A while back we ran a series on this site where we looked at a variety of ways that you can create extra income for your family. Creating a side income is a great way to get ahead and dump debt faster, work towards maxing out that Roth IRA or 401(k), or to just build up that emergency fund. Having secondary sources of income has been a huge godsend for our family, and I believe it can be for yours as well.

Today I thought we could look back at some of the posts we’ve done in the past couple of years that involved creating side income, including posts from our “Ways To Make Extra Money” series. Have your own posts about how to make extra income? Leave a link in the comments and I’ll try to make sure it gets approved.

• Ways To Make Extra Money Series: Guide To Diversifying Your Sources Of Income
• Ways To Make Extra Money Series: 5 More Great Ideas For Creating Extra Income
• Ways To Make Extra Money Series: 5 Simple Ways to Create Income
• Ways To Make Extra Money Series: 5 More Ideas To Create Extra Income

Here are a few more posts that we’ve written on the topic of making extra money:

• Making Money With Cash Crate – A Step By Step Guide
• 5 Ways To Make Some Extra Money
• Make Extra Money By Doing Graphic Design Work On The Side
• Ways To Make Extra Income: How To Create And Sell An Ebook On Your WordPress Site
• How To Increase Your Income Without A Raise
• Making Side Income Can Help Blunt The Impact Of Becoming A One Income Family

Reader Ideas for Creating More Income

Today I thought I would wrap things up with a few more ideas brought to us by our readers in the comments,  as well as suggestions given on Twitter.  If you want to add your own – as always – add your suggestions to the comments!

Money Making Ideas from Twitter:

• Make Money by starting a local community website and selling advertising locally.  @mattjabs
• Sell old movies, CDs, books on Amazon. Everyone has at least 10 items they’ll never use again that they can sell.   @foreignersfinan
• If you have a skill like another language, you can try tutoring for local schools or universities (I’m fluent in German).    @lafoxey86
• Mechanical Turk will pay at least a few bucks an hour.  Was just playing around with it last night, it’s interesting! @ericabiz
• Think about stuff you don’t like to do and would pay somebody for, then offer that as a side hustle.  Dog Poop anyone?  @fiscalgeek
• Depending on how much soda your family drinks, there’s always recycling. Money’s low but it’s a good lesson for the kids. @ipickuppennies
• Tutor students in courses you did well in. People want to get high grades/pass and they are willing to pay for it.  @studenomics
• Sell homemade food. I used to sell homemade bread. @domesticcents
• Start a business.   A blog, a cake business, something u are passionate about & will pour time/patience in to develop.  @nodebtplan
• Submit to a site that pays for articles. @budgetpulse
• Can you guess my favorite way to make extra money?  @deliverawaydebt (as in delivering pizzas!)

Money Making Ideas from the comments:

• English as second language is huge right now with the migrations from various parts of the world. There are certificate programs you can take or you can do it informally. That’s a niche you can enter for no other reason than being able to speak the native tongue!   Kevin at Out Of Your Rut
• My wife has begun keeping kids in our home. I am starting part-time census work this month.  Ken at moneymakingsense.com
• If you happened to have a plow for your truck in the southeast this year you could have made a killing as much snow as we have gotten. Supply and demand was in effect and the demand for snow clearing far outweighed the supply of plows.  Kyle at SuburbanDollar.com
• I am commissioned as a notary here in WA, and when I was laid off in 2008 I took a gamble and started a full-time mobile notary service. It keeps me busy and is great income. I got additional training on how to close real estate transactions (I wouldn’t advise anyone to try to do it without that training) but if you’re already a commissioned notary or can become commissioned easily in your state, the “odd job” general notary work is great extra income.  Jessica at thepennywisefamily.com
• Last summer garbage collectors in Toronto went on a very long strike, my brother (a entrepreneur by nature) took quick advantage of the situation by setting up his own private temporary garbage collection services. Start up cost was about $700 and they made over $25,000 in about 3 months. Paid tuition for 3 years.  Ray at Financial Highway.
• A friend of my was able to make some extra money writing short scripts for a production agency. They ranged from 10-30 pages, and it was basically creative story telling. They gave him the premise, he made up the rest. Easy money considering all you have to do is come up with some stories!  myfinancialobjectives.com
• I used to have a thing for designer shoes (in my carefree days of high living off of credit cards). There were many pairs that I sold on eBay for about $800, but they were mostly unworn Jimmy Choos. I had a few other pairs that were equally lovely but I couldn’t get any interest on eBay, so I took them to a local consignment shop that only deals in high end merchandise. Out of the 8 items I’ve taken in, so far, I’ve made $250.  Danielle at thefrugallawyer.com
• My husband and I have turned my hobby of making hair bows for girls into a business.  bowsoprecious.com
• Amazon’s great for selling books, movies, etc. The amount of people on Amazon is ridiculous and when I sold textbooks in college I was shocked by how many books old and new I could sell.   Austin at foreignersfinances.com

Conclusion

One of my main reasons for doing this series, was not necessarily to give specific ideas and methods for making money, but rather to get the creative juices flowing and to  help you to find your own best method(s) for making money.

So often on personal finance blogs we focus only on the frugality aspect of personal finance.  But in reality, you can only cut back so much and you can only be so frugal.  My opinion is that you ignore the other side of the coin – generating income – at your own peril.

There are a million and one ways that you can find to generate income, you just have to find where your skill sets lie, what you’re passionate about, and where there is a need.  So go out there and start earning!

Have more ideas for generating income?  Have a sure fire way to make money?  Tell us your thoughts in the comments!

• 10 Weird And Unconventional Ways To Make Money
• A Money Lesson From John Wesley
• Lending Club Update: Returns Increasing Above 10% As Higher Risk Loans Stay Current
• How To Plan For Long Term Income Loss

We’re in the midst of tough economic times and a lot of people are finding themselves in situations where they need to come up with money quickly in order to pay for one debt or another.  Whether it’s IRS tax debt or needing to replace a broken water heater, there are times when people find themselves with a large bill with no emergency fund to pay it.  So what do you do in a situation like that?  For many people the answer is to take out a 401(k) loan.  Up to 3/4 of company 401(k) plans have a provision available to do a 401(k) loan, and up to 30% of people with one of those plans have taken advantage of that and taken out a 401(k) loan.

Taking out a 401(k) loan can be a legitimate road to take if you’re dealing with a serious financial situation like IRS debt or a foreclosure. You should also be aware, however,  that there are risks to taking out a 401(k) loan.

How 401(k) Loans Work

Before we get too far into talking about the pros and cons of the 401(k) loan, let’s look at how they typically work.  Different plans may have different rules and regulations surrounding 401(k) loans, but typically they’re pretty similar.

