Navigating Your Finances God’s Way

Most Catholics 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 2,500 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 a good and gracious 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.”

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 in the group meeting. The meetings center on discussions about the Bible verses.

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.) This first meeting focuses on helping the participants to know each other.

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 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 we are required 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. There is a big difference between what the church teaches about our call to honesty versus how society treats honesty. It’s the difference between being technically truthful without being totally honest.

Counsel is the second topic in week four. None of us knows everything, so when making important decisions (even financial decisions) we should seek godly counsel from 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 counsel) 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.

Week eight focuses on being prepared for a crisis, as so many crises have a financial impact. The study also touches on the proper perspective for stewards. Stewardship does not mean we have to be poor, not does being God’s steward mean he will bestow riches on us. Stewardship is about being faithful in all ways, and content with what we have, 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 to get help in starting a Navigating Your Finances God’s Way study.

Saving and Investing

Wondering whether you should save or invest? The answer is yes!

Both are necessary for a well-balanced financial future. Saving is putting money aside, bit by bit, for a specific purpose. Saving is a way to reach short-term goals, usually the things you plan to do within the next five to ten years.

We encourage everyone to start saving by building an emergency fund, first by saving $1,000, then by increasing that fund to cover 3 months’ worth of living expenses, then 6 months’, then a year.

This emergency fund provides some level of financial security when the unexpected occurs. Sooner or later everyone gets hit with unpleasant financial surprises.  One of the appliances conks out, or the car needs a repair, or you have to cover the deductible for a medical expense. The worst financial emergency may be losing your job. The emergency fund allows you to pay for the emergency without going into debt. For longer-term issues, such as a job loss, you’ll have money set aside for necessary costs such rent/mortgage, food, insurance, transportation, and utilities.

The most effective way to save is to make it automatic. When you receive money, the first portion should go to the Lord. The second portion should go to your savings. If you make saving a habit and do it as soon as you receive the money, you’ll save more.

The Bible does not define a specific amount to save. We recommend saving at least 10% of your income. This may seem like a huge hurdle and it may not be possible right away, but begin the habit now, then set a schedule to increase your saving to reach 10-15% over a period of time.

Like the ant, we should be wise and plan for the future. “Four things are among the smallest on the earth, and yet are exceedingly wise: Ants—a species not strong, yet they store up their food in the summer.” Proverbs 30:24-25. Saving for our future is similar to the ant storing up food for the winter.

Money for short-term goals that will occur in one to ten years should be saved in cash equivalent products, such as a savings account in a bank/credit union or a money market account. When you need access to your short-term savings, you want it to be available immediately.

Investing is a long-term plan for money that will be needed in 10+ years. Investing can help you reach long-term goals, such as paying for a child’s education or planning for retirement. Investing means taking some of your money and trying to make it grow by buying things you think will increase in value, such as stocks, shares in a mutual fund or real estate.

There is always some level of risk involved with investing and there is no guaranteed rate of return on any investment. It is possible to lose some or all of the funds you have invested. Every investment has a cost: financial, time, effort, and sometimes emotional stress.  For example, a rental house will take time and effort to maintain, and if you can’t find a renter there is a financial drain. Before deciding on any investment, be sure you have explored the personal costs.

Depending on the investment vehicle you choose, it may take longer to access the money you have invested. For example, if you have invested in real estate you’ll have to sell the property in order to withdraw the cash you have invested.

The only time you shouldn’t save, or invest, is if there are more important things you need to do with your money. For example, if you are paying off debt, you should start saving for an emergency fund, but paying off the credit card debt in order to escape paying interest on the debt is more important than investing. Or, if you are the only breadwinner in the family, you need to have your financial house in order before diving into investing.

Unfortunately, most people are not consistent savers

  • 39% of Americans have no savings.
  • Almost ½ of Americans don’t have $500 in an emergency fund!
  • 36% of Americans are not saving for retirement.

Saving is the starting point for investing. Saving money should always come before investing money. Think of savings as the foundation upon which your financial house is built. If times get tough and you require cash, you don’t want to cash in your investments if there is a downturn in the economy. The stock market in the short-run can be extremely volatile, losing more than 50 percent of its value in a single year, but over the long term, it will return more than a simple savings account.

If your employer offers a 401K savings/retirement plan and there are any matching funds available, take advantage of it. Putting money into a 401(k) plan at work if your company matches your contributions is a great way to build your long-term investments. That’s because not only will you get a substantial tax break for putting money into your retirement account, but the matching funds basically represent free cash that is being handed to you on a silver tray.

While the amount you need to invest is highly personal, and specific dollar amounts can be arbitrary, CNBC recently published this simple formula to help you figure out if you’re setting aside enough money. In your 20s, aim to save 25 percent of your overall gross pay, including retirement account contributions, matching funds from your company, cash savings or money you have invested elsewhere.

By age 30: Have the equivalent of your annual salary saved. So, if you earn $50,000 a year, aim to have $50,000 in savings when you hit 30. Every five years, increase the number of years of salary you have saved. By age 35, twice; by age 40, three times, etc. until by age 65 you have eight times your annual salary saved.

