Financial Clutter

Recently, we met with the staff of a Catholic Credit Union. We talked about ways Compass Catholic can help their members be wise financial managers and how they can honor God with the way they spend, save and give money.

The president referred to something he called “Financial Clutter” as those things that get people into trouble financially and sidetrack them from their most important financial goals.

Making good financial decisions isn’t just about providing for the distant future; it’s about cutting down on the very real worries you feel each day, whether that means saving more or spending less, paying off credit cards and the student loans or getting rid of the mortgage.

Here are some ideas to consider to help you reduce the amount of financial clutter in your life…

Giving is a way to honor God and thank him for everything he has given to us. It’s easy to justify why we can’t be generous, and most people think once they get their finances in order, then they’ll be able to give. Our experience is that giving is the first priority. Once you start giving back to God some of what he’s given to you, everything else falls into place in your financial life. Acts 20:35 “Keep in mind the words of the Lord Jesus, who himself said ‘It is more blessed to give then to receive.'”

If you spend more than you earn, it always causes worry, stress and mental clutter. 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 it’s almost impossible to rent a car or a hotel room without a credit card. Still, it’s crucial to make a realistic budget and stick to it, so you live within your means. Proverbs 21:20 “Precious treasure remains in the house of the wise but the fool consumes it.”

Most financial experts say you shouldn’t spend more than one-third of your take-home pay on housing and related expenses. This is especially true if you don’t make much money, because other bills will quickly gobble up the rest of your budget. Think of it this way: If you take home $2,000 a month but spend half that on housing, you have $1,000 left to survive. That works out to $33 a day for food, gas, clothing, insurance and everything in between for the whole family. If you stretch yourself too thin on your housing expenses, you’ll struggle to pay for everything else.

Intelligent people can disagree over precisely how much you need in a rainy day fund. But not saving anything for unexpected events, and living paycheck to paycheck is irresponsible. It naively assumes you won’t ever need the money for an emergency should something unfortunate happen.

You know that you, along with every American, should be saving for retirement in some way. If your employer offers a 401k match, it’s free money from your employer as a reward for something you should be doing anyway, so take advantage of it. Not contributing to a retirement plan with an employer match is like throwing away a gift of cash. It stays in the back of your mind and causes clutter!

There are risks with any investments–particularly if you chase aggressive, short-term gains. Higher rates of return come with higher risk, and promises of instant profits through day-trading or house-flipping often prove themselves too good to be true. Keeping greed in check is crucial–but so is planning properly to prevent falling behind. If you build up a good emergency fund and start planning for retirement early, you won’t have to take big risks out of desperation as you get closer to retirement age.

The other side of saving for retirement is being tempted to think the money in your 401k or IRA can be used early (before age 59½). Cashing out one of these retirement funds early comes with steep penalties: Federal taxes, State taxes, and early withdrawal penalties. In addition to the tangible loss of that money, there’s the fact that you still need to save for retirement.

Shifting the shortfall from one part of your budget to another is not a viable long-term solution. Worse, 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 lose the lost investment returns on that money as well as wasting money by having to pay the penalty and taxes for early withdrawal.

Life insurance companies aren’t run like charities, and they set premiums based on the risk of payouts. It’s only natural, then, that an older American has to pay a higher premium for life insurance. The vast majority of folks can take out a substantial and very affordable life insurance policy in their 30s and cover their spouse and family into their 50s or 60s. The same holds true for disability insurance to protect your earnings on the job.

Along the same lines, a good will is a crucial part of providing for your family should tragedy strike. In most cases, a visit with a qualified professional for a few hours will ensure your family stays in control of any assets and avoids estate taxes–not to mention preventing any squabbling among survivors. Our Bible study Set Your House In Order, will help prepare you for the discussion with a qualified legal professional.

The bottom line is getting distracted by financial clutter can cause all sorts of problems.

Just like cleaning out the clutter in your garage, cleaning up the financial clutter needs to be done one step at a time. Goes back to old saying – If you continue doing what you have been doing, you’ll continue to get the same results you’ve been getting.

If you aren’t sure what to do to get control of your financial clutter, go to and under the resources tab, download a copy of the Compass Money Map. It will help you set priorities and meet goals to get rid of the financial clutter, and make sure it does not come back.

Tune into our podcast for more on getting rid of financial clutter.

26 Weeks Till Christmas

26 Weeks until Christmas


26 Weeks until Christmas

Breaking News … This year … Christmas will be in December! 

As you probably know all too well, the holiday season can be a major financial drain each year. Many of us don’t budget or plan for holiday spending throughout the year.  The result is that Americans whip out the plastic for Christmas spending and use credit to finance Christmas costs.

A survey from Magnify Money indicated that: 44% of shoppers racked up more than $1,000 in holiday debt last year and 5% accumulated more than $5,000 in debt. 