• Minimum withdrawals: Most plans will have a minimum amount that you can take out when doing a 401(k) loan, typically anywhere from $500-1000.  They do that in part to try and discourage people from taking out small amounts from time to time to pay for smaller bills, to discourage people from short-circuiting their investment gains.
• Maximum loan amounts: Typically you’re allowed to borrow up to 50% of your vested balance in your 401(k) account, but no more than $50,000.   Also keep in mind that quite often you won’t be able to borrow from your vested company matching funds, but only personally deposited and vested funds.
• Payment terms:  Usually 401(k) loans have a 5 year payment term, and the interest rates are usually set at prime rate plus 1%.    If you’re taking out the loan to buy a home, longer terms may be available.
• Fees to process your loan:  Many plans will charge a fee just to process your loan – a fee anywhere from $50-100.

When taking out a 401(k) loan be sure to know what the provisions and stipulations of doing one are with your company’s 401(k).  Depending on what the fees are, maximum or minimums may be, you may not want to go down that road.

Pros Of Doing A 401(k) Loan

I’m not a huge proponent of doing a 401(k) loan just because I think it short-circuits the gains you could see in your retirement account, and it carries some significant risks.  That being said, there are some situations where I might consider doing one.

For example, if you’re in a situation where you’ve got a large IRS debt that you need to pay, I think a 401(k) loan might be preferable to getting in trouble with the IRS.  You don’t want to go to prison. Or if you’re in danger of going into foreclosure, or losing a vehicle to repossession, you may want to consider it.   Just know the risks.

Here are some reasons why a 401(k) loan can be a good thing.

• Very little paperwork needed:  Typically a 401(k) loan requires very little paperwork and can be done regardless of if you have an actual need.  In many cases it’s as easy as making a phone call or clicking a few links in your online account.  The only time you may need additional paperwork is if you’re using it for a home loan.
• Paying yourself interest:  When you get a loan from your bank or a credit card you’re going to be paying interest to them on the loan proceeds.  With a 401(k) loan you’re paying yourself interest.  Sounds like a good deal right?
• Easy repayment:  Quite often a 401k loan repayment comes directly out of your paycheck.  That makes paying your loan back easy – it comes directly out of your paycheck so you never see the money and feel the pinch of losing it.

While I don’t typically suggest a 401(k) loan, it can be an option if you’re in a pinch and you have to pay off a pressing debt right away.  There are some positives of doing one, but you also have to be aware of the significant risks – which we’ll look at next.

Cons Of Doing A 401(k) Loan

There are some considerable risks to be aware of when doing a 401(k) loan.  If you’re not careful they could come back to haunt you.

• Fees, fees, fees:  If you’re not careful you could be losing quite a bit of money to fees. There can be loan origination fees, and in some cases annual maintenance fee.  So for example, if you take out a $1000 loan, and then have a $75 origination fee and $25 maintenance fee on a 5 year loan, you would end up paying $200in fees – or 20%.  That’s a steep price to pay.  Be careful to know what fees your plan charges.
• Defaults, penalties and taxes:  If you go into default on your loan for one reason or another it will mean that the money will be taxed at your normal rate, and you’ll be charged a 10% early withdrawal penalty.  That could mean a huge tax payment when it comes to tax time, something most folks may not be prepared for, especially if the money is already spent.
• Money taxed twice:    When you repay your 401(k) loan, you’re using post-tax money to repay it.  But since the money is then going back into a pre-tax account, it will then be taxed again when a distribution is taken in retirement.  Double taxation!
• Moving jobs or being fired means loan comes due: If you end up deciding to move to a new job, or if you get let go from your current job, the 401(k) loan will automatically come due in full – although usually there is a grace period of 60-90 days.  If you can’t pay in that time you’ll be subject to a 10% penalty and your normal tax rate just like a normal default. That can mean upwards of 35-40% in taxes and penalties.  So when tax time comes, you may have a big tax bill at a time when you can least afford it!
• Lost retirement gains:  When you take money out of your 401(k) you’re taking away from any gains that your retirement funds may have made during the interim.  The cost can be especially great if you take the money out at the bottom of the market and it isn’t returned to the account until later when the market is higher.  You lose out on any gains your money may have made.

So as you can see there are a ton of cons associated with taking out a 401(k) loan.  There are risks associated with the fees charged, penalties if you default or lose your job and can’t pay in full, and the lost opportunity cost of not realizing investment gains.  Those are some pretty serious things to consider.

Try Considering Other Options First

My suggestion when it comes to taking out a 401(k) loan is to avoid it if you can and try other options first.  What are some other options?

Try saving up an emergency fund in advance so that when you have a need for a large chunk of cash you’ve already got it saved and ready to go.  That’s what I’ve done with our 12 month emergency fund – so that when big bills come due, like my recent $5000 tax bill, it wasn’t a problem because we’d planned ahead.

Another option is to open and use a Roth IRA account for your retirement savings instead.  When you use a Roth, you can withdraw your Roth IRA contributions at any time without any tax penalties, so you can avoid those risks of the 401(k) loan.   You’ll still be having the risk of losing out on investment gains, but at least you won’t be paying taxes or penalties.

If and when you decide to go down the road of a 401(k) loan, however, make sure that you’re doing your homework.  Go run the numbers using a 401(k) loan calculator and see just what interest rates you’re actually paying.   That may help you to decide if it’s actually a good deal.

Have you ever taken out a 401(k) loan?  If so, how did it turn out, did you pay it all back, or did you face paying taxes and penalties? Tell us your 401k loan experience in the comments.

• Should You Pay Off Debt Or Save For Retirement?
• Nearly A Quarter of Fidelity’s 401(k) Accounts Have Loans Against Them. Why This Is A Bad Idea.
• Important Inheritance Tips For Your 401(k)
• 401(k) Rollover To IRA: What To Do With Your Retirement Account When Leaving Your Old Job

This past week I started getting all of my tax forms.  I got my W2 from the company I work for at my day job, 1099s from a variety of companies that I do freelance work for, some miscellaneous tax forms from investments that we have and reporting forms showing how much we’ve donated to our church and other charities.

I’ve been using TurboTax for the past few years, and I’ll be using it again this year – so I started entering all of my information into their software a couple of nights ago (check out the tax software  I recommend).   I’m still waiting on a few 1099 forms, but I’ve almost received them all at this point.