This timeline is similar to the one recommended by retirement-plan provider Fidelity Investments, which recommends having the equivalent of your salary saved by age 30 and 10 times your final salary in savings if you want to retire by age 67.

However, be sure to avoid risky investments. Thousands of people lose money each year on highly speculative investments and scams. When investing, it is a good idea to consider if you would benefit from professional advice from a regulated independent financial adviser.

You can lower the level of risk you take when you invest by spreading your money across different types of investments. This is called diversification. All investments can perform very well or very badly so make sure that you don’t put all your eggs in one basket. Mutual funds are typically thought of as having less risk than investing in just one or two stocks. Greater diversification means less risk. Ecclesiastes 11:2 says “Make seven or eight portions; you know not what misfortune may come upon the earth.”

We all have a lot of goals for our finances. You may want to buy a car within a year, or you may want to save for a newborn’s college education in 18 years or your retirement in 30 years. All of these goals have different time frames, which means only you can decide whether it’s best to reach your goal by saving or investing. That’s why it’s important to make a plan.

Everybody should be saving AND investing no matter what your income level. If you are only earning a bare minimum, you still need to save a little bit every time that you receive a paycheck. You have to be prepared for that time in the future when an emergency occurs.

If you are earning more than the bare minimum, there should be no question about having an emergency fund, money saved for the things that you want to do in your life and especially for retirement.

And, just because you are focused on savings and investing, remember to be generous. Everything that you have is a blessing from God. As you think about the balance between giving and saving/investing, your attitude should be not how much of your money you are going to give to God. Rather your thoughts should focus on how much of God’s money you need to keep!

Dreaming and Doing are Two Different Things

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. 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 genuinely hard to accomplish?

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 where your money goes and 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 small step today it won’t happen at all. Success is the sum of small efforts repeated day in and day out, month after month and year after year.

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.? Review it weekly, and monthly.

Once you have tracked your spending for 2 months, step back and look at the total of 60 days’ worth of spending. The 60 days of spending provides you with a baseline start for a monthly budget. (Or you can call it a spending plan since nobody likes the word budget.)  

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 most important things. Is it more important to save for the kid’s college education or to buy a fancy coffee on the way to work every day? Success begets success and controlling the monthly income and outgo helps you focus on more strategic money goals.

Review your spending on a monthly basis and analyze your progress. Is your debt lower this month than last month? Do you have more money in your emergency fund this month than last month? Is your giving more generous this month than last month? Have you over spent in any categories? What can you do to be more successful in the next month?

Once you get your day-to-day spending under control every month, you can tackle bigger picture items like paying off all your consumer debt, paying off the mortgage, and saving for college and retirement.

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. You can download a free eBook copy of Your Money Counts, and when you read it 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 candles 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 order 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.” Don’t fall victim to the enticements of this world.

Listen to the Compass Catholic podcast for more about how to stop dreaming and start doing.

God Marriage & Money

When a couple gets married they each bring assumptions and preconceived notions about money into their marriage. He thinks $1,000 in debt is horrible. She thinks $10,000 in debt is normal. He wants to lease a car and get a new one every 2 years.  She assumes they’ll buy a good used car and drive it till the wheels fall off. He thinks they will only use cash and buy what they can afford. She thinks they can use credit cards and buy whatever they want. He wants to fly by the seat of his pants financially. She thinks they need a formal written budget.

All of these assumptions, and many more, will come up at some point in a marriage. Maybe right after the honeymoon or ten years down the road, but financial assumptions will come up someday. And unresolved financial differences will cause problems sooner or later.

Think about how much of your time is occupied by money in your day to day routine.  Every minute is somehow connected to money. You are either earning it, spending it, managing it, or using something on which you spent money. There aren’t very many activities that do not somehow relate to finances.  

Without planning and a sense of direction, discussions about money can lead to arguments and finger pointing–definitely not a good communication method! Communication about anything makes that topic a shared concern between the spouses, and money falls into this category

Having a date and talking about money may not be considered a romantic thing to do when you are engaged to be married. But, not talking about money may lead to divorce, which is definitely not romantic! Joint discussions about the family finances need to happen early and often in order to build and maintain a strong healthy marriage.

Financial discussions should take place in an honest and open way without playing the blame game. One of the reasons we encourage couples to develop a spending plan is to take away the emotion and help them focus on facts. Instead of saying “you always overspend,” the conversation can be much more non-threatening, such as “Our entertainment budget is over the limit let’s talk about what happened.”

Having a spending plan helps you and your fiancé focus on the overall vision and plan for your money and once you do that, the small day to day decisions take care of themselves. It’s about making a plan, and sticking to it together by encouraging each other.

Information gives you power over your finances. Not talking about money, not making a plan and not coordinating as a team makes you a victim of your finances. If you control your finances, they will never control you or your marriage.

We encourage couples to have a clearly defined money management system all the way from who handles the mail to who pays the bills and who balances the bank and credit card accounts. Without a well thought-out operational plan, things fall through the cracks

The day to day spending should be reviewed weekly. The budget needs to be reviewed monthly (or more often if you are just starting out.) Long term financial goals such as buying a house, saving for retirement, replacing a vehicle or a large scale home improvement projects should be reviewed every 3-12 months.

