3 Ways To Keep God In The Center Of Your Financial Chaos

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With the beginning of a new year, the internet is a-buzz with resolutions about saving money and getting out of debt. We have a few of our own goals, and since our savings challenge went well last year, we are doing it again this year with a few changes.

As Christians, we share a lot on this site about finance from a Biblical perspective. We believe the Bible has answers for many of the financial situations people find themselves in, and that God’s desire is for us to have a healthy relationship with money as a resource, while not allowing the love of it to take root in our hearts (1 Timothy 6:10).

3 Ways To Keep God In The Center Of Your Financial Chaos

When we are weighed down by financial stress, or are singular-minded in our desire to overcome debt’s hold, it can become easy to focus on our own abilities or helplessness and forget that we have a heavenly Father who sees our situation, is in control of it, and actively involved in working it out for His glory!

I have to be reminded that my finances are not separate from anything else in my life, and certainly not separate from my spiritual life. The same Biblical truths that govern everything else, should apply to how I view my financial situation.

1. Remember That God Cares About Your Situation

Whether I’ve made made poor financial mistakes and gotten myself into a mess, or am doing well and trying to decide what to do with the surplus funds I am taking in – God cares! In the sermon on the Mount, Jesus reminds the people that our Heavenly Father knows what we need and that he will take care of us (Matthew 6:28-33). While we should (prayerfully) plan and be diligent, those things should not lead to unhealthy anxiety and worry. Whatever is out of our control can never be out of His!

We are not alone in our sea of financial concerns just as we are not alone in our relationships, in our problems, in our struggles with sin. As you consider your next step on your financial journey, remember Who is walking with you, and already has the future all mapped out.

2. Remember That God Has Given You the Ability to Be Content in Any Situation

Many Christians struggle with contentment: the inward state of satisfaction (regardless of the outer circumstances), yet that is what God wants from His children. Contentment does not equate to complacency or surrender, nor does it mean that you have to put on a pretense of joy in times of hardship.

In Philippians 4:11-13, Paul says, “ Not that I speak in regard to need, for I have learned in whatever state I am, to be content: I know how to be abased, and I know how to abound. Everywhere and in all things I have learned both to be full and to be hungry, both to abound and to suffer need. I can do all things through Christ who strengthens me.”

In many places, including the passage above, the Bible exhorts us to look to Christ as the source of our strength and our joy. Your happiness shouldn’t be determined by whether you can afford a certain luxury, or pay off your student loan. Those things are nice, but the contentment in your heart should not be affected by them, not if the true source of your happiness is the Lord.

3. Remember That God Will Use Your Life For His Glory

One of my favorite passages, and one I’ve heard many times in my life is Romans 8:28 “And we know that all things work together for good to those who love God, to those who are the called according to His purpose.” It used to make me feel great because it meant that eventually things were going to be okay.

But there is more than just the first half of the sentence, the last part is equally important  “called according to His purpose”. Being a Christian means that my life is not my own, I follow and serve Christ. There are other passages that talk about the need for our focus to be on God and glorifying Him, like 1 Corinthians 6:19-20, or the end of the passage from the sermon on the Mount that I mentioned earlier – Matthew 6:33 “But seek first His kingdom and His righteousness, and all these things will be added to you“.

Even though things may not happen in the time frame you’d like, or the way that you’d like them to turn out, remember that God’s plan for you is bigger than what you have for yourself. The things that we go through serve reasons that go beyond our temporal success or satisfaction. While we are alive, we are also being made holy, and sometimes that happens through trials (James 1:2-3). That is only one of many possible reasons,  we may never know the answer to until we meet the Lord.

As you go through your financial journey this year, whether with hope, gusto, or trepidation, please remember that God is your source. He is your strength, and your great reward.

Every Sunday I am blessed to look at this scripture on a banner in front of me during our service, and it is one I think of daily. I pray it will bless you also as you focus on God:

Proverbs 3:5-6 “Trust in the Lord with all your heart And do not lean on your own understanding. In all your ways acknowledge Him, And He will make your paths straight”.

5 Reasons Why You Need a Budget!

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If I asked you to tell me how much you spend eating out or buying gas each month, could you tell me? What about your household’s true cost of living?

This is the most basic reason you need a budget: To be able to plan and track where your money goes! Most people who I speak to about their finances have no clue how much they spend on a monthly basis. All they know is that by the end of the month, their bank accounts are nearly empty and they are waiting for their next paycheck.

Even if you don’t find yourself scraping together pennies at the end of the month, you still need to have a budget in place. In order to take control of your finances you need to come up with a plan. This means assigning a job to every dollar that you receive before you ever receive it.

