Health Care Sharing Plans – Part 1

Health care costs seem to be rising every year, which has increased the popularity of some alternatives to traditional health insurance. These are called health care sharing plans. They operate at a cost that is well below traditional health insurance but they may be restrictive with their benefits.

To help you decide if one of these plans is right for you and your family, you need to know that a health care sharing plan is typically a faith-based organization, which facilitates voluntary sharing among members for eligible medical expenses. 

Members send in monthly “shares” (which is similar to a premium) and that share covers the medical expenses of other members. In other words, I make a payment and that payment is distributed to you for health care costs you incurred, according to the program guidelines.

The premise is that people with similar beliefs and values are coming together to share each other’s burdens, which is similar to the risk-pooling nature of regular health insurance. It is the same message we find in Galatians 6:2, “Bear one another’s burdens, and so you will fulfill the law of Christ.”

A major appeal of health care sharing plans is that they are much less expensive than regular health insurance.  Families can become members in health care sharing plans for $300 to $500 per month, compared to about $1,500 per month, which is the average unsubsidized cost of traditional health insurance coverage for a family. 

The cost is usually calculated on one or two adults, and the plans we looked at have an additional cost for children. However, it is the same cost whether you have one child or ten. In addition, health care sharing plans usually have lower out-of-pocket expense limits than typical high-deductible health insurance. 

It’s easy to see the savings appeal for people who do not have job related health care or those who do not qualify for government assistance. 

One caveat to keep in mind is that healthcare sharing plans are not actually health insurance. One of the reasons they’re less expensive is that their coverage may be more limited. Their limitations of coverage are based not only on managing potential costs and claims, but also the faith-based nature of the programs in the first place.

While health care sharing plans do cover many ordinary medical expenses that health insurance covers, they typically do not cover many health-related costs deemed to be unbiblical. They may exclude payments for birth control, injuries related to alcohol or drugs, and injuries from certain hazardous activities (or even failure to wear helmets or seat belts in some situations.)

To become a member, health care sharing plans may require you to sign a statement of faith, and in some cases, they may verify regular church attendance and have your church membership validated by a church leader. The requirements vary by program, but are very similar.

Even though it may seem like a group of people pooling risk and sharing expenses is the definition of insurance, it isn’t. There are some key features of health insurance which health care sharing plans lack. Insurance is a legally binding contract between an insurer and the insured. But everything in the health care sharing plans is voluntary and not binding. Health care sharing plans do not guarantee compensation for specified loss, damage, illness, or death in return for payment of a premium.

Even though they are not health insurance they rely on a similar framework, but use different terminology. 

Here are some common health insurance terms, and their health sharing program equivalents:

  • Deductible = Personal Responsibility, Annual Household Portion (AHP), or Annual Unshared Amount (AUA)
  • Premium = monthly share
  • Claim = eligible event, incident, or illness
  • Explanation of Benefits (EoB) = Explanation of Sharing (EoS)

Health care sharing plans are designed to mimic insurance, and have successfully done so for decades to the tune of billions of dollars of facilitated sharing payments. 

In a time of rapidly increasing health insurance costs, people are turning to this alternative option more frequently. All of the major healthcare sharing groups have seen dramatic increases in membership over the last few years, with total membership now over one million people between the four major programs. 

You can find information on the web arguing how good or bad each of these programs are. In general, the website of each program is very clear about what is covered and is not—even if what they do and don’t cover isn’t always the same as traditional health insurance. And, of course, each program works differently from traditional insurance. 

And each of the healthcare sharing organizations has multiple options. And, to make it more complicated they all have their own unique approaches, pros, cons, and quirks. 

With an understanding of what these programs are, how they work, and some of the differences between healthcare sharing and regular health insurance, what should you do?

On one hand, there is considerable risk in joining these programs, as your health and even your life may be at stake. 

However, there are many people for whom these health care sharing options are working very well. Their needs are covered, and they are saving hundreds of dollars (or more) every month. 

But it’s a decision each individual needs to make based on their own situation, the price, moral appeal, and acceptance of the various coverage gaps and risks. And even being aware of the gaps, doesn’t mean it’s easy to know the risks. 

Being willing to accept those risks is a very personal decision that YOU have to make based on personal research. Nobody can make that decision for you.

The major health care sharing plans, are listed below. Most of them have an online calculator to determine your costs. There are “contact us” forms on their websites where you can request further information. And most of these sites have an online chat option. 

If you are considering a health care sharing program, we highly encourage you to do extensive homework. Look at the company, how long they have been in business, comments from members, all the different options and especially what they will and will not cover.

When making a decision such as this, which has such a potentially significant impact on your life and wellbeing, we also encourage you to pray for wisdom!

Join us next week for Healthcare Sharing Plans – Part 2. We will be having a discussion about things to beware of because they are not covered or coverage is limited.

Congratulations on Getting Engaged!

Christmas and Valentine’s Day are popular days for marriage proposals. If you recently got engaged, congratulations!

It’s time to start talking about a lot of things—the location of the wedding, the reception, the guests, the food, the flowers, and the all-important topic of money in your marriage.

It may not sound very romantic to talk about money when you still have stars in your eyes. But not talking about money before you get married is a sure recipe for disaster.

There are so many assumptions when couples go into marriage, and that is especially true about finances. Unless you have had significant discussions with your fiancé about your individual finances, you really don’t have any idea about how you’ll manage your joint finances.