After a couple of hours of entering data into the TurboTax interface I was shocked to realize that despite the fact that I had paid 100% of my tax liability from 2010 this past year, I was still going to end up owing quite a bit of money come tax time.  In fact, it looks like I’m going to owe about $5000 in combined federal and state taxes.  Wow.

How Did I End Up Owing So Much?

How did I end up in a situation where I owe that much money on my taxes?  It happened for a variety of reasons.

First, when paying my taxes using TurboTax last year it automatically calculated what my estimated tax payments for the coming year should be.   It printed out payment coupons for me for what I should be paying each quarter.   The total of the payments it gave me was equal to 100% of 2010′s tax liability.    Knowing that I would be within the safe harbor requirements for 2011 taxes, I think that gave me a false sense of assurance that despite the fact that I was tracking blog income and expenses pretty closely, I wouldn’t need to do any re-calculations if my income rose – because I wouldn’t be subject to any penalties.  I could just pay any small overages when tax time came.

Another factor causing me to owe  more than expected was the fact that my blog income rose more than I expected this year – by between $15,000-20,000.  Not only that but I had another one time increase in online income due to an online asset that I sold for around $8000.  So the increase in blog income, along with a one time bump due to selling that property – means I made around $25,000 more online this year than last year.    I was expecting to increase income, but not quite that much – especially after I was hit by Google’s Panda update last April.

Finally, the last thing that threw me off was that 2011 was the first year that we didn’t have my wife’s income being included in the mix come tax time. Because of that, while I expected my online income to rise, I thought it would be offset somewhat by the drop in my wife’s income since she wasn’t working outside the home.  My online income rose so much, however, that it more than offset the drop in her income.

Making Sure To Avoid Tax Penalties

Thankfully I was able to avoid any tax penalties this year despite the fact that I underpaid my taxes by almost $5000.  The reason?  I met one of the criteria for the IRS safe harbor requirements.  To avoid penalties you have to do one of these things:

• Owe less than $1,000 for this year’s taxes. (Nope, my taxes owed were almost $5000!)
• Withhold 100% of last year’s tax liability.  (I met this requirement. Phew!)
• Withhold 90% of this year’s tax liability.

If you’re not sure if you’ve had enough taxes withheld, you’ll want to probably want to look into it and make sure.  If you do need to pay more, you can just increase your withholding at your job, or increase your estimated tax payments.

Why We Can Pay A $5000 Tax Bill With No Problem

A $5000 tax bill is nothing to sneeze at, and it isn’t something to be taken lightly.   Thankfully we have planned ahead for unexpected expenses just like this, and have saved up a 12 month emergency fund.

One thing I did do right this year was to save a big portion of my blog earnings to completely fund that 12 month emergency fund – in addition to paying cash for our used Honda CRV.   Because we planned ahead I’ll be able to just transfer the funds from our Ally Bank emergency fund and pay the $5000 tax bill with no real pain to us.  Of course I’ll then re-fund that account over the next few months, just in case we have another crisis come up.

What can you do if you don’t have the money on hand to pay the tax bill?  I wrote a post about that a while back called “What Should I Do If I Can’t Pay My Taxes?”

Avoid A Big Tax Bill By Re-Evaluating Income Throughout The Year

One thing I do know after going through this is that I want to be a bit more careful next year about how much we’re paying in taxes throughout the year. I don’t want to have another situation crop up where we’ll have to make a big lump sum payment like this.

Because of that I’m going to start the year making estimated tax payments in order to reach that 100% of last year’s liability safe harbor requirement.  Then I’ll re-evaluate once or twice throughout the year to make sure we’re paying enough to not have to owe next year (or at least not as much).

Have you ever been faced with a big tax bill at the end of the year? How did you handle it?  Tell us in the comments.

• How To File Your Federal Taxes For Free Using Free E-File Programs
• How To Prepare And File A 1099 For Contract And Freelance Workers
• Do I Need To File A Tax Return? It Depends Upon A Variety Of Factors.
• 3 Ways To Ensure A Fast Tax Refund

I‘ve been investing with Lending Club for a couple of years now, and I’ve gone from a skeptic when I first started investing with the service, to someone who is convinced that Lending Club can be an integral piece in any person’s investing strategy. I’ve seen good returns since I started, and despite warnings from a variety of sources about how the site was a flash in the pan and not something you’d probably want to put your money in, I’ve stuck with it. Over the years I’ve used the site I’ve only had one loan get charged off.  Since I was diversified, however, I’m still getting 11.44% returns. Not too bad.

This past week Lending Club announced that they had reached $500 million in loans originated since inception (2007), further showing just how strong the platform is.

Lending Club, the leading platform for investing in and obtaining personal loans, today announced that $500 million in loans have been originated via the platform since inception.
Lending Club serves the needs of prime consumers who choose the lower interest rate loans available through Lending Club over more expensive credit cards.

The San Francisco-based company commenced operations in 2007 and has exceeded 100 percent growth in loan volume each year since. More than a quarter-billion dollars in loans were originated on the platform in 2011, more than doubling the previous four years combined. Lending Club now averages more than $1 million in loan originations per day, with an average loan size of $10,945. The majority of borrowers (66.7 percent) say they use Lending Club’s fixed-rate personal loan platform to pay off their high-interest credit cards.

So Lending Club according to their site is originating more than $1 million in loans per day.   I would say that they’re here for the long haul, and if you haven’t checked them out yet, you should give it a shot!

Interested in my original Lending Club Review? check it out below.

Check out my original Lending Club review

Returns Increase To 11.44% And Another Late Loan

This past week I started looking at my taxes and figuring out how much interest I earned last year with Lending Club – as it is taxable income.  If most of your loans are smaller ones with Lending Club like me, you won’t be getting any tax forms, and it can be quite a confusing process figuring out your interest earned.  If you’re as confused as i was when I started looking at it, check out my post on Lending Club and taxes.

This past month my Lending Club account had it’s first charged off loan in over 2 years of using the site.    While it was disappointing, thankfully I didn’t lose much on the deal because the loan was over 1/2 paid off already.  Despite the charged off loan, my returns increased this month again to 11.44% as I added more “high risk” loans.   Unfortunately I had another loan go into the “16-30 days late” category.  We’ll see if they get back on track, it shows that they have scheduled a payment.

