It’s been an interesting week here in Minnesota – we’ve had some strange July weather with cooler than normal temperatures, and over the last day or so we’ve had extremely overcast skies (see the photo I took last night above), but no rain.  Our area has been pretty dry this year, and we could really use some of that rain.  While we were at a friend’s cabin a couple weeks ago the shoreline was back about 20-30 feet from where it normally is.  Water levels are extremely low!

Welcome

This past week we welcomed a new contributor to the site, Craig Ford.  Craig was born and raised in the South Pacific nation of Papua New Guinea (PNG), and is currently working there as a Christian missionary.  His first post earlier this week, “Ten Ways To Improve Financial Intimacy In Marriage“, was a great one. I know it brought up some great points that really made me stop and think about my own marriage. If you’re interested you can read a guest post Craig sent in last week as well.  It’s called, “Net Worth: How Should It Be Defined?“. Check out Craig’s site, “Money Help For Christians” as well!  We look forward to more great posts from Craig every Tuesday!

Carnivals, Links And More

I had a lazy week this past week, and only participated ina couple carnivals of note.

• Carnival of Personal Finance – New Zealand Edition: My article 10 Tips To Help Sell Your Home Fast In A Down Market was included in the mix!
• Carnival of Top Personal Finance Posts: My post Saving Up And Paying Cash For The Things You Buy Makes The Purchase More Enjoyable was included as one of the top 5 posts of the week!  If you haven’t voted yet, please consider voting for me!

Apparently it was the week of the Cash For Clunkers posts – so here are a few of the better ones!

• Cash for Clunkers a.k.a. Car Allowance and Rebate System @ mrsmicah.com
• Cash for Clunkers Bill @ ptmoney.com
• Gas Guzzler Rebate, Get Cash For Clunkers @ moolanomy.com
• Car Allowance Rebate System – Cash For Clunkers @ freefrombroke.com
• Cash For Clunkers Program @ frugaldad.com
• Cash For Clunkers Program@ bargaineering.com
• Beware of Cash For Clunkers Scams @ militaryfinancenetwork.com
• Cash For Clunkers – Is It Even Worth It? @ amateurassetallocator.com
• Cash For Clunkers Program @ fourpillars.ca

Other good non CARS rebate related personal finance reading from this week:

• Squawkfox.com is giving away a free e-book!  Get it now while it’s still free!
• A Popular Personal Finance Blogger Decides To Move On (Thanks for the inspiration that your site has given me over the past couple of years!)
• Contentment: A Great Financial Principle
• Are You Smarter than a 5th Grader? (Kind of)
• Emergency Fund Is For Emergencies ONLY – 6 Ways To Leave It Alone
• Spending Money and Guilt: A Christian Conversation
• Strategies to Curb Lifestyle Inflation
• Saving For The Short Term
• Disposable Products Draining Our Wallets
• The National Debt Road Trip – Video

Now get out there and  start reading!  Have a personal finance article you think we might enjoy?  Leave a comment with a link!

Copyright © Bible Money Matters - please visit biblemoneymatters.com for more great content.

Cool Weather, Storm Clouds And A Post Roundup

I read an interesting piece over at Fox News this week talking, once again, about famous people and their inability to spend their money wisely.  This time the focus was specifically on musicians who had blown their fortunes.

I thought it would be interesting to take a look at some of these stars, and how they blew their millions.  (Remember, at any income, the only way to ensure that you’ll continue growing wealth is to spend less than you earn!  These folks obviously didn’t do that.)

Famous Musicians And Bankruptcy

• MC Hammer:  MC Hammer was at the top of his game in the early 90’s.  He had a hit record, was on constant replay on MTV, and he was making millions.   The Hammer wasn’t very wise with his money, and spent lavishly (on parachute pants?).  Unfortunately bankruptcy didn’t realize that “you can’t touch this” performer, and Hammer filed for bankruptcy protection in 1996 after burning through $33 million.  He’s now attempting a comeback through a reality show tracking his new middle class lifestyle.
• Willie Nelson: In 1990 the IRS caught up with Willie and he was put in a world of hurt for owing back taxes to the tune of 16.7 million dollars.  His fortune didn’t cover it all, so Willie released another record titled “The IRS Tapes: Who’ll Buy My Memories” and paid the rest of his bill.  By 1993 he was free of his IRS problems, and is now re-building his fortune.
  
