates that it takes 21 days to make or break a habit. Other experts recommend a period of intermittent financial fasting, such as fasting financially for one week out of every month. Your time period could be shorter or longer, depending on your goal and what spending category you will fast.
  3. Decide what you will fast. One option is to go on a strict fast, where you only pay bills and purchase groceries and medicine. Another option is a partial fast in which you forego spending for specific categories of items. For example, if buying shoes is a personal weakness, you might fast shoe purchases for an extended period. If you are saving to go on a cruise, you might give up dining out and recreational spending to have more money going toward your cruise budget.
  4. Plan for success. If you give up eating fast food for breakfast and lunch, ensure you have groceries to prepare those meals at home. Have motivational phrases and Scripture verses in your wallet, car, and computer to help you stay motivated. Celebrate your success without breaking your fast.
  5. Avoid temptations. If you are fasting clothing expenditures, avoid visiting your favorite apparel sites and stores. Throw away catalogs and delete marketing emails without reading them.

Recently, I participated in a 24-hour dietary fast at the request of a friend with a terminally-ill child. The purpose of the fast was to spend time in prayer for the child. I had no other motivation. Although I have been working to lose weight for a while, I did not fast with the expectation of losing weight. When the fast ended, however, I found that my appetite had been “reset.”  I have been able to eat less and feel satisfied, which has led to weight loss. A financial fast can provide the benefit of resetting your spending mindset, which will reap economic benefits for you long after you have ended your financial fast.

My Bible study, Honoring God with Your Money, is a great resource to help you understand how to manage your money better and achieve your financial goals. It is available on Amazon. If you would like to receive my quarterly newsletter with tips on managing your money, please complete this short form: Honoring God with Your Money (list-manage.com)

Hope is Not a Plan

As a Christian, my hope is in the Lord, who holds my life in His hands. As a writer, I hope people buy my books and read my blogs. As the owner of short-term rental property, I hope that vacationers decide to stay at my home. But, as a small business consultant, I share with my clients the mantra, “Hope is not a plan.”

Hope is essential to taking risks and moving forward with new opportunities in your life. However, hope does not bring me readers or renters. I must take action to inform potential readers of my books and blogs and potential renters of my property. Those actions involve effort, such as marketing, advertising, and asking for reviews.

If you are trying to achieve a financial goal, hope will not help you to accomplish your goal. You need to have a plan:

  • If you want to purchase a new home or car, you need a plan to accumulate the down payment.
  • If you want to get out of debt, you need a plan to start paying off one debt while meeting the minimum obligations on your other debts.
  • If you would like to retire early, you need to start putting money into a retirement account at an early age and be consistent in making contributions.
  • If you want to improve your credit score, you need to obtain your credit report and assess what debts need to be paid off, what errors need to be corrected, and what steps you can take to reduce your total amount of debt.
  • If you want to start your own business, you must maintain a high credit score and set aside money to invest in your business.
  • If you want to start budgeting, you need to research and evaluate budgeting tools to determine which one you will actually use.

Key Factors of a Plan to Accomplish a Financial Goal:

  1. Live below your means. If you want to save money for any reason, or if you’re going to pay down debt, you must spend less than you make. This requires you to know what you spend and evaluate where to make cuts.
  2. Write down your goals. Studies show that writing down your goals significantly increases your chances of achieving them.
  3. Have an accountability partner. If you are married, you and your spouse should hold each other mutually accountable. If you are unmarried, ask a friend to be your accountability partner. Hold each other accountable by encouraging each other and reminding yourselves that money spent cannot be used to meet your goal.
  4. Celebrate milestones. Give yourself a pat on the back when you hit an intermediate milestone, such as paying off a debt or saving a certain amount of money. Milestone celebrations should be free or low-cost to keep you on track to achieve your goal.
  5. Make it easy to save. Set up payroll deductions for retirement or other savings so you never have access to the money. Download a budgeting tool that makes it easy for you to track your spending. Avoid “window shopping,” which increases your desire for items you do not really need.
  6. Keep your goal in front of you. Have a picture of your dream home or car on your refrigerator. Write your business plan and look around for possible locations. Develop a bucket list of all the fun things you will do in retirement.
  7. Evaluate your progress periodically, and if you have gotten off track, take action to correct your mistakes and get back on the right track.