How? You need to create and update a budget in order to plan and keep track of your spending. This goes both ways – if you don’t keep track of your spending, then creating a budget is pointless. You have to periodically evaluate your spending to ensure that you are staying on track.

Why You Need A Budget

Budgeting - You Need A Budget

You Need A Budget To Accomplish A Financial Goal

It will be nearly impossible to accomplish a financial goal without a budget – of course it can be done, but with a lot more hassle and waste. With a budget, you can allocate a specific amount toward your goal – whether it be savings or debt repayment – and ensure that it is reasonable.

It will also be easier to accelerate your plan by reducing spending in one or more areas and funneling that money into your “main goal”.

If you look at our 52-week savings challenge results, you’ll see an example of how budgeting can help you reach a financial goal.

You Need A Budget To Help Handle “Shocks” To Your Finances

If you find out today that your job will be cutting your salary, or implementing furloughs (mandatory, unpaid days off), how would you handle it? Would you be able to make the necessary adjustments?

If you keep track of your spending (which will be necessary to follow a budget), it will be easy for you to make these adjustments. You will be able to look at every area of spending and determine where you need to cut back – or even if it’s worth it to try to increase your income.

Learn how to set up a financial contingency plan (and no, it’s not as simple as having an emergency fund)!

You Need A Budget To Identify Areas Of Waste

Waste Money

Most people who make small daily purchases (like coffee, breakfast, or lunch), are shocked to see how much they’re really spending in these areas. It’s easy to spend $5 on a cup of coffee and a bagel in the morning, $3 on a candy bar and soda from the vending machine, and then spend $6-$10 on lunch without even thinking about it.

However, if you have established a budget, it will become increasingly difficult for these expenses to escape your attention.

The first month after you set up your budget will probably be a big eye-opener for you (it definitely was for me). Remember that coffee, candy and lunch from above? You would probably budget about $50 or $75 to that category. However, 22 days (the typical amount of work days in a month) of that type of spending will cost you nearly $400 every month!

Committing to (and adjusting when necessary) a budget will help you to evaluate this type of spending and decide if you should divert money from another category, or change your habits!

You Need A Budget To Ensure That Any Surplus Is Not Spent On Frivolous Items

Similar to looking for areas of waste, this will call for you to identify areas where you can reduce or eliminate spending. Once you allocate your income across living expenses, giving, debt repayment and savings, you may find that you have money left over (a problem that we all would love to have).

Instead of this money just being absorbed into your spending (something that usually happens without a budget), you will be able to give this surplus a new assignment. This, of course, depends on your exact situation and level of risk aversion.

You may choose to give more, accelerate your debt repayment, increase your savings, or master your investment strategy. The point is that having a budget will easily allow you to identify these opportunities.

You Need A Budget To Help Develop Discipline In Multiple Areas

Value of Time

This is accomplished in a few ways. First, you are forcing yourself to tightly control your spending, which will call for discipline – especially if this is the first time you have done this.

Secondly, by constantly monitoring your finances and having to make small adjustments, you are more aware of every financial decision you make.

By holding yourself accountable for every dollar that you spend, you will tend to evaluate your free time in the same manner. For instance, you will begin to consider the value of your time in terms of money and lost opportunity, which may cause you to re-evaluate your decisions.

These are just some of the reasons why you need to develop a budget. Over the next few days, we will look a few painless steps you can take to create a budget, and also to change your thinking about money!

Read The Rest Of The Series

Reader Questions

  1. What are some of the benefits that you see in having a budget?
  2. How often to you review your spending to ensure that you are within your budget?
  3. Have you ever discovered that your budget was unrealistic?

I look forward to your comments.

Should I Cosign For a Loan?

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A friend or family member needs a loan, but their credit score is not high enough (due to terrible or no credit history, or massive credit card debt), or they don’t have a large enough down payment or some other reason. So they come to you and ask you to be a cosigner on their loan.

 

What Does It Mean To Be A Cosigner?

To be a  “cosigner”, simply means that you agree to assume the responsibility of another person’s debt if they are unable to pay it. For example, if you are a cosigner on your brother’s $20k car loan, you have now agreed to pay the bank back that $20k (or whatever is left at the time of default) if your brother is not able to pay it back.

Many people will face this dilemma at one point in their lives. In fact, many people will actually cosign for loans even when they do not feel comfortable doing it. It is usually due to not wanting to be the bad guy, or is sometimes a genuine attempt to help someone. This is often viewed as a way to help out someone in need – such as a responsible, young person who just needs a chance to display or prove their credit worthiness; or a way to assist your child at the beginning of their “independent life”. But is this a wise thing to do?