Here are some examples of financial assumptions: He thinks $1,000 in debt is horrible. She thinks $10,000 in debt is normal. He wants to lease and get a new car every 2 years. She assumes they’ll buy a good used car and keep it forever. He thinks they will only use cash and buy what they can afford. She thinks that they can use credit cards and carry a balance from month to month. She thinks they need a formal budget. He would rather fly by the seat of his financial pants. She wants to keep their finances separate. He wants joint finances

It’s easy to understand how these things will come up sooner or later in a marriage, so it is best to have the money discussions when you are preparing for marriage.

The Compass Catholic book God Marriage & Money will help you with topics to discuss. There are 17 short chapters and each chapter contains a different topic related to money in marriage.

Sample discussion points include the following: 

  • Sharing credit reports and credit scores.
  • How much money can each of us spend without discussing it together?
  • How much debt do we have as a couple?
  • How much interest are we paying on debt each month?
  • How much do we have in savings?
  • What are our saving goals?
  • How much will we give?
  • Who will we go to when we need to seek Godly counsel? 

It is important to find ways for you both to be equally engaged in all money decisions or money can become a control mechanism and a divisive factor in your marriage. 

As a couple, define your decision making process around finances by creating “what if” scenarios. What if I lose my job? What happens when we have a baby on the way? What if we have to move to a different city?

We strongly believe that all the finances in a marriage should be joint. If you aren’t sharing your finances, what else are you holding back from your spouse? If there is a specific situation where the money cannot be co-mingled, decide together what is mine, yours and what is ours.

Most couples have their own hybrid system for what works best. Find the one that is best for both of you. Have a clearly defined money management system all the way from who handles the incoming mail to who handles the outgoing payments. Without a well thought-out operational plan, things fall through the cracks. One person “doing the accounting” is probably the best way to keep the books straight. But it is necessary for both of you to be involved and informed. 

When things get tough, address problems immediately (no secrets allowed).  Avoiding the issue only makes it more toxic and drives a wedge into your relationship. It may not sound romantic, but schedule regular money dates to make sure you are staying on track with your budget, savings, and financial goals.

Talk, talk and talk some more. The most important thing is to have open communication with no blame and shame. We all have hang-ups around money. Treat your partner with compassion. And it’s not just about communication. It’s about making a plan, and sticking to it together. 

Information gives you power over your finances. Not talking about your finances, 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. 

A lot of couples keep their parents involved in their finances, either by asking for loans or because mom and dad have been paying for some items and keep paying for them after the marriage.

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). When you marry, you are to leave your parents for your spouse in order to become financially and emotionally independent from your parents.

Part of the reason to leave is because it forces you to become more mature and more dependent on each other. That’s what marriage is all about – growing that bond between husband and wife

How you communicate about money and how you handle money as a couple has a huge impact on your marriage. Money can be one of the leading causes of divorce, so we encourage you to have the money talk when you are engaged and to find ways to work together on your joint finances.

Lessons from a Financial Train Wreck

An article on The WealthSimple.com website caught my eye. In their “Money Diaries,” they feature interesting people telling their financial life stories in their own words. 

This is the story of one couple who is a financial train wreck. They did just about everything wrong in their finances, and even acknowledge the mistakes they made, yet they refuse to change.

Their income is healthy by any standard. She makes $70,000, he makes $90,000 a year, additionally he earns $100- $250 per night a few times a week bartending at private events. Their total yearly salary is somewhere in the neighborhood of $170,000-$180.000. Yet they can’t make ends meet each month and they keep digging deeper and deeper into debt.

Spending whatever you earn without a thought to how you are spending it, or where it is going is a sure recipe for disaster.

The explanation for how they got into debt was, “I think education loans probably started us on this path. But credit cards got us in trouble.” Did you notice there was no acknowledgment of personal responsibility in those statements? No admission that THEY took out the student loans and THEY used the credit cards irresponsibly.

Not taking responsibility for financial problems also means they don’t have to take any responsibility for solving their problems. 

Sometimes you just have to look at yourself in the mirror and admit you were wrong and you need to do something to correct your mistakes. Facing up to mistakes is the only way to solve problems.

The wife has a law degree but has never practiced law. They think her student loan debt started at $90,000, but they aren’t sure of the current balance since the only time they check the student loan website is to request financial hardship status so they don’t have to make payments on the loan.

But the interest keeps building. With interest, the law school debt is now $120,000 to $140,000. That’s about $30,000-$50,000 or more they’ll pay in interest. 

They think they are escaping a problem by asking for deferrals on the loan, but all they are doing is pushing the problem into the future. The less they pay, the more interest adds on to the original loan amount, and the more they owe. That interest is building debt like a tsunami wave which will eventually crash down on them.

Like many people, this couple uses credit cards to sustain a lifestyle they can’t afford. They have a total of 10-15 credit cards, with 8 maxed out. Yet they freely accept more debt on the credit card and loan solicitations they get in the mail, even though they think the lenders are crazy for offering them more credit.

Maybe the banks just know a cash cow when they see one!

If you’re really serious about getting your finances straight, at some point you need to quit digging the hole deeper and deeper.

In addition to the student loan debt, they have no idea of their overall total debt. They think they have: $60,000 in credit card debt; $18,000 in a personal loan; $360,000 in a mortgage and a second mortgage, plus the unknown student loan amount. That’s close to $600,000 in debt!

The first way to control debt is to list it all. Every penny. Mortgage, car loans, credit cards, student loans, regular bills that are past due, and money borrowed from Uncle Fred. Then add up how much interest is charged each month. When people see how much money they waste every month by paying interest, it’s usually enough to get their attention and get serious about paying off debt. Yet they keep pushing it aside. 

