Middle Class Money Mistakes

According to a Pew Research study done in 2014, the middle class is defined as people who have an annual salary between $42,000 – $125,000. That is a huge margin between the low end and the high-end earners.

If you are on the low end of the income level, you are probably struggling to make ends meet, you have little to no savings and you can’t afford any frills.  If you are on the high end of the spectrum, you probably have a little bit of savings and can afford some of the nice things in life.

But whether you are on the low end or the high end, you may be making some mistakes that are not beneficial to your financial future. Here are some topics to consider if you want to improve your financial health.

The first thing that everyone needs to work on is ditching the debt. You want to be in a position where you are totally debt free—no credit card payments, no car loans payments and no mortgage payments.  Getting rid of the mortgage is a long-term goal but paying off the consumer debt should be priority number one.

If you were going to be charged an extra 15%-21% for everything that you buy would you still buy it?  Probably not. But people who use their credit cards and don’t pay them off at the end of the month are doing just that by paying interest. You get absolutely no benefit from carrying a balance on your credit cards and paying interest. It only provides added costs, more debt, and lots of stress when it’s time to make the payment.

The second most common mistake people make is not having an emergency fund. Personal finance experts stress the importance of having an emergency fund to cover unanticipated expenses and avoid long-term financial damage.

If you were suddenly hit with an unexpected $500 bill, would you be able to cover it? If the answer is no, you’re not alone. Nearly six in 10 Americans don’t have enough saved to cover an unplanned $500 expense, according to a report from Bankrate.com. When the unexpected expense occurs and there is not enough ready cash to cover it, the credit cards get whipped out and you go further into debt, paying even more due to interest charges.

An emergency fund is money that has been saved and reserved for emergencies. It needs to be in a liquid account (checking or savings not a retirement plan) so you can access the cash immediately when needed, with no penalty for early withdrawal. The money is never touched except for emergencies.

We encourage people to start with a minimum of $1,000. For most people, this is a goal that will take several months to achieve.  But even if you only have $400 in your emergency fund when you need it, you will avoid $400 in debt for that emergency. After you get a $1,000 saved in your emergency fund, increase it to one month’s income, then three month’s income. The goal is financial protection from all the unexpected expenses that are looming in your future.

The third mistake people make is spending without a plan.  If the money comes in and goes out and you have no idea where it went at the end of the month, how do you know that you are spending money on what is most important to you and your family?  

A lot of mistakes can be avoided if you just stop, think and evaluate how, when, where and why you are spending. Proverbs 21:5 tells us “The plans of the diligent are sure of profit, but all rash haste leads certainly to poverty.” Spending without setting priorities is certainly a way to run head first into financial chaos.

The fourth mistake is not taking advantage of an employer match on retirement savings. To avoid this mistake, invest enough in your 401(k) to maximize your employer match. Always, always save the maximum that your employer will match—it’s free money!

Along with not maximizing your employer match, the fifth mistake is delaying retirement savings until later. You may think that saving for retirement will be easier once the car is paid off, or after the kids graduate from college or when you get that long-awaited raise. But the key to a healthy retirement fund is to start early and save consistently, even if it’s a very small amount. That way you can maximize the magic of compound interest, where you’re earning interest on both what you have saved and the interest you’ve previously earned. Compounding the interest on your savings helps your savings grow exponentially over time.

The sixth mistake is spending too much on cars. A car is a depreciating asset and the newer it is, the faster it depreciates. An average car loan these days is five years or 60 months. An average payment on a car loan is $500. If you start when you are 20 and buy a new car every five years with a $500 monthly car payment, over your driving lifetime of 60 years, you will spend about $360,000 on car payments. And that calculation does not include the interest you could have earned if you had saved and invested that monthly car payment.

The seventh mistake is absorbing any extra money into your day-to-day spending. If you get even a small financial windfall or an increase in your salary it will disappear quickly if you just spend it.  Instead, allocate the additional money to emergency savings, retirement savings and to a worthy cause.

And that brings us to the eighth mistake, which is thinking you don’t have enough money to be generous. Everything we have is a blessing from God.  It is all too easy to bemoan what we DON’T have. When we think this way, it is easy to rationalize why we can’t give any money to charitable causes. Yet if we really believe that everything we have is a blessing from God, then when we are generous we are simply giving back to God what is already his. We need to look for ways to praise God and be grateful for what we DO have, and one of those ways is to be generous.

Taking time to think and plan your spending is the best way to avoid these common mistakes. It’s not glamorous and it may not be fun, but steady plodding keeps you on track. Proverbs 21:20 tells us “Precious treasure remains in the house of the wise, but the fool consumes it.”

The Importance of Stuff

A week after the horrific Las Vegas shooting, the area which was once host to a day of country music was full of abandoned items which were being catalogued and organized so they could be returned to their owners. There were clothes, shoes, baby strollers, phones, backpacks and purses strewn across the huge crime scene. When people were fleeing for their lives, it was easy to let go of their material possessions in an effort to run to safety.

The same thing occurred with the recent hurricanes in Texas and Florida and the fires in California. Most people willingly abandoned their homes, their possessions and all their stuff in order to save their lives.  

When we are faced with the possibility of death, it is easy to leave behind all the things the world tells us are so important. But why does it take a life and death situation to help us put the stuff in our lives into the proper perspective?

We live in the most affluent culture in the history of the world, where we are constantly bombarded with costly, manipulative advertising to prompt us to spend money. Advertisers usually stress the importance of image rather than function. For example, automobile ads rarely focus on a car as reliable, economical transportation. Instead, they project an image of status or sex appeal.