A sure way to derail your marriage is to involve your parents in your finances, either by asking for loans or because mom and dad keep funding your lifestyle. When you marry, you are to leave your parents in order to become financially and emotionally independent from them.

It is dangerous to a marriage if the couple is financially dependent on mom and dad, because that dependency gives mom and dad every right to judge how, when, where and on what you spend money. A young married couple needs to learn how to work together as a team without the involvement of either set of parents.

Many financial experts promote the use of separate bank accounts–yours, mine and ours–but that can be dangerous to a marriage as it builds walls between the spouses. Jesus said, “A man shall leave his father and mother and be joined to his wife, and the two shall become one flesh” (Matthew 19:5).  In order to become “one flesh,” the money must be considered ‘ours’ or there will be arguments and accusations.

The money in a marriage and all the responsibilities that come with money need to be shared by both spouses–no matter which one works or who makes more money. Find ways for you both to be equally engaged in all money decisions.

Whether you like it or not, how you communicate about money and how you handle money as a couple has a huge impact on your marriage

The God Marriage & Money book from Compass Catholic Ministries will help you discuss these and many more topics related to finances in marriage. The book provides detailed topics for you to share, such as how much debt and savings you have; your credit reports and credit scores; and your attitude about giving, spending and saving. Start your marriage off on the right foot and have the “money talk” now!

Listen to the Compass Catholic Podcast for more on this topic.

Are You Being Honest With Yourself?

 

Fifty 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.

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.

Sooner or later we all have to face the dishonesty within ourselves. And that dishonesty is especially harmful if it is related to our current financial situation.

Let’s dig into those areas where you may be lying to yourself.

Needs are the basics in life—food clothing and shelter. Wants are anything above and beyond basic needs. Things like the newest cell phone, the bigger house, restaurant meals or the latest fashions are all wants. It is really easy to convince yourself that you NEED something when in reality, you really just WANT it.

Don’t confuse yourself by calling the things you WANT a NEED. Because once you start confusing needs and wants it is easy to talk yourself into buying anything that catches your eye. It is not necessarily bad to fulfill your wants. In fact, as humans, we are wired to have goals and dreams, but be totally honest about which is which.

We are also being dishonest with ourselves if we think that the next thing we buy will make us happy. Happiness is a state of mind and while you may get some temporary satisfaction out of a new possession, it will never bring happiness for long. Setting yourself up to be happy based on buying things puts you in a never-ending cycle of “what’s next?” It’s hard to be happy if you never stop and appreciate what God has already given you.

In 1 Timothy 6:8, we read: “If we have food and clothing, we shall be content.”  It is much harder to be content if you have food, clothing, and shelter, plus a long list of unfulfilled “needs” and a never-ending inventory of things to buy which will finally bring you happiness. If you aren’t happy with what you have, you will never be happy when you get what you want.

Another way we may be lying to ourselves is when we justify being in debt because “everybody has debt.” There’s the school loan, the car loan, the mortgage, the second mortgage and all the credit card debt.  If you are using debt to subsidize a lifestyle you can’t afford, you are just being dishonest with yourself.

In order to gain control and spend less than you make, it’s crucial to live within your means. Try writing down everything you spend money on for a few months and organize your spending into categories. (Here is a helpful spreadsheet.) Once you have a few months of spending in a format you can review, it will help you develop a spending plan so you can manage what’s coming in vs what is going out.

If we convince ourselves that we don’t make enough money to save anything it’s another big lie. You may not be able to save a significant amount of money but if you are not saving anything, sooner or later you will be forced to use debt when there a health issue, an accident, an appliance that needs to be replaced or a major repair to the car. Those unexpected expenses hit everyone sooner or later. And if you haven’t saved any money, the only option is the credit cards or a loan.

We can again lie to ourselves by delaying retirement savings because there will be time for that later. The best way to build a retirement savings account is to start early and save on a regular basis. In Proverbs 21:5 we are encouraged to save on a regular basis “Steady plodding brings prosperity…” Every American should be saving for retirement in some way. if your employer offers a 401k match, take advantage of it. A 401k match is a free money from your employer to reward you for something you should be doing anyway.

Getting hoodwinked into investing in something because the returns on your investment are too good to be true means you are believing someone else’s lie. When these “can’t miss” investment opportunities are presented to you, keep your greed in check. Taking big risks out of desperation for a quick gain usually results in losing your original investment. In 1 Timothy 6:9, we read “Those who want to get rich fall into temptation and are caught in the trap of many foolish and harmful desires which pull them down to ruin and destruction.”

And considering that everything we have is a gift from God, our biggest lie is thinking that we don’t make enough money to be generous. Or we convince ourselves that we need the money more than the church does. The act of giving starts with what we have, not what we think we need in order to be generous.

When we are tempted to be stingy due to a perceived lack of resources, remember Acts 20:35, “It is more blessed to give than to receive.” Giving is a way for us to honor God and acknowledge him as the source of everything we have.

The best way to get your finances under control is to be honest with yourself.

Avoid Holiday Spending Stress

Following is loosely based on an article in USNews that was titled “7 Ways to Avoid Holiday Stress”

We are finished with Black Friday and the buying season is in full swing.

