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.

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.

Black Friday and The Light

black-1271449_1280On Thanksgiving, we express our gratitude for all the good things in America: “spacious skies, amber waves of grain, purple mountain majesties and brotherhood from sea to shining sea.” The last line of this beautiful song written by Katherine Lee Bates says, “Confirm thy soul in self-control….”

At midnight on Thanksgiving, we are faced with “Black Friday” which marks the beginning of six weeks of a general lack of self-control.

There are many reasons for the term “Black Friday” but in the world of retail sales, this particular day will make or break their financial year. A good day will put them in the “black.” A bad day will put them in the “red.”

Unfortunately for most American families, the very thing that puts retailers in the black puts us in the red. Too often experiences like Black Friday encourage us to buy based the pressure from society and we fall prey to overspending and going into debt for Christmas buying sprees.

We are over-run with a culture that pushes us into spending frenzies, and consumption in its highest form, which can press down upon us and darken our lives. We are constantly besieged to buy this or buy that in order to be successful, happy, or fulfilled. We focus on buying the latest fad for our kids, or they will be forever harmed, because everyone else is sure to have one under the Christmas tree!

Buying presents for Christmas is not necessarily bad and taking advantage of sales is a good thing, but like all good things, moderation is the key to success.

Answering the call of our culture, and getting caught up in the unending busyness, we can become immersed in blackness as the demands of the season press upon us. We are hurrying, but going nowhere. We are busy but not productive. There is no sense of peace and calm and joyful hope as we anticipate the birth of the Christ Child.

This year the first Sunday of Advent is the first Sunday after Black Friday. Our frenzied buying spree collides with our Advent preparation to celebrate the birth of Jesus, who was born in a manger, worked as a carpenter, walked everywhere he went, focused on the plight of the poor and lame, and was crucified for his beliefs. What would a modern day Jesus think about all of the frenzy that accompanies the celebration of his birth or the debt that is created by our overindulgence?

Nowhere in our culture do we hear about Advent, and preparing ourselves spiritually for the arrival of the Infant Christ Child.

In order to appreciate the beauty and meaning of the advent season, let’s redefine the term “Black Friday” this year, and use it as a metaphor for the journey of our Advent preparations.

One of the definitions of the word “black” is “an absence of light.”

During Advent we await the birth of the Light of the World, so we are indeed in darkness, living in a world that seems very black because the light has not yet arrived. Yet, in 1 Thessalonians 5:5, we are reminded that the light is within us. “For all of you are children of the light and children of the day. We are not of the night or of darkness.”

Even in the hurry and stress of Christmas preparations, we can shine the light of Christ into the darkness of our consumer culture.

Our Advent preparations can include giving to those in need, consciously and prayerfully. Proverbs 21:13 tells us: “He who shuts his ear to the cry of the poor will himself also call and not be heard.” Make opportunities for the children in your family to hear the cry of the poor. Give your children, grandchildren, nieces, nephews, or godchildren a list of adult approved charities and a dollar amount for each child to donate.

Then let them investigate the charities, weigh the relative benefits and decide which charity gets the money. Help them pray for wisdom and discernment in their decision-making. This teaches them to see there are many less fortunate people and encourages them to grow into generous givers. The important thing is to plan now so it becomes part of your Advent journey and an activity you can share with the children in your life.

Bring some light into Advent by simplifying and stop buying endless presents for friends, long lost relatives and other ‘obligatory’ people on your list. The recipients will probably be as relieved as you are. In Acts 8:20 “…Peter said to him, “May your money perish with you, because you thought that you could buy the gift of God with money.” No money can buy us the joys of family, friendship, and love. Find ways to celebrate with friends and family in a meaningful manner that does not include buying more stuff that nobody enjoys, wants or uses.

Use your Advent candles as way to anticipate the light and “wait in joyful hope for the coming of our Savior, Jesus Christ.” Pray each evening as you light the Advent candles and ask for peace, serenity and harmony.
Black Friday can be turned into the first step of a continuum to experience the darkness lifting as we get nearer and nearer to the joy of Jesus’ birth.

The Advent season can be one hectic rush into what is supposed to be one perfect day, or it can be a time to spread light into an ever darkening world.