No matter what the product—clothing, deodorants, credit cards, you name it—the message is communicated that the fulfilling, beautiful, wrinkle-free life can be ours if we are willing to buy it. How many commercials do you see which infer that you can never be happy, or fulfilled, satisfied or successful until you buy this thing or that thing? The advertising message is that the big house, fancy car, stylish clothes, and whatever else they are selling will bring us happiness and fulfilment.  All we have to do is buy it. And all too often we fall prey to the advertising hype and sink into the trap of thinking that our happiness is directly related to how much stuff we’ve collected and how much money we have.

We are inundated with the message that once we collect a certain amount of money or buy certain products we will be happy. The problem is that almost as soon as we have purchased the latest object of our desires, or reached a certain level of financial security, we find that it really doesn’t satisfy us, and we need more in hope that more it will provide the satisfaction and happiness we desire. We end up in a constant cycle of accumulation.

Romans 12:2 (GNT) says, “Do not conform yourselves to the standards of this world, but let God transform you inwardly by a complete change of your mind. Then you will be able to know the will of God—what is good and is pleasing to him and is perfect.”

The truth is that only God can provide ultimate happiness, fulfillment and satisfaction. In his letter to the Philippians, Paul stated that he had to learn to be content. We too must learn to be content. There is no need to keep accumulating more and more stuff to satisfy our need for happiness when only God will provide all the joy we could possibly desire.

When we are face to face with our mortality, it is so easy to figure out what is really important. In the face of death, it’s easy to walk away from our stuff and run to safety.

But how hard is it to walk away from our stuff when we are comfortable and safe?  How often do we place more importance on our material things rather than our mission to proclaim the good news?  Our energy and focus can be easily diverted from our faith life into collecting and maintaining the things we have—the house, the car, the boat, the tech toys and on and on.

In the Gospels, Jesus tells his apostles to travel light so that they are not weighed down by material possessions. He wanted his disciples focused on their mission not their stuff.  “He instructed them to take nothing for the journey but a walking stick—no food, no sack, no money in their belts.”   Mark 6:8

He also wants us focused on our mission not our stuff. The mission hasn’t changed in the past 2000 years. We are to share God’s word with everyone we meet. Yet so many times, our stuff can get in the way of our mission.

The difference between how our world views wealth, and possessions is in direct contradiction to how Jesus views wealth. He does not teach that wealth is bad, but condemns being enslaved by worldly wealth and having the love of wealth be an obstacle to our life in grace.

“Jesus then said to his disciples, ‘I assure you: it will be very hard for rich people to enter the kingdom of heaven’” (Matthew 19:23). Riches are deceitful because they are tangible and can blind us from the reality of the unseen Lord. We imagine that our finances and our possessions have some importance that only belongs to Christ.

We can use money to fulfill selfish desires or we can use money to further God’s kingdom on earth. We can use money to keep up with the neighbors or we can use money to help our neighbors. We can use money to accumulate worldly wealth or we can realize that true wealth is not of this world. We can worship money or we can worship God.

What is real security? We can find it in God alone. Apart from a relationship with Christ, it’s nothing more than an illusion.

There’s a Catfish on the Sidewalk!

We’ve spent a lot of time this month preparing for then dealing with the aftermath of Hurricane Irma.

For you non-Floridians, hurricane preparation means securing anything in the yard or patio that could be picked up by the wind and become a projectile. Laundry must to be done because we all need clean underwear in case of prolonged power outages. A visit to the ATM is a must because if there is no electricity, credit and debit cards don’t work. Of course, if all the stores are closed due to electrical outages, there isn’t much shopping going on anyway. We have to check the pantry for non-perishable food because once the electricity is out, things spoil pretty fast in the Florida heat if we can’t make or buy ice and the fridge doesn’t have any power. We need to be sure clean drinking water is available as there is always the possibility of contamination in the local water supply. The car has to be filled with gas because the gas stations are closed when the electricity is out (or when they run out of gas.) Sandbags must be acquired, filled and stacked to protect low lying areas from flooding.

Then after all the preparation, we spend endless hours sitting around waiting and waiting and waiting for the inevitable wind, rain and damage.

After the hurricane, the first thing is a prayer of thanksgiving that we survived. Then comes the damage assessment. Are our families and neighbors safe? Do we still have a roof? Are there any broken windows? Any leaks? Is the electricity on? Who needs immediate help? Do we have enough food and water for the next few days till the roads are cleared and the grocery stores restocked? How much of our landscaping is now trash strewn around the neighborhood?

When it’s safe, we walk around the yard and neighborhood trying to figure out what to do first.

As we were doing damage assessment, one of our weird post-hurricane experiences this year was finding a catfish on the sidewalk in front of our house. It was a fairly large fish—over twelve inches long and it was VERY determined to stay in the teeny-tiny puddle on the sidewalk. We tried picking it up with a yard rake—it flopped off. Then we scooped it into a bucket, and it jumped out. We finally got it into the bucket and put a lid on the bucket for the trip to the pond. We never did figure out how the catfish got in front of our house which is a half-block away from the pond at the end of the street.

Thinking about this catfish reminded me of how a crisis can impact our life. We suddenly find ourselves in unfamiliar territory, with our whole world turned upside down. Like the catfish, we can find ourselves in a place that is out of our comfort zone in the aftermath of a hurricane or other unplanned crisis situations.

