Best of the week – March 28, 2015

Here are some articles that caught my eye this week…

The 10 Commandments of Fruclassity

Great list. Take charge of your life. Paying off debt. Saving. Learning to work together with your spouse. Raising kids that become responsible adults. Avoiding the temptations of advertising and practicing contentment and gratitude. These things are hard; there is no question. But the alternatives are hard too. Taking responsibility for your life in these areas will lead you to a life that is worth the struggles that it takes to get there.

Integrity in Finances

Have you ever been tempted to cut a corner here or there? Integrity is often defined by what we do when we know we are unlikely to be caught. Taxes are one area where it can be especially tempting. The state where I live has a line item where you declare out-of-state purchases for which state sales tax was not collected. Items like this are a test of your integrity. If you “forget” a few purchases who would ever know? But what is the price of integrity?

How Cars Affect your Financial Freedom

I am convinced that our obsession with new cars is perhaps the number one reason most of us will never reach financial freedom. I read recently that the average car payment in America is now $492 and most of us have at least 2 cars sitting in the driveway. If you are not a millionaire, it’s pretty hard to get financial traction when you have $1,000 a month going out in payments. Throw in student loans, credit cards, and other debt payments and it is little wonder so many reach retirement age and have very little to show for a life’s work. Debt is a thief. It does not bring blessings to your life.

Move aside payday lenders — we found an even worse way to borrow money

Debt in almost any form is dangerous because of the risk it brings to our lives. But some forms of debt are especially bad. In my mind payday lenders and title lenders are among the worst as they take advantage of those who are in the most need. When I think of Jesus words “what you have done for the least of these you have done for me”, I think many of these lenders will have much to answer for. Don’t get trapped in these awful products.

The Creative Income Savings Account Challenge

Very cool idea. What creative ideas could you come up to add a little extra to your savings?

Invest Your Time in These 13 Things While You’re in Your 20s

I notice that keeping track of who got the rose or who was voted off the island didn’t show up on the list. Take advantage of your youth to do some of these things that will set you up for a lifetime of success.

The real secret to building wealth

If you watch late night cable you’ll find a lot of infomercials that promise they have the secret to building wealth. Google the secret to building wealth and you’ll find thousands of entries. Many people think there is a some secret that only the wealthy know.

So how does one really become wealthy?

1. You have to learn to live on less than you make

It may seem obvious that you can’t build wealth when you are spending more than you have coming in, but evidently it isn’t because this is exactly what many people do.

You will never be able to save any significant amount of money when you are living a deficit month after month. So what does that mean?

First, you need need to have a spending plan, otherwise known as a budget. Without a plan money will disappear and you’ll never quite know where it went. Without a plan you may not even know if you are spending more than you have coming in.

Second, you might need to cut some spending. It is a balance. Sure you need to live your life. But the more margin you can create the more you can save.

Third, if you can’t make ends meet but you don’t have much spending to cut then you need to find ways to increase your income. Short-term that may mean a part time job. Longer-term it may mean taking steps to pursue a different career path.

The bottom line is you will never build wealth when you are spending money as quickly as it comes in.

2. Be passionate about eliminating debt

Step 2 goes hand in hand with step one. When members of the Forbes 400, that is the 400 wealthiest people in America, were surveyed about the keys to building wealth, 75% indicated the most important key was to live a debt free life.

It can be difficult enough to live on less than we make. When a significant part of our income is going out each month in debt payments, it can be almost impossible.

Debt is a thief. It will steal your peace. It will steal your security. And it will steal your ability to build long-term wealth.

3. Save early and often.

The most important key to saving money is, you have to actually do it!!

The earlier you start the easier it is. Assuming a 10% rate of return, a 20 year old need save only a little over $100 a month to have a million dollars at age 65. Wait until 40 and that same person would need to be saving $770 a month to get to a million. Time really matters.

This is not meant to be a discouragement if you are older. You still have a choice. You may need to save more. You may not be able to build as large a nest egg. But you can do something.

The most effective way to save is a little by little over a long period of time.

4. Interest rates really matter

Let’s say you were able to save $200 a month from age 20 to age 65. If you did that you would have saved $108,000 of your money. Now let’s see what impact interest rates have.

  • Let’s say you put it in a savings account earning 1% interest. In 45 years you would have earned about $29,000 in interest so your account would be worth $136,910.
  • Suppose instead you put it in some long-term CD’s and made about 2.5% instead. Now over 45 years you would earn over $92,000 in interest, giving you a total of $200, 529.
  • Maybe you decide to invest the money conservatively in some bond funds or conservative stocks and earned a 6% return. You are getting a little more than double the interest rate but your interest earned isn’t double. It is more than 4 times as much, at $433,000! So now you put in a little more than a hundred thousand but at age 65 you have $541,219.
  • Finally, let’s say you invested your money in a well diversified stock portfolio. The S&P 500 has averaged just under 12% over the years. At 12%, you would have earned 3.5 million in interest! So your total investment is now worth $3,650,923.

Here is what many people don’t understand. You work hard for your money and you don’t want to lose it. You watch the news and there is always some “expert” talking about the coming crash. So you decide to be safe. But if safe means you are only earning savings or CD rates the problem is you really aren’t even out running inflation. By playing it safe you are actually losing money.

Now I understand that you can’t count on making 12% every year if you were to invest in quality mutual funds. Once in a while that “expert” will be right and your investment will lose money. Some years you may not make much at all. But some years you might make 20 or 30%!

The point is we are saving for the long-term. You only ever lose money on your investment if you cash it in when it is down. If you are saving over a period of many years, when those down years hit, you have plenty of time for things to bounce back.