But you still have time to pull together a financial plan for the holidays that will keep your bank account in the black.

So take some time before your spending spree starts to go through the following steps and keep some sense of sanity in Christmas spending this year.

Check your credit score. 

  • That may seem like a weird way to start holiday shopping
  • But if you are already in trouble with our credit score, overspending on Christmas will make things even worse
  • So it is a good idea to check your credit score before you head our shopping
  • and that may be a wake-up call to help you put some sanity into your holiday spending
  • If you are motivated to maintain or improve your good credit score you will be less likely to
    • overspend,
    • rack up credit card purchases you can’t pay back
    • or open new lines of credit when you are presented with deals that are just too good to be true.
  • We recommend using CreditKarma.com as it is a free service and will help you stay on top of your credit through weekly emails and suggestions on how to improve your score.

Decide who and how much

  • You need to plan for who and how much
  • Are you only going to buy for your immediate family
  • ]or do you want to buy for the extended family plus a bunch of neighbors and friends
  • If you only have a few people you can spend more on each one
  • If you have a lot of people on your list then you need to concentrate on buying inexpensive presents that won’t break the budget
  • BUT the tendency to overspend may be hard to resist, if you have a huge list of people

Set your budget and divide that by the number of people on your list.

  • First step in to figure out your budget for holiday in total – including gifts, travel, meals, decorations and donations
  • Then assign an amount to each of those categories
  • And figure an amount you can spend per-person
  • The more organized you are and the more detailed you are, the less chance you will bust the budget
  • Define an exact dollar amount for each person on your shopping list.
  • Once you hit that dollar amount, stop shopping for that person.

Window shop

  • Scope out purchases in advance. 
  • Use online shopping carts or “wish lists” as a way to avoid impulse purchases.
  • Select things for your basket or “wish list,” then walk away until tomorrow
  • To entice you to complete your purchase, some retailers will email coupons to those who have left a full cart on the site, making a future purchase less expensive.
  • For people who shop in a real store, do the same thing by scouting out purchases
  • Leave your purse or wallet at home and visit the stores which are most likely to have the gifts you want to buy
  • Both of these methods also help consumers avoid the scenario in which they buy one gift and then later find something else they like better.

Pick one day to go shopping with a list. 

  • When it comes time to actually buy, try to pick one day to complete all your shopping.
  • Be sure you have a complete list of specific purchases for each person on your list
  • Without a list, it’s easy to get confused and overwhelmed
    • Without a list, everything in the store is fair game to buy
    • That may mean over buying for one person and completely forgetting another one

Plan your credit card usage. 

  • You may have a budget for the holidays that includes a spending plan for everything
  • But without cash in hand, you are going to use credit to for your purchases
  • And that can mean disaster come January when the bills start rolling in.
  • There’s nothing wrong with using credit cards for holiday shopping IF you have a budget and plan to pay them off at the end of the month.
  • If you are racking up credit card debt hoping you can pay it off sometime in 2018, you are asking for trouble.

Think of alternatives to store-bought gifts. 

  • One of the best ways to avoid being financially stressed during the holidays is to skip the expensive store-bought gifts altogether.
  • This approach has benefits beyond simply saving money.
  • Maybe you can make baked goods for some of the neighbors,
  • or maybe you can offer services such as mowing the lawn once a month for an elderly neighbor
  • For family members, how about a digital picture album of fun times you shared during the previous year

The holidays are closing in fast, but there is still time to take these proactive steps to avoid finding yourself in a financially stressful situation.

Once Christmas 2017 is finished, we highly suggest saving 1/12 of your Christmas budget each month.

If you say you can’t afford to do that, what makes you think you can PAY 1/12 of the charges you made for Christmas 2017, PLUS interest.

After all, the buying frenzy that occurs every year at Christmas has absolutely nothing to do with the baby in the manger

The gift of God made man

The only one and true gift we need at Christmas.

Don’t Go Into Debt for Christmas

This year, it seems like Christmas advertising started the day after the kids went back to school.  For months, stores have been featuring Christmas decorations, trees, wreaths, lights and ideas for presents.

As a society, we seem to skip from one shopping season to another with no regard to the holiday we are celebrating.  Other than the meaningless rush to buy stuff there seems to be no reason for the Christmas holiday. We don’t even think about what we are really celebrating and what the holiday is all about. Unfortunately, this materialistic mindset has many parents worrying about how they will pay for Christmas this year.

According to CNN, two-thirds of them will spend more than they can afford, meaning many parents will take drastic measures to afford Christmas. Many of them will use credit cards for Christmas presents and go into debt which will take months to pay off. Others will take more extreme measures to fund their purchases:  11% will dip into their retirement account, 14% will use funds from their emergency savings, and 11% will take out a payday loan.

Funding short term purchases with anything other than cash can have harmful effects for years to come.  Paying off credit card debt for months means paying 15%-21% more for those presents once the interest charges are factored in. Using money withdrawn from a retirement account means a penalty on early withdrawals, lost interest and tax consequences. Raiding emergency funds for Christmas presents makes people more vulnerable when an actual emergency does occur. And using a payday loan for anything is a horrible idea. You will be paying an exorbitant interest rate plus a finance charge.  For a two week loan, the interest rate on a PayDay loan can be as much as 400% APR. 