Your plan does not have to be complicated to be effective. Start dreaming, set a goal, and develop a plan to reach that goal.

Setting and achieving financial goals helps you honor God in how you use and manage the financial resources He has entrusted to you. It also allows you to build treasure in Heaven. For more tips to help you manage your financial resources, please see my other blogs in the Finance tab. My book, Honoring God with Your Money, is full of guidelines to help you use money in a way that builds true wealth.

If you have never accepted Christ as your Savior, please consider accepting the free gift of salvation from your sins and eternal life in Heaven. It will pay dividends for all of eternity.

Minimizing the Costs of Credit Card Balances

Americans have a love affair with credit cards. They make life easier while also making it easier to overspend. Studies reveal that a purchaser will spend an average of 20% more on an item when using a credit card than when paying with cash.

Person using a laptop computer and holding a credit card. Title is "Minimizing the Costs of Credit Card Balances."

Credit card usage peaked in the fourth quarter of 2008, as the nation entered a severe recession, with balances reaching a then-high of $866 billion. Credit card balances fell significantly over the next 5 years. As the economy recovered, however, the use of credit cards and credit card balances began to rise. Today, credit card balances are approaching the $1 trillion level. The average consumer carries a credit card balance of $7,279 (Lendingtree.com). Fifty-three percent of credit cards being actively used are not paid off in full each month. The average interest rate of these balances is 20.92%, and the average interest rate being offered to new borrowers is 23.65%. 

The good news is that most Americans make regular credit card payments, and only 2.25% of credit card balances are delinquent by 30 days or more.

The minimum credit card payment is typically about 2% of the balance. On the average balance of $7,279, the minimum payment would be $86. At that payment and an interest rate of 20.92%, it would take a borrower 28 years and 3 months to pay off the debt. The total interest paid would be $27,776. In this scenario, the $7,279 in debt would cost the borrower $35,055.

When a consumer (that’s you) begins to take an active role in their financial future, they can minimize the interest on credit card balances. Remember, interest is handing part of your hard-earned paycheck to someone loaning you money. If you are not paying off your credit card each month, you need to determine why you carry a balance. 

The steps below can help you make advances on getting a handle on your credit card debt: 

  1. Always pay at least the minimum balance on time.
  2. Set up automatic payments to ensure that payments are always made on time.
  3. Pay more than the minimum balance whenever possible.
  4. Consider the actual cost of debt before making large purchases on credit cards.
  5. If your balances are on multiple credit cards, prioritize paying off the card with the highest interest rate first.
  6. Live below your means so that you will have some money each month to put toward your credit card balances.
  7. Create a budget to live within your means. (Refer to my past posts on budgeting) 

To learn more about how to manage your money and pay off debt, please click the Finances categories tab to find many blogs on money management, budgeting, and stewardship. My book Honoring God with Your Money is a great tool for financial money management.

If you would like to receive my quarterly newsletter on managing your money, please complete the short form: newsletter signup.

9 Tips for Sticking to Your Budget

A few weeks ago, I shared tips on developing a personalized budget that works for you and your family. You can find that blog by clicking the following link. https://susaneball.blog/2023/03/30/how-to-create-a-personalized-budget-one-size-does-not-fit-all/

A reader wanted me to share some ideas on how to keep on track and stick with a budget. Often we desire to manage our finances and enthusiastically start the steps to wrangle in our spending but quickly lose the motivation and discipline. So, this post focuses on motivating yourself to follow the budget you developed to manage your finances better and achieve your goals.

What is Your Goal?

You should take the time to determine your goal(s). Simply saying that you want to save money is typically not incentive enough to save money. It is nebulous, and you will find that you can justify overspending when you have not determined a marker of how much to save and a date to accomplish this goal.   Setting specific financial objectives and developing a budget will take you one step closer to achieving success. Your plan will motivate you because every good spending decision brings you one step closer to your dream. Your goal should be unique to your life, and you might have multiple ones that you are working on simultaneously. If you have not thought about your financial plan(s), below is a list of some common ones:

  1. Pay off debt(s). 
  2. Reduce stress.
  3. Improve your credit.
  4. Save for a memorable vacation.
  5. Save a down payment for a house.
  6. Save for a new(er) car.
  7. Retire early.
  8. Invest in your retirement fund.
  9. Save for your children’s college expenses.
  10. Start your own business.