1. Net Annualized Return of 11.44%: Up from 11.23% in December, 10.93% in September, 10.76% in August and 10.53% before that. At last check my returns were higher than 62% and lower than 38% of all investors on Lending Club’s compare feature. Unfortunately the compare feature in Lending Club account is now gone completely, so I can’t keep up on those numbers anymore.  I understand the numbers weren’t completely accurate, but it was still a fun to compare.
2. Number of defaults.. one and counting: Last month I had my first charged off loan, a Grade B loan.   Go figure.  Just goes to show that it isn’t always the high grade loans that peform as well. I’ve seen quite a few Grade A and B loans either pay off early, or as in this case – get charged off. 
3. Twenty two loans have been paid off early: Nine were A grade loans, six were grade B loans, five were C grade, and one grade E and F. Looks like grade A and B loans are more likely to get paid back early, reducing returns. Another reason why I’ve started investing in more higher grade loans.
4. My account balance still going up: I currently have $2,690.24 in my account, with $195.47of that ready to invest.  I’ll be finding some loans later today.
5. I’m still diversified by investing across a large number of loans: I’ve had 153 loans, with no more than $25 in each loan.  In other words, I’m diversified across a large number of loans, lessening my risk from any one loan going into default or getting charged off.

NOTE: Did you know that 100% of investors who have invested in 800 notes or more had positive returns. Not too shabby, not everyone in the stock market can say that!

What’s Your Actual ROI?

When you’re looking at the numbers on the Lending Club and Prosper sites, it has been pointed out time and again that their numbers are overly rosy view of what your  actual return on investment will be.  The ways that they calculate the ROI isn’t really standardized, and they don’t take into account how old your loans are, possible future default rates, or other things that may become a factor.  The numbers they show are just something you have to take or leave.

A site that I discovered a while ago that gives what I think is a better picture of the actual ROI you can expect is Nickel Steamroller’s Lending Club portfolio analyzer. Basically the analysis tool with give you an estimated ROI after you download all your notes from your Lending Club account and upload the .csv file. It will go through you notes and give sell recommendations, show duplicate notes and highlight notes that are below Lending Club’s average return (so you can sell them on the secondary platform).  It will even give you a fun little map showing where your loans are (see mine above).

In looking at my returns on the analyzer, my actual return according to the site will be closer to 10.33%.

Those are still better than the returns I’ve seen in the stock market this year, or in my savings account.

Lending Club Strategy

Here’s the basic strategy I’ve been using with Lending Club over the past couple of years.  I’ve fudged on this a bit in the past few months due to the fact I’m buying more low grade loans, but it still holds mostly true.

• Less than $10,000: I believe I’ll still be sticking with mostly loans below $10,000. Lower amounts mean higher likelihood of payback of the loan.
• Zero delinquencies: Again, I may fudge slightly on this one, but I still want it to be very few or zero delinquencies.
• Debt to income ratio below 20-25%: I like to invest in loans where the borrowers have a lower DTI ratio, and preferably have higher incomes. I’ll try to keep this as is.
• Good employment history: I like loans with a decent employment history of at least 2 years, and a decent income.

So that’s what I’m doing with my Lending Club portfolio right now, and how I’m investing.

Not ready to invest, but looking to consolidate debt or pay off a high interest credit card? You might want to consider borrowing from Lending Club. Check out my post on borrowing from Lending Club.

Are you currently investing in Lending Club? How are your returns looking? Tell us in the comments!

• Save And Pay Yourself First: A Part Of All I Earned Was Mine To Keep
• Should You Pay Off Debt Or Save For Retirement?
• Give The Gift Of Stock This Christmas: Help Someone Build A Solid Financial Foundation
• Saving For Retirement Til It Hurts!

Many say the life of responsibility begins when you walk down the aisle and say, “I do.”  Still others believe it truly begins when you have a child.  Certainly having a child can make you question your values and what you believe to be important in your life as well as make many people want to be more financially responsible.  Often, a couple finds the time immediately after the birth of a child to be a good time to buy life insurance.

The thing is, you may want to consider purchasing life insurance even before your first child is born.

Do You Need Life Insurance?

Life insurance for a grown adult with no dependents is often considered unnecessary.  Yet, if you are childless, you may want to consider purchasing it if a few factors apply.

Would your parents experience financial hardship paying for your funeral?

Although we like to think our parents would have enough money to afford a funeral should we pass, that is not always the case.  My brother passed away several years ago at the age of 29, and my mom, who has worked as a secretary for the majority of her life, had trouble finding the money to pay for the funeral.  As a parent, it is hard enough to lose a child, let alone worry about how to pay for the funeral.  As a young, single adult, a life insurance policy that is small enough to cover the cost of a funeral, which usually costs between $7,000 and $11,000, would only be a nominal monthly expense.

Do others depend on your income?

If you have a significant other who depends in part on your income, could he or she survive without it?  Many couples buy homes together but rely on both incomes to afford the house.  If you were to pass, would your spouse be able to afford the home and the standard of living you are accustomed to?  Some may argue that your spouse may be able to just sell the home should you pass, but again, grieving is difficult enough.  Do you really want your spouse to have to worry about paying for your funeral, selling the home you have made together and selling your car because they are no longer affordable on one income?  Those things may happen with time, but a life insurance policy affords your partner a chance to grieve and take time from work, if necessary.

If your income is significantly higher than your spouses, buying life insurance becomes even more essential.  A good policy could allow your spouse time to increase income or finish his or her education, if that is the case.  Both raising income and completing an education take time, as does grieving.  A life insurance policy affords your spouse the time he or she may need to get life in order without you.

Will you be having children in the future?

Life insurance policies are at their lowest when you are young and in good health.  If you are 25 now and planning on having children in the next few years, it may be worthwhile to get the policy now and buy it for an extended amount of time, such as a 20 or 30 year term life insurance policy so you can pay the lowest rate available.

Some may argue that there is no need to buy a separate policy because you can purchase life insurance through work.  While life insurance provided through work is a nice option, it is unreliable in that you could lose your job and, as a result, lose your life insurance.  In general, it is better to have your own private policy with work-provided life insurance as a nice supplement.

When you are young, you feel that nothing can happen to you and that you don’t need to worry about products like life insurance.  However, even if you don’t yet have children, investing in a life insurance policy may be a smart financial move for you and your immediate family members.

• Why I Have Life Insurance And Why You Probably Should Too
• Shopping For Term Life Insurance And Why It’s A Smart Choice For Most Situations
• Term, Whole And Variable Life Insurance. Which Type Of Life Insurance Should I Buy?
• What Types Of Insurance Should I Have?

A couple of years ago I wrote a post on this site called Ways To Watch TV Without Paying An Arm And A Leg For Cable Or Satellite where I talked about a variety of ways that you can find free or cheap TV, movie and other entertainment content online – while not spending an obscene amount on a monthly cable or satellite TV bill.

In the article I gave an inside look at the setup we have used at our house that gave us pretty much all the entertainment options that we would ever need.