• Marvin Gaye: The Motown legend made millions through his beautiful music, but lost it all to a combination of divorce, problems with the IRS and a bad drug problem.  He declared bankruptcy in 1979, and ended up living in a van in Hawaii.  He was shot to death by his father in 1984.
• Tom Petty:  Tom Petty’s 1979 bankruptcy was by some accounts a negotiating ploy against MCA records after they bought Petty’s indie record label.  The bankruptcy allowed him to negotiate a fresh deal with his new record label home.  His first album under the new deal  was Petty’s biggest album to date, and helped him to find his way out of “bankruptcy”.
• Meat Loaf: Meat Loaf struck it big with his 1977 album “Bat Out Of Hell” from which he earned millions of dollars.  Unfortunately for him he had some shady management and they were stealing most of his money before he even saw it.  He found new representation, but they sued, had his assets frozen and he was forced into bankruptcy in 1981.  Hoping to dig his way out of debt he released a new album, which bombed.  He ended up going bankrupt for a second time.
• TLC:  The singing trio had great commercial success, and had one album that sold over 11 million copies. Unfortunately the millions they made from their records and touring weren’t enough to make up for their other huge bills.  Lisa “Left Eye” Lopes in an alcohol induced rage set her boyfriend’s house on fire, Tionne “T-Boz” Watkins had huge medical bills because of her sickle cell anemia, and their record deal wasn’t very favorable to them.  All of that meant that they were forced to declare bankruptcy. The band never fully recovered, and on the eve of the release of their fourth album, Lopes was killed in a car accident in Honduras.
• Mick Fleetwood:  By the early 1980s Fleetwood Mac’s drummer along with his bandmates had sold more than 55 million albums, and was selling out tours around the world.  Most of his bandmates held onto their wealth, but Mick filed for bankruptcy in 1984.  He says that he blew his millions on real estate, failed business ventures and lots of drugs.  By his own account he spent about 8 million dollars on cocaine alone.   By the 90s he had kicked his drug habit, and the band’s reunion tour had allowed him to re-stock his bank account with an estimated 3.5 million dollars.
• Cyndi Lauper: Before becoming a huge star Cyndi Lauper was in another band that had an album that flopped. They fired their manager, the manager sued – and they ended up in bankruptcy.  Luckily for Cyndi her bankruptcy was out the way by the time she released her 1983 multiplatinum debut album – and she was able to make her millions.
• Andy Gibb:  He was a huge star in the late 70s with a long list of disco hits.  He was on top of the world dating other celebrities, and being a who’s who of the entertainment world.  By the 1980s he had become drug addicted and was playing small gigs at hotel casinos to get by.  He went bankrupt in 1987 and died within a year.
• Isaac Hayes:  The “Shaft” star had a silky smooth voice and rode his pipes to commercial success, an Oscar several milestone soul records.  Despite his success his record label was in financial trouble and stopped paying him.  He sued his label.   In turn Hayes stopped paying banks that had loaned him thousands of dollars, and they sued him.   6 million in debt Hayes lost his house and his royalties to all his music.  Starting in 1997 he was able to get back in the black through his turn as “Chef” on the animated series “South Park”.

For more details about these stories, check out the original article.

What’s The Moral Of The Story?

So what’s the lesson that we can learn from all of these musicians and their financial troubles?

1. Pay attention to your finances: Too many of these stars just didn’t care enough about their finances until it was too late. They trusted shady managers too much, spent too much when they should have saved, and in general ignored their bank statements.
2. Pay your taxes! :  Several of these sad stories happened because these artists simply didn’t pay their taxes on their wealth.  This could have easily been avoided by enlisting trustworthy help, and by paying their taxes.
3. Stay off the drugs kids! : What happens when you get hooked on drugs?  You spend more than you have just to get the next fix.  Some of them ended up dead from their addictions.  All of them ended up broke.
4. If you’re not good with money, enlists someone you can trust to help you: A good number of these stars didn’t have trustworthy managers, or people who were good with money helping them. They enlisted the help of friends or hangers-on to manage their money. The result was that they lost it all. Enlist the help of a good certified financial planner to help you manage your money.
5. Money can’t buy you happiness:  So many of these celebrities found that even the fame and fortune they had always longed for couldn’t bring them happiness. Too often they tried to make themselves happy by spending millions, by doing drugs and through illicit relationships.    You can only find true deep and lasting happiness through a relationship with Jesus Christ.

What other things do you think we can learn from these sad stories?  Tell us your thoughts in the comments.

Copyright © Bible Money Matters - please visit biblemoneymatters.com for more great content.

Famous Musician Bankruptcies: From Millions To Broke

We’ve written several posts on this site in recent weeks about the Making Homes Affordable program.  The program was originally intended to help stem the tide of foreclosures that we’re seeing right now, and to help our ailing real estate markets.  The program aimed to do this by helping homeowners with high interest rates to refinance into a loan with a lower rates, or to help homeowners that were in risk of foreclosure by modifying their current loans.

Thus far the program hasn’t been overly successful.  With foreclosure rates on pace to reach 3.5 million foreclosures this year, the fact that the program has only seen 131,030 loan modifications as of July 6th is a bit disappointing.  We’ve seen quite a bit of anecdotal evidence through the commenters on this site, as well as through other news stories that doing a refinance or loan modification through the Making Homes Affordable program isn’t as easy as it should be. Banks are throwing up roadblocks, and dragging their feet on implementing the program.   More and more homeowners are finding themselves in trouble, and yet the banks don’t seem to want to move on these refinances and modifications. But why?

Reasons Why The Making Homes Affordable Program Hasn’t Done Very Well

When you get down to it, there are quite a few reasons why the program hasn’t really taken off.