In talking to people and reading social media since the hurricane, I have come to believe that people fall into one of two categories in these types of situations. There are the whiners and the winners.

I want to be clear, that these two categories are referring to people who have experienced minor irritations and disruptions due to the storm, not people who have lost everything.

The whiners look on the hardship and inconvenience as a personal attack by some cosmic force. Their attitude is a “Why me?” cry of frustration and dissatisfaction until their world returns to normal. There were six million people in the state of Florida without power and most of the electrical grid in the state had to be rebuilt. Yet the whiners were complaining that their power was not turned on within a day of the storm. They acted as if Armageddon was upon them, even though they were going through a minor inconvenience compared to how the rest of the world lives on a daily basis and how so many other Floridians fared in the storm.

Again, I want to be clear that the whiners were safe, there was no damage to their homes and they were simply experiencing the lack of electricity and internet connection. Yet they acted as if it were the end of the world.

The other type of person, the winner had an “It is what it is” attitude. Yes, they were uncomfortably hot with no air conditioning and they would have appreciated the internet or TV as a distraction from the chaos. But they knew there were much higher priorities than their comfort and they were satisfied to wait out the return to normal.

Several of my friends actually used the past week as a way to be in mental communion with the poor and empathize with the way many people around the world live every day. How many people in other countries suffer through each day without a safe dry home, without enough food to eat or clean water to drink? How many people lack access to the things we take for granted–electricity, running water, air conditioning, refrigeration, dishwasher, TV, internet service?

I find myself being grateful for the return to normal and I also find myself aware of how much in life we expect, how spoiled we are with minor irritations and how selfish we are in putting our wants above the needs of others.

As Americans, we are pampered by the great abundance in this country and we expect it to continue indefinitely. Maybe the whiners all need a lesson in what is really important in life. Maybe our hurricanes are providing that lesson, at least to some of us.

I pray that each and every person who is suffering the devastating effects of losing their loved ones, homes and businesses through hurricanes, earthquakes and other natural disasters will find peace and comfort in the Lord. My heart goes out to those who have lost everything and I encourage you to join me in donating to their relief.

I suggest sending a donation to Catholic Charities in the Dioceses of Galveston/Houston; Corpus Christi; Venice: St. Augustine and Miami.

I also pray that each and every whiner will face a wake-up call and learn the difference between needs and wants, between conveniences and necessities, between being a whiner and a winner.

The Tradeoff Between Energy, time and Money

Do you remember summers as a child when you had unlimited energy and all the time in the world to do whatever you wanted to do before the start of school?  And there was no real need for money.

Then you grew up and all of a sudden there was never enough energy, time or money for everything. Seems like with family, friends, work, church and other activities there is not enough time in 24 hours to get everything done we need to do. That makes it really easy to justify spending money on things we are able to do for ourselves, but just don’t have the time or energy to do it ourselves.

It is tempting to justify paying someone to mow the lawn, clean the house, wash the car or whatever else needs to be done around the house. When we do that we are trading money for the time and energy to do other things. That may be a good tradeoff but we are using money that could be directed towards things that are more important than paying someone to do our chores.

Balancing energy, time and money can be an art form and it is different for every family and each individual, but it is important to understand the tradeoffs and make a conscious decision.

About twelve years ago, we moved back to Orlando from Atlanta. When we were house hunting, we were very focused on buying a house big enough to be comfortable but small enough to be easy to take care of. It is not exactly a zero lot line house but the houses are pretty close together. The biggest benefit to us is that the home owner’s association takes care of the lawn and plants in the front yard, which saves us oodles of energy, time and also money. The side yards are filled with river rock so there is no maintenance there and the back yard is filled with mulch and plants so there is no maintenance there.

Our home is not large by any means, and that is a good thing. We can easily travel without having any maintenance cares above the normal maintenance that occurs when we are home. Just like the story of Goldilocks and the Three Bears – “it’s just right!”

A smaller living space keeps you from accumulating a bunch of stuff that you really don’t need or use. It saves time because the less active living space you have, the less time you’re going to spend cleaning it and taking care of it. It saves money because a smaller home has smaller bills – lower property taxes, lower insurance rates, lower energy bills.

We also make conscious decisions about the tradeoff with energy time and money in how we handle our groceries. Even though we are both working in the ministry out of a spare room in our home, dinner can sometimes be a challenge. We have many evenings where we have to rush off to a meeting or when we arrive home so late in the afternoon neither of us feels like cooking. That’s why we plan leftovers in to our weekly menu so there is something to eat on those evenings when there is no time to cook. It also saves money because it is cheaper to eat at home instead of the time and energy it takes to go to a restaurant.

I consciously make my menus and shopping list based on bulk buys and bogo items. There are lots of items around the house that we use every day and really don’t want to run out of, such as toothpaste, soap, paper towels, laundry detergent and toilet paper. If we run out we have to buy them at the current price. So we try to buy in bulk or when they are on sale or when we can buy through a bogo. Even if we have plenty on hand, I’ll take advantage of a sale because I know we’ll use them and that saves energy time and money.

Over the years, I have learned that cleaning what’s dirty on a regular basis works much better for me than an all-out blitz to clean everything all in one day. Every day I make sure that errant items are picked up and put away. When needed I will do a more thorough cleaning. This strategy keeps my desire to hire someone to clean the house at bay.

Seems like some days we are in the car a lot and it’s easy to get thirsty and stop at a convenience store for a bottle of water or soft drink. By keeping a bottle of water in the car, we know we don’t have to stop at a convenience store (saving both time and money) and we stay hydrated.