Keep Your Goal in Front of You

When my husband and I decided to buy a pizza franchise business, we knew we had to save money to invest in our company. We cut back on discretionary expenses, such as dining out. When we were tempted to go out to eat, we reminded each other that the money we saved by eating at home helped us to achieve our dream. To maintain our excitement about our future business venture, we worked on our business plan and discussed our business goals daily. We also sold possessions not needed in our new life so we could add to our investment fund. Sticking to our minimized budget and saving money was easy because we were excited about our new venture.

Celebrate Goal Milestones

Try to set intermediate goals and celebrate reaching them. It takes a long time to achieve many financial goals, such as paying off a large credit card debt or accumulating a down payment to purchase a home. The average home price is about $350,000, and the lender typically requires 6% as a down payment from the buyer. That means you will need to save $21,000 for the down payment. If you save $1,000 per month, it will take you nearly two years to put aside the down payment. To keep yourself from getting frustrated, set mid-goal milestones, such as saving multiples of $3,000, and celebrate hitting those marks. Your celebration needs to be modest and within your budget, such as having a reasonably-price dinner at a restaurant or purchasing an accessory for your future home. Also, you might make a chart to record your progress if you are visually motivated.

Focus Your Spending Attention on Discretionary Spending

Your mortgage or rent payment, car payment, and insurance premiums are set amounts each month. In the short run, you cannot change them. Of course, they are a significant portion of your budget and must be considered. However, it would be best to focus on areas of your budget where you have more flexibility. Consider saving money on utilities, telephone and internet services, food, clothes, recreation, and other miscellaneous spending.

Use a Bill Paying System to Make Bill Paying Easy

I have scheduled each regularly occurring, fixed payment bill to be paid using our bank’s bill-paying service. This system is great for paying the mortgage, HOA fee, car payment, and insurance premiums. Utility bills and other expenses that vary from month to month are delivered directly to the bank, making it fast and easy to pay them.

Set Regularly Times Each Week to Pay Bills

Setting a regular time to pay bills and balance your checkbook will reduce your financial stress. You can put bills out of your mind until it is time to deal with them. I balance my checkbook each Sunday morning before we go to church. Our church service starts later than a typical workday, and our Sunday morning routine is less hectic than our Saturday mornings. After breakfast, I pour a second cup of coffee and settle at the computer. It only takes a few minutes since there are only one week’s bills to pay and cleared checks to reconcile. 

Set Up Automatic Transfers to Savings

Once you have established your budget, you need one additional category added to your automatic transfers. This new category should be your savings. Once you determine that amount, set up an automatic transfer on the first of each month or the first payday. This is one less decision you must consider, and you are unlikely to be tempted to pull the money out of savings once it is there.

Make It a Family Effort

If you are married, it is important that you and your spouse work together to set your goals and achieve them.  If you have children, share your goal with them and build excitement.  This is a great learning opportunity for them, and will help them to understand why you are saying “No” to certain items they want you to purchase.  Set aside a time once a week or twice a month to assess where you are and hold yourselves accountable to one another.   As intermediate goals are met, have a family vote to decide on the reward, or take turns choosing the reward.

Recruit an Accountability Partner

If you are not married, you will want to recruit someone that you can review your spending with once or twice a month and who will encourage you to stick with your plan. Be careful not to sabotage your budget by asking your shopping buddy to be your accountability partner.  Perhaps you have a mentor at your work or church, or a parent, who has consistently demonstrated financial responsibility who would be willing to assist you.  Having an accountability partner greatly increases your chances of being successful in reaching your goal.

In summary, set goals, reward yourself for reaching your intermediate and long-term goals, and set up systems to make it easy to pay bills and live within your budget. The easier it is to monitor your spending, the more successful you will be in sticking with your budget.