Worldly wealth is only important if it is used for eternal purposes. Reflect on this verse about the unfaithful steward from Luke 16:11, “If, therefore, you are not trustworthy with dishonest [worldly] wealth, who will trust you with true wealth [an eternal life with our Lord]?”

Advent can be a time of hectic buying sprees or a time to prayerfully and consciously wait for the arrival of the Baby in the manger.

After all, what does that hectic 24-hour day of shopping have to do with the Christ Child? Nothing – absolutely nothing.

Manage Your Money God’s Way … WHAT???

When we tell individuals we run a ministry to teach people how to manage money God’s way, they usually look at us like we have three heads. And many listeners to our Radio show on Breadbox media ask “What does the Compass Catholic show title Manage Your Money God’s Way mean?”

The answer may surprise many people.  Our source of financial advice is never wrong. For thousands of years, it’s never been wrong.  The real expert on how we manage money and possessions is the Bible. There are 2,500 verses in the Bible dealing with money and possessions. In a country that seems to be moving further and further from Biblical foundations, the skeptical looks we get are easy to understand.

When we think of those who are skilled in financial decision making, we often think of experts or those who are older, wiser and more experienced.  And even though they may sound so very confident in their predictions, many financial experts are, at best, just making an educated guess. It’s not the so-called experts and financial gurus that try to forecast the future direction of the stock market or real estate market who are the experts. It’s God’s word.

This is what the Bible says about itself in Hebrews 4:12, “Indeed, the word of God is living and effective, sharper than any two-edged sword, penetrating even between soul and spirit, joints and marrow, and able to discern reflections and thoughts of the heart.”

Scripture tells us we can have more insight and more wisdom than those who are experienced in the ways of man’s economy by searching the Bible.

The truths in the Bible are timeless. It’s a living book that our Lord uses to communicate His direction to all generations. The Lord cares for us and knew we’d need help with our money, so that’s why he gave us such clear financial direction in the Bible.

The reason Compass Catholic Ministries exists is to teach people what the Bible says about handling money. The very first filter we use when making a financial decision is the Bible. If it clearly answers a question, we do not have to go any further, because the Bible contains the Lord’s written, revealed will.   

Some areas where the Bible gives us direction are:

1. God owns everything: 1 Chronicles 29:11-12, “Everything in the heaven and earth are yours and you are king, supreme ruler over all.  All riches and honor come from you.” Too many time we think we are in control of our money and possessions and we do not acknowledge that everything we have is truly a gift from God.

2. Our possessions do not help us get to heaven: Mark 8:36, “For what does it profit a man to gain the whole world and forfeit his life?” All of the stuff we own and which seems so important now, does not mean much in the end. Any material goods we accumulate, money we have or high honors we receive, is all useless the moment we die.

3. The Bible calls us to be content no matter how much or how little we have. Philippians 4:11-13, “For I have learned to be content in any and all circumstances.  I have learned the secret of being filled or going hungry, living in abundance and want.  I can do all things through him who strengthens me.” Contentment is a hard lesson to learn based on our society’s constant pressure to get more, have more, do more, be more.  Yet nothing can be more comforting than learning to be content.

4. Saving to get rich is not a Godly goal:  Luke 12:34, “Where your treasure is, there also your heart will be.”  Our saving needs to be balanced with giving. Any savings should be done with the goal of taking care of future needs not accumulating wealth for the simple goal of being wealthy.

6. We are really serving God in our work when we use the talents God has given us to do our job. Colossians 3:23-24, “Whatever your task, work heartily as for the Lord and not men … You are serving the Lord Christ.”

7. We are called to be generous.  Acts 20:35, “Remember the words of the Lord Jesus ‘It is more blessed to give than to receive.’” Unless our giving comes first, there is always an excuse to not give because we need the money for ourselves.

8. We are called to be honest in all things, at all times. In Matthew 5:37, Jesus tells us, “Let your yes mean yes and your no mean no. Anything more is from the evil one.”  Everyday each of us makes many small choices about being totally honest.

9. Debt is not good: “The rich rule over the poor and the borrower is slave of the lender.” If you don’t think you are a slave to the lender, try missing a few payments on your credit card, car loan or mortgage and see what happens.