There is always a shopping list on our refrigerator. If we’re running low on anything, it gets written down. When it’s time to go to the store, I start with the list and add what’s needed from my meal plan for the week. Because our schedule is so dynamic, I only shop for 3-5 days at a time. I find that works best for us as we don’t buy a lot of things that go bad because we ended up having dinner out more than I had planned. I always check the sale brochure to see what is on sale and plan meals around that so I don’t buy expensive ingredients that will be on sale the following week. Sometimes we’ll be low on something and it is not on sale, and I am pretty sure there is a sale coming up so I just keep it on the list till the next week’s sale brochure comes out.

Since meals are planned around what we have on hand, it’s very rare that we run out of items in the moment, meaning that we rarely have to make “emergency runs” to the store, and the fewer trips I make to the store, the more money, time and energy I save.

There is a great balancing act between energy, time and money. There are a lot of ways that you can spend less time and get more things done without spending the money to pay someone else to do it for you.

The first key point is energy. If you are physically incapable of performing specific tasks around the house, you may not have an option of doing it yourself. If you HAVE the energy and physical ability then it becomes a balancing act between time and money.

Another key point in the balancing act is your time. What are your priorities for spending your time? If you have the money, it may make sense to pay someone to do chores for you if that gives you more time to spend on things that are more important to you, such as time with the family. Of course, getting the family involved in helping you with the yard work can accomplish the same thing. While also teaching children about responsibility and work ethic.

And the third part of the balancing act is money. If you are in debt or you don’t have any emergency savings then not spending money is your highest priority.

If you are struggling with balancing energy time and money, take it to prayer and God will lead you in the right direction. Remember this verse from Ecclesiastes 3: “There is an appointed time for everything, and a time for every affair under the heavens.”

For more on this topic, connect with the Compass Catholic podcast on Breadbox Media as we discuss the balancing act between energy, time and money.

Work is More Than a Job

We are all called to be workers. In the earliest part of the creation story God, the universe’s first worker, gave Adam the garden to “tend and keep” (Genesis 2:15).  The first thing God did with Adam was to put him to work. Work was given to man as a gift, before original sin, not as a punishment after original sin. At it’s very core, a Christian approach to work is rooted in man’s relationship with God and creation.

According to the United States Bureau of Labor Statistics’ 2015 American Time Use Survey (most recent data available), in the US, employed persons worked slightly more than an average of 7.6 hours a day during the work week.

The job we do during our work week allows us to buy the necessities in life. Work provides “our daily bread” and we are able to support our families with what we earn. What is more challenging to understand is that our work (and how we accept, respect and support the work of others), is the mechanism that provides for the nourishment of our spirit.

Pope Francis has stated that being a worker and engaged in business is a genuine human and Christian calling. He calls work “a noble vocation, provided that those engaged in it see themselves challenged by the greater meaning in life; this will enable them truly to serve the common good by striving to increase the goods of this world and to make them more accessible to all.”

When we forget that our work is an opportunity to use our gifts and our energies to help meet the needs of our fellow man, we forget that we are called by God to be a worker. Realizing that we actually work for Christ, not our boss, changes everything.

Just as many people separate their spiritual life from their finances, many people separate their work life from their spiritual life. Jesus teaches in Matthew 6:24 that “No one can serve two masters; for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and mammon.” If we are truly living our faith, our work life and spiritual life need to be integrated. If we are serving God with our work, then our work has a higher purpose.

We have a tendency to feel that the person with the big office and big paycheck has more value than the person who is emptying trash cans and cleaning the bathrooms. When we do this, we fail to acknowledge that there is equal dignity in all different occupations. What would the workplace be like if no one every emptied the trash or cleaned the bathrooms? The CEO and the janitor have different tasks, probably different education levels and different sized paychecks. But their work has equal dignity if done for the glory of God.

Pope Francis reminds us that work is fundamental to the dignity of the human person. He explains that “work ‘anoints’ with dignity, and that dignity is not conferred by one’s ancestry, family life or education. Dignity as such comes solely from work.”

Think about the lesson learned in the parable of the talents in Matthew 25:14-30. Each of the three servants is given a portion of the master’s assets based on his abilities, and is entrusted to be a responsible steward.

Two of the three follow the master’s instructions and make productive use of the master’s talents. The third, out of fear, hoards the asset and does nothing with it. The first two are praised and rewarded, and the third is scolded, rejected and punished. God expects us to use our “talents” to care for ourselves and our families. Work honors the gifts and talents that we receive from God. We are all called to use these talents in proportion to our abilities for our own care and benefit and for that of others.

Depending on your approach to work, you can spread the light of Christ or not.

Are you a frustrated worker always complaining and badmouthing your fellow employees and management? Do you constantly grumble about what goes on in the office or your hours or your co-workers?

Think about how your work is affecting your attitude. Do you feel a sense of joy and energy about your work? Or are you feeling depressed and overwhelmed? Your work should be uplifting to you.

Make a list of the gifts God has given you and evaluate how well you are using those gifts in your current job. See if you might tweak what you do or even make time for a hobby or a way to serve as a volunteer so you can use those gifts. Joy follows when you put your gifts to good use and if it doesn’t happen in your daily job, it needs to come from somewhere.