What Does The Bible Say About Being A Cosigner?

Proverbs 17:18 tells us that,

A man lacking in sense pledges and becomes guarantor in the presence of his neighbor.

Right away we see that the bible describes one who becomes a cosigner on a loan as “senseless“! We can see that it is not a wise thing to make a pledge based on someone else’s ability to pay back a loan.

We also see such council in Proverbs 22:26,

Do not be among those who give pledges, among those who become guarantors for debts.

Not only are we instructed not to cosign for a loan, but we are also shown some of the dangers of doing so… Proverbs 11:15 tells us that:

He who is a guarantor for a stranger will surely suffer for it, but he who hates being a guarantor is secure.

So, we are actually told that we will “surely suffer” if we decide to pledge ourselves for another person’s debt; and that one way to stay secure is to “hate being a guarantor“! Those are very strong words to describe what has become such a common practice today.

Also in Proverbs 20:16 we find these words,

Take his garment when he becomes surety for a stranger; and for foreigners, hold him in pledge.

It was common to pledge a garment as security for a loan, but – according to Exodus 22:26-27 and Deuteronomy 24:10-13 – that garment had to be returned by sundown.

The idea here is that one who is foolish enough to pledge himself for the debt of a stranger will most likely never be paid back; so the one making the loan should demand the cosigner’s garment as security for the loan.

This shows the senseless and unpredictable nature of pledging your possessions or your life based on another person’s ability or willingness to pay their debts.

Also, one question that must be asked is, “Why does this person need a cosigner?”. The most basic reason is that their bank does not believe that they will pay back the loan.

They use their own experience, a few calculations and the potential borrower’s history with loans (usually expressed on their credit report) to make their decision regarding the loan.

When they request a cosigner they are basically saying, “We don’t trust this person to be able to pay us back, but if YOU are willing to take all the risk then we will give him the money!

What Should You Do If You Have Already Become A Cosigner?

Proverbs 6:1-5 gives us additional instruction. This time however, the instruction is given to one who has already pledged himself on behalf of someone else:
My son, if you have become surety for your neighbor, have given a pledge for a stranger
If you have been snared with the words of your mouth, have been caught with the words of your mouth
Do this then, my son, and deliver yourself; Since you have come into the hand of your neighbor; go, humble yourself, and importune your neighbor.
Give no sleep to your eyes, nor slumber to your eyelids;
Deliver yourself like a gazelle from the hunter’s hand and like a bird from the hand of the fowler.

As we can see from the strong language in this passage, it is a serious matter to pledge yourself on behalf of another. This is because you have essentially given up control of something that God has given to you as a stewardship, and have become “snared” by your pledge.

This situation is so serious that you must do everything that you can to free yourself from this arrangement and gain back control of your God-given resources. Look at how strong the language is here; you are told to “deliver yourself” and not to sleep until you have freed yourself (see Proverbs 22:7)! You are to act as a gazelle  or bird that is about to lose their life to the hunter!

So, if you are in this situation, it should be your highest priority to free yourself from this before you “surely suffer” (Proverbs 11:15; cf. Genesis 43:9, Genesis 44:32-33).

What can you do instead if you want to help?

If you still want to help while obeying God’s word regarding cosigning, there are a few things that you still can do.

Give Them An Interest-Free Loan:

If you know the person is in need, this is one way to help them that will honor God. Proverbs 28:8 assures us that,

He who increases his wealth by interest and usury gathers it for him who is gracious to the poor.

According to Deuteronomy 23:19-20, it was against the law for an Israelite to charge interest to fellow Jews (of course, loans were only to be requested in times of extreme need and poverty – not to fund frivolous, sinful spending like we see today), but many violated this command. As we see here, giving someone in need a loan and not charging interest is a way that you can assist the one in need and please God.

Give them the money that they need.

Proverbs 19:17 tells us that,

One who is gracious to a poor man lends to the Lord, and He will repay him for his good deed.

If you are able, giving your money to one in need – and only expecting repayment from the Lord – is another way to assist a brother in need and honor God with your finances.

Final Thoughts:

As mentioned earlier, since the bible teaches that debt is slavery (Proverbs 22:7), borrowing should only be done when one has a basic need that cannot be met by their income. It was usually a short-term loan, and the Israelites were commanded to forgive all debt every seven years (see Deuteronomy 15:1-15).

Much of the borrowing that we see today represents a person’s desire to live above their means, and I do not believe that type of borrowing (or giving) is what God is speaking of. Hopefully, I will have a chance to address this in much detail in a future article.