10. How we manage money and possessions impacts our life in eternity:

Luke 16:11, “If therefore you have not been faithful in handling worldly wealth who will entrust true riches to you?” Everything we do in this life has an eternal impact, even how we manage the money and possessions God has given to us.

11. God’s word gives us the ultimate truth. Judges 17:6 “Everyone did what was right in his own eyes.” Instead of following the ways of the world, we need to follow God’s word. No matter what the experts predict or where they tell you to invest or where you are pressured to spend, following the Bible will never lead you astray.

I don’t know what financial challenges you are facing today. But I do know where you can go for help. It’s the Bible.

Evelyn Bean

Are You Abusing Your Credit Cards?


credit-card-1520400_640Credit cards can be a good tool for you to use to manage your finances. They can also create financial chaos if you fall into the trap of using credit cards to satisfy every whim. The secret is to use credit cards wisely or not at all. 

Use them don’t abuse them.

When people pay for purchases with credit cards instead of cash, they spend about one-third more money, because credit cards don’t feel like real money.  It’s just plastic. So it is easy to buy what you see, but don’t necessarily need. Racking up credit card purchases can quickly get you into trouble if you are not paying the balance in full at the end of each month.  It does not take long for interest charges to multiply your outstanding balance to the point of no return.

Paying interest on credit card purchases is a waste of money.  If something is too expensive for you to buy, and you use your credit card to make the purchase, and you carry a balance from month to month, you may end up paying multiple times more than the purchase price for that item you thought was too expensive!


The average American has about $16,000 in credit card debt. If you have an APR (annual percentage rate) of 18% on your credit card, you are paying about 0.049% in interest every day. If you start the month with an outstanding balance of $16,000, every day you are being charged roughly $7.84 in interest.  In a month that adds up to $236.88. In a year your interest payments will add up to $2,822.40 if you aren’t making significant progress paying down the balance. Surely you have better things to do with almost $3,000 than give it to the credit card company in interest payments. Paying interest on credit cards is simply a waste of money.  It’s making the credit card company rich and draining away your financial success.

Sirach 20:12 sums up interest payments in this verse, “There is one who buys much for little, but pays for it seven times over.” The longer you keep an outstanding balance on your credit cards, the more likely it is that you will be paying seven times the purchase price for whatever your charged on your card.

Using credit cards wisely means only using credit cards for budgeted items.  It is important to your financial future to pay off your credit card balance every month and avoid interest charges. This is where a budget is used to help you manage. On the same day that you charge something on your credit card, deduct the amount from the appropriate budget category. You spent the money via your credit card, so it is no longer money in your budget that is available to spend. This way, the money to pay off the credit card will be available at the end of the month and you will not be digging a debt hole that you may not be able to escape.

If you are tempted to use credit cards for an unbudgeted purchase, use a “Wish List.” Write down the date and the item you want.  Get three prices.  Wait 30 days.  If you still want the item after 30 days AND you have saved the money in your budget, go out and buy it.  If something else comes to your attention that you want to buy before the 30 days is up, cross out the first item. Write down the second item you want along with the date. Get three prices. Wait 30 days. If a third item gets your attention before the thirty days is over, start the process all over again.  Cross off the second item, write down the third item … This is a sure way to stop those impulse purchases that turn into budget busters.

Destroy your card the very first time you have a credit card bill that you can not pay in full the month the bill is due.  Use one of our proven strategies.  Cut it up into little tiny pieces or put it through the shredder.  Put the credit card in the oven at 3500 for half an hour. Or freeze your credit by sealing the card in a plastic baggie, putting the baggie in a bowl, filling the bowl with water and putting the whole thing in the freezer.

And always pray and ask for strength to follow through with your efforts to get out of debt.

The best way to avoid financial problems is to avoid the situations that are most likely to cause financial problems. For most families, the primary cause of
financial problems is the misuse and abuse of credit cards.

If you fall into credit card abuse, it is in your best interest to function without them. Being disciplined and paying the balance in full each month will ensure that your credit cards will not be abused.

Evelyn Bean

Money Myths

dollar-941246_640 (2)When I was young, I believed the Tooth Fairy put money under my pillow, Santa put the toys under the tree and the Easter Bunny put the candy in the basket. As an adult, I don’t believe in the Tooth Fairy, Santa or the Easter Bunny, and you probably don’t either. But you may believe some money myths.