To learn more about how to manage your money, please click the Finances categories tab to find many blogs on money management, budgeting, and stewardship. My book Honoring God with Your Money is a great tool for financial money management.

8 Steps to Help You Survive Times of Financial Challenges

Sometimes we find ourselves in challenging financial situations, despite our best efforts to budget and manage our money. For my family, one of these times came in 2009 when my husband was laid off from his job. As the primary wage earner, his salary accounted for 70% of our income. Little did we know, it would be nearly three years before he returned to work. 

You may be in a similar situation. Amazon announced this week that they would be laying off 9,000 workers in addition to the 18,000 layoffs that were announced in January. Yahoo plans to lay off 20% of its staff by the end of 2023, and Zoom has recently laid off 1,300 workers. Even if you are in no danger of losing your job, your budget and finances may have been negatively impacted by the steep increase in interest rates or rising prices for food and gasoline.

When my husband called me at work to say he was packing up his office belongings, I did not panic. I was filled with an amazing amount of peace. My faith has never been in the government or the economy; it is in God, and God takes care of His people. I am comforted by the words Jesus spoke to His disciples in Luke 12:27-28. Jesus told His followers, “Consider how the wild flowers grow. They do not labor or spin. Yet I tell you, not even Solomon in all his splendor was dressed like one of these. If that is how God clothes the grass of the field, which is here today, and tomorrow is thrown into the fire, how much more will he clothe you—you of little faith!”

If you find yourself negatively impacted by rising costs and your peace shaken, the first step is to put your faith in God. If you have been tithing and managing your money in ways that honor God, He will bless you during this challenge. However, He also expects you to use wisdom to evaluate your expenses and make cuts where possible. Godly principles apply to all areas of our lives, including becoming financially sound during unstable times. 

Here are some of the steps we took that helped us survive without my husband’s salary:

  1. Examine your expenses. Be ruthless in cutting all unnecessary costs. Our first cut was the daily newspaper. Our second was trash pickup service. There is a convenience center near our home, and my husband could drop off our trash. We did not cut out cable and Internet, but we reduced our cable package to save money.
  2. Apply for unemployment. You have been paying into this fund for many years for just such a circumstance. You will likely receive 25% or less of your previous salary, but you will appreciate having it.
  3. Update your resume and start your job search. Let your family and friends know that you are job hunting. They may know someone who knows someone who has a job for you.
  4. Commit to cooking at home and not eating out. Home-cooked meals are healthier and less costly than eating out. Make a list of low-cost meals you like. We “dusted” off the dozen or so meals we fixed regularly as poor graduate students when we were first married. In college, we saved money on food by eating meatless meals occasionally for a week, and we did that again during this period.
  5. Freeze all discretionary spending. Do not spend your new-found free time shopping on the Internet. Only buy what is absolutely necessary, and then shop for the best deal.
  6. Make a list of all the ways you can have fun without spending any money. Invite friends over and pull out the board games and puzzles for hours of free leisure time. Visit free venues like public parks, museums, and community events. Re-engage in activities you have been too busy to enjoy, such as biking, fishing, and hiking. 
  7. Finish projects you started. You may have home repairs that you never got around to doing or unfinished crafts/sewing/needlepoint projects that could be completed and given as gifts.  
  8. Sell unneeded items. While you are unemployed, clean out your closets and basement and have a yard sale. You may have higher ticket items, such as furniture, that you no longer need that you can sell to generate some extra cash.

These are just a few tips to help you survive financial challenges. I would also urge you to (1) continue tithing on any income you receive during this period and (2) record God’s faithfulness to provide for you in unexpected ways during this time.

To learn more about how to honor God with your money and build treasure in Heaven, please click the Finances categories tab to find many blogs on money management, budgeting, and stewardship. My book Honoring God with Your Money is a great tool for financial money management.

Biblical Guidelines for Helping Others

In Matthew 25, Jesus spoke to His followers about how important it is to show compassion and help those in need. He specified that we should help those who are hungry, thirsty, sick, imprisoned, in need of clothing, and foreigners. Jesus spoke of rewards for those who showed compassion by providing food, water, clothes, care, shelter, and companionship. However, nowhere did Jesus say we should simply hand out money to the poor and needy.