Paying off those balances can take months or even years. Only half of those surveyed expected to repay the debt within 3 months. Almost a third of the survey participants (29%) said they need more than five months to pay it off, often leading to growing balances on their credit cards and lots of money wasted paying interest. More than 10% of people surveyed said they would only be able make minimum payments on their credit cards. 

So let’s go thru a real life example of Christmas credit card debt. If the shopper spent $1,054 on Christmas and pays a minimum payment of $25 each month. He will be paying down the balance from Christmas 2019 till 2025. With an average interest rate of 15.9% the consumer will pay $500 in interest – that’s half of what they spent initially. And if they take on an extra $1,054 in debt every Christmas, the amount of money wasted paying interest grown exponentially.

It is easy to understand why the number one fear of people during Christmas is debt. Unfortunately, people willingly put themselves in that position. There is no law requiring us to overspend at Christmas—it’s a choice we make!

That’s not what Christmas is all about. Do you think the Lord wants us to celebrate the birth of Jesus by taking on debt which takes years to pay off?

That’s why we’re talking about Christmas in summer… because we are 6 months into the year. It’s not too late to start saving now to avoid the Christmas debt. You still have 5 months to build a Christmas nest egg.

Now I can hear a lot of you thinking that you can’t possibly save 1/5 of your Christmas costs over the next 5 months. So my question to you is “How can you possible afford to pay for all those Christmas costs PLUS INTEREST in the months and years following Christmas?”

The reason so many people get into debt for Christmas is simple—they haven’t planned ahead. They haven’t saved or given thought to how they may be able to creatively reduce the cost of Christmas. If you haven’t already developed a budget for Christmas do it now and start saving money to avoid the Christmas debt trap and eliminate the post-holiday stress.

Our cost savings plan for Christmas is that we do not exchange gifts with each other. That may make us sound like scrooges but we aren’t.  Our priority is to go places and have experiences instead of collecting more stuff. At this point, our ability to travel is so much more important to us that simply buying things.

We already have enough stuff and we don’t really need anything so why should we rack our brains trying to come up with a unique idea that neither of us really wants?

And we don’t need to spend money to prove we love each other. We have a strong marriage and a good relationship and we don’t need a holiday to remind of us of how important we are to one another.

The other reason we don’t buy each other gifts is because we have a limited amount of money and higher priorities. The more we avoid spending on non-essentials, the more cash we have left to fund the goals that are most important to us.

Don’t put your important long term goals at risk by spending money buying gifts people don’t want or need. You probably have much higher priorities. Once your priorities are in order, keeping the Christmas spending under control becomes easier.

Start by figuring out how much you spent last year for Christmas, including travel, parties, special meals, gifts, decorations, etc. Divide that total by the number of paydays till Christmas. The result is how much you have to save each paycheck to have a debt free Christmas.

If things are tight, decide to cut down on the number of gifts you’re giving until your finances are in better shape. Instead of trying to buy gifts for each person, decide to draw names and each person buys for one other person. Now is the time to have the discussion with other family members and friends about cutting back on Christmas spending–they will probably be as relieved as you are to simplify things.

We had a mom share with us her simple formula for Christmas gift giving.

Each child gets 5 presents:

  • Something to wear
  • Something to share
  • Something to read
  • Something they need
  • Something they want

This family discovered how to keep their Christmas spending in bounds with their budget.

As a family focus on the real reason for the season—to celebrate the birth of our savior. Make a commitment to focus on the spiritual side of Christmas by centering on celebrating the birth of Jesus.  Now is the time to discuss how you can do that–otherwise you are into the holiday season and it is too hard to change what you’ve always been doing.

The most important thing you and I can do is to remember why we’re celebrating Christmas—the birth of our savior, Jesus Christ. In the busyness of the season, it takes an intentional effort to focus on the true meaning of Christmas, to have a spirit that’s ready to worship the Christ of Christmas.

Start that journey now by prayerfully making the commitment not to go into debt this Christmas. The only gift anyone really needs at Christmas is the Baby Jesus.

Tune into the Compass catholic podcast for more on how to prepare financially for Christmas.

Heal Financial Infidelity

Couples saying their wedding vows don’t promise to be completely honest about all financial information from this day forward.

Maybe they should, because not being honest about finances can wreck a marriage.

Signs of financial dishonesty may be:

  • A concealed bank or credit card account
  • Cash missing from accounts
  • Late payments on bills because money is not available
  • Hiding or lying about purchases

If dishonesty about finances is putting your marriage at risk, a good place to start the conversation is by having a weekly money date. It may not sound romantic but handling money well as a couple affects every area of your marriage. These weekly money dates are vital because they establish the habit of regular financial conversations when there’s no crisis.

Too many couples don’t even begin a conversation about money unless a problem has surfaced and the panic button has already been pushed. Tension can reach the boiling point in a hurry when blame and defensiveness take over. That’s when it gets personal and hurtful when the couple is in conflict with each other instead of working together to resolve the problem.