They have 3 children who attend private school. The tuition is $32,000 a year per child or $96,000 total per year. But they declared a financial hardship and are only paying $15,000 total in tuition for the three children. But, of course, the $15,000 in school tuition is being charged to more credit cards. Another way they are digging the debt hole deeper and deeper.

They bought a house they couldn’t afford about 3 years ago. And they used both a first and second mortgage to buy the house. They have refinanced the first mortgage several times, which means more money down the drain in closing costs for refinancing. The house is worth $360,000, and that’s how much their mortgage debt is. If there is a need to sell, they will probably lose money.

They didn’t calculate the cost of the mortgage payment along with the other housing costs (repairs, maintenance, utilities, etc.) to ensure housing costs total no more that 40% of their monthly budget —mostly because they can’t even comprehend the thought of a budget.

Like many people in the same situation, they were looking for a quick fix. They cashed out his 401(k), which was around $70,000. They paid down the balances on three credit cards with the $70,000 and also paid off a $12,000 loan. Because there was some financial relief, they “Had a really good Christmas that year.”

But they didn’t fully understand the cost of the tax penalties in cashing in a 401K account, and they ended up owing $18,000 to the IRS and $2,000 to the state in penalties. Because cashing in the 401(k) didn’t work in eradicating their debt, they went to her parents and borrowed $40,000 to continue funding an unaffordable lifestyle.

If you want to escape from the trap of debt, there really isn’t a quick fix. Changing your financial life is like a diet. You can go on a starvation diet and lose lots of weight really fast. But you can’t keep it off. In a similar way, you can use easy money to pay off debt but if you have not changed your life style, debt is going to creep back up. 

In the article, it stated they shop at Goodwill for clothes because they can’t afford to pay full price, which is great. But when it came time to rent a tuxedo so their son could go to prom, they didn’t have enough cash to rent a tux, so they bought their son a tuxedo using their non-maxed out store credit card. They grow veggies in the back yard, but one of the kids likes to snack on sushi and a smoothie, which adds up to a $15-$20 snack!

The unfortunate thing is that they are not teaching their kids any financial responsibility. The kids are learning to be just as irresponsible with money as mom and dad are.

The really sad thing about this whole situation is the way they are destroying their marriage because they cannot handle their finances like responsible adults.

They closed the interview by admitting that one of them will probably have a heart attack and die from stress due to their financial situation. So, the solution is that the surviving spouse can use the life insurance proceeds to pay off debt. But that won’t solve anything if the surviving spouse continues to be irresponsible with money.

I don’t know if these people are Catholic, or Christian or if they even go to church. They never mention faith in the interview. 

The big piece they are missing is the joy of living as a steward of all the blessings God’s given them. That can change everything.

Stop Funding Your Adult Child’s Lifestyle

Your adult child comes to you for financial help. What’s your response? 

The adult child may be thinking: “They should help me—I deserve it. Mom and dad are fine financially, why shouldn’t they help me? I studied hard in school but I can’t find a job in my field. My roommates moved out and I can’t afford an apartment on my own.” 

Mom and dad may be thinking: “We need to save for retirement. We did our job to help them grow up. Now they are an adult and should be taking care of themselves. They waste money on unnecessary purchases why should we waste our money helping them do that?”

How much you should help adult children is a loaded question, and it’s two sided. Our children grow up and become adults, but we never stop being parents and often it’s hard to know where to draw the boundary between helping and hurting.

The best financial gift you can give your children is to teach them how to be financially independent when they are young. Giving them more and more financial responsibility as they grow from toddlers to teens to adults provides a solid foundation for being on their own.

If you’re a parent who wants your adult child to be financially independent, start when they’re young. Teach them to budget, because budgeting skills are key to long-term financial independence. It’s a learned skill, not something that they will pick up on their own. Start small so they can learn and gain confidence as they grow up and take on more responsibility. 

Even if you are paying for something when they’re teens, involve your child in budgeting. If you are paying for school clothes, give them an amount that can spend then allow them to spend it the way they choose. Or give them an amount they can spend on school lunches then let them manage the money. Don’t bail them out when they make mistakes. If they spend all their lunch money for the week on Monday, they’ll have to figure out how to eat lunch for the rest of the week without your help.

Teach them the difference between needs and wants. This goes along with budgeting, and learning the value of a dollar. Knowing the difference between needs and wants helps them map out a budget that takes care of the necessities before they blow money on something that is unnecessary

Define a transition plan. If your child will soon be leaving home, you may want to set up a deadline for financial independence, such as when they graduate from college and land their first job. Or you may want to implement a more gradual approach where you transition one financial obligation at a time. Whichever you decide to do it, have conversation to help them prepare for the transition. Your job is to be supportive but firm. Answer questions and give advice when asked but don’t bail them out if they miss a payment, incur a late fee or overdraft their bank account.

The transition plan needs to be clearly defined. There may be bills that make sense to pay jointly due to family plan discounts, such as a cell phone coverage. Or you may want to include the adult child in the family vacation without expecting them to contribute their fair share of the expenses. Or you may have saved money in a college fund that they can use for an advanced degree. Whatever it is that you are prepared to contribute to them, be sure to let them know.

This whole situation of how much to help adult children can be a very sticky subject between parents and children. It is important for both you and your spouse to be on the same page about what kind of financial assistance you may want to offer, how much and for how long. It can get even stickier when you consider there may be two married couples involved if your child has a spouse. The decision on how much to help is an art more than a science, which requires prayer and discernment. 

Supporting your adult children financially for too long, means you may fall into one of two traps. First, it drains money that you should be directing toward your retirement savings. Second, the more you help them, the more dependent they become.