Is your job in conflict with your faith and family? It is important to be sure that work is not interfering with your vocation as a spouse or parent. If your work means you constantly miss important times with the family, then you may need to make some changes. For example, does your job interfere with your prayer life or your ability to have breakfast or dinner with the family on a regular basis? Even if you work less because you are putting your attention on the important areas of your vocation, your work time will be more productive if your priorities are in the proper order.

Evaluate the budget. Is having both parents working really adding to the family budget or tearing the family apart? Look at the costs associated with the second working parent—day care, restaurant lunches, fast food dinners, convenience meals, clothing, dry cleaning, transportation, etc. and figure out how much extra money is actually coming in to the family budget. It might not be as much as you think

If any of the above items hit a soft spot in your heart, maybe you need to make a change. Pray to the Holy Spirit for clarity about your current situation.

God is our Provider and He’s always faithful to provide for our needs. Obviously, our jobs are a big part of that. We never want to be ungrateful for our work because the Lord has provided it to us. The most important way to stay grateful on the job is to always keep in mind that you’re working for the Lord. Col 3:23-24 says, “Whatever you do, do your work heartily as for the Lord rather than for men—it is the Lord Christ whom you serve.”

For more on this topic, connect with Compass Catholic on Breadbox Media as we discuss the purpose and meaning of work.

Finding a Financial Planner (part 1)

You can certainly go it alone when it comes to managing your money, and you could also try to do it yourself when it comes to auto repair, cutting your own hair or giving yourself a root canal. Doing it yourself is a brilliant idea for some people in some instances and a really, really bad idea for many others.

Learning all the details about managing personal finances requires many hours of research, study, and experience, and it may not be worth your time and effort to develop the expertise you need to make good decisions when it comes to your own personal financial planning.  Plus, the fact that you are emotionally involved with your own finances may prevent you from making an unbiased decision.

A trustworthy financial planner can save you both time and money and help you stay on track with your financial strategies. They can help you tackle a specific financial goal, such as preparing for retirement, saving for college or estate planning.  It may sound crazy to pay someone to keep track on your money, but if you match your needs with their skill-set and knowledge it may be crazier to try and do it yourself.

Finding the right planner requires work and patience, but once you find someone who shares your passion for what you want to accomplish, it can make all the difference in the world when it comes to your financial future.

To help you find the right financial planner, start by having a conversation with your spouse if you are married.  Even if their knowledge of finances and investments is very limited it is important for this to be a collaborative decision. Marriage is a joint effort and the results (good or bad) of your savings and investments will affect both of you—so you both need to be involved in the decision-making.

Single or married, the first step is to decide what you are looking for. Are you only interested in certain financial firms? Are there other financial firms you want to avoid? How aggressive or conservative do you want to be in your investments? Are you looking for someone who provides counsel from a Biblical perspective? Are there certain types of products you do or do NOT want to invest in (annuities, mutual funds, bond, stocks, etc.)?

Do you want to avoid companies or products associated with gambling, alcohol, or pro-choice issues? There may also be investments that you prefer, such as companies that are environmentally friendly, focused on pro-life issues, or businesses that close on Sunday.

If you have a specific interest—such as charitable giving or socially responsible investments or if you’re a newlywed or recently widowed — you’ll want to find a financial planner that concentrates in that area.

Write down your financial goals along with a high-level time line.  Do you have 5 years to prepare for retirement or 25?  It also helps to have documentation on your current financial situation.  How much do you make each month? How much do you spend each month? How much debt do you have? How much do you have saved in what type of accounts (401K, 403B, IRA, Roth, stocks, mutual funds, stocks, annuities, passbook savings, etc.)? Yes, this is personal financial information and yes you will need to share it with a financial planner if you intend to use one.

Once you (and your spouse if you are married) have a high-level idea of your current financial situation, your goals and what you want in a financial planner, seek counsel from godly people. Sirach 32:19 tells us, “Do nothing without counsel, and then you need have no regrets.”

Friends, relatives, and neighbors may all have recommendations about financial planners they trust. They may also have some suggestions about people to stay away from! Some parishes have a resource listing all parishioners who own or run a local business, and there are always advertisements in the back of the bulletin where you can potentially find professionals who have the expertise you are looking for. Use all the resources at your disposal to vet potential advisors.

Assemble the facts that will influence your decisions, then seek God’s direction as well. Anytime you are making a large financial decision it is a good idea to pray about it. We have to remember that answers to prayer will sometimes direct us in a way contrary to our assessment of the facts alone so pray with an open mind.

Once you have a list of names, start investigating. Look at their website–what does it say and does it appeal to you? If you don’t have a website address for them, you can usually find a financial planner by entering their name and “CFP” in a google search. Be cautious if they or their business does not have a website.

Check the Financial Industry Regulatory Authority (FINRA.org) website. You’ll have to enter the broker’s full name, the Company’s full name, and the zip code. The results will be a report on whether the financial planner has any criminal charges and convictions, formal investigations or disciplinary actions initiated by the regulators, customer disputes and arbitrations or personal financial disclosures such as bankruptcy, unpaid judgments or liens.

Once you find everything you can discover from all public sources, you still have to be sure that they are a good fit for you, and the best way to do that is in a face-to-face meeting. Pick your top three choices, contact them and set up an appointment. In this process, you may encounter financial planners who cater exclusively to clients with a certain level of assets to invest.  If someone you call has criteria you do not meet, move on to the next name on your list.

When you meet with them it’s good to have all your questions written down and to take notes on what you asked and how they answered. We suggest meeting with a minimum of 3 financial planners before deciding who you’ll work with.  