The first thing to do on a money date is to start by praying together. Jesus makes this remarkable promise in Matthew 18:19-20, “If two of you agree on earth about anything for which they are to pray, it shall be granted to them by my heavenly Father. For where two or three are gathered together in my name, there am I in the midst of them.” When a couple prays together about their finances, they invite the God of the universe to be personally involved with how they earn, spend, save and give.

After praying, review your income and spending to make sure that you are both aware of your current financial status. Focus on the facts and don’t argue or nag one another! Instead, use it as a time to discover the facts, because couples simply make better decisions when they are both fully aware of their financial situation. In addition to looking at the past week, consider what is coming in the future. Is there a big expense on the horizon that needs to be planned? For example, your money dates in July are a perfect time to discuss back to school expenses.

Your money date should end by celebrating success, no matter how small those successes are. Celebrating is important because you are more likely to continue your progress if you celebrate along the way. Maybe the first date is simply celebrating the fact that you have started a conversation.

Married couples will always face financial challenges, and the best way to face those challenges is by intentionally creating a culture of prayer, encouragement, gratitude, and celebration.

Financial infidelity can be a very challenging matter to overcome in a marriage. It’s often a core symptom of two people who aren’t communicating well and have different visions for their future, which results in a damaged relationship.

One way to build trust and communication skills is to share your goals because a discussion about goals naturally includes a discussion about finances.

Each of you should separately make a list of ten goals that are truly important to you. What things do you want out of life in the next 5, 10 or 20 years? Don’t worry about what your spouse may be writing, just write down what is most important to you. Then when you each have your list, compare them.

Like any couple, you are going to have some shared goals and you’re going to have some personal goals. That’s a good thing—it’s healthy and normal.  What’s not healthy is when you allow your personal goals to overtake your joint goals as a couple. By sharing what is important to each of you, as a couple, you can agree to focus your financial efforts on the items that overlap.

As you work through these goals together, you may discover things you didn’t know. Maybe your spouse has hidden some financial transactions from you.

Let’s be honest. We’re all human. We all do things that we regret, usually because we put a very short-term emotion or desire above a long-term plan or goal. If you do discover secrets, forgive your spouse’s mistakes. Jesus tells us we must always forgive. In Matthew 18:21-22 we read: “Then Peter approaching asked him, ‘Lord, if my brother sins against me, how often must I forgive him? As many as seven times?’ Jesus answered, ‘I say to you, not seven times but seventy-seven times.’”  Instead of concentrating on past mistakes, concentrate on moving forward.

If you and your spouse can’t get through financial differences on your own, you may want to consider marital counseling. For some couples, that can be incredibly helpful. If you’re truly struggling with financial infidelity and the trust in your relationship has eroded, counseling will help. Financial infidelity can be overcome, of course, but it requires honest effort from both parties.

Accusations won’t solve the problem, nor will anger. It takes time, trust, communication, and calmness. And it takes a lot of prayers. Moving forward isn’t about “winning” or “losing,” it’s about finding a new direction that works for both of you. In Mark 10:8, we hear the verse about how two will become one flesh.

And that mindset is absolutely required in a marriage—even when it comes to finances.

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

The Benefits of Using Financial Planner: Part 1

Would you give yourself a root canal? Probably not! You may think it’s crazy to pay a financial planner to keep track of your money, but if you don’t have the skill-set and knowledge it may be crazier to do it yourself.

A financial planner can save you time and headaches in addition to helping you tackle financial goals, such as retirement, saving for college, or estate planning. 

Before talking to a financial planner, get a handle on your personal finances. How much do you make each month? How much do you spend each month? How much debt do you have? How much do you have saved in what type of accounts (401K, 403B, IRA, Roth, stocks, mutual funds, stocks, annuities, passbook savings, etc.)?  What are your financial goals for the next year? 5 years? 10 years?

Once you have a high level picture of your current financial situation and your goals, seek counsel from godly people to find a planner. Sirach 32:19 tells us, “Do nothing without counsel, and then you need have no regrets.” Friends, relatives, and neighbors may all have recommendations about financial planners they trust. They may also have some suggestions about planners to avoid!

Once you have a list, start investigating. You can find a financial planner by entering their name and “CFP” in a google search. Look at their website. Does it appeal to you? Be cautious if they or their business does not have a website.

To investigate a financial planner, check the Financial Industry Regulatory Authority ( website. Enter the broker’s full name, the Company’s full name, and the zip code to get a report on whether the financial planner has any criminal charges and convictions, formal investigations or disciplinary actions initiated by the regulators. The report will also disclose situations such bankruptcy, unpaid judgments, liens, customer disputes and arbitrations.

After gathering information, set up an interview—we recommend interviewing at least three planners before deciding who you want to work with.