So overall we see that God is completely against the idea of one becoming a cosigner for the debt of another, even if we are really seeking to be a blessing to someone in need. However, the bible does teach us other ways in which we can assist others.

I mentioned stewardship earlier. I realize that this may not be a term or concept that is familiar to many modern readers, but this is a concept that God expects us all to understand. A steward is one who manages another person’s property, finances or other affairs. Here are several articles that do a good job of describing the concept of stewardship:

I would love to hear your thoughts on cosigning – even better would be your experiences with it. If you have any questions on this or other concepts, please leave your comment below.

photo credit: 4PIZON

How to Choose A Career Path

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When considering a career path, one can feel overwhelmed by the various choices. In order to help you narrow down your choices, some well-meaning friend will tell you, “do what you love”, while another will say, “choose a career that will pay a lot of money”. Who is right in this case? How can you determine what path to take?

 

I was reading an article titled, “Doing What You Love Versus Doing What Pays” that looks at common advice on the subject. In reading the comments to that article, it seemed as though most of the readers would advise someone to choose a career path based on the potential income. Others still stuck with the “do what you love” advice that many hold to.

But is it really that simple? Let’s take a look at a few of the pros and cons to both of these views, and also see if there isn’t some other choice that we can make.

A Career Path that you don’t love but pays well:

Pros:

  • You will make a good amount of money
  • You will more than likely avoid the stress that comes from having a lower income (of course this ultimately depends on your financial discipline)
  • The added income may give you the financial freedom that you need to pursue what you love, as a hobby – or at least to not focus on the income it generates
  • You may be able to retire faster and then do what you love full-time

Career Path
photo credit: HikingArtist.com

Cons:

  • If you dislike a particular field, it may be harder to gain enough of an expertise in order to be highly compensated (for instance, those who hate math will not make top notch engineers)
  • You may be required to give up quality time with family and friends in order to accomplish your salary goal
  • Some people with higher incomes find it harder to exercise financial discipline than those with lower ones
  • Many high paying careers paths are also considered to be the most stressful
  • This stress will impact your relationship with family and friends over the long run

A Career Path that you love, regardless of the pay:

Pros:

  • Your love of that field will make you a great student, and so you may excel to the point where you are a top earner in that sector
  • You will have a sense of fulfillment and happiness from your work
  • The lower salary may force you to develop financial discipline
  • You may have lower levels of work-related stress

Career Path

photo credit: icadrews

Cons:

  • Lower salary – you may have to live a much simpler life
  • May take you longer to retire – this may not be a big issue for you if you absolutely love your job
  • If you lose your job, it may be harder to find a new one – although there are a few low paying jobs that are in demand

A couple of things to note. First, this is by no means an exhaustive list. Actually, I am counting on your comments below to help fill in the missing pieces. Second, you will notice that many of these points use uncertain terms like “may”, or “many”; this is due to the fact that many of these will not be true in EVERY case.

My take on choosing a Career Path is this:

I think that the answer to this question is different for everyone and is a matter of prospective. My initial reaction to this question was, “If you can get paid a ‘decent’ living wage for doing what you love, go for it! We wouldn’t have teachers, social workers, or pastors if people didn’t follow this line of thinking.” I also said to myself, “Money isn’t everything, and if you have to be miserable for 10 hours/day just to make a few extra dollars, it probably isn’t worth it.”

Do what you love, and if the pay isn’t great, lower your standard of living to match your pay. You can’t determine your standard of living apart from your income. In other words, LIVE WITHIN (or actually below) YOUR MEANS! This is true no matter what your income turns out to be.

However, for many there is little to no career opportunity in what they “love“. In that case, find a balance. Do something you like, and if it doesn’t pay enough to maintain your desired standard of living, try to make a few bucks from what you love. Like others have said, don’t choke the life out of what you love by focusing on money, but maybe you can be a consultant in that area or start a blog giving advice about it.

Ultimately, we should be content with whatever financial/work situation in which we find ourselves. In the words of the Apostle Paul:

Not that I speak from want, for I have learned to be content in whatever circumstances I am. I know how to get along with humble means, and I also know how to live in prosperity; in any and every circumstance I have learned the secret of being filled and going hungry, both of having abundance and suffering need. I can do all things through Him who strengthens me. ~ Philippians 4:11-13

We see from this passage that our situation should not be able to determine our satisfaction or contentment in this life – especially if we are slaves to Christ!

Personally, I happened to “like” a field that is in good demand (Economics & Finance). However, my true love is Theology, and that may be something that is in my future.

What about you? What choice did you make? Any regrets? How would you advise someone in choosing a career path? Would you tell them to look for money, happiness, or both?