• Banks don’t have enough resources:   Traditionally the mortgage servicers have done relatively easy tasks of collecting payments and escrow funds, and dispersing those payments when needed.  Dealing with borrowers who were in arrears typically was never more than 2-3 percent of their business.   Now that the banks are being asked to modify thousands upon thousands of loans, often up to 25 percent of their portfolio, they are finding that they’re scrambling because they don’t have enough resources to handle the influx of requests.   They don’t have the trained staff, and they just can’t handle the sheer volume.
• Mortgage loan modifications require a lot of work: Modifying a loan isn’t an easy process as it requires a lot of one-on-one work to underwrite the modified loans – especially when many of these loans weren’t properly underwritten in the first place.   Also, since the reason a lot of these homeowners need to refinance is because they’ve lost a job or have other financial difficulties, they have to figure out if the borrower can afford the new payments.  Doing all this stuff takes time, and personnel.
• Banks don’t see enough incentive to do the loan modifications:  Another possible reason that loan mods and refinances aren’t being done is that the banks just don’t see enough incentive for them to follow through with them.  We’ve seen anecdotal evidence from commenters that it takes months just to get a phone call back, and that the process is un-necessarily tough to navigate.  Many banks also believe that if they just wait the borrower out, that they will “self-cure” or get caught up on their payments.   Often that is the case.  For the ones that don’t, the banks realize that the default rate for those that have modified their loan is still upwards of 50%, so they often believe that following through on the loan mods isn’t worth their time and effort.
• Not doing loan modifications makes the banks balance sheets appear healthier than they are:  Many banks are avoiding doing the loan mods and refinances because it makes their balance sheets appear healthier.  While it’s true that foreclosures will ultimately be more costly to the banks than loan modifications would be, they can often push the foreclosure process out to 18 months or more, and in the meantime they can keep the loans on their books at an inflated value.   A lot of them would rather do that then a bunch of loan modifications.
• $1000 government incentive to the banks is next to meaningless:  Some experts have said that the $1000 per modification incentive that the government is dangling in front of the banks is next to meaningless because of the costs the banks would have to incur due to the thousands upon thousands of loan modifications.  The time, effort and costs involved in doing these loan mods is astronomical.

It’s pretty obvious from the statistics that the program really hasn’t done very much to help the foreclosure crisis thus far.  So what can be done about that?

Government Plans To Get Things Moving

The government realizes that the program hasn’t helped very much so far, and now they’re looking to jumpstart things by moving from giving incentives, to doing more of the punishments for not following through.  This past week the Obama administration sent out letters to representatives from the top 25 mortgage servicers asking them to assemble in Washington on July 28.  At that meeting they plan to talk in depth with the companies about loan modifications, and why more aren’t being done.  They also plan to demand that more be done to help troubled homeowners.

So now that the carrot hasn’t worked especially well, the government is taking out the stick. That letter the administration sent out on Thursday did not mince words. It demanded that the servicers begin “adding more staff than previous planned, expanding call centers beyond their current size, providing an escalation path for borrowers dissatisfied with the service they have received, bolstering training of representatives, developing extra online tools, and sending out additional mailings to borrowers who may be eligible for the program.”

And the laggards? Starting next month, the government plans to begin publishing data showing which servicers are doing well and which are doing poorly, thus trying to shame them into doing the right thing. And, of course, there is that July 28 meeting, in which all these points will be made, I suspect, rather forcefully.

Apparently, the only incentive left is a good swift kick in the rear.

We’ll see if these added steps have the desired effect.  At this point, I’m not sure that they will.

What do you think about the Making Homes Affordable program?  Why do you think it hasn’t been more successful?  Have you had an unsuccessful attempt to refinance or modify your loan? Tell us about it in the comments.

More Making Homes Affordable Information

• Making Home Affordable Refinance Program Frequently Asked Questions
• Making Home Affordable Loan Modification Program Frequently Asked Questions
• Update: Modification Program Updated To Cover Second Mortgages
• Loan To Value Restrictions Eased – Up To 125% LTV Allowed Now
• My Experience With The Making Home Affordable Refinance Program

Copyright © Bible Money Matters - please visit biblemoneymatters.com for more great content.

Having A Hard Time With Your Refinance Or Loan Modification Under The Making Homes Affordable Program? Join The Club.

“Money related issues in marriage can draw a husband and wife closer together.”

Following this phrase a laugh typically ensues.  People think someone is obviously trying to humor them by speaking such ridiculous words.  Money brings about intimacy in marriage?  I want to plead with you to accept this premise – all married couples have the potential to a healthy and intimate financial relationship.

Here are some of the common complaints about money in marriage: “My husband and I are never on the same page with money.” “My wife wants to tithe, but I don’t think we can afford it.” “My husband keeps doing business deals that cost our family a lot of money.” “My wife keeps buying things for our kids even though we cannot afford it.”  Not surprisingly, money fights are one of the leading causes of divorce.  I believe financial tension in relationships can be improved if not alleviated if couples commit themselves to following these ten suggestions on how to improve the financial intimacy in their marriage.

Ten ways to improve your financial intimacy in marriage

1.     Pray for guidance and wisdom:

Few couples invite God into their financial lives.  I think God has some amazing things he can do with our finances if we allow him to enter into the process.  Marriage is always a joint relationship between husband, wife, and God.

In your prayers focus on the following:

Pray that God would allow you to put the marriage above any individual concerns.  Ask God to guide you in how he wants the funds earned, used, and distributed.  Request a double portion of humility so you can be prepared to accept God’s guidance.  Plead with God to give you the necessary strength to release control of your money and give God control.