While our setup still works, it’s been a while since I wrote the post so today I thought I would write another post and do an update.  I’m going to look at some of the new ways you can access free or affordable video content online, examine some of the new features of the software that we’re using, and talk about some of the new devices that will work in helping you to cut the cord.  So without further ado, let’s look at ways to get free or cheap tv and movie content.

Why Do People Want Alternatives To Cable And Satellite TV?

Why is it that there is such a huge demand for alternatives to paying a monthly cable or satellite TV bill?  For one main reason - it’s expensive.  Not only is it expensive, but the companies have a myriad of ways to rope you into long term deals where incentives run out, and you end up paying crazy amounts of money every month.  It’s not uncommon to be paying $100+/month.   I think premium TV is starting to feel the pinch, however.  Because of lower subscriber numbers they’re beginning to try and find ways to offer cheaper alternative plans.

While subscribers to fiber-optic service and satellite saw last year’s average monthly bills jump 15% and 12%, respectively, research firm Centris found that cable subscribers are now paying 1% less,an average of $69.70. (It’s also cheaper than the average $76.80 for satellite and $99.67 for fiber-optic.) Experts say it’s the start of a shift as cable companies introduce new, lower-cost plans with a more limited selection of channels to grab market share from other pay-TV providers — and keep budget-conscious customers from cutting the cord altogether.

The introduction of more and better streaming video services like Netflix, Hulu and Amazon Instant has shown the premium TV providers that they can’t ignore budget conscious consumers anymore. They have to come up with some cheaper alternatives.

The thing is, even their “cheaper alternatives” really aren’t that cheap when you compare them to our plan, and they often leave out popular channels that many people want.

How Our Home Entertainment System Is Setup

Because we wanted to have an alternative, we setup our own home entertainment system that didn’t include cable TV.  It basically involves a combination of our PC, our big screen TV, a networked media device, and a software called PlayOn installed on our desktop PC.  Here’s everything we use, and what they cost:

• TV:   We have a 50″ TV in our basement entertainment area.  We use this as our main TV watching area.  Most people already have a TV, so this shouldn’t be an extra cost.
• Networked Media Device:  We have an Xbox 360 at our house, although any DLNA compliant networked media device should work.  Things like Playstation 3, Nintendo Wii, Roku, Google TV, Android and Apple devices should all be compatible for this setup.  If you already have one of these it won’t cost you any extra to buy it.  Otherwise devices like the Roku are very affordable – around the $100 mark.  We found a second Xbox 360 for $50 on Ebay as well.
• PlayOn Video Streaming Software:  This software is one of the keys to our setup.  It can be found at Playon.TV and allows you to stream online video from popular services like Hulu.com, Netflix, Amazon Instant and others straight to your TV through a networked media device. The software costs either a one time fee of $49.99 (on sale now, normally $79.99) or an annual fee of $19.99. That’s less than the cost of one month of satellite TV!
• PlayLater Online DVR Software:  The folks that brought us PlayOn have now released a DVR software of sorts that works in conjunction with streaming services to record all of your favorite online streaming shows. It also includes features like being able to skip past commercials.  Just queue up shows you want to record, and they’ll be saved, just like a DVR with your cable TV service.The software costs either a one time fee of $49.99 (on sale now, normally $79.99) or an annual fee of $19.99.
• Streaming Video Sites:  Video streaming services like Hulu, Netflix,  Amazon Instant have been gaining traction the last few years.  Now they’re easier than ever to watch as they’re all supported via the PlayOn and PlayLater software!  The software also supports plugins, so other channels are being added constantly including CBS.com, Youtube,  Comedy Central, HGTV, ESPN the Food Network, NBA/NFL content, and more.  Some services may require an extra subscription fee to watch, however, like MLB.tv.

That’s the basic setup we use at our house. A desktop PC that’s always on that streams video content via PlayOn to our 2 TVs with networked media devices (we have two Xbox 360s), along with our Android phones and tablet.  We can also use PlayLater to record shows to watch later – especially helpful for services like Hulu that only leave certain episodes on their free service for a short time.

If you want, you can of course also just connect a laptop to your TV to watch a lot of these services, but having something like Playon just makes it easier to have everything all in one convenient package, instead of having to bookmark 10 different sites and manage different logins.

Other Options For Home Video Setups

There are other good options for setting up a home video experience that’s more affordable than cable TV. Here are a few – chime in with your own in the comments!

• Boxee Box:  If you want more of an all-in-one type solution, one that people keep telling me about is using the Boxee Box from D-Link. Basically you plug it into your internet, and start watching TV shows and movies from a variety of online services like Amazon, Netflix and others.  It also has a live TV Dongle that allows you to mix in live TV content with online content as well.  Definitely an interesting option – all for around $200.
• Smart TVs: Another good option for some people is having one of the newer smart TVs that include apps for Netflix , Amazon, Hulu and a variety of other services like Pandora and Facebook.  Throw in the fact that you have live over the air HDTV as well, and it’s a good replacement for many folks.
• Your Laptop:  If you already have a laptop you can definitely just hook that up to your TV, and use that to watch all of your video content.  If you want to get a bit more fancy and don’t want to physically hook up the laptop using an HDMI cable, you can use a gadget like the Netgear PTVU1000 to wirelessly stream HD video from the laptop to your big screen.
• Apple TV: This option will allow you to purchase or rent from the Itunes store, as well as from Netflix, YouTube, Flickr, MLB TV, NBA TV, Vimeo, and MobileMe.
• Tablet Devices:  Apple’s Ipad, as well as a host of Android devices can all access your streamed content via PlayOn.  In addition you can download a variety of free apps like the ones from Hulu, Netflix and more.

Free And Cheap Video Streaming Services To Use

So now that we have our video setup all set to go, we need to figure out what streaming services to use.  Here are a few of our favorites:

• Hulu.com:  You can use the free version of the service, or pay for a premium subscription. We just use the free version and make sure to watch or DVR our favorite shows.
• Netflix.com: We use the lowest possible streaming only plan for Netflix ($7.99), and stream via our Xbox 360′s native Netflix app.
• Amazon Prime: If you sign up for Amazon’s Prime membership, you’ll also get access to their streaming video service for free.  Only certain videos are available for free, with a selection similar to Netflix – at $79/year, or $6.58/month. We stream this via PlayOn. You also get free 2-day shipping at Amazon, and free Kindle books!
• Itunes:  The Itunes store is an option if you have certain shows you can’t find online elsewhere at a decent price. One off rentals for your favorite show that can’t be found free online can still be cheaper than cable.  Works best if you use a device like an Apple TV or an Ipad.
• Xbox Live:  If you’re an Xbox owner they have a variety of free and pay TV/Movie options. Not usually the cheapest, but if you want to rent a first run movie or show quickly, it could be an option.

