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 accomplish.

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 care for. 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 us from accumulating a bunch of stuff that we really don’t need or use. It saves time because the less active living space we have, the less time we’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 of last minute changes to our schedule. 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 paying off debt and saving for an emergency is your highest priority. Those items need to have a higher priority than paying someone to do chores for you.

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 Podbean as we discuss the balancing act between energy, time and money.

Navigating Your Finances God’s Way

Most people don’t realize how much the Bible says about money and possessions. They may know that Jesus talks about the danger of riches or the need to care for the poor, but when they are told that the Bible has over 2500 verses dealing with money, possessions and basic stewardship principles, they are shocked.

People typically separate the financial and spiritual aspects of their lives. This separation is similar to the mercenaries who fought in the Crusades during the 12th Century. Because it was a religious war, the mercenaries had to be baptized before they went off to fight. When the mercenaries rode their horses into the water for Baptism, they held their swords high above their heads, out of the water. In effect, their swords were not baptized. They were saying that God could control their lives, but they were in full control of their swords.

Many people today hold their wallets high above their heads (out of the water so to speak) indicating that they will give their lives to God, but they remain in full control of their finances.

Yet at the very core, everything we have (including money and possessions) comes from God and it is our responsibility to care for all the blessings that God has bestowed on us, including money and possessions.

The Compass Catholic nine-week Bible study, Navigating Your Finances God’s Way helps people make the transition from “This is mine” to “It all belongs to God.”

And it does all belong to God. “To the LORD belong even the highest heavens; the earth is his also, and everything on it.” (Deuteronomy 10:14, GNT) “The world and all that is in it belong to the Lord; the earth and all who live on it are his.” (Psalm 24:1, GNT)

The Navigating Your Finances God’s Way Bible Study is nine weeks long, meeting once a week for two hours. In preparation for each weekly meeting the participants read Bible verses and do personal financial exercises.  No personal financial information is ever shared. The meetings center on discussions about the Bible verses.

The first week focuses on introductions and allowing the participants to get comfortable with each other. Prior to the first meeting, the participants read Your Money Counts, which is the discussion topic for that meeting (The eBook version of Your Money Counts is available for free from the Compass Catholic website.)

In week 2, the focus in on the difference between God’s Part and Our Part. The Bible verses for the second week help people realize that God owns everything and we can trust him to provide for our needs. We are simply his stewards.

Recognizing God’s ownership and trusting him to provide for our needs (not our wants) is one of the first steps in becoming a steward of all God’s many blessings. We are called to be faithful with what we have been given, whether it is a little or a lot, and to be faithful in every area.

When we learn and live these principles we can develop a more intimate relationship with Jesus. Having our finances in order often leads to a stronger marriage and as parents we are called to teach our children the things they need to know about living a faith filled life—which includes how to manage money and possessions.

The topic for week three is debt. The discussion centers on what is considered debt and how the cost of debt can act as a vulture to family finances. The Bible never defines debt as a sin, but being in debt is considered a curse. This week’s topics also include co-signing, credit reports and credit scores.

Honesty and Counsel are the topics for the fourth week of the study. We discuss the difference between being technically truthful without being totally honest. There is a big difference between what the church teaches about our call to honesty versus how society treats honesty.

Counsel is the second topic in week four. None of us knows everything, so when making important decisions (including financial decisions) we should seek godly counsel. Our sources of counsel are the Scriptures and Church teaching, our spouse and godly people. We must be careful when seeking counsel from someone who will have a financial gain or loss depending on our decision. We should always avoid the counsel of people who do not know God, unless we are seeking facts (not advice) from them.

In week five, the topic is generosity. We explore what the Bible, the Catechism and the United States Conference of Catholic Bishops have say about how much we have to give. The social justice aspects of giving to the poor and needy are included in this discussion.

If we truly believe that God owns everything and we are simply caretakers of what he has given to us, then it changes how we think of giving. The question to ask ourselves is not “How much of MY money do I have to give God?” The question becomes “How much of GOD’s money to I need to keep?” which is a much different perspective.

The role God plays in work is the topic for week six. Our attitude about work means viewing our work as a way to serve God and use the talents and skills he has given us. We talk about the responsibilities of both employees and employers. Other work issues are discussed, such as the benefits or negative aspects on the family when both parents are employed outside the home.