There are many timeless truths about money—most of them originating in the Bible—and there are nearly as many myths about money as there are truths. Listed below are some Money Myths and the real truth:

If I only had more money, then I’d be happy.
Happiness is a state of mind. Ecclesiastes tells us about the foolishness of thinking that wealth brings happiness. If you aren’t happy with what you have, you’ll never be happy with what you get.

The mortgage interest deduction is a huge tax advantage so I never want to pay off the mortgage.
This is just bad math. The amount of interest paid on your mortgage reduces the amount of tax you owe based on your tax bracket. You aren’t getting money back; you are getting a tax deduction. Sure the deduction helps decrease your taxes, but you are paying way more in interest than you’ll ever get back on your taxes.

I don’t make enough to save.
The truth is, almost everyone can cut expenses enough to tuck away a few dollars a week. It just takes discipline and practice. People who make little HAVE to save or else you’ll end up digging an even deeper hole by having to use credit cards, payday loans or title loans every time an unplanned expense comes a long.

I don’t make enough to give.
This goes along with not having enough to save. Giving to God comes from your first fruits – before you have a chance to spend it on something that is not important. If you aren’t giving, start giving with an open heart and see what happens.

I don’t make enough to budget.
The less a person earns the more important it is to budget. Flying by the seat of your financial pants often means you spend more than you make. Everyone needs a budget, which is simply a way to allocate money to the things that are most important to you and your family.

A raise will cost you money if it moves you into a higher tax bracket. Actually, the higher tax rate only applies to the increase, not your whole salary, so you’ll net more money with a raise, even in a higher bracket.

Renting is just throwing money in the trash.

That’s wrong, too. Housing is a necessary expense, just like transportation and food. That myth got started back when property values rose continuously, so when you bought a house, it always appreciated. If you are going to be in a location for a short time, renting makes more sense, as you can rent less expensively than buying. If you’ll be moving soon, renting avoids the closing costs and realtor fees associated with buying a house.

You get what you pay for.
People say this all the time to justify spending. Actually, there are plenty of expensive things out there of questionable value, such as brand-name drugs, which cost 2 or 3 times more than generic, but are rarely more effective. Another example is tests done on cosmetics to see if the more expensive ones were better than the drugstore brand. They weren’t. Google “generic vs expensive cosmetics” to see the details of many different investigations of this subject.

The stock market is going down I have to sell.
Or, the market is soaring, I have to buy.
That’s exactly backward. The best time to buy stocks or mutual funds is when prices are low. The best time to sell is when prices are high. Your investment horizon (that’s the period of time before you need the money) should be far enough in the future so that you can ride out downturns in the market. If it’s not, you need to invest in something that has less risk.

The more money you make the richer you are.
Wrong! Just because someone has a 6-figure salary does not mean they are managing it well. The more people earn, the more they tend to spend. How many lottery winners go bankrupt? Sixty percent of NBA athletes are broke within 5 years of leaving pro sports. It’s not how much you make; it’s how well you manage what you make.

It’s easy to minimize credit card costs with 0% offers
If using a zero percent interest card is part of your strategy to pay off your credit cards, it may be a great idea. But just shuffling your debt around by opening and closing credit card accounts can hurt your credit score, which can lead to higher interest rates down the road

Carrying a balance on your credit card boosts your credit rating.
In truth, the best way to improve your credit score is to pay your credit card off every month in full.

It’s more spiritual to be poor.
In the Bible we find people who love and follow Jesus with all their heart at every economic level. We are not required to be poor nor are we promised riches. God’s people are called to be faithful whether they have much or little.

I don’t need a will because I’m leaving everything to my spouse.
There could still be probate costs and challenges from children and other relatives if you don’t have a will. And no will means the state in which you live decides how to distribute your assets. What if you and your spouse die together? Who will be the guardian of your children? Every adult should have a will.

So Tooth Fairy, Santa, and the Easter Bunny are not real, and neither are these money myths!