If any of you lacks wisdom, he should ask God, who gives generously to all without finding fault, and it will be given to him. (James1:5 NIV)

2.     Be partners

Marriage is an amalgamation of all the pieces of life.  The husband and the wife lose their individual identity and become one.  “I” is dropped from the vocabulary and replaced with “We.” The married couple no longer uses “my”, but “our”.  This includes finances.  Every dollar brought into the home is a dollar that belongs to the home.  Every dollar that goes out the door is a dollar that the household spent.  Erase all notions of individual finances.  Forget about who bought what.  It doesn’t matter who first signed for the loan.  From now on we are in this financial situation together.  We have an equal responsibility and an equal opportunity.

For this reason a man will leave his father and mother and be united to his wife, and they will become one flesh. (Genesis 2:24 NIV)

3.     Define Goals

Goal setting is a form of practical dreaming – and who doesn’t like to dream about what the future could be?  This goal setting is not just about finances, but it is about all things in life.  Where do you want to be?  What do you want to be doing?  What do you want people to say about your life accomplishments?  Goal setting is where a husband and wife look at each other and say, “Where do we want to be in 5 years? In 10 years? In 15 years?”  Husband and wife then look at the financial implications of those goals they have jointly set. If a husband and a wife have separate goals it will be nearly impossible to have financial intimacy in marriage.

Jesus knew their thoughts and said to them, “Every kingdom divided against itself will be ruined, and every city or household divided against itself will not stand. (Matthew12:25 NIV)

4.     Combine it

Since there is a union between husband and wife it is essential that couples combine bank accounts and all other financial items.  It is difficult, but possible, to function financially with separate bank accounts.  However, what do you seek for in your marriage?  To ‘function’ or to thrive?  I do not believe a marriage can thrive until there is intimacy on all levels.  This involves combining all financial resources.

It doesn’t matter who earns it. Some couples think that the one who earns the money spends the money or dictates how it ought to be spent.  Instead, you should respect your unique contributions to the home.  Our family has made the decision that my wife will stay home and raise our children.  She is well educated and easily marketable in the professional world, but we made a choice, and we each make a contribution to the decisions we made.

The wife’s body does not belong to her alone but also to her husband. In the same way, the husband’s body does not belong to him alone but also to his wife. (1 Corinthians 7:4 NIV) *

* While this passage speaks of the physical relationship between husband and wife the principle of joint ownership applies.  What previously belonged to the wife/husband (his and her body) is now shared with the spouse as he is now a joint-owner of his/her body.

5.     Distribute Responsibilities:

Money management takes time, energy, knowledge, and wisdom.  One of the common complaints about the modern family is the burden of so many responsibilities and commitments.  This makes its way into the home as couples are forced to decide who will take care of the different tasks related to personal finances.

Here is what I suggest:

1. Take out a blank piece of paper (or open a Word document on your computer) and list all of the the jobs related to personal finances.  This list might include things like balancing the check book, transferring funds, paying bills, researching retirement options, making investment decisions …
2. Make a copy of that list.  Both spouses should write on of the following phrases by each tasks:    (a) I enjoy doing that, (b) I am willing to do that, (c) Blahh. Please don’t make me do that.
3. Compare your lists.  Assign responsibilities first according to the task you each enjoy.  Next, assign responsibilities by rotating every other task in the “willing to do that” list.  Then finally, if both of you are “blahh” for the same task, consider (a) outsourcing it if possible, (b) splitting the responsibility50/50 , or (c) assigning the task to one partner and the other will assume another household responsibility that you both rate as ‘blahh’.

Proverbs 31:10-31 outlines the responsibilities assumed by the wife of noble character.

6.     Budget Jointly and Meet Regularly:

When you have defined your goals you now have a broad or general direction that you would like to follow in your lives.  In addition, you have figured out the financial implications of those goals.  Now your job is to apply those long term goals to the short term – this month’s budget.  If you have first agreed on your long term goals your dollars should more easily fall into a natural pattern for short term usage.  The budget represents the small goals you meet along the way to achieving your ultimate goals.

Once the budget is set it is important that you track your progress.  The best way is to meet together regularly.  Imagine if Junior got sick and I bought a bunch of medication.  My spouse needs to know that happened because we may need to adjust another budget item to make the budget work.

Here is what my wife and I do. Every Monday night is budget night.  After the kids go to bed we sit down at the dinning room table together.  We take all the receipts we collected from the previous week.  She reads them and I type them into our budget program.  One of us could do the job, but as she reads and I type, we are both aware of all the week’s expenditures.  We then take a quick look over the budget to be sure the dollars we allocated to each category still seems sufficient.  If we have overspent on a category we take the money from somewhere else in the budget.  The meeting shouldn’t take any more than 15 – 20 min per week.

However, each one of you also must love his wife as he loves himself, and the wife must respect her husband. (Ephesians 5:33 NIV)

7.     Work at Removing Financial pressure:

Too many money discussions in marriage happen in high-stress situations.  Chuck Bentley at Crown Financial Ministries frequently talks about creating financial margin.  Where there is margin, stress is removed from the situation.  Imagine this scenario: you are on your way to work on a day that every second counts because you didn’t leave a spare moment anywhere on your agenda.  Then you end up getting stuck in traffic.  Every moment is torturous because you have no margin, no space to delay.  I guarantee that if you made that same drive on a Saturday morning visit to see friends you would not be nearly as stressed.  You need to take away the pressure that every financial decision could break you. This must be done by paying off debt and saving for emergencies.  Once you have taken care of those financial pressures you will find that all your financial discussions are suddenly so much easier because there is now space to breathe and even room for error.