5 young people helping others by providing food, clothes, medicine, and love

There are many people today who are advocating giving monetary payments to people who are low-income earners, homeless, or at risk of becoming homeless. Just this week, some politicians in Oregon proposed a $1,000 per month to such individuals. While it is hoped that this money will be used for food and shelter, there are no restrictions on how it can be spent. While this plan is well-intentioned, it is riddled with flaws, because it does not follow Biblical guidelines for helping those in need.

In both the Old and New Testaments, the Bible encourages generosity toward those who are genuinely in need. At the same time, it discourages helping those who are able to work and provide for themselves but choose to be idle.

First and foremost, we are instructed to help members of our families who are in need, particularly the widows. We can read in 1 Timothy 5:3-4, “Give proper recognition to those widows who are in need. But if any widow has children or grandchildren, let them first learn to show piety at home and to repay their parents, for this is good and acceptable before God.” If the widow has no family and if she is older and unable to provide for herself, then the church is instructed to step in.

But, what does the Bible say about helping other people?

  1. We should meet their immediate needs with food, water, clothing, shelter, and companionship, as Jesus instructed. 1 John 3:17 warns us against seeing a brother in need and not helping meet that need. “If anyone has material possessions and sees a brother or sister in need but has no pity on them, how can the love of God be in that person?”
  2. We are commanded to provide opportunities for the poor and foreigners to work and provide for themselves and their family members. In Leviticus 19:9-10, the Lord commands the Israelites, “When you reap the harvest of your land, do not reap to the very edges of your field or gather the gleanings of your harvest. Do not go over your vineyard a second time or pick up the grapes that have fallen. Leave them for the poor and the foreigner. I am the Lord your God.” Notice, however, that the poor and needy were not given handouts. They were given access to the fields and vineyards, where food was available. But they had to do the harvesting themselves. They were able to eat because they did the work.
  3. In the book of Ruth, we see this principle in action. Ruth, a young widow provides for her widowed mother-in-law, Naomi, by going out to the fields and gleaning wheat. When Boaz, the field owner and a near relative of Naomi, saw her working, he told his men to leave more wheat for her to glean. He did not give her money or even provisions, but he made it easier for Ruth to provide for herself and Naomi. He also provided her with sustenance while she was in the fields working.
  4. In the fourth chapter of 2 Kings, we read a story about a poor widow whose two sons were going to be sold to pay her debts. God provided assistance through Elisha. Elisha did not pay the woman’s debts; instead, he instructed her to collect jars from her neighbors. Then he instructed her to pour the small amount of oil she had into the jars. The oil filled every jar. The woman could sell the oil to pay her debts and redeem her sons. God provided a miracle in that the oil did not run out until she had enough to sell. However, she had to make the effort to collect jars, pour the oil, and sell the oil.
  5. We are instructed to not help those who are lazy and refuse to work. In fact, God promises that such people will be poor. “Those who work their land will have abundant food, but those who chase fantasies will have their fill of poverty.” Proverbs 28:19

God blessed Ruth and Boaz for their obedience, Ruth for working, and Boaz for leaving gleanings for the poor. They married and raised a family. Among their descendants were King David and Jesus Christ, our Savior. God also blessed the widow who obeyed and followed with the work Elisha told her to do.

Providing the poor and needy with opportunities to work and be productive is God’s plan for taking care of them. Those who cannot work do need to be cared for, but most people are able to do some type of work. Work produces self-esteem and confidence, as well as independence and financial freedom.

Perhaps those legislators in Oregon should take a second look at their plan. How can they assist homeless people in getting job skills that will allow them to escape perpetual poverty and homeless? Giving them unrestricted money will help some for the moment, but it is not a lasting solution.

When you are given the opportunity to help someone in need, pray and seek God’s solution. God will always make a way.

If you grapple with how to help others and whether to give to charitable causes, my blogs on generosity can provide you with godly guidance.

To learn more about how to honor God with your money and build treasure in Heaven, please click the Finances categories tab to find many blogs on money management, budgeting, and stewardship. My book Honoring God with Your Money is a great tool for financial money management.