There are many families who can support an adult child financially, but it is still a good idea to help them learn to handle their own finances. You may be in a solid financial situation today, but that can change.

There are ways to help them financially without providing financial support. Treat them to dinner when you visit. Give gifts of cash on special (or not so special) occasions so they can splurge a little (such as sending a check along with the Valentine’s Day card.) If you are visiting them, buy groceries and include a few extras things they enjoy but can’t afford.

Remember that a gift is a gift. If you are going to give a cash gift, they get to spend it the way they want to spend it. If you have strings attached, then it really is not a gift. 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.

If an adult child runs into financial problems that are no fault of their own, how much should you help? There are a lot of factors to consider to answer that question. How much can the parents afford? Is the child going to work and contribute to the household expenses? Are they married and are grandchildren involved? Is the problem able to be solved relatively quickly?

I believe that we should do whatever we can to help our children when something challenging happens to them that is beyond their control. You just have to walk the fine line between spoiling them and helping them. Provide just enough to help them stay out of debt for basic needs

If your adult child is married, do not usurp the role of their spouse. Your advice is secondary to their spouse. Don’t use your money to control their lives. Encourage them to be dependent on God and each other.

Teaching children to handle money God’s way AS THEY GROW UP is part of a parent’s responsibility. If you really want what is best for your children, and if you want them to remember you as a good parent, keep in mind this verse from Proverbs 22:6 “Train up a child in the way he should go; even when he is old he will not depart from it.”

Are Christmas Bills Flooding Your Mailbox?

The buying spree on Black Friday after Thanksgiving may have led you to experience Black Monday, Black Tuesday, Black Wednesday … as you pick up all those Christmas credit card bills from the mailbox each day.

For many people, the reality of Christmas bills arriving in the mail means the worst time of the financial year. Not budgeting for Christmas spending, but going on a spending spree anyway means the cost for all the gifts, decorations, travel and party food has hit the fan and it’s time to figure out how to pay for the Christmas spending.

Reviewing various websites, the average cost of Christmas is about $700 per family. Most of the money is spent on gifts and after that, the next largest Christmas expense is travel. 

Statistics show that the average family will be paying for Christmas 2018 – all the way until October 2019. And that’s about the same time the whole buying spree starts all over again!

If you are in a debt cycle now that the Christmas bills are rolling in, stop spending with your credit cards until you can get the Christmas charges paid off. Put your credit cards in a drawer and don’t use them again until your Christmas debt is paid in full. 

Or put the cards in a baggie, seal it up nice and tight, then put the baggie in a bowl, add water to the bowl and put the whole thing in the freezer. That will make the credit cards much harder to access and you’ll have to stop and think before using them.

While your credit cards spending is on hold, scour each and every spending category for ways to cut back. The only response to spending money at this time is NO! so you can direct every extra penny to pay off the Christmas debt.

Add up all of the Christmas purchases on each of your credit cards so you know the total you spent on Christmas by card. Then for each card make the minimum payment, plus as much as you can scrape up to pay against your Christmas purchases. If you have cards that you didn’t use for Christmas spending, but they still have balances—pay only the minimum payment until your Christmas debt is paid in full.

Luke 14:28-30 reads: “Which of you wishing to construct a tower does not first sit down and calculate the cost to see if there is enough for its completion? Otherwise, after laying the foundation and finding himself unable to finish the work the onlookers should laugh at him and say, ‘This one began to build but did not have the resources to finish.’”

Not planning for Christmas spending is like starting to build something with no idea of the total cost. You know Christmas comes every year on December 25th. You know that there is extra spending at that time of year. You know you have to spend money on gifts, decorations, travel and food. But just like the verses from the Gospel of Luke, if you haven’t planned your spending, you are the person who started building without calculating the total cost.

Make this be the LAST year that you get into debt for Christmas. Plan ahead for Christmas 2019!!

As soon as you have the Christmas debt from 2018 paid in full, figure out how many months are left until Christmas 2019. Multiple the number of months remaining by the amount you can afford to save for Christmas. And that calculation is how much you can spend on Christmas in 2019 so you can have a debt free holiday. The key is to limit your spending for Christmas 2019 to the amount of money you have saved!

This is the year where you get ahead of the debt cycle by paying off the Christmas debt and saving for the upcoming Christmas so it is important to control your spending and escape the ongoing debt.

If you were only able to save $400, that’s all you can spend. You can only spend what you have saved. Which is just the basic idea behind making and managing a budget.

Even ants know how to save! Proverbs 6:6-8 says: “Go to the ant, O sluggard, study her ways and learn wisdom; For though she has no chief, no commander or ruler, she procures her food in the summer, stores up her provisions in the harvest.” You are smarter than an ant, but, do you have the discipline to save like the ants do? 

Always remember—in the back of your mind—Christmas will be coming again on December 25th. Will you be ready celebrate Christmas this year without going into debt?

As Sirach tells us in 18:30, “Do not follow your base desires, but restrain your appetites.” Restraining your appetites means a healthy financial future. What’s more important—over the top Christmas spending or a secure financial future?

Make 2018 be the last year you go into debt for Christmas!

Make Resolutions You Will Keep

We are a few weeks into the new year, and by now you’ve probably abandoned your resolutions. If you’ve already broken most of the resolutions you just made a few weeks ago—get serious and focus on just one or two.

Some of the most common resolutions are: stay fit; get healthy; lose weight; get my finances in order.

And if getting your finances in order is your resolution, we are here to help. Once you learn how to manage money God’s way, you’ll be renewed in spirit and become a good and faithful steward of all God’s blessings. One of the best ways to get your finances in order is to understand that God plays a role in your finances and one day you will be accountable to him for how you handled what he has given you.