In week seven we discuss the balance between saving to care for our family and accumulating wealth simply to become rich. The purpose for savings as well as what Scripture says about saving and investing are discussed.

NOTE: (Compass Catholic Ministries provides no specific savings or investment advice—the discussion revolves around types of saving and investing vehicles and the attitude we have about savings.)

Week eight focuses on being prepared for a crisis, as so many crises have a financial impact. Why bad things happen to good people is a topic that is almost always discussed. Part of handling a crisis is learning to be content in whatever circumstance we find ourselves. The study also touches on the proper perspective for stewards. It’s not about giving away all our money or becoming rich. Stewardship is about being faithful in all ways, whether we have a little or a lot.

The final week of the study is week nine where we discuss eternity. “What profit is there for one to gain the whole world and forfeit his life?” (Mark 8:36) We are pilgrims on this earth, and our real citizenship is in heaven. This week sums up the other weeks in a call to action to be a good steward of God’s blessings.

The small group environment of the study builds deep friendships, a better understanding of how to integrate our faith into day-to-day life and a profound appreciation for financial stewardship.

The study is available in both English and Spanish and both have an imprimatur from The Most Reverend John Noonan, Bishop of Orlando. It’s for everyone, young or old adults; single or married; working or retired; financially stable or just scrimping by each month

Listen to the Compass Catholic podcast and learn more about this life changing experience.

Call us at 844-447-6263 or use the contact form on the Compass Catholic website today if you are interested in starting a Navigating Your Finances God’s Way study.

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.”

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 wide margin between the low end and the high end.

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 good for your 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 is not having an emergency fund. Personal finance experts stress the importance of having an emergency fund to cover unanticipated expenses to 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 savings to cover a $500 unplanned expense, according to a report from Bankrate.com. When the unexpected expense happens and there is not enough money 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 poverty.

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 car every five years with a $500 month 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 made on the money if you had saved it. We suggest driving used cars, avoiding the car payment altogether, and saving the extra cash for retirement and long term goals.

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.”

Avoiding Christmas Debt

It’s August, so why in world are we talking about Christmas?

Too many Americans whip out the plastic for Christmas spending and use credit cards to finance Christmas costs. The average consumer ends up with more than $1,000 of Christmas related debt on their credit cards each year. Last Christmas, 14 million Americans were still paying off holiday debt from the previous Christmas.  

More than 25% of all consumers said it took them until October the following year to pay off credit cards from their holiday spending. That’s 10 months of interest payments on top of whatever you spent on Christmas. If the interest rate on your credit card is 18%, and it takes you 10 months to pay off the Christmas debt, that $1,000 Christmas debt cost you an additional $154.

The reason so many people get into debt for Christmas is simple—they haven’t planned ahead. Now is the time to establish a budget for how much you’re going spend for Christmas and start saving some money each month between now and Christmas. This exercise will put you in much better financial shape come January 2018.

You may be thinking that you can’t possibly save all the money you need for Christmas in 4 months. So, my question to you is “How can you possibly afford to pay for those Christmas costs PLUS INTEREST in the months following Christmas?”

Planning ahead not only helps you avoid the last minute rush to buy presents, it also eliminates all the stress of shopping with a deadline, which can get us out of the Christmas spirit. What is really important at Christmas is the gift of God made man, not all of the toys, games, clothes, and electronics we buy for each other.

In an effort to maintain peace in the family, many people spend more than they should, something that becomes painfully obvious when credit card statements arrive in January. Now is the time to have the discussion with other family members and friends about cutting back on Christmas spending. They will probably be as relieved as you are to simplify things. Instead of trying to buy gifts for the whole family, draw names and have each person buy a present for one other person.

Look at your checking account and your credit card statements and figure out how much you spent last year for Christmas. That info will help you determine a reasonable amount to set aside each month for holiday spending.

Be sure to include ALL costs. If you host a Christmas party, that needs to be in your calculation for savings. If the holiday dinner is at your house and you take care of all the food and beverages, that needs to be in your budget.  Or if you travel to be with family in a different state, the costs to cover the trip need to be included in your planning. If your family lives in a different location there are shipping costs to consider, along with the cost of gifts.