While those are the main services we use and stream to our TVs, we also sometimes use the following, although quite a bit less:

• TV Network Websites: PBS, ABC, NBC, CBS and FOX all have good full episode streaming options available which we usually watch via PlayOn.  I read somewhere that of the top 100 shows, I believe 80+ of them are available for free through the networks.
• Vudu.com: Video rental and purchase.
• Crackle.com
• Joost.com
• Veoh.com
• Sidereel.com
• CinemaNow.com
• EpixHD.com
• Sports:  If you need to get your sports fix, you may need to pay for a premium membership to the league of your choice’s online video streaming.  Some may not have live game viewing due to blackout restrictions.

Other Cheap Video Content Options

Beyond just online streaming video services, there are quite a few decent options for getting physical movies and TV shows.  Some of these options might be even better for those who don’t watch a lot of TV or movies.

• Free Over The Air HDTV:  If you have a TV with a HDTV tuner and an antenna, you will have access to a ton of great free HD content via the big broadcast networks.  Quite honestly my wife could survive on this alone usually as most of her favorite shows are on those stations.
• Redbox:  You can rent a movie at your local Redbox location for about $1.20 per night plus tax. If you only watch movies infrequently, this is a good option.
• The Library: Many local libraries have a surprisingly big movie collection, and getting a library card is free.
• Your Friends:  We have friends that are movie buffs, and who have pretty much every movie ever released.  We sometimes will borrow a movie or two from them.  Again -free.

 Conclusion

When it comes right down to it cutting the cord and finding free, cheap or affordable video entertainment online really isn’t that difficult. While there may be some higher initial start-up costs if you don’t have any of the equipment, in the long run you’re usually going to be saving hundreds of dollars over cable or satellite TV.

The one caveat is that you need to actually sit down and figure out how much you’re spending on your “affordable” non-cable TV option, as you could easily end up spending more that way than if you had just stayed with cable.

At our house we already had most of the equipment, and we only spent money on the PlayOn and PlayLater software ($99) , on Netflix ($7.99/month) and on Amazon Prime ($79).  In total that comes out to about $273.88 the first year, and then $174.88/year in subsequent years.  That’s much cheaper than if we had paid $65/month or $780/year for cable like we have in the past. Even if you add in a few more rentals or premium season pass purchases for your favorite shows, it still comes out cheaper.

What is your setup for watching tv at home for free, or cheaper than you could using satellite or cable TV?  Do you use options we didn’t mention here?  Tell us in the comments.

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Over the last few years I have considered not doing my taxes on my own and instead going to a CPA.  My tax situation has become more complicated, what with side income from the blog, taxable investments like Lending Club and Betterment, and a variety of other things that make tax day a bit more fun.

The last few years, while I’ve been close to going to a CPA, the frugal spender in me keeps coming out, and I’ve gone back to the TurboTax software time and time again.   I’ve been using it for years now because I just didn’t feel like there was anything I couldn’t figure out on my own, and the help database at TurboTax has been surprisingly good. Most situations that I’ve run into someone else has already dealt with – and shared how to do it correctly.

If you’re planning on filing your own taxes this year I highly recommend that you e-file using one of the many software out there.   Your tax return is processed a lot faster than if you send in a paper tax return, and you’ll be getting that refund (if you have one coming) in no time.

NOTE: You can get a refund in as little as 5 days with e-file, but it can take a month or more to receive a refund via check.

If you met certain income restrictions in 2011, you can also file your federal taxes for free!

Filing Your 2011 Tax Return For Free

There are actually quite a few options out there if you want to e-file your taxes free this year.  You only have to meet certain restrictions.

The IRS has a Free File program that allows taxpayers who have below an adjusted gross income (AGI) of $57,000 in 2011 to get free tax preparation via several tax software.   Some of the companies have AGI restrictions lower than $57,000 in order to qualify for the free e-file option, so be aware of what your approximate AGI will be so that you can use a company that has free e-file at your income level.

Software That You Can Use To File Your Taxes For Free

If you’re looking to file your taxes for free, here are a few of the free filing options. Remember the required maximum AGI for free filing will vary from company to company. Click on the company name to check if you qualify with that company and start your free return!

TurboTax Free Edition- TurboTax is one of the better known names in tax preparation, and the company that I’m using again this year. They offer:

• FREE preparation, FREE printing, FREE efiling for your simple tax return
• Guides you like a GPS through your simple tax return
• Double-checks your return to make sure it’s accurate
• Check to see if you qualify for free e-file here.  Free filing with AGI $31,000 or less

CompleteTax Free – Complete Tax offers a free file option, and I’ve heard from others that the software works pretty well:

• 1040EZ Federal form only
• Earned Income Tax Credit (EITC)
• Single, and Married Filing Jointly filing status
• No children or dependents

Tax Act Online Free Edition -2nd Story Software Another great tax software that I’ve heard great things about. Free federal filing, and add state for only $17.95!

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For the last few years we haven’t been doing as much investing as we would like as we’ve had a variety of health issues in our family (and associated medical bills), babies being born and other expensive situations to pay for.

After paying for all of those things we decided that we wanted to max out our emergency fund before maxing out our retirement account contributions because you never know when your job may be downsized in an economy like this.

This past year after we finally maxed out that 12 month emergency fund we finally started contributing close to the maximum to my 401(k) account through my job. This year as we make further changes we’ll be contributing right up to the maximum for 401(k) accounts, and we may also being contributing to the Roth IRA as well.

One thing that was a pleasant surprise this year was that for the first time in several years the 401k maximum contribution was increased.

401(k) Maximum Contributions Increased For 2012

For the first time since 2009 the maximum contribution to a 401(k) account has increased.  So why did the limit go up?  The limits went up as a result of higher inflation and the latest cost of living adjustment (COLA) data, which also resulted in benefits increases this year for Social Security recipients.

So how much have the max contributions gone up?  By $500.  Here are the maximum contributions for the last 6 years.

So as you can see from the table the max contributions have gone up by a total of about $1500 since 2007. It would be nice if they had gone up even more, but having an increase this year is better than nothing. Most people probably won’t be contributing that much anyway I suppose, although they probably should.

Increasing Our Contributions To 401(k) And Roth 401(k)

So in the first week of the year this year I increased our contribution to my company’s combination 401(k) and Roth 401(k) plans.  Since the two account types carry a combined $17,000 limit, I’m diversifying my tax situation a bit and contributing to both pre-tax and post-tax accounts, although slightly more to my pre-tax 401(k).