With that in mind, we have some ideas to help you stick to financial resolutions for the long term.

Try concentrating. If you set a lot of resolutions, it is easy to lose focus and become frustrated. Focus on tackling the one or two things in your life that bother you the most, and define a resolution that helps to fix those problems.

It is important to define the reason for making the change. Changing because of pressure from others or because you think you should, will never motivate you for very long. The change needs to be driven by a deep desire in your own heart—and hopefully, this desire is driven by a need to please God.

Make sure your resolution is achievable. It is easy to get carried away with resolutions and make them so brilliant that they are impossible to achieve. If your resolution is to save $500 a month and you are barely making ends meet each month, saving $500 a month is not a realistic goal. You will improve your likelihood of success by taking small steps, being faithful to those small steps, and building on your success.

Make your resolution part of a long term goal. If you’ve decided to pay off debt, it may tie to a long term goal of putting yourself into a position to buy a home. Or maybe getting out of debt means more savings for retirement, or funding college for the kids. Whatever it is, your immediate resolution should be the first step towards a bigger life goal.

Be VERY specific about exactly what your goal looks like. Generic statements like “Manage my money better” is too vague and you really don’t have a roadmap for what to do or how to define success.

The change you want to make needs to be concrete, well defined, and measurable. A well-defined goal would be to say “I want to save $1,000 for an emergency fund by December 30, 2019” 

This is a concrete goal—you know the amount and the time frame so you can measure your progress. If you start this week, you’ll have 50 weeks to meet your goal. Each week, you need to save about $20.

The next step is to define what you’ll do to save $20 each week. Will you quit eating lunch at a restaurant? Stop using the vending machines at work? Start a carpool to get back and forth to work? Avoid the toll roads? Or some combination of all of these? By making many small daily choices you can achieve your long-term goal.

Every single day, there should be something simple and small you can do to move closer to your goal. The small consistent successes are evidence that you are making positive forward progress.

It’s fine to celebrate your success, but make sure that your celebration doesn’t undermine your goal. If you’ve achieved a savings goal, reward yourself with a few hours to do something that you consider fun and inexpensive!

It’s a great idea to concentrate on a change that needs to be made, while at the same time increasing your prayer life and time with God. If your new year’s resolution concerns financial changes, we have some Bible verses for you to use for reflection:

If you are trying to get out of debt, meditate on Proverbs 22:7: “The rich rule over the poor and the borrower is the slave of the lender.” If you are in debt and don’t think you are a slave, try missing a payment. 

Sirach 20:11 works if paying off a specific loan is on your list of resolutions.  “There is one who buys much for little, but pays for it seven times over.”   Depending on your interest rate, you can pay more than twice as much for an item by making only the minimum payment on a credit card. Are you “paying for something seven times over?”

If your resolution is to save money, picture Proverbs 21:20, which tells us: “Precious treasure and oil are in the house of the wise, but the fool consumes them.” Spending first means there will never be enough money to save, and unexpected expenses result in debt.

To stop overspending, reflect on 1 Timothy 6:10: “For the love of money is the root of all evils.” When we overspend, it can be due to using money as a form of gratification. The power, fun, fulfillment and short-term happiness we get from spending can quickly turn into idolatry if our spending habits overwhelm us.

Acts 20:35 “Remember the words of the Lord Jesus, who said it is more blessed to give than to receive.” Giving increases around Thanksgiving and Christmas because it’s a natural thing to do at that time of year. How can you continue to be generous for the rest of the year?

It may sound counter-intuitive to give when you are getting your finances straightened out, but it is important for you to consciously recognize that God owns everything and you are his steward. This concept should be the foundation of all your financial planning.

Our prayer for you this year is that you eliminate financial burdens in your life and honor God in the way you spend, save, give and manage your finances.

If you truly make a resolution that is God-centered and wrapped in prayer, it is much easier to maintain the strength to keep the resolution.

Your 2019 Financial Plan

Looking for more control of your finances in 2019? Read on….

Controlling your finances means building a foundation for a secure financial future. Developing a financial plan for the year is similar to building something. “Which of you wishing to construct a tower does not first sit down and calculate the cost to see if there is enough for its completion?”  (Luke 14:28). Having a plan and managing your money and possessions is all about being good a good steward of the blessings God has given you.

Start your 2019 financial plan with a review of your 2018 finances. How did your actual spending compare to your budget? If you’re using a budgeting app, budgeting software or a spreadsheet, it should be easy. Just run a report for the full year, January through December, by category. Review each category to see if you over or under spent in any category. If you’ve been using a budget (aka spending plan) every month, nothing on your year-end report should be a surprise to you.

Looking at each category from an annual perspective will give you insight into your yearly spending. While you are looking at the year in total, it is time to contemplate changes that will occur in 2019 which may have an impact on your budget. Has your income increased? Have any of your expenses increased or decreased? Are there any large expenses on the horizon for 2019? Are you preparing for a life change such as marriage, retirement, buying a house, or a new baby, which will all impact your budget?

Once you have thoroughly reviewed last year’s budget and changes that will occur in the new year, you have a good basis for creating your 2019 budget.

If you do not have a budget from last year to use as your starting point, now is the time to create one.  Set up categories to track your spending and estimate how much you spend in each category. For the first three months of 2019, track what you actually spend against your estimates in each category. This will be the beginning of a budget. At the end of March, average the first three months of spending in each category to come up with a preliminary monthly budget by category.  Be sure to include those expenses which only come due quarterly or yearly. Refine your budget each month as you have more and more data. Do this for about 6 months, then reevaluate your monthly averages to define a solid budget to use as a tool for managing your income and outgo.