Start with questions about their practice in general terms, such as their investment and client philosophy. Your intention is to be sure the services they offer match your needs. Here are the questions to ask:

  • How many clients do you work with? 
  • Are you currently engaged in any other business, either as a sole proprietor, partner, officer, employee, trustee, agent or otherwise? 
  • Will you, an associate or a team be working with me? 
  • Will you sign a fiduciary oath? 
  • Do you provide a comprehensive written analysis of my financial situation along with recommendations? 
  • Do you offer advice in:
    • Goal Setting
    • Cash Management/Budgeting
    • Tax Planning
    • Investment Review and Planning
    • Estate Planning
    • Insurance Needs
    • Education Funding
    • Retirement Planning

Anyone can call themselves a financial planner, so be sure and ask if they are recognized as a certified financial planner. A CFPÆ designation means they have passed a rigorous test administered by the Certified Financial Planner Board of Standards. It also means they must commit to continuing education to maintain their designation. The CFPÆ credential is a good sign that a prospective planner will give sound financial advice.

After you learn the basics, find out more about their qualifications.

  • What is your educational background?
  • What are your financial planning credentials/designations?
  • How long have you been offering financial planning services?
  • Do you have clients who might be willing to speak with me about your services?
  • Will you provide me with references from other professionals? 
  • Have you ever been cited by a professional or regulatory governing body for disciplinary reasons? (Also available on the ( website.)
  • What more can you tell me about your experience in providing financial planning services?

Ask for the code of ethics they follow. Certified Financial Planners are held to the CFPÆ Board’s Code of Ethics, which requires them to act as a “fiduciary.” In short, this means the planner has pledged to act in a client’s best interests at all times. This point is critical.

If an investment professional is not a fiduciary, anything they sell you merely has to be suitable for you, not necessarily ideal or in your best interest. The difference between ‘best interest’ and ‘suitable’ is an important fine line for you to consider.

The next important question is how they get paid. Financial advisors deserve to get paid for managing your money and since you are paying the bill, you need to understand how it works.

  • How is your firm compensated and how is your compensation calculated?
  • Do you have an agreement describing your compensation and services that will be provided in advance of the engagement? 
  • Do you have a minimum fee?
  • Do you receive referral fees from attorneys, accountants, insurance professionals, mortgage brokers, etc.? 
  • Are there financial incentives for you to recommend certain financial products? 
  • How do you pay for their services. How often? Are the fees deducted from your account? Are you expected to pay by check?

If a financial planner is paid on commission they could have an incentive for steering you in a direction, which may not be in your best interest.

You might pay them a flat fee, such as $1,500, for a financial plan or their fees may be calculated on an hourly basis.

They may be paid a percentage of your portfolio. It is often 1-1.5% of all the assets in your portfolio—investment, retirement, college-savings, etc. The more your money earns for you, the more it earns for them so they have an incentive to keep your portfolio growing.

Ask how much contact they normally have with their clients. Some planners hold an initial planning meeting and then only meet with clients once a year. Others may have quarterly meetings.

  • Do they offer continuous, on-going advice regarding your financial affairs, including advice on non-investment related financial issues?
  • Do they offer an online platform or some level of technology integration so you can view your account, net worth, budget, etc.? 

Financial plans will vary based on the planner and the company. Be sure that what they provide will meet your needs.  You may get overwhelmed with 40 pages of facts and figures or you may want more details.

As the meeting ends there’s one last question you want to ask yourself: Did they seem interested in you or did they do 90% of the talking? If they asked about you, your life and your goals that’s a good sign. 

Don’t let someone con you into working with them because they promised to make you rich.  Nobody can make that promise and keep it.

Choosing the right financial planner is important, but ultimate peace of mind comes from the confidence that God alone is our true provider and protector.

Thanks to John Kennedy, CFP, Co-Founder of CandorPath Financial for his expertise in this podcast and blog.

What’s Your Definition of Financial Success?

Too many times we define financial success according to an outside standard instead of defining it for ourselves. We look at the person with the six-figure income as financially successful. Or we think the person with the biggest, fanciest car is financially successful. Or we think the people who live in the high-class area of town with the big houses are financially successful.

We fail to take into account our own lifestyle, the goals specific to our own life, our own starting point and our own resources as a way to define financial success.

It’s like looking at someone who is a physical fitness trainer as a benchmark for defining our own physical fitness. We will never go from being a couch potato to being a long distance runner in a short period of time. If we are trying to improve our health we need to take it one step at a time. We have to acknowledge the weight we lost over the last year. The amount of daily exercise we are doing now. And the way we have changed our eating habits to be healthier.

So, when we define financial success, we need to start with where we are, define where we are going, evaluate how we have used the resources available to us and measure how much progress we are making to get to our own definition of financial success. Your definition of financial success is not the same as how the couple next door, or your brother or your friend define it.

To some, financial success might mean a certain income. To others it might mean all their debt is paid off. To others, it might mean total financial freedom. Some people may define financial success as simply being able to pay the monthly bills with a little bit left over.

The best way to define financial success is very simple. How much progress have you made on your financial goals? If you are making progress according to your plan, then you’re financially successful.

It takes hard work and paying attention to what you are earning and spending. But almost everyone can make some progress in being financially successful. We frustrate ourselves when we define financial success by looking outward at other people instead of looking inward at our own progress.