Methods for Tracking Spending

Have you overdrawn your bank account recently?  Are you running up balances on your credit cards because you don’t have enough money to cover your monthly expenses? Do you find yourself wondering where all your money went? Do you want to save money for a memorable trip, yet find your savings balance decreasing rather than increasing?    If you answered yes to any of these questions, you need to create a budget and set financial goals.

Creating and sticking to a budget will allow you to stay out of debt and achieve your financial goals.  However, you need to know where your money is going before you can create a budget that will work for you. Start by tracking your spending for a few months.

Cell phone with spending app open

In times past, most people tracked their spending using a notepad and pen. I recently found a spiral notebook that my grandmother used to record her spending in 1956. She used a separate page for each month. She listed her take home income at the top of the page and carefully noted each expense. As a single woman, she brought home about $275 each month, so it was imperative that she managed her money well. This method still works well if you faithfully write down all your expenditures.

I am a big fan of spreadsheets. When my husband and I started our own home twenty-five years later, I used a pen and paper method, too. But, a few years later, when Lotus 1-2-3 (precursor of Excel) was introduced, I graduated to using a spreadsheet to track income. Today, I use Quicken to track and balance my bank accounts, and I use a spreadsheet to develop our budget. I balance my checkbook every week or two to be aware of my spending and how much money is in my accounts.

Other people use different methods. I have friends who use the envelope system. On each pay day, they cash their checks, put their budgeted savings into their savings account, and allocate the rest toward expenses. The money for each expense category goes went into a separate envelope. They pay cash for all expenses, and when the envelope is out of cash, they spend no more on that category for the remainder of the money.

Today there are many apps to help you track your spending. Some can be connected to your bank accounts and credit cards. Some apps simply track your spending, while others allow you to input spending parameters and are indeed budgeting tools. Apps benefit those who do not balance their checking accounts regularly. According to StatisticBrain.com, 79% of people rarely or never balance their checking accounts.

Some of the most popular spending apps currently are:

  1. Mint. This free app can sync to your bank accounts and credit cards. It allows you to set goals, track investments, and be reminded of when to pay bills. It will also alert you when you have exceeded your spending goals.
  2. YNAB (You Need a Budget)–This zero-based budgeting system lets users allocate all income into spending categories, debt reduction, and savings. It also lets users set goals. The downside is that after the free 34-day trial ends, you must enroll and pay a monthly or annual fee.
  3. Goodbudget. This system mimics the envelope method. The user assigns an amount to each “envelope.” This method does not connect to bank accounts or credit cards, so the amounts must be entered manually. This is a good version for those who do not want all of their accounts connected. There is a free version, but if you want to track more than a few categories, you may need to pay a fee.
  4. Every Dollar. This method is similar to my method of recording expenses in Quicken and using a spreadsheet to track totals. Like Goodbudget, it does not connect to bank accounts or credit cards. All expenses must be entered manually. It does allow the user to set reminders to pay a bill.

There are many other apps available that you might want to consider. Choose a method based on compatibility with your style and personality. Mint or YNAB might be a good choice if you want to connect all your accounts without entering expenditures manually. On the other hand, these systems may not be suitable for you if you worry about identity theft and the risks of having things too automatic. So, set aside a few hours to evaluate the options available and decide to start using one of them to track your expenditures.

If you need help to learn to manage your money and improve your credit, please check out some of my other blogs on Finances, Money Management, and Stewardship. My book Honoring God with Your Money is a great tool for financial money management.

For more money management tips, subscribe to my quarterly newsletter: newsletter signup

Four Reasons to Check Your Credit Report

Most people have easy access to their credit scores.  Mine is available on my credit card statements each month and from my banks.  People are less likely to look at their credit report, especially if their credit score is good or excellent.  However, it is a good idea to review your report occasionally.  Here’s why.