Where many people get into trouble is not matching the list of gift recipients to their budget. Once infused with the gift-giving spirit, you may be tempted to include every aunt, uncle, fifth cousin, neighbor, and friend on your list. Before that happens, limit the number of names by dividing the amount of money you can reasonably spend by the number of people on your list.

For example, if your budget is $400 for gifts, determine whether it’s better, to spend $100 a piece on four people or attempt to please 20 people by buying each one a $20 present. More often than not, this will help you pare down your list to your immediate family.

Let’s be realistic—many of the gifts we give are not used by the recipient. They are tossed aside, ignored, re-gifted, returned for something else or donated to a non-profit organization. So why spend your hard earned money on something a person won’t use and doesn’t appreciate?

Thoughtful spending also means keeping some sense of sanity in the gifts for the children in your family.  It’s easy to over buy and shower the kids with everything they think they want, but is that really a good lesson for them to learn?

We had a mom share with us their formula for Christmas gift giving. Each child gets 5 presents: something to wear; something to share; something to read; something they need and something they want. This family discovered the formula for keeping their Christmas spending in bounds with their budget. And along with that they set reasonable expectations for the kids. This is a much more reasonable plan that buying the ten things the kids just have to have.

When it comes to the children in your life, pay attention during the year to ideas for gifts. You may get some great ideas as you analyze what interests them without the pressure to buy the perfect gift at the last minute. We were on vacation last week with our son and his family and in talking to the teenagers, we got several good ideas for Christmas gifts based on those conversations. Keep your ears open to the interests and activities of the children and teens in your life so you can pick up gifts throughout the year.

By starting your holiday shopping early or, better yet, by keeping your eyes peeled for bargains year-round, you’re almost certain to find great gifts at steep discounts—from toys and games to clothing and electronics.


If you are a crafty person, make some of the gifts. It’s very personal and often more appreciated than a store bought item. Summer is also a good time to get the kids involved in crafts. Maybe the kids can decorate an inexpensive picture frame with seashells. Add a picture of the family at the beach and you have a unique personalized present that grandparents will love and treasure. And that handmade gift would communicate how much you care for them without costing much.

Now is the time to plan for saving and keeping some sense of financial sanity in Christmas spending. Otherwise, you are into the holiday season and it is too hard to change what you’ve always been doing

The most important thing you and I can do is to remember why we’re celebrating Christmas—the birth of our savior, Jesus Christ. In the busyness of the holiday season, it takes an intentional effort to focus on the true meaning of Christmas. It takes a purposeful effort to have a spirit that’s ready to worship the Christ of Christmas without getting caught up in all the Christmas hype our culture throws at us.

The important thing is to prayerfully make the commitment to avoid all debt this Christmas. When you are tempted to overspend, think of this verse from James 1:16-17: “Do not be deceived, my beloved brothers: all good giving and every perfect gift is from above, coming down from the Father.”

The only gift anyone really needs at Christmas is the Baby Jesus.

How Much Debt is Too Much?

Debt is a way of life in America. Most Americans carry some amount of debt. There is the mortgage, the car payment, medical bills, credit cards, student loans and the money good old Uncle Fred loaned to you.

Unfortunately, many people don’t realize they have too much debt until they reach disaster level with their debt load. That’s when they get to the point where they’ll do anything to escape the enormous weight of those monthly payments.

If you don’t know how much debt you have in total, try adding up the outstanding balances on all your debt and see if the number horrifies you. Calculate how many hours you have to work to pay your monthly debt. Calculate how your total debt compares to your yearly salary. How many years do you have to work to pay it off? Calculate how much you are paying each month in interest only. Then figure out what you are NOT able to do because you have to pay debt.

Usually that’s enough for an epiphany of some kind, and there is a “light bulb” moment when you decide it’s time to turn things around. That happened to us when we hit bottom. We had a mortgage, tons of credit card debt, two car payments, no savings and an unhappy marriage filled with financial stress. We knew that something had to change, in order for us to turn around our financial mess and stay married.

If you have stopped bringing the mail into the house and let it sit in the mailbox, or if you bring it into the house and shove it into a drawer so it is easier to ignore, you may be in a situation where the debt is taking over your life.

If your credit card balance increases every month you have too much debt.

If you are just squeaking by financially each month, and living paycheck to paycheck that is a big warning sign. When your debt payments consume so much of your income that you’re scraping pennies together at the end of the month, it’s time to do something about it. 