Christmas should be about celebrating the birth of Christ, creating memories, and enjoying friends and family, not about creating debt. Christmas is a wonderful time of year, but it should not come at the risk of your long-term finances stability.

So, as you are getting ready for Christmas, here are some tips to avoid going into debt for the holiday season.

Begin by matching your budget to your Christmas list. You may want to buy gifts for every one of your family members, all of your co-workers, the tradespeople you deal with on a regular basis, and every neighbor up and down the street.  But can you really afford to do that?

It might seem harsh, but you don’t have to buy gifts for everyone. You can always make cookies for your neighbors or your children’s teachers. Or give them a small token gift card with a sincere thank you note about how they have touched your life.

Most times, a simple thoughtful gift means more to people than one more overpriced trinket that they don’t want and won’t use. Try to think of all the ways that you can show the people in your life how much you appreciate them without going into one penny of debt.

For many of us, being able to give a beautifully wrapped expensive store bought gift would be a nice way to make the people we care about feel special. But the reality is that we simply can’t afford to be Santa to everyone in our lives during the holidays.

If you’re from a large family, suggest that you each pick a name and only buy something for that person. A white elephant gift exchange is another way to do something fun and inexpensive. Each person brings one wrapped gift to contribute. (Be sure to indicate some parameters such as a dollar limit for the gift.) Have the gifts in a pile with everyone seated around the pile. Assign an order in which the gifts will be chosen. You can draw numbers from a hat or assign an order based on age. The first person gets to choose a gift from the pile, open it and show it around. Each person follows one at a time and when it’s their turn, they can choose to either pick an unwrapped gift from the pile or steal an open gift from someone else. Anyone who gets their gift stolen can do the same–choose a new gift or steal from someone else. This usually results in both chaos and fun.

Another way to save money is to window shop before buying. Start with your list of recipients and a budget for each of them. If you are doing online shopping, save items to your wish list for a few days before buying. If you are shopping in a brick and mortar store, walk through the store without your wallet or purse to scope out what you may want to buy. This helps you see what’s available that may be an appropriate gift in a slow thoughtful way. After your window shopping expedition, make a specific list of what you are going to buy for whom and return to the store or website to complete your purchases. This method helps you comparison shop, keeps you from buying things you have to return, ensures you remember everything and everybody and puts some sanity into what can be a chaotic rush to buy something – anything!

If you’re not sure how to rein yourself in when it comes to shopping for your kids, try using the Five Gift Rule.

1. Something they want

2. Something they need

3. Something to read

4. Something to wear

5. Something to share

It’s a great way to organize your gift giving without breaking your budget.

And let’s face it, how many times do the young ones have more fun with the huge cardboard boxes than with the toys. And kids don’t care how much you spent or whether it is brand new or from the thrift store. They don’t even notice that you spent hundreds of dollars to make sure they had the hottest gift of the year.

Take the stress away. You’re not a bad parent if you don’t spend $500 on each child. You’re not a bad parent if you bought them a bike at a garage sale and fixed it up. Kids remember Christmas because it’s a fun time of year. They remember it because they get to spend time with you, their parents. They get to eat cookies and sing fun Christmas carols. They aren’t going to count each gift and ask the price of everything under the tree.

So, avoid the inevitable financial pressure that comes each year at this time. Remember, going into debt for Christmas presents prevents you from reaching your long-term financial goals, like paying for your kids’ college tuition or funding your own retirement.

Every time you go into debt to buy a present, you’re choosing a physical object over your long term financial security. Try some of the above tips to stay on track and on budget this holiday season. It will still be merry and bright; and your future self will absolutely thank you.

 And remember what Pope Francis has said about money, “If money and material things become the center of our lives, they seize us and make us slaves.” This Christmas, escape from the slavery of debt and consumerism. Keep your eyes focused on Christ—the reason for this season—and not on all the unnecessary stuff our society throws at us.

For more on this topic, connect with the Compass Catholic podcast on Podbean as we discuss how to keep some sanity in Christmas spending.

Ditch the Debt!

If you are tired of paying interest or if you feel like there is an avalanche of debt coming your way, it’s easy to feel totally overwhelmed. But putting your head in the sand is no solution and ignoring debt can make things even worse.

Many types of debt destroy your future. Maxing out your credit card on vacations and luxuries isn’t going to help your financial situation. Buying a new car every few years ensures you will never get a car loan paid in full. And not paying bills on time will destroy your credit rating.

If you willingly take on debt, you are obligated to pay it back.  Romans 13:8 from several different Bible translations admonishes us “Owe nothing to anyone;” “Keep out of debt;” “Owe no man anything;” “Let love be your only debt;” “Don’t run up debts.”

Debt is a tool, and like any tool it needs to be used correctly. A hammer is a tool but you don’t use a hammer to kill a bug on a window. And you should not use debt to subsidize a lifestyle you can’t afford.

In looking at your personal debt, it helps to understand the difference between secured and unsecured debt. Secured debt is tied to a specific piece of collateral, such as your house or car. If you can’t pay the loan, the lender can seize this collateral to fulfill your debt obligation.