Our next blog (Finding a Financial Planner (part 2)) will delve into more details on qualifications and questions to ask as you look for a financial planner who is right for you.

Where is Your Heart?

Our hearts follow where our money goes as it says in Matthew 6:21, “For where your treasure is, there your heart will be also.” Too often we let the money take the lead and control our heart. However, the heart should take the lead and control where the money goes.

If God is our treasure, then it is easy to understand God’s role in helping us put our priorities in the proper order. God comes first. He comes first in our heart, and the money follows where our heart leads.

There are many immediate demands on our money. The mortgage has to be paid, there are groceries to buy, the oldest child is approaching college, retirement is looming on the horizon. All of these requirements can simultaneously compete for every dollar in our possession.

There are only three ways to deal with these competing priorities for your money. You can spend it, save it or give it away. Think of these three methods as being the three sides of a triangle. If one of the sides is too long or too short the triangle is out of balance or incomplete. Or think of these things as being three legs of a tripod. If one of the legs is too short, too long, or entirely missing, the tripod will be out of balance and unable to stand firmly.

The key to a godly attitude in how we handle money is to have the three sides of the triangle or the three legs of the tripod in balance. Spending, saving and giving must be balanced.

If we get too caught up in spending and saving, giving can be forgotten.

As Christians, we are called to be light and salt in the world. We are challenged to live in a way that is different from how the rest of society lives. That means holding on to our money and possessions with an open hand. Think of the difference between someone holding an item in their open palm versus holding it in a clenched fist. If, for some reason, money and possessions are to be removed from our care, and they are resting lightly on our open palm, it will be much less painful than if God has to pry open our tightly clenched fist to remove it.

Everything we consider so important in this world has no meaning in the light of eternity.

There is a story about a man who was about to die. He was very wealthy and hated to leave his riches behind, so he prayed that he could take his wealth with him.

An angel hears his prayer and tells him that is impossible to take it with him. The man asks the angel to speak to God and plead for an exception on his behalf. The angel speaks to God and returns to the man telling him he will be allowed to take one suitcase to heaven with him. The man gathers his largest suitcase, fills it with gold bars and places it next to his bed so he can quickly get it when his time on earth is finished.

Shortly thereafter, the man dies and approaches St. Peter at the pearly gates. St. Peter sees the suitcase and tells the man he is not allowed to being anything to heaven with him. The man explains that God has granted him an exception since he was so wealthy on earth.

St. Peter zips open the suitcase to inspect the worldly treasure that was too important to be left behind. He stares in astonishment at all the gold and in a bewildered tone says “You brought paving stones?”

We are so caught up in this world that like the man in the story we sometimes forget that what we have on this earth has no lasting value.

I encourage you to estimate the number of days you have left on earth. My mom is 96 and my dad died at 90. If I live an average of their two ages, I have about 10,000 days left. Sounds like a lot, but thinks of how fast the years pass by. Making this calculation has helped me become aware that I need to invest my life, my time, and my money in efforts that will count for eternity.

Imagine a rope running through the room where you are now. To your right, the rope runs billions of light years all the way to the end of the universe; to your left, it runs to the other end of the universe. Now imagine that the rope to your left represents eternity past, and the rope to your right, eternity future. Take a magic marker and place a small dot on the rope in front of you. That tiny dot represents your brief life on earth compared to eternity.

Because most people don’t have an eternal perspective, they live as if the dot is all there is. They make dot choices, live in dot houses, drive dot cars, wear dot clothes, have dot friends and raise dot children.

When I am face to face with Christ I want to know that my heart followed him in all ways. I want to know that how I used my money followed my heart. I want to know that material things were useful if they facilitated serving God while I was on earth. I don’t want to squander my life on things that won’t matter throughout eternity.

As Sirach18:7-8 advises, “The sum of a man’s days is great if it reaches a hundred years: Like a drop of sea water, like a grain of sand, so are these few years among the days of eternity.” This is the backdrop against which we can determine which is leading and which is following – our heart or our money?

Follow Me or Not

prairie-1246633_1280The Mass reading on Sunday was one of the most well-known stories in the Bible. It is when Jesus calls the first apostles to follow him. According to Matthew 4:22, “He called them, and immediately they left their boat and their father and followed Him.” It is no wonder that this story has such a long-lasting impression on us: these men had faith enough in God and his plan that they gave up everything to follow Jesus, a stranger to them!

We may not be able to imagine ourselves in the same position as Peter, Andrew, James, and John. I don’t think any of us are fishermen, nor do I think Jesus will walk up to us and actually say “Follow Me.” But just as he called the first apostles, he is calling each and every one of us to follow him every day in every way.

We may not be asked by a stranger to walk away from our jobs or our family, but we are called to put God first in every thought, every word, every action. Everything we do in using the time, talent and treasure God has given to us is a way to follow him.

We also have the choice to turn away from him in our selfishness.

Think about the last month—where did you spend your time, your talents and your treasure? Those places are an indication of your priorities. You can tell a lot about what people consider important by looking at their credit card statements, bank account records, and their calendar. Where we spend our time, our talents and our treasure indicate what is most dear to us. How much of those three precious commodities was dedicated to God and how much was dedicated to achieving what the world considers success?

We are inundated with the message that we can never be happy, or fulfilled, satisfied or successful until we conform to the world’s standards —spending time watching TV or surfing the net, spending our talent in ways that may not always honor God and spending our money accumulating more and more of the stuff the world considers important.