“The way of fools is right in their own eyes, but those who listen to advice are the wise.” Proverbs 12:15

Are You Honest or Truthful?

church-783165_640Fifty or sixty years ago, if you had asked someone if they were honest or truthful, they would have looked at you as if you had two heads. At that time, there was no discernable difference between the two. Our attitudes have changed so much that today people often manipulate their words and actions so they are scrupulously truthful without being absolutely honest. Unfortunately, the act of being totally truthful without being absolutely honest is acceptable in our secular society.

A great example of this is the little boy who was playing soccer in the house. He kicked the ball and it crashed into a lamp. The lamp fell to the floor and broke into a million pieces. Mom rushed into the room and asked the little boy if he had broken the lamp. He looked at her innocently and said “No Mommy.” When questioned further, he admitted that HE did not break the lamp. The BALL broke the lamp. He was technically honest, without being entirely truthful!

Judges 17:6 reads, “In those days there was no King in Israel; everyone did what was right in their own eyes.” When we act in ways acceptable to the secular world, but unacceptable in our spiritual lives, we are acting as if our living Lord, Jesus Christ, is incapable of discovering our dishonesty.

It is human nature to try and avoid the feelings of discomfort, yet acting dishonestly is never an acceptable way to make ourselves feel better. When we act dishonestly, we take matters into our own hands and control situations to our own benefit.

Think of the Pharisees who were utterly meticulous in giving their tithe. They even made sure to include the smallest mint leaf in their offering. But they were giving their offerings from a sense of duty rather than a sense of love and their attitude was not pleasing to God.

By manipulating our actions and words to be totally truthful without being honest, or by telling “little white lies” to avoid conflict, we are just as displeasing to God as the Pharisees. Society’s acceptance of relative honesty is the opposite of what we learn in Scripture. The Lord requires absolute honesty from all of us at all times in every aspect of our life.

Think about the difference in attitudes related to honesty that exist in our secular society and in God’s eyes. Society says our decisions about being honest can be based on whether or not we will be caught, yet if we are making a godly decision, we must base all our decisions on whether or not they will please God.
All of us make many small decisions about being honest every day. Do you deal honestly in all areas of your life, even the smallest ones? Do you quietly smile and pocket the extra money if the cashier makes a mistake when giving you change? Have you ever sold something and not been entirely truthful because you may have lost the sale? Do you cheat on your taxes—even just a little? Do you bring supplies home from the office for personal use?

When we act dishonestly we are deceiving another person. We may fool ourselves into thinking it’s just a business, or the government, or an insurance company. We may talk ourselves into thinking we are just trying to avoid conflict, but the victim is always a person and ultimately it is the business owners, the other consumers, or the taxpayers, or your spouse, friend or family you are hurting. In these situations, we are directly harming one of God’s children.

Our actions speak louder than our words and acting dishonestly dims the light of Christ shining within us, erodes our faith response, and tarnishes the Christian life that others see in us.

Little white lies are easy to tell, but each one leaves a small chip in the foundation of your relationship with others, and too many small chips will result in a cracked foundation.

The Catechism teaches, “By its very nature, lying is to be condemned. It is a profanation of speech, whereas the purpose of speech is to communicate known truth to others. The deliberate intention of leading a neighbor into error by saying things contrary to the truth constitutes a failure in justice and charity.” (Catechism of the Catholic Church 2485)

And the Bible tells us: “Scoundrels, villains, are they who deal in crooked talk.” (Proverbs 6:12) and “Lying lips are an abomination to the Lord, but those who are truthful, his delight.” (Proverbs 12:22)
If you have been dishonest in any way, seek the Sacrament of Reconciliation for a fresh start.

Evelyn Bean

Adults Kids, Parents and Money

dollar-1362244_640Most parents look forward to a visit from their adult children…but what if that visit includes all their worldly possessions, two grandchildren, a ten-week-old puppy, two hamsters and no plans to move out?

There are any number of reasons adult children may move back home but by far the most common one is money. A listener to our radio show recently asked the following: “My husband and I are finally empty nesters. Now our oldest daughter is experiencing financial problems and wants to move back in with us bringing her spouse and two kids. As a couple, they are very poor money managers. The combination of mortgage, school loans, credit card debt, and an unexpected job loss has overwhelmed them. I feel sorry for them, but I know they are spending money on frivolous items, and I resent them asking to move in with us.”