If you’re just making the minimum monthly payments, getting out of debt can take almost forever. When you owe so much that your credit cards are rejected it is a telltale sign that things have gone too far.

Have you ever checked your net worth? If you haven’t, it’s worth exploring.  First list your assets and total them (house, car, cash on hand, bank and investment balances) then list your debts and total them (outstanding balances on your mortgage, car loans, student loans, credit cards, past due bills, etc.) Then subtract your debts from your assets. That figure is your net worth. If your net worth is a negative number then you owe more than you have. When your net worth calculation is negative, it is certainly a signal that things have to change. (Go to CompassCathlic.org where you can find “spreadsheets to customize your budget” for a form to help you calculate your net worth.)

If you aren’t able to save for an emergency fund, or if you aren’t contributing to long term savings through a 401K or IRA because all the money is going to pay off debt, you are making one serious mistake. A mountain of debt can create a vicious cycle of not saving and not saving means more debt when emergencies come up.

A job loss, unexpected illness, or family emergency will throw your finances into a tailspin. Think about what would happen if you or your spouse lost your job—how long could you survive financially? How many months of living expenses and debt payments can you handle with a decreased income?

If you’re in debt and ready to make a change, you have to be ready to say enough is enough. You have to get to the point where you’re thoroughly tired of the struggle, and ready to make some sacrifices—to do whatever it takes to turn it around.

The first step in getting out of debt is to acknowledge the situation you are in, then vow it’s time to change. Start by praying for strength and guidance as well as contentment. Track every penny you spend, which will show you how much money you may be wasting on non-essentials. If you can’t pay off your credit cards every month, stop using them.

Starting with your credit cards, make the minimum payment on all your debts and funnel any extra cash to the credit card with the smallest balance, while making the minimum payment on all other debts. Once the credit cards are paid off, tackle the consumer loans, school loans then the mortgage.

We know what you are going through. When all of your expendable income goes toward debt payments, it can be disheartening. We’ve been there and it is not a happy place to be. Paying off debt is not fun and it is a ton of hard work. But, I can tell you from experience, that there is nothing better than paying off all your debt and being totally debt free.

If debt is holding you back, now is your moment to decide to stop digging a hole, and start climbing out. Getting out of debt won’t happen overnight, but the process can’t begin until you decide it’s time. Dealing with and recovering from your mountain of debt requires a life change, a total transformation.

When you and your spouse decide together that enough is enough, and you work together to pay off your combined debt, your marriage will be MUCH stronger.

Proverbs 22:7 tells us “Just as the rich rule the poor, the borrower is slave to the lender.”  Stop being a slave and get that debt paid off! The freedom is worth the struggle.

When it Comes to Money, Planning is the Easy Part!

Several weeks ago, we were talking about the difference in the monthly payments between a 15-year mortgage and a 30-year mortgage. The 15-year mortgage has a higher monthly payment than the 30-year mortgage payment, but it allows you to save a ton of money in interest payments. You may be wondering if getting a 30 year mortgage, which has a lower monthly payment, and then adding additional money each payment would accomplish the same thing. Plus paying extra on a 30 year mortgage gives you the option to make the lower payment when you just can’t come up with the extra cash.

And the answer is a big fat probably not.

Yes, you can get a lower monthly payment with a 30-year mortgage. Yes, you can make additional payments on a 30-year mortgage to pay it off in 15 years. Yes, paying off a 30-year mortgage in 15 years will save a significant amount of money in interest.

BUT . . . do you really have the discipline to make that happen? Planning to pay off a 30-year mortgage in 15 years is the easy part. Making it happen is much more difficult.

How many people have had that same plan and had the discipline to stick with the additional payments for 15 years? The answer isn’t 0%. But it’s a lot closer to 0% than it is to 100%! Self-discipline is hard. The mortgage payoff illustration is just one example of how easy it is to make a plan and how hard it is to actually execute the plan.

The keys to personal financial success are very simple. Keep track of your money. Spend less than you earn. Have an emergency fund. Find ways to economize. Save and invest on a regular basis.

Every other life change you may want to make is also very simple.  Want to lose weight? Eat fewer calories than you burn. Want to get more organized? Clean up your junk. Want to get that college degree? Go back to school. Want a deeper faith life? Pray and receive the sacraments on a regular basis.