The rich rule over the poor, and the borrower is servant to the lender. (Proverbs 22:7 NIV)

8.     Agree on Some Guiding Principles:

You should only need to make some decisions in your marriage once.  Unfortunately, many couples have not put those boundaries in place so when it comes to making financial decisions they are forced to keep re-addressing the same issues.

Here are some examples of guidelines you might have: We will give a least 10% of our income to our local church or other charities.  We will save 15% of every paycheck towards retirement.  We will buy things with cash and will not borrow.  We will always make a car payment to ourselves.  We always put down at least 25% when buying a home.  The list could continue.  The point is when you set your goals some decisions only need to be made once and then you budget according to these guidelines.

Commit to the Lord whatever you do, and your plans will succeed. (Proverbs 16:3 NIV)

9.     Seek outside help:

Sometimes a third party can be an invaluable resource.  Couples who find themselves at an impasse often just need someone to help them hear what the other spouse is saying. When communication in marriage has failed, find a church counselor or minister who can guide you back on track.  This does not need to be a costly endeavor as many churches have resources available to offer you assistance free of charge.

Perhaps you need a different type of outside help.  Ask a friend or parent to watch the kids for an evening or day so you and your spouse can discuss these issues without the children distracting you.

Plans fail for lack of counsel, but with many advisers they succeed. (Proverbs 15:22 NIV)

10.     Put the needs of your spouse above your own.

Often our financial discussions are a sign of our immaturity and our carnal self.  We hunger and lust for things.  We desire those things even above the welfare of our marriage.  Give up the insignificant things of life so that you can gain the greater reward of a unified marriage.

Each of you should look not only to your own interests, but also to the interests of others. (Philippians 2:4 NIV)

Which of these have been most helpful in your relationship?  Is there something I neglected to mention that you think would be a valuable suggestion for couples?

Copyright © Bible Money Matters - please visit biblemoneymatters.com for more great content.

Ten Ways To Improve Financial Intimacy In Marriage

I‘ve been running Bible Money Matters for almost a year and a half now.  It’s been a labor of love, and during that time I’ve tried to write at least 5 quality posts every week.  Writing that much can get exhausting over time.

This year i decided that I may want to bring some contributors on board to help give us a fresh perspective on things, and to also give me a break from writing quite so much.  The only problem is that whoever I allowed to write for the site had to be able to write quality content, and at the same time hold a lot of the same values that I do.  Finding someone that fit the bill was no small task!  A few months ago I brought on board a great writer and person to write devotionals for the site on Sundays, Jason Mitchener. He’s done a great job, and we look forward to more great devotional posts from him in the coming weeks.

This past week I asked another great writer to come on board to write some more biblically based personal finance content. Thankfully he agreed to give it a shot!

Our New Contributor

Craig Ford was born and raised in the South Pacific nation of Papua New Guinea (PNG).  For ten years he lived in PNG as his family continued doing missionary work.  At age ten, Craig’s family moved to Canada, his country of citizenship.  After nine years of living in Canada, Craig did school work at several institutions in the United States (Rochester College, York College, Abilene Christian College, and Harding University Graduate School of Religion).  During this time he earned an AA, BA, and an Masters of Divinity degree, all in the field of Biblical Studies.

Over the last ten years Craig has worked in several ministry-related positions, including youth ministry, pulpit preaching ministry and missionary work.  Craig is married to a wonderful woman originally from Cheyenne, Wyoming.  They have three young children, all of whom carry dual citizenship between Canada and the United States.  In 2006, the Ford family moved to Alotau, PNG to begin working towards preaching the good news to those in need of the gospel message.

Craig says,

“living in New Guinea made me keenly sensitive to issues related to Christians and money management.  Anyone who has lived in a third world country knows the importance of developing a theology of wealth and a theology of giving.  This helps you function in the midst of severe poverty.  So I have spent some personal time over the last few years studying, questioning, exploring, and even writing on topics related to Christians and money.”

(The average annual income in New Guinea is $745 USD per year.)  Craig decided to start blogging about Christians and Money.  Within the last couple of months he launched a blog called Money Help For Christians. (You can subscribe to his RSS feed here.)

Through the blog Craig hopes to :

1. Present financial teachings from a Biblical perspective.
2. Publish daily posts on topics that impact all aspects of personal finances.  This includes practical tips for saving, earning, giving, and managing your money.
3. Take a behind the scenes look at our finances – the motivations, impulses, and the spiritual implications of our financial decisions.  All of these components will help us honor God with our finances.

In terms of his view of the relationship between money and Christianity, Craig highlights that Jesus taught a lot about money.  Some say it was his second most discussed topic, second only to the Kingdom of God/Heaven.  Jesus taught about money because he knows we are always learning.  Our view of money can either be taught in a way that will honor God, or it will be caught from the popular views of the surrounding culture.  Jesus preferred to teach how God wants us to handle money because where there is not teaching money can so easily become our Master (Mt. 6:24).

In a similar way, Paul identifies two options for Christians: (1) be transformed, or (2) be conformed (Rom. 12:2).  If we are not taught about Christian finances, our knowledge and practice will naturally conform.  If, however, we study God’s teachings about money we have the opportunity to transform ourselves and our culture for the Glory of God.