If you define financial success as having a million dollars in the bank and you are hardly making ends meet, then you’ll never feel financially successful, even in you manage to dig totally out of debt and your retirement is fully funded.

No matter what anyone else is doing, if you are putting yourself in a better position, little by little then you are making progress and being financially successful.

If you think that financial success is impossible, look for a realistic definition that relates to your own life. If you have $25,000 in credit card debt and you reduce it to $20,000 by the end of the year, you are being financially successful. If you have not saved anything for retirement and you can save $1,000 this year, you are being financially successful. Figure out what financial success means in your own life and aim for that. 

You can’t compare yourself to someone who was given a huge inheritance or someone who made a killing in the stock market when a company they founded went public, or someone whose salary is 10 times what you make.

Are you doing better today than you did yesterday? That simple question eliminates all the excuses you may conjure up for yourself. You can’t excuse your own failure based on the success of those around you.

Measuring financial success is no different than measuring your progress in getting healthy. You may weigh 300 lbs., but if you weighed 350 lbs. last year you’re making progress.

All we can really do is evaluate the progress we are making on our own journey. Financial success isn’t hitting some arbitrary net worth number or buying a certain item.

It’s about a long term journey one step at a time to be in better financial shape each week, each month and each year. It’s hard work. But it is well worth the effort.

Start your journey to financial success by being intentionally grateful for what you have. Instead of wanting more and more, appreciate all those things that you already have. 

Once you begin to appreciate what you do have, the constant quest for more goes away. You’ll see that a bigger house doesn’t really matter.  A bigger TV screen doesn’t really matter. A newer car doesn’t really matter.

Look at what you DO have, not what you are lacking. Philippians 4:11-13 tells us “Not that I say this because of need, for I have learned, in whatever situation I find myself, to be self-sufficient.I know indeed how to live in humble circumstances; I know also how to live with abundance. In every circumstance and in all things, I have learned the secret of being well fed and of going hungry, of living in abundance and of being in need. I have the strength for everything through him who empowers me.”

What actually matters in terms of success and failure is how well you’re managing what God has given to you. If you work hard, spend carefully and give cheerfully, no matter what happens, you’ll be better off than if you had done nothing at all. You’ll be able to weather both the good and bad that comes your way. Nothing else matters, because there’s nothing else you can really control.

Judging your circumstances against other people makes you frustrated, complacent or arrogant.  God is calling you to be a faithful steward of all the blessings he has given to you. He is not calling you to compare yourself against anyone else or to define your success based on anyone else’s journey through life.

Health Care Sharing Plans – Part 2

To help you decide if a health care sharing plan is right for you and your family, we are going to look at things to think about and questions to ask.

Several plans have restrictions on the doctors available to you. If you live in a large metropolitan area, this may not be a problem, but if you are in a small town or rural area, you may not have much choice in doctors. Be sure you understand which doctors are included or excluded from any plan you consider buying.

Some of the sharing plans will negotiate lower costs with the doctors and other plans require you to do the negotiating. Are you comfortable negotiating lower costs with your doctor? Most medical providers are so happy to not deal with insurance companies and their claims process that large discounts are often available for cash-pay customers who are willing to ask.

There are several health care sharing plans which include a savings card for dental, vision, and prescriptions. And others don’t have that option. If those services are important to you, ask before buying.

One of the plans requires you to send your monthly payment directly to another member instead of to a clearing house. This may appeal to you as it gives you the chance to tell someone you are praying for them or maybe you like connecting with people in different areas. Other people prefer to send payments to a clearing house to avoid the personal connection. Which is right for you?

The terms around pre-existing conditions and how pre-existing conditions are defined vary with each program. In general, there is some time limit applied, and sharing around subsequent events related to a pre-existing condition are either not shared, or shared at a lower level. If you have any pre-existing conditions, be sure to understand exactly what is and is not covered. None of the programs we investigated decline membership due to pre-existing conditions. 

Even though some of the programs will actually help pay for adoption costs, the adopted children are subject to the same eligibility requirements as other new members, which means adopted children who have pre-existing conditions will be subject to the pre-existing conditions clause. This limitation on adopted children seems to be in conflict with the family friendly mindset of these plans.

People who use tobacco, drugs, or alcohol may be excluded. Any medical expenses related to these can result in otherwise eligible expenses being rejected for sharing. Tobacco use is prohibited across the board in all health care sharing programs. In addition, recreational marijuana use (even in legalized states) would not be consistent with program guidelines. 

People who participate in hazardous activities need to be cautious. Each program is different about what exactly constitutes “hazardous.” It might be riding motorcycles or hobbies that require you to wear a helmet such as three-wheel ATVs, off-road vehicles, rock/cliff climbing, spelunking, skydiving, deep sea diving or bungee jumping. 

Each health care sharing program has at least some caveats with respect to being a secondary payment source for those also eligible for federal or state assistance. If you receive federal or state assistance be sure to understand the limits of the sharing plan. 