Planning what you want to do is the simple part. Actually having the discipline to act on that plan is a lot harder. Just because something is simple does not mean it is easy to achieve. This could be said about losing weight, finishing college, getting organized, deepening your faith life or getting your finances in order.

So how exactly do you make a change in your life that seems really simple but is actually really hard to put into practice?

The best way to start is to do one thing each day that moves you one step closer to your goal. If you are trying to get control of your finances, start tracking every penny you spend each day so you have an understanding of exactly what needs to change.  If you don’t have any idea of where your money is going, how can you hope to define any changes you need to make?

It’s fun to dream about being debt free, but that won’t happen for a long time. It’s also fun to dream about a time when you will have your retirement funded. It won’t happen this week or this month or this year.  But if you don’t start with a baby step today it won’t happen at all. Success is the sum of small efforts repeated day in and day out.

The only way you’re going to make any long term progress is to begin by making short term progress. What can you do today to move in a positive financial direction? If you succeed today you have taken one small step in the right direction. If you add today to all the todays that follow, one small step at a time, you will get to your destination.

Track your spending for 60 days and put it into categories. How much did you spend today on giving, housing, food, transportation, clothes, entertainment, etc.? Tracking 60 days’ worth of spending allows you to have facts and figures so you can decide how to cut or reallocate your spending. It’s called a spending plan (since nobody likes the word budget).  

Tracking against a plan helps you stay focused on those things that are important to you.  Is it important to save for the kid’s college education or to buy a fancy coffee on the way to work every day? In our case, tracking our spending has helped us totally eliminate debt and have a simple lifestyle we enjoy, because we are able to do the things that are most important to us.

Reviewing your budget on a monthly basis allows you to see how much progress you are making on controlling and allocating your money to the important things.  Once you get your day-to-day spending under control, you can tackle bigger picture items like paying off all your debt, paying off the mortgage, or saving for college and retirement. Success begets success and controlling the monthly income and outgo helps you focus on more strategic money goals.

Is your debt lower this month than last month? Do you have more money in your emergency fund this month than last month? Did your net worth increase this year over last year? Is your giving more generous this month than last month?

One things that helps when you are trying to get your finances in order is to hang out with people who have the same goals you do. If you are trying to cut your spending, hang out with your friends who are naturally frugal and not the people who spend money like it’s water trickling through their fingers.

Surrounding yourself with people who want to achieve or who have achieved the same goals you have means you have a natural support system. Their actions will help bolster your actions. Over time, their spending and saving habits will seem more and more natural to you.

It is also important to celebrate your success. When you read Your Money Counts, you’ll see that we are big believers in celebrating success. In a small way. When you pay off that first credit card, celebrate.  For your very next dinner do something special—like lighting a candle on your dinner table and thinking about how much money you are saving by eating at home!

When you accomplish your next financial goal—like paying off that 2nd credit card— celebrate again.  Maybe you can have a sundae at the ice cream store. Once you get all of your credit cards paid off then you can go out to eat at any nice restaurant where you can each get a meal for less than $20!

Celebrating your short term successes and achievement of milestones is a fantastic way to feel great about how things are going, but that celebration should not undo the progress you’ve made. If you’re trying to improve your financial status, don’t celebrate your success by overspending.

Simple doesn’t mean easy. Creating a plan to fix your finances is simple. However, executing the plan is hard. The choices you have to make are hard and they go against the influence of our materialistic society.

Of course, the easy road is usually the one that puts you in a place where you don’t want to be. Perhaps it’s time to try the harder road … the road that Jesus outlined over 2000 years ago … you may just find that the harder road isn’t quite as hard as you thought.

1 John 2:17 we read, “Yet the world and its enticement are passing away. But whoever does the will of God remains forever.”

Listen to the Compass Catholic podcast on Breadbox Media for more about how to make your plans a success.

Question: What financial goal are you working on today?

Mother’s Day

Sunday is Mother’s Day—a time to honor mothers, grandmothers, stepmothers, godmothers, friends who are mothers and anyone in our life who fills the role of mother.

The concept first originated in 1868, when Ann Jarvis established a meeting for mothers whose sons fought or died on opposite sides of the American Civil War. She wanted to expand this into an annual memorial, but she passed away before that happened, so her daughter (Anna) continued the task.