Another way to check on your financial progress each year is to use the Money Map, which is available on the Compass Catholic website. This map takes you through the steps to reach True Financial Freedom, which means you have no debt and you have saved enough money to fund your retirement. It provides you with a step-by-step plan to accomplish short term, mid-term and long-term goals to reach financial freedom.

There are seven destinations on the Map and each destination has several steps. Look at each destination in order and check off the steps you have completed in each destination. Once you’ve done that, go to the earliest destination that is incomplete and complete the open steps in order. As you complete once destination, move to the next.

Our third suggestion for a yearly checkup is to calculate your net worth by listing your assets, and subtracting your debts.

Your assets are the value of everything that you possess (house, cars, electronics, furniture, jewelry, boat, and tools, along with the value of checking, savings and retirement accounts, etc.)

Debts are everything you owe (credit card balances, bank loans, mortgage loans, lines of credit, car loans, student loans, even loans from Uncle Fred.

Your goal is to have a positive net worth—the value of your assets is more than what you owe, not a negative net worth—you owe more than your assets are worth.

Hopefully, from year to year, you will see your assets grow and your debts decrease, which means your net worth will be increasing and you are making progress to true financial freedom!

This is a long term journey. We still are using the basics from the plan we developed around 2003. The plan has been reviewed, updated and adjusted each year as our life changed. Over that period of time, we became empty nesters. We both changed jobs several times. We bought and sold houses in different states, had salary increases and decreases, retired, and qualified for Social Security.

Every year as life changed, we tweaked the plan based on the changes in the previous year, or the changes we anticipated in the new year. We also reviewed and updated the plan when those life changes occurred. The plan always provided a sanity check at each step along the way

The Lord tells us in Psalm 32:8, “I will teach you the way you should go; I will instruct you and advise you.” Developing a plan and wrapping that plan in prayer will help you become a good steward of all the blessings God has showered upon you.

We encourage you to become financially free so you are liberated from the bondage of debt and can serve God in the unique way he has called you.

Plan to Enjoy Christmas

In the busyness of the season, it takes an intentional effort to focus on the true meaning of Christmas, so we have some suggestions on how to keep Christ in Christmas and how to plan a Christmas Day the whole family will enjoy.

Even if your Advent has not been very spiritual to this point, start now by reading through the Advent story in the first chapter of the Gospel of Luke. It is a beautiful story of trust in the Lord where we hear about two faithful women who were open to the miracles God gave them.

Two verses in this reading relate to the Hail Mary Prayer. In Luke 1:26-28 we hear the greeting from the Angel Gabriel to Mary, “Hail, favored one! The Lord is with you.” This is the first line we use when praying “Hail Mary full of grace the Lord is with you.”

The next part of the story is when Mary visits Elizabeth and we hear the second part of the Hail Mary in Elizabeth’s greeting from Luke 1:41- 42, “Most blessed are you among women, and blessed is the fruit of your womb.”

Through these two faithful women, we can see that God works miracles in situations which humans would think impossible. Elizabeth was considered too old to bear a child, Mary became pregnant, even though she was a virgin. Instead of worrying about all the things you have to do this week, think about the miracles God has worked in your life.

Unfortunately, many people have a hard time seeing those miracles, and for them, Christmas is a very difficult time of the year. Some have lost their spouse. Some have experienced life changes that have thrown their world off balance. And how many single parents need encouraging friendships and financial help? It’s easy for them to feel all alone and consider Christmas as a time to simply survive.

It is easy for us to exclude these people from our celebrations—just as Mary and Joseph were excluded from the inn when they sought shelter in Bethlehem. I challenge you to make room for the lonely, the outcast, and the widow by praying that the Lord will bring one needy person into your life this holiday—someone who has a need for fellowship or financial assistance or someone who needs to feel the love of Christ in a real way.

Carry a care package in your car with handouts for the homeless, including water, granola bars, canned meals, disposable cutlery, and small toiletries. This is a great way to help the homeless without giving them money.

If there are people in your church who need transportation to Christmas Mass, go out of your way to help them. It’s easy to get caught up in the activities of your own family, but what better way to teach children about the real meaning of Christmas than to show them what it means to be a Christian.

Invite someone who is alone to join your family for a Christmas meal. Your table may be full, but there is always room for one more.

Maybe you know someone who is homebound, or in a hospital or nursing home. Take time on Christmas Eve or Christmas Day to visit with them, take them food (allowable on their diet) and pray with them. Fill Christmas stockings with simple items they’ll use like hand-cream, postage stamps, pens, pencils, a small notebook, magazines, socks or simple Christmas decorations.

Extend your outreach to your own family by planning some low key activities for Christmas Day that the whole family will enjoy. One of the problems is the headlong rush into Christmas Day, then suddenly it’s over as soon as the presents are opened. Christmas will be more meaningful if you find ways for the family to slow down and savor the day.

A leisurely gift opening on Christmas Day can foster an attitude of gratitude instead of having everyone tear into presents in five minutes of total chaos.

In our family, when it’s time to open gifts, the children pass out the gifts to everyone. When everyone has their presents in a pile in front of them, we start with the youngest, who opens ONE present, when that one present is opened, and everyone has oohhed and aahhed over it, the next oldest opens ONE present. We go through the family in rotation from youngest to oldest with each person opening ONE present when it’s their turn, till all presents are opened.