Please take a moment and welcome Craig to the site in the comments! Stay tuned as his first regular post will be going live tomorrow morning!  I’ve had a preview and it’s very good!  (If you want to check out Craig’s previous guest post, click here)

Copyright © Bible Money Matters - please visit biblemoneymatters.com for more great content.

Please Welcome Bible Money Matter’s Newest Contributor

For which of you, intending to build a tower, does not sit down first and count the cost, whether he may have enough to finish it; lest perhaps, after he has laid the foundation and is not able to finish, all those seeing begin to mock him, saying, This man began to build and was not able to finish. Luke 14:28-30

Earlier this week I wrote a post about how important it is to plan ahead, to save for the things you need to buy, and how much more satisfaction you’ll get when you do that. Today’s verse speaks to the importance of counting the costs of the things we buy, and planning ahead for those costs.

The verse says, “which of you intending to build a tower, does not sit down first and count the cost..”.   We could easily change that verse to apply to today saying something like, “which of you, intending to buy a car, does not sit down first and count the cost”?

So many people just approach their finances passively, allowing things to happen to them.  Instead of planning ahead, saving up for a car and being ready when the time comes to buy a new one, instead they drive their old car until it completely dies, and then when the time comes they buy an expensive brand new car (more than they can afford), financed at a high rate of interest.    They didn’t count the cost, and now they’ll paythe price.

B e active with your finances, count the costs, plan ahead, and you’ll be much better off when the time comes to buy the things you need.

Copyright © Bible Money Matters - please visit biblemoneymatters.com for more great content.

Personal Finance Bible Verse Of The Day: Count The Cost And Plan Ahead

My wife and I have been out of debt except for our mortgage for a couple of years now. I can still remember paying off that last debt, my student loan, and how good it felt. It was like a weight had been lifted off of my shoulders, and we were now free. I can’t even imagine how good people feel who have finally paid off every debt, including their mortgage. You must become weightless, and float off into the sky! Free like a bird!

Since we’ve been debt free we’ve also been following some other good principles of personal finance like following a budget, spending less than we earn and making do with what we have instead of spending to buy new.

One of the big changes that we’ve made is that now we’ve started not making any big purchases without first saving up the cash for those purchases. If we can’t pay cash, we don’t buy it.

Saving Up For Big And Small Purchases

Saving up enough cash to buy some things this is no big deal.  When we decided that it was time to upgrade our old 5+ year old computer that we had been nursing along for the last few years, we needed to scrape together a few hundred dollars in order to buy a new one.  We set our savings goal (about $300) and reached that goal in one month.   We did our research and found a nice refurbished Dell computer for $300.  The computer was much faster and less frustrating to use than our old one.  Done deal, and we paid cash.  We declined to finance our $300 purchase using Dell’s “easy monthly payments”.  The computer just runs so much nicer knowing that it’s paid for!

Some things require a bit more discipline in order to save for them.  For example, we paid cash for my new car that I purchased last October.   The car we bought was a nice 2  year old used car (we’ll probably never buy a new car, even with all the rebates and tax credits available today).  The car was just under $10,000, so saving up for this purchase took a bit longer.

A while back when we knew we would need a new car within a couple of years, we started saving for that purchase.  Using a plan similar to Dave Ramsey’s “Drive Free Cars And Retire Rich” plan, we set a goal for  new car within 3-4 years, and started saving towards that goal.  Instead of making a car payment (since we didn’t have one on our old car either) we just started paying ourselves a monthly car payment, and over a couple of years we had saved up enough money to buy a nice used car.

My car ended up dying before it’s time last October, so we didn’t quite reach our complete savings goal, but in the end we found an extremely nice used car for the amount that we had saved.  The car had under 30,000 miles,  and cost us less than $10,000.    We probably would have spent more, but now I’m glad we didn’t because I absolutely love my car now!

The best part is, my car is paid for.  The car is a beauty, and when people ask me how much my monthly car payments are on my nice new car, I tell them, “What payments?  We paid cash for this car!” .  We get some quizzical looks, because paying cash for a car (or other big purchases) just isn’t normal these days.  Taking on debt of all kinds IS normal.

I’ll tell you what, I may not be normal, but I don’t care to be.  And my paid for car?  It drives so much nicer without a monthly payment.

Have you ever tried paying cash for the things you buy, instead of financing them?  Did it change how you viewed that purchase, and did you get more enjoyment out of it? Do you find that you spend less when you pay cash – since the purchase is that much more real?

Copyright © Bible Money Matters - please visit biblemoneymatters.com for more great content.

Saving Up And Paying Cash For The Things You Buy Makes The Purchase More Enjoyable!

A couple of weeks ago I wrote about the Cash For Clunkers program that was expected to be passed. Now, a couple of weeks later the program has passed and is signed into law, and people will soon be able to take advantage of it.

I’ve been getting emails and comments surrounding the program, asking for more details. I decided to put together a quick FAQ covering some of the most common questions surrounding the program.

FAQ About Cash For Clunkers

Q: Is the billed signed into law yet?

A: Yes the Cash For Clunkers bill has been signed into law.  The program is now the responsibility of the NHTSA and they will be implementing the system with car dealers. The program’s official website is: http://cars.gov. Dealers will be responsible for signing up for the program, and participating dealers will eventually be listed on the government website.

Q: When will the program be available?

A: Your new car must be bought or leased between Late July (when the program is rolled out) and Nov. 1 to qualify.