NOTE: So how much would you have to contribute to put in the maximum in your 401(k) this year?   It comes out to about $1416.67 per month, or if you have two pay periods every month – about $708.33 per paycheck.

Over 50? Catch-Up Contribution Limits For 401(k)

If you’re over 50 years old before the end of 2012 you can make a catch-up contribution of $5,500 to your 401(k). Most plans allow this, although there are those that don’t, so check with your plan administrator. Here’s a look at the catch-up contribution limits for the past few years.

Employer Contribution Limits For 401(k)

If you’re one of the lucky few who still have an employer contributing to your account, you don’t have to worry about their contributions affecting your own contribution limit. The employer has a separate limit of up to 6% of the employee’s salary.

The total maximum 401k contribution for this year for an employer to their employee would be $33,000, for a combined total of $50,000 (33k+17k).  Add to that the $5,500 contribution if you’re over 50, and you can have a total amount of up to $55,500.

Conclusion

So we have now upped our contribution amount so that we’re going to reach the maximum contribution to the 401(k) this year, for the first time in some time.  It feels good to know that we’re making wise investing decisions and saving for our future.

Are you, or are you planning to contribute to the maximum?  Why or why not? Tell us your thoughts in the comments.

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If you’re leaving a job that you’ve been at for a while it can be tough to think about much else beyond trying to find a new job, or getting acclimated to your new one. There are resumes to brush up on, skill sets to improve and connections to make.

There are other things that you need to think about beyond a new job, however, that are important as well. Things like doing a 401k rollover from your old job’s plan to an IRA you’ve set up on your own.

What Are Your 401(k) Options When Leaving A Job

When you’re leaving a job, you have several different options of what to do when it comes to your 401(k).

• Leave it in the current plan:  You can just leave your 401(k) where it is and not touch it.  If you’ve got a great plan that has good low cost investments and low fees, you may want to consider doing this.  The thing is, usually you can do better to moving to your own IRA through a discount brokerage or mutual fund company.
• Cash it out: You can choose to cash out your 401(k) plan when you leave the job.  Honestly though I think this is an awful idea because if you’re not 59 1/2, you’ll be subject to a 10% early withdrawal penalty, along with your current combined state and federal tax rates.  Assuming you have a combined rate of 35%, and a penalty of 10%, you’re only going to be left with 55% of your money.  If you had $100,000 in the account, you’ll be left with $55,000 after penalties and taxes.  Don’t lose out on all that money just by withdrawing it early.
• Roll it over to an IRA:  Rolling over your 401(k) to an IRA that you’ve set up at an external brokerage or company like Vanguard is probably the best option.  It will allow you to have access to more and better funds, lower costs and more control.
• Roll over to a new 401(k):  If you already have a new job and 401(k), you may want to consider rolling the funds over if it’s a good plan. Typically you can do better rolling to an IRA, however.

So when it comes down to it, my suggestion is to roll the funds over to your own IRA at a company like Vanguard, or a discount brokerage.

Reasons To Rollover Your 401(k) To An IRA

There are a variety of reasons why you may want to rollover your 401(k) to your own IRA once you’ve left your old job. Here are a couple of the biggest:

• Better investment options in an IRA: When you invest in your company sponsored 401(k) the plan that they have set up may not have that many investment options, or the ones that they do may not be the greatest.  Many only offer one index fund, something like a S&P 500 index fund, and a few other low cost options.  Rolling over your funds will give you more investment options in order to maximize your returns.
• Lower fees in an IRA:  Quite often a 401(k) through your company will have a bunch of pre-selected mutual funds that don’t have very good expense ratios. On top of that the plan may have an annual management fee or other miscellaneous fees.   By moving to your own IRA you can select low cost mutual funds and index funds that will allow you to cut down on expenses.

It should be stated that there area  few situations where you may not want to rollover your 401(k), but I won’t go over those here as they’re few and far between. Situations like if you’re retiring early, planning a roth conversion, or situations where you’re dealing with a large amount of company stock.

How To Rollover Your 401(k)

When you’ve decided to rollover your 401(k) to an IRA, there are a few steps you’ll need to go through.

1. Open an Individual Retirement Account (IRA):  If you haven’t already, open an IRA at a discount brokerage, or mutual fund company.  Here’s a post looking at how to choose a IRA custodian.
2. Contact your old 401(k) provider, get forms:   You’ll want to contact the provider of your old 401(k) to verify that you don’t have any limitations on rolling over funds.  Then request the forms you’ll need in order to initiate the process.  Make sure to ask what information you’ll need from your new IRA plan.
3. Contact your new IRA provider, verify account setup:  You’ll want to talk to your  new plan administrator, whether it is a discount brokerage or company like Vanguard, and verify that your account is ready to receive transferred funds.  Next, verify any information that you need for the old 401(k)’s transfer forms.
4. Fill out the forms, verify direct rollover of funds:  When you have the forms, make sure that they are completely and correctly filled out to ensure no costly mistakes.  Make sure that you’re asking for a trustee-to-trustee transfer or direct rollover of the funds.  Have them send the check directly to your new IRA company.  If your old company does an indirect rollover and cuts a check for the balance of your 401(k) in your name they will withhold 20% for taxes.  You are then required to deposit the total amount of your balance (before 20% was deducted) into your new 401(k), or you could be subject to taxes and a 10% penalty for the amount under your total balance – a penalty for early withdrawal. For example, if you have $100,000 being rolled over, in an indirect rollover the company would cut a check for $80,000 and withhold $20,000 for taxes.  Then you are required to take the $80,000 plus $20,000 of your own money and deposit it at your new IRA within 60 days, or be subject to taxes and penalties.  The extra 20k that was withheld for federal taxes will be returned when you file your return as long as you deposit all 100k in your new plan.

401(k) To IRA Rollover Conclusion

Leaving an old job can be stressful, and sometimes it can be a pain to try and roll over on old 401(k) – but it’s an important thing to investigate.

Typically your best bet is going to be either to roll your funds over to an IRA with a discount brokerage or mutual fund company, and to do a direct rollover of funds so you don’t have hairy tax situations to mess with.  There are other options to take, so make sure to investigate it for your own situation and proceed down the best path for you.

Have you ever performed a 401(k) rollover? How did it go for you? Did you run into any problems?

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A while back I published a post on this site that gave hundreds of bible verses about money.  The verses were all in some way related to one financial topic or another.  A few of the subjects covered in the post included greed, saving, debt, hard work, honesty, planning, stewardship, worry and where we can find true wealth.