The problem is that using our God-given time, talent and treasure in a way the world considers important rarely provides long-term satisfaction. If we are seeking true happiness according to the world, then we constantly turn our thoughts and desires to the next thing the world offers us. We stay in a state of churn, relentlessly seeking more and more of what the world tells us is worthy.

We have many idols in our lives today and they all stem from the spirit of the world. Money, consumerism, greed, and coveting the possessions of other people are just a few of the many idols. Delve deeper into the last month and write down where you spent your time, your talents and your treasure. Put that piece of paper in a place where you can pray about what’s on it. Are these the things that God really wants you to be focused on? Are these helping you answer Jesus’ call to “Follow Me”?

Our time, talent and treasure help us achieve the specific mission God has for each of us. The mission hasn’t changed in the past 2000 years. We are called to share God’s word with everyone we meet, right here, right now with what we have. We must come to understand that God has a specific, unique plan for each of us—even if we cannot immediately see it. As stewards who gladly acknowledge that we belong to the Lord, we must make sacrifices and prayerful choices in order to spread his word and blessings to the world.

You may not think your talents are very special, but you do have talents. Try listing each of them and beside each one, note some ways you can use them to follow Jesus. As someone who runs a ministry, I can assure you that all types of skills are much needed and appreciated in serving God’s people. Even someone who is homebound and confined to bed can offer prayers on behalf of others. We all have something to give.

When we think of treasure, we often think about money, but treasure also includes our stuff. Our attitude toward material things can be the problem when things have a more important place in our lives than our mission to proclaim the good news. Often our energy and focus are diverted from our faith life into collecting and maintaining the things we have – the house, the car, the boat, the investments, etc. Our focus can get skewed so it is on our stuff and not on God.

We are called in much the same way as the first apostles were—though we are not expected to leave everything behind. Instead, our mission is to use the time, talent and treasure God’s given us to serve him. “Follow Me” involves responsibly planning how we’ll occupy our time, use our talent and spend our treasure in the manner God intended. It also involves strength and bravery to set aside our love of worldly ways for a higher purpose.

“You have a gift. You have a talent. Find your gift. Find your talent. And use it. You can make life better in this world just by letting your light shine and by doing your part.” Sr. Thea Bowman

To save or Not to Save – That is the Question

piggy-bank-1595992_1280Today’s blog title is a take off on a scene from Shakespeare’s play Hamlet. In this scene, Prince Hamlet was contemplating the meaning of life.

Today’s blog contemplates the reason for saving.

The savings rate of the average American has hovered around 5% for the last several years. The personal saving rate is the net amount of money saved as a percentage of your disposable personal income (gross income minus deductions and, in our opinion, also minus giving.)

But according to Nerd Wallet, a savings rate of 5% is far too low. Most financial planners advise their clients to save between 10% to 15% of their disposable income for emergencies, retirement and other needs.

Saving takes a conscious effort, dedication and hard work. But having an emergency fund or fully funding your retirement is well worth the effort.

Proverbs 21:20 tells us, “Precious treasure remains in the house of the wise, but the fool consumes it.” Saving can be hard work, but spending every penny you make is simply foolish. Too many people think they will get to a point sometime in the future when saving will be possible. They live each day looking to an uncertain future without making a concerted effort to make saving a priority.

Every little bit you save will help build your nest egg, so start with whatever you can do, even if it is a very small amount. There can be a huge difference between saving small steady amounts on a regular basis versus waiting until you have one big lump sum to save.

One of the exercises we do in the Compass workshops is to make a deal with the attendees. We ask “Which would you prefer, a lump sum of $1,000 right now or a penny a day doubled every day for a month?” Most people look at $0.01 and compare it to $1,000 and take the thousand dollars. The interesting thing is that a penny a day doubled every day for 31 days will net over $10,000,000!

While the penny exercise may be unrealistic, it is a good way to illustrate how a small amount can grow exponentially.

Here’s another example of exponential growth. If a person saves $2.74 per day they will have $1,000 in a year. In 40 years, at 10% interest, the $2.74 per day will grow to over $500,000. If they wait just one year and only save for 39 years, the difference is over $50,000 less!

Compounding your savings makes a huge difference and is based on three variables: the amount you save, the interest rate you earn, and the length of time you save.

1. The amount you save depends on your income and spending. Learning God’s way of handling money will help you focus on being a conscious spender so you can find ways to save.

2. The interest rate you earn has a huge impact on how quickly your savings will grow. An interesting fact about savings is how long it takes your money to double. It’s called the rule of 72. Take the number 72 and divide it by the amount of interest you are earning, and the result is how long it will take your money to double. If you are earning 3%, your money will double every 24 years. If you are earning 6%, your money will double every 12 years.

3. Time is the third factor. Answer this: Who would accumulate more by age 65: Danielle who started saving $1,000 a year at age 21, saved for eight years, and then completely stopped; or Matt who saved $1,000 a year for 37 years starting at age 29? Both earned 10% interest.

Interestingly, at age 65, Danielle who saved a total of $8,000 has $427,736 while Matt who saved $37,000 has $363,043. Danielle saved $29,000 less and accumulated $64,693 more.

As you can see from this example, since Danielle started earlier, it made a huge difference in the total amount over a long period of time.

1 Timothy: 16-19 gives us good advice about our attitude toward gathering riches:

“Tell the rich in the present age not to be proud and not to rely on so uncertain a thing as wealth but rather on God, who richly provides us with all things for our enjoyment. Tell them to do good, to be rich in good works, to be generous, ready to share,
thus accumulating as treasure a good foundation for the future, so as to win the life that is true life.”