Unsecured debt (medical bills, past due bills on utilities, and money owed on credit cards) is solely based on your creditworthiness. A lender will approve unsecured debt, without any collateral to secure it, by reviewing your credit report and credit score.

If you are having problems making ends meet, it makes financial sense to prioritize the secured debt and pay that first. Falling behind on a credit card payment may ruin your credit score, but falling behind on your car payment may lead to your car being repossessed.

If you find yourself in a position where you have to prioritize debt payments, you will never recover without using a budget. It is the only way you can match your income against your expenses and find ways to bring them into balance.

A budget forces you to assess priorities and set limits while giving you the information you need to make smart decisions with your money. In general, you should use a budget to figure out places where you can cut back and save money. In addition to taking care of your basic needs, your budget should include a strategy for how much you can add to minimum debt payments and the order in which you want to pay off your debts.

Remember, that a budget is a tool and the success of a budget depends on how you use it. Writing down some numbers you pulled out of the sky is not a budget. Track your spending for a few months, categorize the spending and use that as your starting point for a realistic budget. Be sure to prioritize your debts and expenses, listing those that are essential to pay (like the mortgage, or the utility bill) and those that might be less important (such as department store charge cards or loans from family and friends).

A budget allows you to see if you are staying on track and making progress. Otherwise your finances are just guesswork, which is probably how you got into debt in the first place.

If you are seriously using a budget but can’t make any progress after a few months, you may need help from a credit counseling organization. If you do, check out the company’s credentials first. Not all agencies are legitimate—some charge excessive fees, fail to perform promised services, provide bad advice, don’t discuss alternative ways to deal with debt, make false promises, and sometimes even take your money and run. The federal Trade Commission website offers tips on how to choose a credit counseling agency: https://www.consumer.ftc.gov  and search for: choosing-credit-counselor.

You may be considering using a home equity line of credit (HELOC) to pay off your unsecured debt. Or you may consider debt consolidation, which is a loan used to pay off all of your debts at once. For many people, a HELOC or some sort of consolidation loan may seem like an easy fix. But the HELOC may put your home at risk if you don’t pay it on time and a consolidation loan can lead to more debt.

If you don’t make fundamental changes to your lifestyle you’ll be in debt again within a few years after securing these loans. They are an easy fix to the immediate problem but debt is just a symptom. The real problem is how you manage your money.

To solve the root cause of debt, you need to resolve the reasons you ran up so much debt in the first place. Are your expenses greater than your income? Is your spending irresponsible and impulsive? Do you live beyond your means?  Are you addicted to credit card spending sprees? Unless your lifestyle goes through a fundamental change, you will keep spinning in the debt cycle

To pay off debt, you only have two choices: spend less or earn more.

To spend less, think of potentially significant changes to your lifestyle. Can you manage on one car? Should you sell the house and downsize? Can you take on a roommate to help pay the mortgage? Are you willing to buy clothes at a consignment shop? What do you own that you can sell? Your biggest savings will come from lifestyle changes.

Similarly, if you want to earn more, maybe you need to change jobs. Or maybe it’s time to approach your boss with all the (well documented) reasons you deserve a raise and a promotion.

But be sure to weigh the difference between cutting expenses and making more money. For each $100 decrease in your spending you have $100 more for debt payments. For each $100 you earn, only a portion is available for debt payment because of taxes, payroll deductions and other expenses related to your job.

If you can’t seem to stay away from those little pieces of plastic that allow you to buy every whim, follow one of our strategies. Freeze your credit by putting the credit cards in a plastic bag, putting the plastic bag in a bowl, filling the bowl with water and putting the whole thing in the freezer. Or try plastic surgery by having your credit cards meet a nice sharp pair of scissors.  Another trick is to cover a cookie sheet with aluminum foil, add your credit cards, then put the cookie sheet in the oven at 3500.

The bottom line is that any time you are trying to change a habit it is a long process and a lot of hard work. Making a lasting lifestyle change won’t happen overnight.

While we do NOT encourage debt, some debts, such as a mortgage, student loan or business loans are hard to avoid. These three examples can be classified as ‘acceptable’ debt as they are appreciating assets. Homes usually appreciate in value. A student loan is assuming a higher salary after graduation. A business loan may allow you to expand your business and earn more. In these cases, debt is an investment in the future.

To help you stay focused, meditate on this verse from Proverb 22:7: “The rich rule over the poor and the borrower is slave to the lender.” All the hard work you will go through to pay off your debt and change your habits is the price you pay for the freedom that comes with being debt free.

Connect with us via our podcast on Podbean for more about how to dig your way out of debt.

Giving Tuesday

November 28th, the Tuesday after Thanksgiving is Giving Tuesday. It was originally started as a way to use social media to challenge the excessive consumerism found in Black Friday and Cyber Monday where BUYING is the mantra. Instead of pressuring you to buy more, Giving Tuesday encourages you to give more.

Generosity is a topic that can be frustrating. People may give because they feel a sense of obligation. Sometimes they give to appear spiritual. Sometimes they feel pressured to contribute to a certain organization. But the best way to give is to an organization that grabs you heart with its mission and vision.