If this situation comes up, the first step is for parents of adult children to have a conversation with each other about how much to help and how much to let adult children handle on their own. It is important to have a united front as this decision is more an art more than a science. And both mom and dad will experience the results of their decision. As with most things in life, the resolution to this problem is made easier with much prayer and discernment.

Maybe this state of affairs is an opportunity to influence your daughter and her husband to be fiscally responsible. On the other hand, having them move in with you may just make a bad situation worse. There is a fine line between helping and enabling, but that line blurs when your child suffers from something they caused vs. a situation that was out of their control.

You and your spouse should also consider the following:

  • How much can you afford to do?
  • Is your child and/or their spouse working or actively seeking employment?
  • Will the problem be resolved relatively quickly or is it a long term issue?

It also helps if you and your spouse talk about ways you can help without having them moving in with you. This again takes lots of open discussions and your daughter and her husband need to share their whole financial situation with you.

I believe that we should do whatever we can to help our children when something challenging happens to them that is beyond their control. However, if they caused their own problem, having them work through their problems on their own will make their marriage stronger.

Perhaps parents can lend a hand best by providing something, but not everything. If their situation is easily remedied, you may want to take the grandchildren shopping for school supplies or school clothes, give your daughter and her husband gift cards for items such as gas and groceries or pay them to do work around your home that you would normally pay someone to do (as long as they are qualified.) This gives them some temporary relief, but you are not totally rescuing them from the circumstances they caused.

If, after much prayer, the Lord makes it clear to you and your spouse that your daughter and her family should move in with you, establish ground rules for them staying in your home—and have both husband and wife sign it. If they are poor money managers, the ground rules may include having them work with a budget coach or credit counselor. The ground rules also contain detailed living arrangements such as who does what around the house, an estimated timeframe for them to move out, and financial arrangements. What tasks will they do around the house, what will you provide, will they pay rent, how long will they stay, what are they doing to improve the problems they incurred, etc. Once the ground rules are established, welcome them, just as the forgiving father welcomed home the prodigal son.

  • There are some guiding principles to keep in mind during this situation.
  • Don’t usurp the spouse if they are married – your advice is secondary to their spouse.
  • Don’t use your money to control their lives.
  • You and your spouse should be of one mind.
  • Encourage them to be dependent on God and each other.

If you decide to give them money instead of having them move in with you, be clear if the money is a gift or a loan. If it’s a loan, draw up paperwork with the amount, interest rate and expected payback plan. If you are helping them financially it is important to distinguish between a gift and something that has strings attached—many hard feelings on both sides can be avoided by being sure this is understood clearly by both parties from the initial stages.

Adults moving back home presents a strong case for teaching young children how to be responsible with money. Teaching children to handle money God’s way is part of a parent’s responsibility. Teaching them how to save regularly, spend wisely and give generously when they are children will prevent many heart and head aches when they are adults.

Proverbs 22:6 “Train up a child in the way he should go; even when he is old he will not depart from it.”

It’s not easy, but it could be a good experience if you are able to help them learn to be independent. If you are just increasing their dependence on you, it’s going to be trouble!

10 Steps to Build a Budget That Works

Many people cringe at the thought of a budget as it raises mental images of not being able to go anywhere, do anything or have any fun.  A budget seems to convey the feeling of restrictions and lots of record keeping.

However, a properly designed and maintained budget gives you freedom rather than restrictions, especially if you think of it as a spending plan, not a budget.

Instead of your money simply trickling through your bank account each month, a budget allows you to actually plan where your money goes—you are in control. It gives you the freedom to decide what is important to you, both long and short term, and then use your money for what is most important.

Most people struggle with how to set up a budget and they often start by estimating how much they spend each month, which creates a lot of trouble.  How much we think we spend is usually much less than what we actually spend. 

By following the ten simple steps below, you can create a budget based on reality and you will be much more successful.

STEP 1 – Before even trying to create a budget, track all your spending for a minimum of 30, preferably 60 days.  Track every kind of spending you do, using cash, checks, credit cards, debit cards and auto pay accounts.

