Susan's Reflections

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:

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.
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.
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.
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.
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.
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.
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.
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.

Cultivating True Wealth

The Bible teaches us that true wealth can only come from having a personal relationship with Jesus Christ. To enter into a personal relationship with Jesus, we must admit that we are sinners in need of a Savior, recognize that Jesus is the only one who can be our Savior, and accept His freely-offered sacrificial death as cleansing for our sins. Repentance and faith in Jesus lead to true peace on earth and an eternity in Heaven.

In Proverbs 22:4, King Solomon wrote that “Humility and the fear of the Lord bring wealth and honor and life.” We must come to the Lord humbly admitting that we are sinners and in fear that He will give us the just punishment our sins demand before we can truly accept His gift of salvation. In accepting Jesus as our Savior, we become children of God and joint heirs with Christ in the abundance of Heaven.

When the rich young ruler came to Jesus and asked what he must do to obtain eternal life, Jesus told him to obey the commandments. When pressed for what else was necessary, “Jesus answered, ‘If you want to be perfect, sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me.'” (Matthew 19:21) The next verse tells us, “When the young man heard this, he went away sad, because he had great wealth.” (Matthew 19:22) This young man was so tied to his earthly belongings that he was unwilling to give them up for the true riches of Heaven. How very sad! Our earthly possessions are fleeting, but true wealth will last forever.

This post is a reprint from my quarterly newsletter. If you would like to receive my free newsletter with other tips on managing your money in a way that honors God, subscribe here.

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.

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.

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.
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.
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.
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.

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?

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?”
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.
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.
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.
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.

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.

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:

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.
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.
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.
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.

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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

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

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 Side Hustles You Can Do from the Comfort of Home

Although inflation dropped to 6.5% in December, it is still quite high. Many Americans are feeling financially pinched from more than a year of above average inflation, combined with raises that did not keep up with inflation. So, I was not surprised to read that more and more Americans are taking on a second job or a side hustle. I was a bit surprised, however, that the percentage has risen to 93%, according to a survey by Insuranks (https://www.insuranks.com/side-hustles-2022). That means that nearly everyone you know is working two or more jobs or engaging in some type of second-income generating enterprise.

Woman working from home on computer and holding a handful of cash

The survey found that the most common reasons for taking on a side hustle were (1) to earn a bit of extra cash and/or to have something to do, (2) to make ends meet, (3) enjoyment, (4) helping to deal with inflation, and (5) paying off debts sooner. https://www.insuranks.com/side-hustles-2022

On average, people surveyed earned nearly $500 extra per month from their side hustles. Most people I know would be happy to bring in an additional $500 per month, especially if they could earn it on their own schedule and from their own home. Here are some options that meet these criteria.

Online surveys. Online surveys do not pay much, typically between $0.50 and $5.00 per survey. However, most surveys can be completed in 10 minutes or less. Let’s suppose that the average survey pays $2.50 and takes 10 minutes to compete. If you have 4 hours per week to devote to taking surveys, you could earn $240 per month ($2.50 * 6 surveys per hour * 4 hours per week*4 weeks per month). If you have 1 hour per day, your potential earnings would increase to $450. You want to make sure that you find legitimate sites and try a few to see which site works best for you. To learn more about the most trusted online survey sites, see https://walletmanual.com/best-paid-online-survey-sites?utm_source=adwords&gclid=CjwKCAiArNOeBhAHEiwAze_nKKY1EnXT4IT4YSOCi2oXlcxdMxQJ9zHxXpo5TaBi4Km0pfGNjjCSohoC-kUQAvD_BwE
Earn money from your hobby. Do you paint, make jewelry, or sew? These and many other hobbies can earn you money online. You can sell your handmade items online at Etsy, Ebay, WooCommerce, Shopify, and many other portals. Potential earnings will depend on the products that you make and your ability to market your products effectively. To learn about alternative sites to Etsy, see https://www.cloudways.com/blog/etsy-alternatives/
Teach online. Online classes gained in popularity during covid, but even before covid, many people were teaching online classes. I know people who teach English to children in Asia online—this requires adapting your life to their schedule. I know other people who teach piano, guitar, sewing, singing, and art online. Your earnings will vary depending your industry. For instance, piano teachers earn $40 or more per hour for private lessons, whereas teaching English to foreign students will pay in the range of $15 – $26 per hour.
Freelance. There are many opportunities to earn money as a free-lancer. Some of the skills most in demand are graphic design, web site development, social media management, and virtual assistance. You can take one-time jobs or secure a regular gig as a part-time free-lancer. I have a client who has been a virtual assistant for several years. She has four clients that each require 4 – 8 hours of her time per week. She sets aside 2 hours per week per client for communications with them. They email her tasks to be completed, and she typically has 4 – 5 work days to complete them. She can do the tasks at 2 pm or 2 am, so long as they are completed by the deadline. For a list of sites that match free-lancers with those in need of having tasks completed, see https://www.hostinger.com/tutorials/best-freelance-websites. You will make more money if you market yourself independently and find your own clients, however.
Sell clothing and other unwanted items online. There are many sites where you can list belongings you no longer need. You earn cash while de-cluttering your home. Ebay and Craigslist were among the first sites to offer this service, but today there are many. If you are selling clothing, look for a site that specializes in clothing. For guidance and sites for selling clothing, see https://www.goodhousekeeping.com/life/money/g26415683/how-to-sell-clothes-online-sites/. For household items, see https://www.familyhandyman.com/article/best-websites-for-selling-your-stuff/

If you need some extra money, or if you have extra time on your hands, a side hustle may be a good choice for you. Those discussed above can be done at your leisure from the warmth and comfort of your home. There are many other options available, particularly if you are looking to get out of the house.