We always encourage people to be generous to their parish and diocese as well as to ministries that are doing the good work of preaching the gospel. We hope that the good work done by Compass Catholic Ministries is on your heart as a place to give so that you can participate in the Church’s work of Evangelization. Galatians 6:6 tells us “If you are being taught the Christian message, you should share all the good things you have with your teacher.”

Every day, lives are changed and hearts are healed by the prayers, teachings, and conversations that happen in the Compass Bible Studies.

Did you know that Compass Catholic has had or currently has Bible studies in about 70 parishes and 20 dioceses in the US? And we are in Latin America: Columbia, Dominican Republic, and Mexico. In the rest of the world, Compass has touched lives in Poland, Croatia and Singapore. The Navigating Your Finances God’s Way and Your Money Counts books are being contextualized and printed in Canada. By translating the Compass material into 6 languages: English, Spanish, French, German, Portuguese and Polish, we can reach 70% of the 1.2 billion Catholics around the world.

The word about Biblical stewardship is spreading and we are helping people everywhere escape from the consumerism that is so prevalent across the world.

God has a plan for each of us as individuals, and also has a mission and vision for each parish, diocese, and the Catholic Church as a whole, as well as each ministry spreading the good news of salvation.

In our world, it takes money to do the tasks that God assigns us and running a ministry in similar to running a business. While our hearts are totally committed to the spiritual aspects of the ministry, there are lots of secular aspects to contend with, such as: the cost to edit, format, proof read and print books. We pay for computer programs and apps that are required in order to run the ministry and keep track of book sales, invoices, inventory, donations. There is a cost to maintain and update the website and send out the newsletters. We travel to conferences in order to spread the word about Compass Catholic Ministries and our mission.

The list of expenses goes on and on and the monthly operational costs average about $7,000. The funding comes from the sale of books and donations.  Every time the ministry grows, the costs increase.

We do everything possible to maximize the use of volunteers. In fact, Jon and I spend almost full time working in the ministry as volunteers, with no need for a salary.

If you are interested in supporting Compass Catholic we can use your help in many ways.  The first way is to become a donor. You may donate by mailing a check or setting up Compass Catholic Ministries as a bill payer vendor with your bank for recurring donations. If you choose to donate by check, please make checks payable to Compass Catholic Ministries, and mail it to:

Compass Catholic Ministries
5840 Red Bug Lake Road #590
Winter Springs, FL 32708

We also accept online donations via the secure PayPal link on our website and you can make a one-time donation or set up a recurring donation at  CompassCatholic.org/donate/.

If you shop via Amazon, use Smile/Amazon.com and choose Compass Catholic Ministries as your charity. Amazon Smile is a website operated by Amazon that lets customers enjoy the same wide selection of products, low prices, and convenient shopping features as on Amazon.com. The difference is that when customers shop on Amazon Smile the Amazon Smile Foundation will donate 0.5% of the price of eligible purchases to the charitable organizations selected by customers. It works whether you are an occasional Amazon user or a Prime account holder.

We can always use more volunteers. We need volunteers who are passionate about using their time, talent and treasure to serve God through this ministry. There are several Volunteer opportunities available

Become a Facilitator and lead a Compass Bible study with a group of friends. Training is available from the Facilitator Page after you create a user ID and password to access it. We are always looking for Parish Volunteers who focus their efforts on coordinating Compass classes and promoting Compass within a single parish.

The Area Volunteer promotes Compass within a local area. The size of the area can be as small as two parishes, or as large as a particular city, an entire state or even multiple states.

And if you have other talents, we are always eager to have people join our mission who can help with Grant Writing; Videographer; Guest Blogger; Editor; Ghost Writer; Translator; Proof Reader.

If you are interested in getting involved or if you have any questions, please contact us.

A lot of times when people are asked to donate to a specific cause, they ask themselves “How much of my money can I afford to donate?” We’re sure that the thought “How much do I have to give?” has crossed your mind. The answer is that you don’t have to give anything. As a good steward, you should be asking the question, “How much do I want to give?” The blessing that we have as good stewards is that we are free to give as much as we want. The whole question of giving shouldn’t revolve around the “minimum” gift, but on the “maximum” gift. Our gifts should come from our heart and should be an indication of our faith. (Cf. USCCB, “Stewardship – A Disciple’s Response; A Pastoral Letter on Stewardship,” p 67.)

Instead of asking “How much of MY money can I afford to give?” the question should be “How much of GOD’s money do I need to keep?” which is a much different perspective.

In addition to what you give to your parish and diocese, we would suggest that you pick one organization to be your major focal point and we hope Compass Catholic Ministries is one of those places in your heart.

When you have found a way to really make your giving sincere and heartfelt, you will make a difference. We cannot do this without your generous support.   We encourage you to join the mission of Compass Catholic Ministries and help us change the world!

When you say “yes” to becoming a partner with us, you’re helping Compass Catholic Ministries teach people to be generous givers, wise spenders and responsible savers. Marriages and families are strengthened and the work of the Church is sustained. Your generosity will touch people and change their lives forever.

For more about the importance of giving, join the Compass Catholic podcast on Podbean as we discuss generosity.

Seeking Godly Counsel

When we really want to buy something, how many times do we slow down enough to seek Godly counsel before purchasing it?