We need to guard against the human tendency to be proud of our wealth. When we accumulate assets we have a tendency to place our confidence in them. Someone once observed, “For every ninety-nine who can be poor and remain close to Christ, only one can become affluent and maintain a close relationship with Him.”

It is human nature to cling to the Lord when it’s obvious that we have no place else to turn. Once people reach financial freedom, however, they often take the Lord for granted because they no longer think they have as much need of him.

When you have financial resources, the tendency is to turn to your money to solve problems, instead of first praying and seeking the Lord. We tend to trust in what we can see with our eyes, rather than in the invisible living God. We need to remind ourselves that wealth is completely uncertain, and can be lost in a heartbeat. The Lord alone can be fully trusted.

Sirach states it well, “Use your wealth as the Most High has commanded; this will do you more good than keeping your money for yourself.” (Sirach 29:11, GNT) By saving and investing with a godly attitude, and balancing saving with generosity, we can live the fulfilling life God intends for us now.

Work

home-office-336373_640The first thing God did with Adam was to put him to work. We are all called to be workers. In the earliest part of the creation story God, the universe’s first worker, gave man the garden to “tend and keep” (Genesis 2:15).  Work was given to man not as a punishment but as a gift.

The United Nations 19th International Conference of Labour Statisticians has established five different types of work that can be measured:

Own-use production work: production of goods and services for our own final use (such as farming).

Employment work: work in exchange for pay or profit (this is what most people do in the US).

Unpaid trainee work: work without pay to acquire workplace skills or experience.

Volunteer work: non-compulsory work performed for others without pay.

Other work activities: everything else.

This brief snapshot captures totally different types of work.  We all know that when we finish our day’s “employment work,” there is still much more work left to do. Think about your typical day before and after your job. There are meals to make; a home to clean and care for; lawns to mow, cars to wash and children and family members who need help.

There are many different types of work but the most common is employment work, which we do in order to buy the things we need and want.  But at it’s very core, a Christian approach to work is rooted in man’s relationship with God and creation. God has given us much more depth to our work than merely earning money.

Pope Francis stated that being a worker and engaged in business is a genuine human and Christian calling. He calls work “a noble vocation, provided that those engaged in it see themselves challenged by the greater meaning in life; this will enable them truly to serve the common good by striving to increase the goods of this world and to make them more accessible to all.”

When we forget that our work is an opportunity to use our gifts and our energies to help meet the needs of our fellow man, we forget that we are called by God to be a worker. Colossians 3:23-24 says, “Whatever you do, do your work heartily as for the Lord rather than for men—it is the Lord Christ whom you serve.”

Realizing that we actually work for Christ, means it is important to integrate our spiritual life and our work life. If we are serving God with our work, then our work has a higher purpose. If we don’t understand the true nature of work in the world, then we will feel unsatisfied no matter what kind of work we do or how much money we make. And we will also use work as a status symbol, ignoring the fact that there is dignity in ALL different type of work.

We have a tendency to feel that the person with the big office and big paycheck has more value than the person who is emptying trash cans and cleaning the bathrooms. When we do this we fail to acknowledge that there is equal dignity in all different occupations. The CEO and the janitor have different tasks, probably different education levels and different sized paychecks. But what would the workplace be like if no one every emptied the trash or cleaned the bathrooms?

All work has equal dignity if done for the glory of God. Each of us is called to work as a duty to God. Pope Francis reminds us that work is fundamental to the dignity of the human person. He explains that “work ‘anoints’ with dignity,” and that dignity is not conferred by one’s ancestry, family life, education, type of job, status or salary.

Whether we earn a little or a lot, work allows us to support our family and it is how we get “our daily bread.” Not only does our work sustain us physically, but it also sustains us spiritually. It is clear that our wages provide the resources to physically support us. However, what is more challenging to understand is that our work (and how we accept, respect and support the work of others), is the mechanism that provides for the nourishment of our spirit.

Together, each human person, makes up the Body of Christ. Work honors the gifts and talents that we received from God.  We are all called to use these talents in proportion to our abilities and resources for our own care and benefit and for that of others. Depending on your approach to work in your life, you can spread the light of Christ or not.

Are you a frustrated worker always complaining and badmouthing your fellow employees and management? Do you constantly whine about what goes on in the office or your hours or your co-workers? Listen to your inner voice as well as the Holy Spirit to see if you need to rethink your attitude toward work.

Make a list of the gifts and talents God has given to you and if you don’t use them in your job, see if you might change your job or even make time for a hobby or a way to serve (maybe in your parish) which utilizes those God given gifts. Joy follows when you use your gifts and put them to good use.

As much as possible make sure that work is not interfering with your family life—your vocation as a husband, wife, parent, child, sibling or friend. If your work means you constantly miss important times with the family, then you may need to make some changes. Even if you work less because you are putting your focus on the important areas of your vocation, your work time will be more productive if your priorities are in the proper order.

It is important to remember that God is our Provider and he’s always faithful to provide for our needs. Obviously, our jobs are a big part of that. We need to be grateful to God for the work he has provided to us.  No matter how frustrating our jobs may be at times, they are still a blessing from God.  The most important way to stay grateful on the job is to always keep in mind that you’re working for the Lord. As Colossians 3 says, “It is the Lord Christ whom you serve.”

Happy Labor Day!

Evelyn Bean