Due to Anna’s work, in 1914 Woodrow Wilson signed a proclamation establishing the second Sunday in May as a national holiday to honor mothers. Only six years later, by the early 1920’s, Hallmark and other companies had started selling Mother’s Day cards, making the holiday as much about sales as about mothers. Even though Anna Jarvis was successful in making Mother’s Day an annual holiday, she soon became resentful that companies were using the holiday as a profit maker. She even tried to get Mother’s Day rescinded as a holiday.

Unfortunately, Mother’s Day has gone the way of many of our holidays and turned into a commercial enterprise rather than a way to reflect on the gift God gave us when he gave us mothers. The real purpose of this holiday is to show love and appreciation to our mothers by writing a personal letter, rather than buying token gifts or simply signing our names to pre-made cards. The day Anna Jarvis worked so hard to create was supposed to be about sentiment, appreciation, and love, not about profit.

I encourage each of you to return to the original purpose of Mother’s Day and thank your mom in a personal way. Tell her how much she means to you and what influence she has had on your life. Recall funny things that happened when you were young or special family memories.

Pray for her also. Ask that God will bless her and give her strength and good health to continue being his instrument of his love in the world. And if your mom is no longer alive, pray for the repose of her soul and in thanksgiving for the gift she was to you.

As my experience as a mother grew and expanded, it certainly gave me a greater appreciation for my own mother. I am so blessed to have had the opportunity to thank my mom for all she taught me when she still had the ability to recognize me and understand what I was saying. I thank God for all the times I took a few minutes to send her a note, or write a letter or call to share a special memory or to tell her how much I appreciated and loved her.

Moms are quiet heroes working day-to-day in many small unnoticed, unappreciated ways that make all the difference in the world to their family.

We moms may never be able to bring about world peace, but we can plant seeds of peace in our family. We may never be able to solve world hunger, but we can feed the hungry by making meals for our own family. We may never make an impact outside of a small group of people, but influencing that small group within our family circle is all God is asking us to do.

When the kids are little it seems that there will be a day far into the future when they will fly from the nest and be on their own and you as a mom will be free. And that does happen (kinda.) But even when your kids are grown adults with children of their own, and they live far away from you, there is always a special bond between mother and child. You never stop being a mother. You never lose that special place in your heart where that child lives. And as a child, there is always a unique relationship with your mother.

Moms may get overwhelmed and they often do not get the appreciation they deserve. After all, who would willingly take an unpaid job that requires them to work 24 hours a day seven days a week with no breaks and no vacations? And even worse, any official holiday means even more work and stress. And mothers who have a job outside the home have twice as much pressure.

But then again, who could give up the sweet faces of trusting children who feel unconditionally loved. Or the macaroni necklaces. Or the handmade misspelled cards, or the sticky-fingered hugs, or the favorite book that has to be read over, and over and over?

For most Catholic children, one of the first prayers we learned is the Hail Mary. It is the most beloved prayer to Our Lady, our Heavenly Mother, and the prayer Catholics say most often. No one can count how many millions of Hail Mary’s rise up to heaven each and every day.

“Hail Mary, full of grace, the Lord is with thee,” is the Archangel Gabriel’s greeting to Mary at the Annunciation (Luke 1:28). “Blessed art thou amongst women, and blessed is the fruit of thy womb,” is St. Elizabeth’s exclamation of joy when Mary came to visit her (Luke 1:42). These two sentences said together were the whole Hail Mary for over one thousand years.

Sometime in the 13th century, the words “and blessed is the fruit of thy womb” were added. By the 15th century, Catholics had added the last half of the prayer, “Holy Mary, Mother of God, pray for us sinners, now and at the hour of our death. Amen.” Pope St. Pius V formally approved the complete Hail Mary in 1566, and Catholics have been reciting it this way ever since. This prayer developed from both the scripture as well as the lived experience of the Church.

If we want heavenly intercession for our role as a mother or if we want prayers for those mothers who touch our lives, who better to ask than our heavenly Mother, Mary, the Queen of Heaven and the most perfect example of a mother.

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.

Do I Have to Pay Taxes?

Let’s face it, nobody likes to pay taxes and complaining about them seems to be a national pastime, especially at this time of year. The annual process of gathering information then completing what seems to be a mountain of paperwork can leave us feeling frustrated and irritated. And if you are like 99% of Americans you want to pay as little as possible and maximize any refund you may be entitled to.