The seven gifts of the Holy Spirit are: wisdom, understanding, knowledge, counsel, fortitude, piety and fear of the Lord. So, if we have received the gifts of the Holy Spirit, especially wisdom, understanding and knowledge, then we should inherently know that seeking godly counsel is a wise thing to do.

The Bible gives us many verses related to seeking counsel:

  • A wise man will hear and increase in learning, and a man of understanding will acquire wise counsel (Proverbs 1:5).
  • Through presumption comes nothing but strife, but with those who receive counsel is wisdom.  (Proverbs 13:10).
  • Listen to counsel and accept discipline, that you may be wise the rest of your days (Proverbs 19:20).
  • Prepare plans by consultation . . . (Proverbs 20:18).
  • Where there is no guidance, the people fall, but in abundance of counselors there is victory (Proverbs 11:14).
  • Without consultation, plans are frustrated, but with many counselors they succeed (Proverbs 15:22).

Those are only a few of the 48 Scriptures verses I found that encourage us to seek counsel.

But how often do we actually go out of our way to seek counsel – especially when it comes to financial matters? For most people, the answer is never or not often enough!

Most of us are very proud of our independence, especially as it applies to our financial situation. When we come face to face with a decision, we don’t relinquish control to anyone or seek help–we’re independent, and we don’t need anyone’s counsel. Yet one of the best ways to avoid financial problems is to seek godly counsel before making financial decisions, especially large decisions.

So, who do you ask for counsel, and how do you go about asking? Even though it may take a little courage to ask for advice, our most trustworthy advisors are the ones who have been there all along—parents, or close, trusted friends. Tell them the facts of your situation in a straightforward manner, being totally truthful. Just tackle the conversation head on, open your heart, and listen closely.

If you are married, your spouse should be your number one source of counsel. You will both suffer the consequences of any bad decision, so it is important for both of you to agree on the course of action. If you do not agree, wait, pray and keep talking about it.  Nothing will ruin your marriage faster than making one sided decisions.

We know because that’s what happened to us. We talked around our differences but never came to a decision on which we both agreed. Many years ago, we were in the middle of buying land and working with an architect to design and build our dream house. This was at the same time my husband decided to start his own business and quit his job which paid a generous salary.

The bad news is that we were not on the same page financially. We never really had any financial issues up till that point in our marriage so we never needed to sit down and hash through a budget, talk about debt or plan for saving. The money just came in and went out.

We never thought of seeking godly counsel in an honest and forthright way.  If we did get input from anyone, our questions were couched in language that assured us of getting the answer we wanted, because of course, we knew we were right. Almost as soon as our dream house was built and the mortgage payments started, we ran into financial turmoil.

The verse from Proverbs 12:15 says, “The way of fools is right in their own eyes, but those who listen to advice are the wise.”  And we were certainly fools who thought we were right in our own eyes. The results of those actions were one of the worst financial mistakes we ever made and those mistakes almost cost us our marriage.

Like us, many people have lost a lot of money and have subjected themselves and their families to years of heartache and stress by making bad financial decisions. And what’s really tragic Is they could have avoided most of their difficulties if they had simply sought counsel from someone with a solid understanding of God’s way of handling money.

All of us should intentionally seek to surround ourselves with godly people who can counsel us is different areas. We each have limited experience and knowledge and we need the insights, suggestions and thoughts of others to make a proper decision.

The one common attitude that keeps us from seeking counsel is pride. Some people think seeking advice is a sign of weakness. It’s against our American spirit of independence to ask for help. The American mantra of “Stand on your own two feet” seems to contradict getting advice and counsel from anyone.

Yet this is totally contrary to what we see in the Bible, which encourages a spirit of interdependence in the Body of Christ. In 1 Corinthians 12:12-26, we are described as a body where in order to function properly, we need each other. As we are one body in Christ, God encourages us to seek wise counsel and to rely on each other for Godly advice. The Christian life is not one of independence from one another; we’re to be dependent upon each other and grow together in love and faith.

There are cautions when seeking counsel. First of all, it is important to be totally open and honest. Because of our pride sometimes we don’t give all the facts. We just offer up the facts that will give us the answer we want. This isn’t really seeking counsel – it’s going through the motions. So, when you ask for advice stick to the facts – all of them, and don’t disguise or hide the facts in order to sway the person to give you the answer you want to hear.

You also need to be careful about who you ask for advice. Sales people may get a larger commission by pushing you to buy a certain product. Or they may pressure you to buy immediately so they can make their sales quota. It is certainly appropriate to gather facts from experts (like sales people) when making a financial decision. But godly advice is best gotten from a person you know well and who has no vested interest in your decision other than your welfare.

If you don’t have someone in your life who can give you financial advice based on the Bible, pray for the Lord to bring that person into your life. It will be one of the best decisions you can make. A great way to find godly people is through the Compass Catholic Navigating Your Finances God’s Way Bible study. Get involved with your church community and you’re sure to find brothers and sisters in Christ who are more than willing to help and share the Catholic perspectives on handling money God’s way.

For more on this topic, connect with the Compass Catholic podcast on Podbean as we discuss seeking godly counsel.