This slow process eliminates the ‘what’s next’ attitude when there is a big build up to Christmas presents, and the presents take less than 5 minutes to unwrap. Usually, the kids get interested in one of their gifts before their next turn, which gives them time to enjoy their gifts and appreciate what they received.

The other thing that happens is that the oldest people (usually parents and grandparents) generally have the fewest gifts and drop out of the present opening rotation earliest. This situation results in the kids being worried about how few presents dad or grandma got, so there are opportunities for talking about what’s really important as far as giving and receiving gifts

Another idea we’ve used to slow down the gift opening is to make a game of it. Hide the gifts and play “hot and cold” as the person gets near where their gift is hidden. Try writing a poem or playing 20 questions in order for them to guess their gift.  And the kids always love scavenger hunts where you hide clues around the house and send them scurrying around to find each clue which finally leads them to their gift.

Creating other family traditions will bring everyone together for fun and build memories that last a lifetime. Make a fire and roast marshmallows or make s’mores. Pick a favorite family game and have a tournament—Spoons; I doubt it; Monopoly; Uno, etc. Pull out pictures from Christmas past—especially pictures of the parents as kids or the children as babies.

Watch traditional family movies on Christmas Day—It’s a Wonderful Life; The Nativity Story, The Ultimate Gift, The Polar Express: A Christmas Carol.

Put together a jigsaw puzzle. Have it set up on a card table, so people can work on it sporadically throughout the day.

Read (or make up) a Christmas story—have different people read different parts in voices appropriate to the character.  Even the little ones can get involved if you have them say some key phrases during the story.

After Christmas dinner, go outside for a walk to get some exercise and use the excess energy the kids have from all the excitement. Play flag football. Play in the snow; build a snowman; have a snowball fight, make snow angels. Or if you are in a warm climate like we are, go to the beach and build sandcastles, play volleyball or simply walk and bask in God’s beautiful creation.

By consciously making plans to slow down and enjoy the holidays. “Then you and your family… shall make merry over all these good things which the LORD, your God, has given you.” Deuteronomy 26:11.

When you really think about it; what do want to accomplish during the Christmas season? You want to build memories you can enjoy the rest of your life. Memories centered around celebrating the birth of Christ, helping the less fortunate, and enjoying family and friends.

This Christmas season, don’t let the world make you discontent with its focus on buying. Instead, learn to be content by developing traditions that are meaningful and fun but not expensive. Use the Christmas holidays to make memories that will last a lifetime.

And most importantly, keep Christ in your Christmas.

Join the Compass Catholic podcast on thoughts on how to make conscious plans for a Christmas day you will enjoy.

Christmas Got Hijacked

Christmas has been hijacked and has become a heavily marketed secular event in which the pressure to wow family and friends with presents, decorations, and Christmas dinner is enough to cause stress for weeks beforehand as you prepare. And there is an additional stress for months afterward as you deal with the credit card bills.

Unfortunately, a beautiful holiday to celebrate the birth of our Savior has turned into one big sales event for retailers.

“Christmas creep” is the continued push to move Christmas buying earlier and earlier each year. Last year, I shopped at one of our big box stores 2 weeks BEFORE Christmas and there were two shelves of Christmas items. However, in October, the whole front of the store was filled with things to buy for Christmas right beside all the ghoulish costumes, decorations, and candy for Halloween.

For many retail businesses, Christmas has turned into a season of “make-it-or-break-it” financially. As the retailers try to reach their bottom line, they push more and more marketing strategies to manipulate us and make us want to BUY in order to boost their profits.

Another marketing ploy over the last several years is making Christmas NOT Christmas. After generations of growing consumerism, the spiritual aspects of Christmas have become the target of people who are intent on stripping away all religious references and symbols in our society. Robbing Christmas of its true meaning gives more focus to the buying and commercial aspects of the holiday. In the retail world, the word “Christmas” is avoided because a secular view means a better bottom line in a religion-free marketplace.

The good news of the Savior’s birth gets buried under all the commercialism.

As Catholics, we need to maintain the ideals of what Christmas is all about—peace, goodwill, charity, and love. These ideals are the total opposites of the consumer frenzy that characterizes Christmas today.

Consider the tradition of gift-giving. What began in the fourth century as giving essential items such as food and clothing to the needy has become the exchange of non-essentials among the not-so-needy. We’ve gone from a way to help the helpless to a tit-for-tat gift exchange. What’s more, driven by escalating expectations, too many of us end up spending money we don’t have to buy people things they don’t need, don’t want and won’t use.

Not only is that a bad exercise in Christian stewardship, but it also fuels the materialistic push towards a Christ-less Christmas. That is not to say that Christians shouldn’t exchange gifts. It only means that the Christian ideal should be balanced toward true charity and that any gifts purchased should be well within the financial means of the giver.

Reclaiming a Christian vision extends to other Christmas traditions as well, and we can move toward a more spiritual sense of Christmas by appreciating the Christian tradition behind some of our Christmas symbols.

Light is the pre-eminent symbol of Christmas. The Light Who is Christ was foreshadowed by the Advent candles and is now symbolized by the Christ Candle that burns throughout the Twelve Days of Christmas. We use this symbol in the lights on our Christmas tree, and in the lights strung around the outside of our homes. (Don’t even get me started on the Christmas “light fights” where neighbors compete to have the gaudiest displays. Another perfect example of hijacking the true meaning of Christmas.)

In ancient Rome, laurel, was used in wreaths as a symbol of victory. Christians adopted the practice, using a wreath to represent the victory of the newborn King.