To keep things simple, start by using one of the two following methods:

1. Pencil and paper. Many people prefer using paper, to begin with. This is a good start as it helps you think through how you actually spend money and when you decide to use a more sophisticated process what you learned using paper and pencil will help you choose the appropriate software.

2. Spreadsheet.  If you are a whiz with spreadsheets, you may want to start budgeting by using a spreadsheet.  The Compass Catholic website has spreadsheets you can access by clicking here.

STEP 2 – As you track your spending, categorize it into different areas. The following categories are typical: Saving; Housing; Food; Transportation; Clothing; Medical & Health; Education; Personal; Entertainment & Vacation; Debts. Details for suggestions on what belongs in each category can be found here.

STEP 3 – Look at last year’s bank statements and credit card statements to find those items that only occur quarterly or yearly.  Divide the amount of the payment by how many months the payment covers to determine a monthly amount.  If a payment is due quarterly, then the payment should be divided by 3 to calculate a monthly amount. If the payment is due yearly, divide the payment by 12 to determine a monthly amount. If your car insurance is paid annually, you need to save money each month so when the annual payment is due you have money set aside to cover it. Another example is Christmas, money should be set aside each month to cover Christmas expenses. Failing to do this is a big budget buster.

STEP 4 – Calculate your monthly “Net Spendable Income.” This is not the same as your salary. It is the amount of money available for you to spend each month after you subtract all the deductions (Income Tax; FICA [Social Security and Medicare]; Employer-provided insurance, 401K or Retirement plan, etc.)  ALSO, subtract your giving at this point—giving comes from your first fruits, not your leftovers. Using your gross salary instead of your net spendable income is another big budget buster.

Step 5 – After tracking spending and income for a month or two, subtract your average monthly spending from your average monthly net spendable income and determine if the number is a negative or positive. 

Step 6 – Make adjustments to eliminate the deficit or surplus based on the results of Step 5.

A positive number means you have money to save toward an emergency fund or long-term goals such as buying a home or car, retirement or funding college. If you have not been saving and you don’t have any extra money at the end of the month, you missed recording some expenses. 

A negative number means you are spending more than you are making. If you find yourself in this position, you need to take action by either spending less or making more.

The good news is that you now have real data to use in analyzing where adjustments to your spending can be made.

Step 7 – Set up a long-term process for your budget by selecting one of the following.

1. Budgeting software. Good user-friendly software programs are available, such as Quicken, or Microsoft Money.  Once you have a handle on your spending using a manual process, you can explore the software options and find one that works best for you.

2. There are tons of apps available.  Our recommendation is to look at the following: Mint; PocketGuard; You Need A Budget; Good Budget; Mvelopes; Home Budget; Wally; Level Money; Spendee;BUDGETT; Unsplurge; Why You Need a Budget.  Each of them is similar, but different.

Explore each one and find one that works for you. The best app will allow you to enter your own categories, define your own budget amount and enter your spending. It also helps if the app is connected to your bank account.  Be sure you can look at multiple views of your spending, both in total and by category. The key is to find a system you’re comfortable using.  And then use it regularly.

Step 8 – Make it a habit. Once you get a good process in place, make budgeting a habit of recording. Recording your income and spending at least once a week enables you to stay current with your finances..

The good thing about using a spending plan is that it doesn’t require endless hours of bookkeeping. It shouldn’t take more than an hour of your time each week.  Being diligent with your budget is a small price to pay to stay on top of your finances.

Step 9 – Review on a regular basis, which will allow you to quickly discover any issues. You (and your spouse if you are married) need to review the spending plan at least weekly to start out.  After you become more comfortable with the process and find you are staying on track, make the interval between reviews longer.  When you are a long term budget user, the reviews can be monthly.

Step 10 – Overhaul your budget when life changes occur. You might have a new child, change jobs, pay off a lot of debt, move to a new location or retire … you’ll be making adjustments due to major life changes as long as you use your spending plan. Anytime one of these life changes occurs, the spending plan will need a total review and update.

Once you establish and use your budget you will see how freeing it can be. “The plans of the diligent end in profit, but those of the hasty end in loss.” (Proverbs 21:5)

For more information, listen to Compass Catholic on BreadboxMedia on Saturday 8/27 at 9:00 am where we talk about creating a budget and leaky budgets.

Evelyn Bean