To help you in your choice, Payscale.com has released it’s list of “Best Undergrad College Degrees By Salary”:

Degrees Degrees
Methodology
Annual pay for Bachelors graduates without higher degrees. Typical starting graduates have 2 years of experience; mid-career have 15 years. See full methodology for more.

Not an engineer or an economist? Here is the full list: http://www.payscale.com/best-colleges/degrees.asp

Be sure to leave your comments below.

 

photo credit: jeremy.wilburn

7 Ways Single Parents Can Save Money

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Raising children is expensive and when you’re a single parent, it can seem downright impossible. Figuring out how to pay your bills while still ensuring that your child’s (or children’s) needs are met can be difficult. It is possible with a bit of planning.

Single Parents Save Money

 

You can pay your bills, take care of your kids and still have some money left over at the end of the month. Here are 7 ways in which you can save money.

Create a Budget

If you have no idea how much of your money is going where every month, your spending can quickly get out of hand. Sit down and create a monthly budget. Figure out how much you pay for fixed expenditures (such as rent and car insurance) and how much you want to stick within on other necessities, such as food and other flexible expenditures.

Once you figure these numbers out, it will be much easier to stick them, which can seriously cut down on impulse purchases. It can also be beneficial to balance your checkbook every month. This can help to make you accountable for all of your purchases and allow you to practice more conscious spending habits.

Great articles on how to create a household budget:

How to Create a Budget – Even If You Suck at Budgeting

How to make a family budget – Today’s Parent

Shop Used

Buying new can eat up a large portion of your finances, whether it’s clothing, a car, or furniture. Rather than trying to figure out how you can afford new, shop used.

Consignment sales and thrift stores are a great way to stretch your clothing budget. Not only can you find gently used (and sometimes new) clothing at cheaper prices, you can also sell the clothing you no longer wear. These types of stores are also great for buying other household goods.

There are plenty of websites dedicated to selling used items, allowing you to save a significant amount of money.

Compare Prices

Before you make a purchase, check to see if there is a cheaper price elsewhere. Thanks to the internet, comparison shopping has never been easier. You can even check for coupon codes for your chosen retailer.

What’s more, many stores will price match, whether it’s honoring their online prices in store or matching a competitor’s price. In some cases, you can still use coupons as well.

Join a Savings Club

Many grocery stores offer free savings clubs, which are designed to encourage your shopping loyalty. With a loyalty card, you can gain access to special sale prices and coupons. By planning your shopping trips around the sales of the week, you can definitely save money – as much as $40 or more per trip.

You don’t have to limit yourself to one store. If you shop at multiple stores that offer savings clubs, sign up for each store you frequent.

Pay Bills on Time

When you’re on a tight budget, it can be tempting to let some bills slide but, in doing so, you could be racking up late fees and other penalties. When you do get around to paying your overdue bills, you’re paying more than you would have initially. If possible, set up automatic payments for things such as your mortgage.

When paying your credit card bill, aim for paying about $50 to $100 over the minimum balance each month. And make sure you leave approximately 5 to 7 days for your payments to process. You should also familiarize yourself with any fees that may be associated with your bank, your credit card or your cell phone. Call each company and ask about any fees you are unsure of.

Shop around for banks that charge no fees, or at least less than what you are currently paying. You may even be able to get your credit card company to lower your interest rate.

Some parents may find themselves in a shortage of cash. Here are some helpful articles to help with that situation:

Should you borrow from family or friends? – Money Advice Service

Installment Loans with Bad Credit up to $5,000 – I Need a Loan

Plan Your Meals

While it can take some time, sitting down to plan your meals for the week can help you to then plan your shopping trips. This can help you to stick to a list and avoid buying what you don’t need.

Planning can also help you to make the most of what buy. For instance, if you roast a chicken, you can make chicken salad out of the leftovers, and have lunch ready for the next day or so. The leftovers also make great sack lunches for the kids when they go to school, rather than having them buy lunch.

Another trick to help you save money is to double your favorite recipes. This way, you have one ready for dinner on the night you make it and you can freeze the second one to eat the following week. This will allow you to take advantage of sales and can help you to save time on a night when you may not be able to cook.

Start a Savings Fund

One of the biggest keys to help you save money is to actually set money aside into a savings fund. Allot what you can each month, even if it’s only $20. Over time, this money can really add up. You are not limited to a savings account. You can set the money aside into a college savings fund for your child or into a retirement account. Use whichever method works best for you and your family.

Raising your kids on one income sounds like a frightening concept but, it is entirely possible. Taking the time to sit down and plan can go a long way in making sure that the bills are paid and everyone in your household is comfortable.

[This post was brought to you through a partnership with Sandy Matthews.]