Q: Can the car you purchase with the trade in voucher be a used vehicle?

A: The purchased vehicles must be new (2008, 2009, 2010 models) and cost no more than $45,000.   You cannot trade in a clunker for a motorcycle. If you’re looking for a used car, check out this site.

Q: Can I lease a car through the program,  or do I have to purchase the new car?

A: Yes you can lease, however, the Cash For Clunkers Act requires that any lease under the program be for a period of at least five years.

Q: How do I find the combined EPA mileage estimates on my old clunker to make sure it qualifies for the program?

A: Go to http://www.fueleconomy.gov and click on the model year of your vehicle, the make, and then the model. Under the words “ESTIMATED NEW EPA MPG” in the red banner, there is a red number with the word “COMBINED” under it. That is the new combined city/highway fuel economy for your vehicle. You may then enter the make, model, and model year of a new vehicle you may want to buy and see its combined MPG for comparison.

Q: Are there restrictions on the year of my trade-in?

A: The car can not be more than 25 years old, and it must meet the MPG requirements.

Q: Will all dealers be participating in the Car Allowance Rebate System (CARS)?

A: Most new cars dealers in the US will participate. They will have to register with the CARS program, but registration details have not been released yet by the NHTSA.  Registered dealers will be eventually listed on cars.gov, but it’s a good guess that most new car dealers will want to be a part of it.

Q: What do I need to bring when I decide I want to do the Cash For Clunkers trade?

A:  You should bring documentation showing the current owner of the vehicle, preferably the title, and documents showing that the vehicle has been “continuously insured by the same owner for a period of no less than 1 year prior to the trade-in.”   The final rule will specify what types of documentation would be acceptable  to prove ownership and the fact that the vehicle has been insured for the past year.

Q: Will I have to pay taxes on the voucher?

A: No.  The Cash For Clunkers Act expressly provides that the credit is not income for the consumer, so the consumer will not have to pay taxes on the credit.  The credit will be considered as income for the dealer.

Q: Are higher income folks excluded from the program?  Is there an income limit that leaves out some vehicle owners?

A: No.  Anyone can take part in Cash For Clunkers since it is designed to help new car dealers, and to help the environment.

Q: I bought a new car in February 2009.  Can the voucher apply to my past purchase – will it be retroactive?

A: No. Cars bought before the official start date (see above) won’t qualify for the credit retroactively.

Q: If my car is worth more than $4,500, should I take advantage of  the Cash for Clunkers credit?

A: The Cash For Clunkers Program would not give you any benefit if you are able to trade in or sell your car or truck for more than the $4,500 credit.   You’re probably better off not applying for the voucher.

Q: Is the CARS credit in addition to any  incentives that dealers are offering toward a new car purchase, or would this credit supplant those credits?

A: The CARS credit is separate from any manufacturer buyer incentives. For example, if your new car dealer is offering $3,000 off the list price of a car and you qualified for a $4,500 CARS credit from your trade-in, then the total reduction off the MSRP would be $7,500. You should always shop for the best deals before buying a car.

Q: Can I trade in more than one vehicle under the program?  Could I trade in two old cars and get a $9,000 credit?

A: The current wording of the bill indicates that only one CARS credit can be applied to a new car purchase.

Q: How do I know the amount of my credit?  Will I qualify for a $3,500 or a $4,500 CARS credit?

A:  The credit you get is determined by your current trade-in car’s current combined MPG, the new car’s combined MPG, and then the improvement you will get in MPG through getting the new car.  Here’s a graphic showing how to determine what your credit will be.

Q: Can I go to the junkyard and buy an old car and use it for a trade or trade in my parents old car?

A:  Probably not.   The NHTSA says you need to bring to the dealer documentation establishing the identity of the person who currently owns the vehicle (the title of the vehicle), and documentary proof that the vehicle “has been continuously insured consistent with the applicable State law and registered to the same owner for a period of not less than 1 year immediately prior to the trade-in.” There is some debate as to whether this means someone – like your parents could trade-in their continuously insured clunker for you, and then you can use the voucher. I wouldn’t count on it though.  Stay tuned for clarification on this question.

Q: What happens to my trade-in?

A: The car will be sent to the salvage yard. Some parts may be kept but the engine and drive-train will be crushed.

Conclusion

Those are a few of the more popular questions about the program that I’ve heard, and I hope that this helps to answer them.  If you have more questions about whether you are eligible or not, please check out our previous post on the Cash for Clunkers program.   Going through with it, and buying a new car?  Don’t forget to claim the new car sales tax deduction!  For more details check out my post looking at  common questions about the new car sales tax deduction.

Have other questions about the program that you’d like answered?  Need clarification on one of the points above?  Let us know in the comments and we’ll do our best to find an answer (or one of your fellow commenters can answer!).

Copyright © Bible Money Matters - please visit biblemoneymatters.com for more great content.

Common Questions About The Cash For Clunkers Program Answered: Gas Guzzler Rebate FAQ

A few weeks ago a new carnival launched with the idea of bringing a few of the best articles written in the personal finance blogosphere to the forefront every week. That carnival is the Best of Money Carnival, brought to us by freemoneyfinance.com. I love the idea of a smaller carnival – that highlights the best posts of the week, instead of everything written that week.   It makes for great reading, but you don’t need an entire day to read everything!