The candy cane legend started in the late 1800s when a candy maker in Indiana wanted to express the holy meaning of Christmas through a symbol made of candy. He took white peppermint sticks and bent them to suggest both the staff carried by the adoring shepherds and the letter “J” for Jesus.  He let the color white symbolize the purity and sinless nature of Jesus, and the color red is representative for the blood Christ shed for us.

Poinsettias are called the “Nativity Flower,” in Mexico. The shape of the leaves symbolizes the Star of Bethlehem. Their red color represents the Blood of Christ and the burning love of God.

There is so much about Christmas that has significant meaning in our faith. Yet we often take things for granted and follow along with our culture. We need to do all we can to fight the culture wars and keep Christ in Christmas.

In Joshua 24:15 we hear the following: “As for me and my household, we will serve the Lord.” Don’t fall into the habit of calling Christmas the “winter holiday.” Teach your children the Christian meaning behind the Christmas symbols. Don’t spend more than you can afford in order to achieve a false sense of the Christmas spirit.

Do everything you can do to stay focused on the Baby in the manger—the true reason to celebrate Christmas!

Join the Compass Catholic podcast for more about reclaiming Christmas for Christ.

Don’t Fool Yourself About Your Finances

Let’s face it, looking at your finances and being totally honest about what you are doing right, what you are doing wrong and what you are not doing at all is not on the top of the to-do list for most people.

But if you are not taking a realistic look at your finances, you’ll never understand the mistakes you may be making. If you don’t understand them you may continue to harm your long-term financial security.

To help you in this thought process, we have compiled a list of ways people fool themselves about their finances. See if any of these apply to you:

The first way people fool themselves is to consider debt to be a normal part of modern life. People use credit cards to buy the things they want and make the minimum payment on the credit cards, maintaining a balance and never paying them off in full. If you are digging yourself deeper and deeper into debt each month by using credit cards to finance a lifestyle you can’t afford, sooner or later you will find yourself in a hole so big that you can’t climb out of it.

This is not to say you have to pay for everything with cash; mortgages and student loans are a practical reality for the vast majority of Americans. And using credit cards is a convenience of modern life. What we are saying is that if you spend more than you earn on a regular basis, and use credit cards to fill the gap, it always catches up with you.

If you can’t subtract your monthly expenses (including what you buy on credit) from your income and come up with a positive number, then you are fooling yourself with the numbers. In order to spend less than you make, it’s crucial to make a realistic budget and stick to it, so you can live within your means.

Using the word “need” when you really just want something is another way people fool themselves. There is a difference between needs and wants. Needs are the basics in life—food, clothing, and shelter. Wants are above and beyond needs—like buying the new cell phone when yours is perfectly usable, going out to eat at restaurants, a newer, bigger house, or more clothes when your closet is already full.

To see if you are fooling yourself, think about how honest you are in acknowledging the difference between needs and wants. Philippians 4:19 tells us that God will supply all our needs. He never promised to give us everything we want.

We can fool 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. Because if you set yourself up to be happy based on buying things you will be in a never-ending cycle of “what’s next?”

You will never be content if you are always in pursuit of the next purchase in an effort to buy happiness. In 1 Timothy 6:8 we learn that if we have food and clothing we shall be content. Yet our society always encourages us to be in pursuit of the next acquisition.

If you think you don’t make enough money to save anything, you are fooling yourself. You may not be able to save a lot of money, and financial advisors can disagree over precisely how much you need to save for an emergency fund or retirement. But if you are not saving anything, and you are living paycheck to paycheck sooner or later you will run up debt. You are ignoring the fact that sometime in the future you are going to have a financial emergency: a health issue, accident, pay cut, or layoff can put your finances into a tailspin.

Every American should be saving for retirement in some way. Don’t fool yourself by thinking there is time to save for retirement later. If your employer offers some kind of 401k match, failure to save is an even bigger mistake. You are turning down free money from your employer as a reward for something you should be doing anyway, so take advantage of it. The best way to build a retirement savings account is to start early and save on a regular basis. Proverbs 21:5 encourages us to save via steady plodding—small amounts on a regular basis.

If you just have to make an investment because the opportunity is too good to be true, you are fooling yourself. There are always risks with any investment. Promises of instant profits through day-trading or house-flipping are often too good to be true. Keep your greed in check, save for emergencies and your retirement on a regular basis so you don’t have to take big risks by wasting your money on something too good to be true.

If you do have retirement savings, you are fooling yourself if you think the money in your 401k or IRA is up for grabs to spend on your wish list. Cashing out one of these retirement funds early can result in steep penalties, eating into your hard-earned savings.

In addition to the tangible loss of your saved money and the penalties you pay, you still need to save for retirement. Shifting the shortfall from one part of your budget to another is not a real long-term solution. Any money taken out of your 401k or IRA could have been growing over time—so you don’t just lose the money that’s withdrawn, you also lose the interest you could have earned on the money you withdrew.

It is really easy to convince yourself that you don’t make enough money to be generous, or that you need the money more than the church does, or that you don’t agree with the way the pastor is spending the weekly donations. These are some of the ways you can fool yourself and justify not giving. But the act of giving comes from what you have, not what you think you need in order to be generous.

Giving is not done because God needs the money, it is done as a way for us to honor him and acknowledge God as the source of everything we have. Acts 20:35 tells us that it is more blessed to give than to receive.

Money is just a tool yet we give it so much more importance than it deserves. We think money will give us happiness, contentment and peace; and the more money we have the better off we will be. But if you aren’t happy with what you have, you will never be happy when you get what you want.

Mark 8:36 asks us to consider “What profit is there for one to gain the whole world and forfeit his soul?”

Join the Compass Catholic podcast to find out if you are fooling yourself about your finances.