The sharing programs have their own prescription drug policies, but generally prescriptions are only shared related to a specific medical need, and only for a short duration.  Such prescriptions would generally fall under the same per-incident limits or personal responsibility. 

There are some restrictions as to how long medication is covered. This means that someone who developed a condition like Type I Diabetes after becoming a Member would only have insulin considered a shareable expense for a very short duration. Maintenance prescriptions are not eligible for sharing at all.  Members are encouraged to participate in prescription discount programs such as NeedyMeds, GoodRx, OneRX, and LowestMed.

While all of the health care sharing programs have strong histories of success, there is no guarantee of payment because these are voluntary programs and not an actual contract for health insurance benefits. 

In fact, each group makes it abundantly clear they are not insurance and membership is not a contract. 

Typical disclaimers read …

  • Whether anyone chooses to assist you with your medical bills will be completely voluntary because participants are not compelled by law to contribute toward your medical bills. 
  • Therefore, participation in the ministry or a subscription to any of its documents should not be considered to be insurance. 
  • Regardless of whether you receive any payment for medical expenses or whether this ministry continues to operate, you are always personally responsible for the payment of your own medical bills.

Ultimately, members are placing a great amount of faith in these programs, which do not receive the state regulatory oversight and protection afforded to traditional insurance. 

With that being said, they have shared billions of dollars of eligible medical expenses over their history. 

The success of health care sharing depends on upholding and dutifully administering the member guidelines – on the whole, they seem to have done this so far.

There are plenty of positives about health care sharing and at the same time, there are lots of things to be cautious about to avoid surprises if you don’t have a complete understanding of the program guidelines. 

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.

Cheap vs Frugal—Is There a Difference?

What some people call being frugal, other people call being cheap.  But there is a difference between the two.

The dictionary definition of cheap is: not costing a lot of money; of low quality; not worth a lot of money; not willing to share or spend money.

The definition of frugal is: careful about spending money; using money or supplies in a very careful way.

A cheap person will invest a lot of time and energy in order to save a dollar or two, but the time and effort they expend may not be worth the amount of money they save. A cheap person will spend an afternoon repairing a $2 piece of equipment.

Their whole focus is dollars and cents, without regard to other areas of their life. They’re also willing to take advantage of social situations to avoid spending money. To me, cheap has a negative connotation, as it refers to a person who often doesn’t consider the value of their time, their energy, or the friendship and goodwill of others. They value money above all else, and they may make spending choices that can alienate others socially. A cheap friend will demand to go to the least expensive restaurant, regardless of what anyone else in the group thinks. They are the person who will pay for their part of the meal precisely down to the penny, but not include any money for the tip.

A frugal person wants to spend less money but the money-saving decisions are made with a balanced lifestyle in mind. A frugal person knows enough to balance saving money against other areas of life such as time, energy, friendship, faith, love, and health. The frugal person tends to account for the impact on things such as relationships when deciding if a money-saving tactic is worthwhile.

A frugal person might haggle for a lower insurance bill, but never take advantage of friends in a social situation. A frugal person might reuse a takeout container but won’t invest the time to wash a flimsy sandwich bag.  A frugal person will make small sacrifices of their own resources—time and energy—to save money, but they generally won’t impinge on others to do so, nor will they sacrifice large quantities of their own resources to save a few pennies.

Here is an example of the difference between being cheap and frugal. There are two different types of trash bags in the store. The price on the first one is $30.00 for 300 bags or $0.10/bag.  The price on the second one is $25.00 for 200 bags or $0.12/bag.

The ten cent bag sounds like a better deal, doesn’t it?

But taking into account the entire picture, the $0.10 bag the cheap person bought is so flimsy, two bags are needed to hold the trash, making the cost per use $0.20. The bag the frugal person bought cost $0.12 cents each, and had the more expensive purchase price, but was $0.08 cheaper per use.

In order to be frugal, not cheap, it is important to compare both the price you pay when you buy something against the cost per use for that same item. A cheap person merely looks at the price but the frugal person views the larger picture and considers the overall cost.

Being frugal means balancing money savings against other factors. You can save money where it makes sense, but you will also pay more for a product where paying more is a better deal for your whole lifestyle.

Here’s another example. A person jogs for exercise. The frugal person will buy the running shoes that best protect their feet and are appropriate for their use. Their decision is made with their overall health in mind, not simply the cost of the shoes. However, they will take advantage sales or coupons to buy that running shoe as inexpensively as possible. The cheap person simply buys the least expensive shoes whether or not the shoes will offer proper support and protection.

Cheap people use price as the bottom line. Frugal people use value as the bottom line.  

Cheap people are driven by saving money regardless of the cost. Frugal people are driven by maximizing total value, including the value of their time, effort and the use of the product.

Being cheap is about spending less; being frugal is about prioritizing your spending so that you can have more of the things you really care about. 

Cheap people are often afraid to spend money. They are willing to sacrifice quality, value and time in order to cash in on short-term savings.