So without further ado, here are my picks for the top 10 best articles of the week!  I hope everyone had a safe and happy 4th of July!

Top 10 Best Money Articles Of The Week

• 10 – Jen@Balancing Beauty and Bedlam presents How to Plan a Cheap Family Vacation… without being “cheap” posted at Balancing Beauty and Bedlam: Jen gives us a close up look at how to plan a “no-spend” vacation. Very touching look (with lots of photos) at how an extended family can spend time together while on vacation, but not spend a ton of money!
• 9 - Travis presents Money Tips from the Most High posted at Christian Money Mountain: Travis talks about some of the common sense money tips you can find in the bible , things like preparing for hard times, seeking counsel and advice, and being generous.  Even if you’re not a Christian, the bible still has some good money tips!
• 8 -The Happy Rock presents Cell Phones Contracts Are Debt, You Just Don’t Realize It posted at The Happy Rock: You may not have thought about how some of your optional monthly bills are actually debt. The Happy Rock looks at why we need to consider these plans, like cell phone contracts, as debt.
• 7 – Benjamin presents Purchasing My Brand New Motorcycle Was Dumb posted at Trees Full of Money: Ben talks about how buying a motorcycle was the last straw that made him realize he had a problem with debt. Great story!
• 6 – Abigail Perry presents Spending: Frustration and Irrational Guilt posted at i pick up pennies: Abigail takes a look at spending while you’re in debt, discusses whether having “mad money” during debt reduction is a good idea, and discusses the guilt associated with spending during debt reduction. A good look at the mindset many people have while trying to reduce their debt.
• 5 – Jim presents What is the Average Credit Score? posted at Blueprint for Financial Prosperity: Jim takes a look at some data from Credit Karma about the average credit scores nationwide, and by state. Interesting.
• 4 – Jeff Rose presents How To Do a Background Check on Your Financial Advisor posted at GoodFinancialCents.com: Jeff takes us through the steps you need to take in order to check up on your financial advisor. You don’t want to hire the next Madoff do you?
• 3 – MoneyNing presents How to Be a Millionaire posted at Money Ning: David gives some funny tongue in cheek advice about how to become a millionaire, and then proceeds to give his real advice.  I enjoyed reading this one.  Great writing!
• 2 – Baker presents Negotiation Tips For Beginners – A Real Life Example Of How I Saved $150 With Just A Few Questions posted at Man Vs. Debt: Baker gives us an in depth look at negotiating, and how sometimes all you need to do to get a lower price is ask!   Great post, with lots of good actionable negotiating tips.

And coming in at #1 – Powerful Ways to Improve Your Life

• 1 – Matt of DebtFreeAdventure.com presents Powerful Ways to Improve Your Life over at fivecentnickel.com: Matt gives us some great ways that we can improve both our finances, and our lives in general. Focus on your passions, stop wasting time on things that don’t matter, and love your neighbor.  Love it!  This week’s must read.  Great article!

Thanks to everyone that submitted their articles for consideration!  There was lots of good reading, but I could only choose 10!

If you would like to submit an article to the next Best of Money Carnival, check out the details on how to submit a post.  Make sure you read the rules thoroughly or you won’t qualify.

Don’t forget to check out the carnival next week as it’s being hosted by an up and coming blogger My Life ROI.

Copyright © Bible Money Matters - please visit biblemoneymatters.com for more great content.

Best of Money Carnival #6

Happy 4th of July everyone!  I hope you have a happy and safe holiday.  God bless America!

The 4th Of July Story

From Wikipedia:

During the American Revolution, the legal separation of the American colonies from Great Britain occurred on July 2, 1776, when the Second Continental Congress voted to approve a resolution of independence that had been proposed in June by Richard Henry Lee of Virginia.  After voting for independence, Congress turned its attention to the Declaration of Independence, a statement explaining this decision, which had been prepared by a Committee of Five, with Thomas Jefferson as its principal author. Congress debated and revised the Declaration, finally approving it on July 4. A day earlier, John Adams had written to his wife Abigail:

“The second day of July, 1776, will be the most memorable epoch in the history of America. I am apt to believe that it will be celebrated by succeeding generations as the great anniversary festival. It ought to be commemorated as the day of deliverance, by solemn acts of devotion to God Almighty. It ought to be solemnized with pomp and parade, with shows, games, sports, guns, bells, bonfires, and illuminations, from one end of this continent to the other, from this time forward forever more.”

Adams’ prediction was off by two days. From the outset, Americans celebrated independence on July 4, the date shown on the much-publicized Declaration of Independence, rather than on July 2, the date the resolution of independence was approved in a closed session of Congress.

One of the most enduring myths about Independence Day is that Congress signed the Declaration of Independence on July 4, 1776.  The myth had become so firmly established that, decades after the event and nearing the end of their lives, even the elderly Thomas Jefferson and John Adams had come to believe that they and the other delegates had signed the Declaration on the fourth. Most delegates actually signed the Declaration on August 2, 1776. In a remarkable series of coincidences, both John Adams and Thomas Jefferson, two founding fathers of the United States and the only two men who signed the Declaration of Independence to become president, died on the same day: July 4, 1826, which was the United States’ 50th anniversary.

Copyright © Bible Money Matters - please visit biblemoneymatters.com for more great content.

Happy 4th Of July!