With so many reports of corporate tax loopholes and large companies paying lower federal tax rates than some low and middle-income families, it easy to think, “If they can cheat, why can’t I?”

That is all very understandable. However, gaining that refund through lying and cheating is not the way to do it. As children of God, we are called to be honest in all situations even if we don’t like the situation.

The IRS Oversight Board published its taxpayer attitude survey in December. While some people indicated it was “OK to cheat on your taxes a little” the vast majority of those surveyed did not agree with cheating on taxes and most of them thought it was proper for the cheaters to be held accountable.

The survey also indicated that the top reason for not cheating was personal integrity. Integrity is sometimes loosely defined as “doing the right thing, even when no one is looking.” A variety of systems and situations in society rely on our integrity and honesty.

For instance, on Halloween children know they are supposed to take only one piece of candy from those delicious-looking bowls full of treats. As we grow into adults, we’re trusted to act with integrity in many situations. Some people do so because they are afraid of the consequences associated with getting caught. Others do so simply because it’s the right thing to do. And others do so because it is God’s call for us to be honest and act justly in all situations.

People may tell you to avoid paying taxes at any cost. After all, they will reason, look how much the government wastes and squanders. But the Bible tells us to pay our taxes. “Everyone must obey state authorities, because no authority exists without God’s permission, and the existing authorities have been put there by God…That is also why you pay taxes, because the authorities are working for God when they fulfill their duties. Pay, then, what you owe them….” (Romans 13:1, 6-7) It’s certainly permissible to reduce taxes by using legal tax deductions, but we should be careful not to make unwise decisions and manipulate the truth simply to avoid paying taxes.

This means when it comes to tax time we must report all income from every source, even if a large portion of our income is in cash. It also means being totally honest with the deductions we take. Things such as the costs for commuting to and from work, unqualified business expenses, legal fees, and medical expenditures for pets are not allowable.

While it may be tempting to cheat on your taxes to save money or get a large refund, it definitely is not worth the risk. If you do decide to cheat, you may have your return audited by the IRS. We’ve been audited by the IRS and it is not a fun experience and I highly recommend avoiding it. And the bottom line is that cheating is both dishonest and a sin.

When people make a decision on whether or not to be honest, the first filter they use is trying to figure out if they’ll get caught or if they can get away with lying. But if we are living from a Scriptural basis, then our decisions are based on what will please God, and we don’t base decisions on what we can get away with.

When we cheat on our taxes, we may rationalize that it’s the government suffering the loss. Yet, if we look at the bottom line, it is our fellow taxpayers from whom we are stealing. Dishonesty always harms an individual. Any time we are dishonest, we are harming one of God’s children.

So as you calculate your tax bill this year, keep the following Bible passages in mind.

The first verse is from Mark 12:14-17, “‘Is it lawful to pay the census tax to Caesar or not? Should we pay or should we not pay?’ Knowing their hypocrisy he said to them, ‘Why are you testing me? Bring me a denarius to look at.’ They brought one to him and he said to them, ‘Whose image and inscription is this?’ They replied to him, ‘Caesar’s.’ So Jesus said to them, ‘Repay to Caesar what belongs to Caesar and to God what belongs to God.’”

The second verse is from Judges 17:6 “Every man did what was right in his own eyes.”

Even though we may not realize it, each of us makes many small decisions every day about being honest. Deciding whether or not to fudge the numbers on a tax return to get more money back is one of those decisions.

Too many times in our society, honesty is a relative thing. People say things like “I don’t quite remember” or “As I recall …” which indicate they may be manipulating the truth.

Society thinks that honesty is relative – you can exploit the truth to get what you want. But the Bible says we must be honest with everything at all times. The eighth commandment is “You shall not lie.” There are no exceptions to that statement.

Society tells us to only deal with the facts that can be seen. Yet the Bible tells us to act in a way that displays our faith in the living unseen God. In John 14:6, Jesus tells us, “I am the truth” We need to follow him and also be truthful.

Our actions speak louder than our words. We can not be good Catholics, and be dishonest at the same time.

So you may not like your current local, state or national government officials, and you may think taxes are too high, and you may not agree with how the government is spending your money, but you still have to pay your taxes.