Frugal people are resourceful with their spending; maximizing their dollars, so that they can fund big-picture wants and dreams.  

I consider myself to be frugal. I plan lunch and dinner so we use every bit of leftovers. I use up every bit of the products we buy by standing ketchup and other bottled products on their head to completely empty the bottle. I use a teeny tiny spatula to get all the product out of a make-up tube. I cut off the end of a toothpaste tube to get a few more nurdles of toothpaste out of it.

But I do not see myself as cheap. I do everything possible to maximize the money we do spend. But I also splurge on the areas where I am passionate (and where the money is in the budget!).

While we DO encourage people to be frugal, we do not encourage you to be so cheap that your life is miserable. Being a good steward means a balancing act by spending money on what is important to you and saving money in those areas that are not so important. Being frugal is about balancing income, giving, saving and spending with a stewardship mindset.

Be frugal, not cheap. Proverbs 28:22 tells us “Misers hurry toward wealth, not knowing that want is coming toward them.”

Life is short—enjoy it but be responsible!

Join us on the Compass Catholic podcast for more about why being frugal (not cheap) is important!

Are You Headed for Financial Disaster?

Are you living paycheck to paycheck, worrying about debt collectors or finding it impossible to make ends meet?

If you are experiencing financial challenges, you’re not alone. Whether your debt is the result of an illness, unemployment, or simply overspending, it can seem impossible to manage.

A lot of people in this situation take out a second mortgage or home equity line of credit, which may solve your immediate problem and allow you to consolidate your debt.  But these loans require your home as collateral and if you can’t make the payments, your home is at risk of being repossessed.

And if you have not changed your spending habits, chances are that second mortgage or home equity line of credit will provide temporary relief but it won’t be a long-term fix.

Financial issues don’t happen overnight—they creep up gradually. If you have drifted into a situation where your finances feel out of control, the best thing you can do is get them under control before they spin into a full-blown disaster.

If you are behind on some bills, talk with your creditors. They may be willing to work out a modified payment plan and the more proactive you are about contacting them, the more likely they are to help. Be persistent and polite. Have good records of your current finances, so you can clearly explain your situation and propose a solution. Your goal is to work out a modified plan that reduces your payments to a level you can manage.

If your creditors are not willing to work with you, bankruptcy may seem like an easy fix, but it is not. A recent major change to the bankruptcy laws requires you to get credit counseling from a government-approved organization within six months before you file for any bankruptcy relief.

Most reputable credit counselors are non-profit and offer services at local offices, online, or on the phone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate non-profit credit counseling programs. Your financial institution, local consumer protection agency, or friends and family may also be good sources of information and referrals.

Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in consumer credit, money and debt management, and budgeting. The counselors discuss your entire financial situation with you, and help you develop a personalized plan to deal with your financial challenges.

An initial counseling session typically lasts an hour, with an offer of follow-up sessions. A reputable credit counseling agency should send you free information about itself and the services it provides without requiring you to provide any details about your situation. Avoid organizations that charge for information. If a firm does that, consider it a red flag and go elsewhere for help.

You can find a state-by-state list of government-approved organizations at This is the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees. This page has many resources from credit counseling to debtor education to frequently asked questions. 

Once you’ve got a list of counseling agencies in your state, check them out with your state Attorney General and local consumer protection agency, which can tell you if consumers have filed complaints about any agency. But even if there are no complaints about them, don’t consider it a guarantee that they’re legitimate.

After you’ve done your background investigation, you will want to interview several credit counseling agencies. Look for an organization that offers a range of services, including budget counseling, and savings and debt management classes. Avoid organizations that push a debt management plan as your only option before they spend a significant amount of time analyzing your financial situation.

Find out about their fees—either an initial or monthly fee and get a specific price quote in writing. Check out any formal written agreement or contract and never sign anything without first reading it and understanding it.

Check out their qualifications to be sure they are licensed in your state and see if they are accredited or certified by an outside organization, then check out the certifying organization thoroughly.

Ask about confidentiality. What assurance do you have that your personal information (including address, phone number, and financial information) will be kept confidential and secure?

Find out how the employees are paid. If they are paid more if you sign up for certain services, or if you pay a fee, or if you make a contribution to the organization, consider it a red flag and go elsewhere for help.

Beware of any organization that tells you it can remove accurate negative information from your credit report, because legally, it can’t be done.

Once you have worked with the counseling agency to develop a plan, contact your creditors and confirm that they have accepted the proposed plan before you send any payments to the credit counseling organization. 

Make sure the organization’s payment schedule allows your debts to be paid before they are due each month. Paying on time will help you avoid late fees and penalties. Review the monthly statements from your creditors to make sure your payments were received and applied properly to your account.

If your debt management plan depends on your creditors agreeing to lower payments or eliminating interest and finance charges, or waiving late fees, make sure these concessions are reflected on your statements.

The best advice we can give you is to stay on top of your finances on a regular basis and don’t let your spending habits and debt overwhelm you.