Do you have a side hustle? Feel free to share your ideas in the comments.

As you earn more money, be sure to thank God for the abilities He has given you and to honor Him with your money. 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.

5 Options to Avoid Debt Next Christmas

A client of mine recently mentioned that he had dropped $7,500 on gifts this Christmas. That’s a lot of money. This man has a large family, and he had a very good business year. Maybe he was making up for leaner Christmases during covid, or perhaps he wanted to celebrate a great increase in the volume of his business. Either way, he spent a lot of money.

Americans tend to spend more money on Christmas presents, food, decorations, and trees than they have saved, and wind up dealing with after-Christmas debt each January. Here are some numbers that illustrate this:

Average spending per couple	$1,864
Average money spent on each child	$330
Average cost for a Christmas tree	$200
Average after-Christmas debt	$1,242

If you are an average family who spends $1,864 all-in for Christmas, you need to save $155 per month to avoid being in debt in January. Of course, you do not have to spend that much on Christmas, and you should not unless it fits into your budget. Whatever amount you decide that you can spend for Christmas 2023, you should start saving now. That is easier said than done, and it is unlikely to happen without plan.

What are your options for starting to set aside money now for Christmas 2023?

Christmas club account. Christmas clubs allow you to set aside an equal sum of money each week, month, or paycheck. Money cannot be withdrawn without penalty until November. The interest rates are on the low side; however, the plan is simple, it pays interest, and payments can be deducted from your paycheck. This was popular when I was a child, and I had such an account for many years.
Opening a savings special account just for Christmas. The idea is the same as the Christmas club, but you have access to the money at any time. So, you must be able to resist the temptation to withdraw the money for other expenses that arise during the year.
Creating a sub-account in an existing savings account. A sub-account allows you to save money for special events, such as Christmas, by automatically transferring money each month or pay period. To learn more about savings sub-account: https://www.iwillteachyoutoberich.com/blog/tip-using-sub-savings-accounts-for-unexpected-expenses/#:~:text=What%20is%20a%20sub%2Dsavings,each%20of%20my%20sub%2Daccounts.
Budgeting the money. If you have great self-control, you can simply budget the amount you need and not spend it on other things. Most people don’t have that much self-control so another option will work better.
Buy presents throughout the year. This is the strategy that I employ. I start shopping in the summer for gifts for my eight grandchildren. This allows me to pay for gifts a few at a time. This method works well, if it is done in conjunction with a budget. You must track your spending and stay within your budget.

Budgeting is important to manage your finance and control your spending on all categories. If you struggle with budgeting, I have many blog articles on creating budgets under the Finance tab. I have also published a Bible study, Honoring God with Your Money, to help you learn and implement godly principles of money management.

Make Tax Time Simple With These Tips

Income tax returns are not due for three months, but your preparation should start now. Here are my tips to make tax time easier for you.

Get a large envelope (11″ x 14″) to put your tax documents in.
Watch the mail for envelopes marked “Important tax information enclosed. For now, put these documents into your envelope.
Gather tax information that was provided during the year and put into the envelope.
Make a quick estimate of your deductions. For most taxpayers, the largest deductible expenses will be home mortgage interest and charitable donations. Add those values. If the sum is much lower than your standard deductions, then don’t bother with adding up your other deductible expenses, unless you had extraordinary health care costs for the year.
Be prepared to get a smaller refund, or to owe more, this year. Tax law changes may result in you having a larger tax liability.

Tax information being sent out in January includes:

W-2’s and 1099’s for earned income
Social security payments
Mortgage interest statements
1099’s for dividends, interest, retirement income, and IRA withdrawals
Statements on rental income and expenses from property managers
2021 state income tax refund statements
Receipts for charitable donations larger than $75

Other tax information was provided to you during the year. This includes property taxes you paid on homes, vehicles, motorcycles, and boats. You likely received receipts throughout the year for donations that you made to charities that were less than $75 each and donations of non-monetary goods and services made to charitable organizations.

The 2022 standard deduction levels were increased, making it less likely that you will benefit from itemizing. The 2022 standard deductions are:

Married couples filing jointly = $25,900
Heads of households = $19,400
Single individuals and married couples filing separately = $12,950

Major Tax Changes for 2022:

Smaller child tax credits and credits for child and dependent care. These credits were temporarily increased by the American Rescue Plan of 2021. They have now reverted back to 2020 levels.
Charitable donations are no longer deductible without itemizing. The American Rescue Plan allowed up to $300 for a single taxpayer and $600 for a married couple filing jointly to be deducted without itemizing.
Income from side hustles will be reported to the IRS. To be fair, we were always supposed to report ALL income earned from side jobs and hobbies. New regulations will require all third-party payment processors, such as Etsy and PayPal, to send 1099’s to all vendors who have generated more than $600 in revenue in a calendar year. Recently, the IRS announced that it will postpone enforcement of this regulations for one more year. This year, 1099’s will only be sent to vendors who earned more than $20,000 or had 200 or more transactions.

So, watch the mail for tax documents and start reviewing your paperwork for information that will be needed to complete your tax return.

Oh, and while you’re thinking about taxes, get an 11″ x 14″ envelope and write on it “2023 Tax Info.” Use it to collect receipts for donations, property tax bills, and other documents received during the year. This will give you a head start for next year.

Watch for blog in early February on preparing your information for your accountant.

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