  • Check for identity theft.  If someone has gotten access to your personal information, they may have applied for a loan or credit card in your name.  You need to review your report periodically for any accounts that you are unaware of.  One of my credit card companies checks this for me and notifies me each month as to whether any new accounts have been open in my name.  You may want to check with your credit card company to see if that service is available to you.
  • Check for errors.  Credit card companies process more than a billion transactions each day. They are going to make some mistakes. The sooner you catch a mistake, the sooner it can be corrected and the less likely it will negatively impact your credit score.  Additionally, some lenders may fail to report closed accounts or debts that have been paid in full, so you will want to check for those type of errors, as well.
  • Learn why your credit score is not higher.  I spoke with a lady recently who told me her credit score was 580.  That is on the cusp between Poor and Fair.  She could not understand why it was so low, as she said she had no debt other than her home mortgage and a loan on one of her four family vehicles.  We pulled her Experian credit report, which told a very different story.  The woman had seven accounts that were flagged as Potentially Negative.  Each of them was small debt that she had not paid and did not realize that she owed.  It was immediately obvious why her score is so law.
  • Make a plan to improve your score.  The seven debts that the lady had not paid have all been sent to collections.  She needs to take care of each of these.  Her plan is to (1) contact each creditor to verify that the bill is correct, and (2) pay each debt that is truly owed.  In her case, one debt was for about $350 and the other 6 were approximately $100 each. She can pay off all seven bills for less than $1,000.  She should see a significant increase in her credit score in 30 – 45 days.

In the case of the lady I spoke with, her credit score was quite low due to unpaid debts totaling less than $1,000.  She can easily pay all of these bills, once she verifies they are accurate.  In other instances, however, someone may have no debts that have gone to collection, yet still have a low credit score.  This could be due to a pattern of paying bills late, opening too many new accounts in a short period of time, or having too much debt in relation to your maximum.  It is difficult to assess why your score is low and make a plan to improve it without reviewing your credit report.

Everyone is entitled to a free copy of their credit report once a year from each of the three major credit rating agencies.  Some financial experts recommend checking all three at the same time each year and comparing them, while other experts recommend spacing them out during the year.  The lady I worked with pulled her Experian report last week. She will take care of each of the debts and allow 45 days for her records to be updated. Then she will get one from either TransUnion or Equifax to verify that the debts have been removed, and later in the year she will get the third one to ensure that she is staying on track with all of her open account.

To access your free credit report, go to annualcreditreport.com

If you need help to learn to manage your money and improve your credit, please check out some of my other blogs on Finances, Money Management, and Stewardship. My book Honoring God with Your Money is a great tool for financial money management.

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How To Organize Your Tax Information

It’s February, and all of your W-2’s, 1099s, and other tax documents should have arrived in the mail. Now it’s time for you to get your tax information ready for your accountant. Be kind to your accountant, and do not give him or her an unorganized mess. 

Pile of unorganized receipts and tax documents

Take the time to go through the documents in the large manila envelope (or box or drawer) you stored them in.  If you are not itemizing deductions, your accountant only needs documents related to income you received and adjustments to income. Documents used to report income include W-2, 1099, 1099-R, 1099-INT, 1099-NEC, and 1099-MISC.  You may have also received a 1098-T for student loan interest, which is an adjustment to income.

If you are not itemizing, these are likely the only documents your accountant needs.  Put your documents in order as they appear on form 1040 and paperclip together.  I recommend that you provide a summary list of all income and adjustments to income.  If you itemize, you should also include your deductible expenses on the list.  Do not give your accountant receipts for deductions; he only needs to know the categories and amounts.

Your deductible expenses might include:

  • Health related expenses that exceed 7.5% of your adjusted gross income (AGI).  For example, if you AGI is $65,000 and you have medical expenses of $9.400, you can deduct $4,525 of medical expenses ($94,00 – ($65,000*.075)).
  • Property taxes
  • State income taxes paid
  • Fees paid to have your taxes prepared by a tax professional
  • Moving expenses, if you moved 50 or more miles for a job
  • Charitable donations—you need a receipt to claim deductions of more than $250 to a single charity.  Separate cash and non-cash donations. You may also deduct mileage on your personal vehicle while performing volunteer services.  Your accountant only needs to know the mileage associated with service for each charity.

My tax summary form looks like this:

These steps will make preparing your tax return easier for your accountant, which may translate into a lower tax preparation fee.