Sirach 20:11 tells us “A man may buy much for little but pay for it seven times over.” Paying seven times over may refer to the interest we pay on debt. We can also pay seven times over when we are overwhelmed by financial stress, and we lose our peace of mind!

If you have ANY inkling that your finances are headed for disaster, address problems as soon as you see them coming. The longer you wait to get your finances under control the more of a mess you’ll have to clean up.

One of the most important things you can do in tackling a financial problem is to pray. If you are married, both of you should pray together on a regular basis for the strength and wisdom to be good stewards of the blessings God has given to you.

Join us on the Compass Catholic podcast for a conversation about addressing a financial disaster.

Lifestyle Inflation—How to Avoid it

Lifestyle inflation is accepted as a normal part of life in America. It means each time your salary increases, so does your spending in an effort to achieve some perceived level of lifestyle where you will finally be happy. In fact, you are considered abnormal if you aren’t constantly striving for more bigger and better stuff.

The problem is that no material thing will result in never ending happiness, and we can get distracted from an authentic Catholic life when we try to keep up with the cultural norms.

The best way to avoid lifestyle inflation is to detach your spending from your income. Set a standard of living you are comfortable with, and stick to it, even when your income increases. Just because you are making more money does not mean you have to be spending more money

One way to put that extra money into perspective is to calculate the real increase to your spendable income.

After giving, taxes, and other related payroll deductions are subtracted from your gross salary, a raise can have a smaller impact on your spendable income than you think. If you get a raise of $500 a month it looks like an additional $6,000 a year. But after you subtract about $200 a month for payroll deductions and another $50 for increased giving, the real addition to your monthly income is $250. Over 12 months that $6,000 increase is only $3,000 in real spendable dollars. While that’s a gracious plenty, it’s not enough to dramatically change your lifestyle.

Calculating the bottom line on your spendable income gives you a dose of reality. Once you calculate your raise versus your net gain, you may find that the increased income has better uses that an inflated lifestyle.

A much better approach is to step back and contemplate your life goals. What is it that you want out of life? What are your goals for the next 5, 10, and 15 years? Is buying more stuff going to fulfill those goals? Or in 10 years will you regret the money spent on all the useless stuff you bought?

When you define and work on your goals, life is much more satisfying. You may change your mind about where you want to be in 15 years but any worthwhile goal will still move you in a direction that will be positive even if the end state changes.

It is easy get off track when you live your life in order to impress other people. When I see someone driving a fancy car, I have a fleeting thought that goes somethings like this: “Nice car—glad I don’t have to pay for it!” Because what other people drive really does not affect me at all. Don’t fall into the mindset of trying to impress other people with what you have, because they simply don’t care! And let’s be realistic, you really don’t know what other people think. If you are spending your hard earned money to impress other people you are making an assumption that you are impressing them, but you may not be.

Live your life and make your financial choices according to what you care about, not what you think the people around you care about. If you truly stop worrying what other people think, the whole impact of lifestyle inflation disappears. Don’t waste your time and energy trying to impress people who are not involved in your day to day life.

Many of the things we enjoy most are completely free. For example, do you have more time and focus on your friends if you have a potluck dinner at home or do you have more time to focus on them in a noisy crowded, expensive restaurant?

The potluck at home is much more relaxed. You don’t have to worry about parking or waiting for your table to open up or being rushed out the door so the restaurant can turn the table over. You and your friends can linger over dinner as long as you want to. Plus, if you have friends who are also avoiding the lifestyle inflation bandwagon, you can all save money by having dinner at home instead of going out to a restaurant.

Why are you having dinner with friends? Is your purpose to spend money or to enjoy time with your friends? Once you get to the bottom of WHY you are doing something, it makes it much easier to concentrate on what is really important and eliminate the potential for lifestyle inflation.

We have found that the best way for us to stay on track and keep ourselves motivated is to spend most of our time with people who think like we do, who share our faith and who want what’s best for us.

Make a conscious effort to fill your life with people who share a set of values with you. You don’t want everybody to think alike in all situations but being in conflict with the people who are closest to you isn’t a good way to live your life. Concentrate on spending time with those people who will support you, understand you and encourage you.

When we get on the lifestyle inflation merry-go-round we spend so much time and effort looking forward to what we want that we often forget to be content with what we already have. If you aren’t grateful for what you have, you’ll never be grateful for what you get. If you are thinking about upgrading the kind of car you drive, stop for a minute and say a prayer of gratitude that you already have a car to drive. If you are thinking about buying a bigger house, stop for a minute and say a prayer of gratitude that you have someplace warm and safe and dry to live.

In 1 Timothy chapter 6 we hear that if we have food and clothing we should be content and we also hear that we brought nothing into the world and we shall take nothing out of it.

We encourage you to avoid lifestyle inflation and be content with the blessings the Lord had bestowed upon you.

Listen to the Compass Catholic podcast for more about lifestyle inflation.