When I look back on the post I’m glad I wrote it and I think it gives a pretty good picture of how we’re told to view money and how it relates to our spiritual lives.  One thing that I thought I could rectify with another post, however, is instead of just having a huge number of verses on the topic, I thought I would write a shorter post giving a few of what I thought were the more important and impactful scriptures, along with a bit of explanation as to why I think they’re so important.

So today I want to give 8 of my favorite bible verses about money, and talk about why I think they’re important for all Christians to know and understand.

8 Important Bible Verses About Money

I’ve read that there are over 2000 bible verses about money and related topics.  Why is that?  I think in part because our financial lives can quickly consume us, our money and wealth becoming an idol that can overtake our lives.  In other words, if we’re not careful about how we view money it can take God’s place in our lives, and lead to ruin.

Because of that I think it’s important that we are always aware of where we place our hope.  It needs to be in Christ Jesus, and not money. So with that said, let’s look at 8 bible verses about money that I’ve cherry picked from hundreds available – because I think that they are representative of some of the most important themes running through all the verses.

Matthew 6:24 No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.

This touches on the theme I’ve already mentioned, how money can quickly begin competing for our attentions with God.  Money, in some ways, allows us to be more self sufficient and to allow ourselves to think that we don’t really need God.  Once we begin to serve money, and do anything to get more of it – it won’t be long before money becomes your master.  Be on guard about your need for a savior!

Philippians 4:11-13 Not that I speak from want, for I have learned to be content in whatever circumstances I am. I know how to get along with humble means, and I also know how to live in prosperity; in any and every circumstance I have learned the secret of being filled and going hungry, both of having abundance and suffering need. I can do all things through Him who strengthens me.

One idea that runs through a lot of the verses is that true contentment doesn’t come from having money or possessions, but instead through having a personal relationship with Christ.  I’ve found it to be true in my own life, whether you’re going through life with a lot or a little true meaning and contentment comes not from your circumstances or the things you have, but from above.

Luke 12:15 Then he said to them, “Watch out! Be on your guard against all kinds of greed; a man’s life does not consist in the abundance of his possessions.”

There are a lot of verses about greed, I think because it’s such an important topic.  It is constantly stressed how we need to guard against allowing our money and possessions to become our life’s defining goal and pursuit.  Greed never ends well, the bible makes that abundantly clear with tens of verses on the topic (examples include Mark 8:36, Proverbs 15:27, Proverbs 1:19).   Ephesians 5:5 says, “For of this you can be sure: No immoral, impure or greedy person-such a man is an idolater-has any inheritance in the kingdom of Christ and of God”

Psalm 37:21 The wicked borrows and does not repay, But the righteous shows mercy and gives.

This is a short verse, but to me it says a lot.  It tells us how it’s important to stand by our word, and to follow through when we’ve said we’re going to do something. If we borrow money, we need to repay it.  We shouldn’t be deceitful in our dealings.  It also tells us what we need to do in order to be righteous.  We need to be merciful to others, and live with a spirit of giving.   In other words we need to live a Christ-like life.

1 Timothy 6:6-12 But godliness with contentment is great gain. For we brought nothing into the world, and we can take nothing out of it. But if we have food and clothing, we will be content with that. People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction. For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs. But you, man of God, flee from all this, and pursue righteousness, godliness, faith, love, endurance and gentleness. Fight the good fight of the faith. Take hold of the eternal life to which you were called when you made your good confession in the presence of many witnesses.

This verse is one of the most often mis-quoted, but still most illuminating scriptures about money.   Many people quote this verse, wrongly, as saying that money is the root of all evil.  In fact, the verse says that the love of money is a root of all kinds of evil.   In other words, it’s not the money itself that is evil, but the love of money. It also says the love of money is a root of all kinds of evil, not that it is the root of all evil.  Big difference.

In any event, it is just as easy for someone with $100 in their bank account to fall prey to the love of money as it is for someone with 1 million dollars. It’s an issue of the heart and where our focus lies.  No matter whether you are rich or poor a love of money will lead to “many foolish desires that plunge men into ruin and destruction”.

It tells us that we need to flee from the love of money, and instead pursue righteousness, godliness, faith, love, endurance and gentleness.   All of which we need God’s help to do because of our inherently selfish natures.

1 Timothy 6:17-19 Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. Command them to do good, to be rich in good deeds, and to be generous and willing to share. In this way they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life.

This verse once again focuses on the importance of being generous to a fault, to be “rich in good deeds” and never allowing your focus to waver from where it needs to be.   Don’t put your hope in wealth because it never satisfies.

Matthew 6:25, 33 Do not worry then, saying, ‘What will we eat?’ or ‘What will we drink?’ or ‘What will we wear for clothing?’ For the Gentiles eagerly seek all these things; for your heavenly Father knows that you need all these things. But seek first His kingdom and His righteousness, and all these things will be added to you.

I know that worry is a big problem for a lot of people, always worrying about whether they’ve got enough for retirement, if they’ll be able to make next month’s mortgage payment or send their kids to college.  One worry replaces the next.  While it’s a good idea to plan for your future, there’s also a danger of allowing yourself to worry too much, not trusting in God’s provision – and instead trusting in wealth.   We’re told  that God will provide for us because he knows we need these things, but there are more important things to do, like seeking His kingdom and His righteousness.  When we do that we’ll find that we’re always in his care, no matter what.  He will provide.

John 3:16 For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life.

This last verse, while it doesn’t speak directly to the topic of money, does talk about where we can find true riches, in God’s son Jesus Christ.   Jesus  came down to earth, lived a blameless life and then died for our sins.  Despite all the bad things we’ve done, He forgives our sins as long as we believe in Him and acknowledge our need for Him.  We are forgiven and have an inheritance in heaven that we haven’t earned, but are freely given.  It truly is amazing!

When I read these scriptures a lot of them come back to the idea of making sure of where our focus in life is.  Is it on temporal things of this world like money and possessions, or is it on an eternal treasure that never rusts, fades or disappears?

Do you want to change your focus today and find your inheritance in Christ?  You can. Just pray this sinner’s prayer:

“Father, I know that I have broken your laws and my sins have separated me from you. I am truly sorry, and now I want to turn away from my past sinful life toward you. Please forgive me, and help me avoid sinning again. I believe that your son, Jesus Christ died for my sins, was resurrected from the dead, is alive, and hears my prayer. I invite Jesus to become the Lord of my life, to rule and reign in my heart from this day forward. Please send your Holy Spirit to help me obey You, and to do Your will for the rest of my life. In Jesus’ name I pray, Amen.”

Click here for our more exhaustive list of bible verses about money

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