To learn more money management tips and how to honor God with your money, please click the Finances categories tab to find many blogs on money management, budgeting, and stewardship. My book Honoring God with Your Money is a great tool for financial money management.

5 Changes To Instantly Save Money

Inflation has slowed to 7.1%. Still, Moody’s Analytics estimates that the average family spent $396 more per month this fall than they did in 2021 for the same goods and services. The Census Bureau calculated the median household income at the end of 2021 as $69,021. The average worker received a raise of 4.8% in 2022. For a family earning $69,021, the raise was $3,313 for the year, or $276 a month. That translates to a take-home increase of about $201. After paying $28 tithe on the extra salary, they have an extra $173 per month. That’s a nice sum, but it falls $223 short of the average increase in monthly costs.

If you are in this situation, now is the time to rework your budget and try to cut $223 from your normally re-occurring expenses. If you manage your money well and live below your means, you likely have some room in your budget. However, it is still important to examine your expenses and make cuts where you can.

Here is a plan to cut on spending without feeling deprived.

  1. Cut back on technology expenses. Most home today have an internet and cable television plan, in addition to a cell phone plan, and perhaps a landline telephone. The average household spends $116 on internet and cable and another $114 on cell phones, and many spend much more than that. This is a good time to research your options and see if you can find a more economical plan. Tom’s Guide offers an analysis of the best cell phone plans for 2023 to help you make a wise decision (https://www.tomsguide.com/best-picks/best-family-cell-phone-plan, and cabletv.com has analyzed the best home internet plans (https://www.cabletv.com/blog/best-cheap-internet-packages). Let’s assume for this example that you are able to reduce your technology expenses to $170 per month, saving $60.
  2. Reduce streaming services. Two-thirds of all American households subscribe to Netflix, sixty percent to Amazon Prime, and nearly half to Hulu and Disney+. The cost of these plans is about $42 per month, plus the costs of any movie rentals that are not covered by a plan. When you are researching cable television packages, try to find one that includes free movies that you enjoy. If you do so, you can cancel these subscriptions and save $42 per month. Even if you don’t find a plan with free movies, you can cancel two or three of these subscriptions and save up to $27 a month.
  3. Reduce food waste. RTS (Recycle Track System) estimates that the average household wastes $1,866 in food each year. That’s more than $155 per month. The biggest culprit is produce which goes bad. Meat and dairy products are also highly perishable. Reduce food waste by planning meals before you shop and making a point to use perishable food items in a timely manner. We will assume, that with some effort, you can reduce food waste by $80 per month.
  4. Unplug appliances and electronics when not in use. Estimates are that the average household could save $15 per month by unplugging the coffee pot and other kitchen appliances when not in use.
  5. Reduce money spent eating out. Fast food prices jumped about 15% in 2022. The average lunch out now cost more than $11 for one person, while a sit-down lunch will run closer to $20 with tip. If you cut out two fast-food lunches and one sit-down lunch per month, you will save $42 per month.

These five changes will save you enough money to make up for the loss of purchasing power from inflation. If you find that you need, or want, to reduce your spending more, coffee and beverages on the go are another source of potential savings. A large soda or a cup of regular coffee at a drive-up restaurant will cost you $2 or more, while a specialty beverage could cost you $4 – $6. If you buy one beverage each workday, you are spending between $44 and $132 per month. This amount could be significantly reduced by brewing coffee at home and buying other beverages at the grocery store.

God expects us to be faithful stewards of the financial resources He entrusts to us. Money allows us to meet the needs of our families and bless others. However, it can be a cause of great stress if it is not managed properly. Prayerfully ask God to help you budget and manage your money, and rely on Him to meet all your needs.

To learn more about how to honor God with your money and build treasure in Heaven, please click the Finances categories tab to find many blogs on money management, budgeting, and stewardship. My book Honoring God with Your Money is a great tool for financial money management. Click here to sign up for my quarterly newsletter on managing your money: newsletter signup

If you have never accepted Jesus Christ as your Savior, you may not understand what it means to rely on God to meet your needs. Please click on Basics of Salvation in the tool bar above to learn how you can accept the wonderful free gift of salvation.

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