The key is to understand risk. How much risk are you willing to take. That largely depends on how much time you have. Just be aware that not taking enough risk will cause you to lose money as surely as taking too much risk because everything you make will be consumed by inflation and taxes. The trick is to find that happy medium where you are comfortable with the risk you are taking and you are taking enough risk to build wealth over time. Just remember that as we saw in the examples above a couple percentage points in interest can mean hundreds of thousands of dollars over the course of a lifetime.

5. Avoid the tax man where you can.

The final principle to remember is to do the best you can to avoid taxes. I am not suggesting you ever do anything illegal. Integrity matters. I also believe that as an American we live in the greatest country in the world and our government does provide many services and protections that make my life better and I have a patriotic duty to pay a reasonable amount for those benefits. But, I also believe in making sure I don’t pay taxes that are unnecessary.

Long-term investments are one place where you have a great opportunity to save on taxes through things like IRA’s and 401K’s. The benefit of programs like these is they allow your investments to grow tax deferred or in the case of the Roth IRA tax free.

This can make a huge difference over time. We have seen previously how the length of time and the amount of interest you earn on your savings can make a radical difference in the amount of wealth you build. If you can protect a quarter to a third of that money from the taxes by saving it in a tax advantaged account like a 401K or IRA, you can make sure those dollars continue to make more and more money for you instead of for the tax man.

The real secret to building wealth

The real secret to building wealth isn’t some program or technique that only the privileged few know. The real secret is actually pretty boring. It is simply paying attention. Living and spending conservatively. Being careful to save. And repeating that day after day, month after month, year after year.

A couple of my favorite proverbs are:

Greedy people try to get rich quick but don’t realize they’re headed for poverty. Proverbs 28:22

Lazy hands make for poverty, but diligent hands bring wealth. Proverbs 10:4

There’s no secret get rich trick. It doesn’t exist. Wealth comes from hard work and sustained diligence over time. This is actually good news. If it was a secret or if it required a special skill that only a few have then it would be closed to most of us. But the truth is all of us have the ability to build wealth.

Best of the week – March 21, 2015

Here are some articles that caught my eye this week…

Remember: The Joneses Aren’t People, They’re Composites

I loved this article. One of the best I have read in a long time. A lack of contentment is one of the surest paths to financial failure. But why do we constantly feel the need to try to “Keep up with the Joneses”? This article nailed it.

Young people who want to have a lot of money in retirement better understand this chart

First time I saw a chart like this I was blown away. Nothing can beat the power of compounding interest over time. If all young people graduating from high school understood this chart there would be no excuse for anyone not retiring with comfortable savings. The need for social security would be a thing of the past.

Six Biggest Myths About 529 Plans

529 plans are a great way to save for your child’s college. We are using a 529 to save for my son’s education. Not all 529 plans are created equal however. There is a great variety in the types of available investments. You want to choose a 529 plan that gives you a great deal of flexibility in how your money is invested.

How to Use Your Emergency Fund to Save on Insurance Premiums

One of the most effective ways to save on your insurance costs is to raise your deductibles. The purpose of insurance is to transfer risk. It is to provide a barrier of protection between you and those financial disasters from which it would be very difficult for you to recover. But the key to being able to do that is you need to be able to cash flow smaller issues.That’s where your emergency fund savings comes in.

Is Amazon Prime Pantry a Good Deal?

Have any of you tried Amazon Prime Pantry? If so leave a comment below with your experiences. I would be curious to hear them. I have not used this service, but we have used Amazon’s Subscribe and Save program to get some really good deals on things we regularly buy.

20 Signs That You Might Be A Cheapskate

So where do you draw the line between sensible frugality and just being downright cheap?

Book Review: The Money Saving Mom’s Budget by Crystal Paine

One of my favorite money-saving sites that I enjoy following is the Money Saving Mom. Crystal Paine and the crew of people who write for her provide tons of money-saving tips to help you save in all aspects of your life.The Money Saving Mom's Budget

One of the things I appreciate most about Crystal is her story. She talks about the early days of her marriage when her husband was in law school and they were living on almost nothing as they were trying to get him through school without piling up a mountain of loans. I love the example they set of sacrificing deeply for a time so that later they could live the life they dreamed about. Crystal and her husband are very successful today, but it is because they were willing to work very hard and sacrifice to get where they are now.

So often in our society today, people want it all and they want it now. They are unwilling to make the sacrifices necessary to get in a position where they are financially on solid ground. Credit has made it easy for those with a microwave mentality to have whatever they want when they want it. But that comes at a heavy price when the bills start to come due.

 The Money Saving Mom’s Budget

In her book, The Money Saving Mom’s Budget, Crystal walks through many of those things she learned back when they were living on next to nothing.

Budgeting

I have always liked Dave Ramsey’s approach to budgeting for two reasons. First, he teaches that you need to do a unique budget every month because every month is a little different. Some things like your rent or mortgage may be the same, but other things like birthdays, non-monthly bills like insurance, school activities, subscriptions, etc. vary from month to month so you need to plan each month for what will be happening that month. The second thing I like is that he gives you permission to not be very good at it if you are just starting.  If you have never budgeted before you probably really have no idea how much you spend on things like groceries or eating out or gasoline. As you are getting started if you are wrong about your guesses for a category, you just have a mid month budget meeting and make adjustments. Over time your “guesses” will become better and better because they are based on past experience.

Crystal takes the same ideas but takes them one step further. She suggests phasing into the budget process by just starting with just one category the first month, Food. Food is often the category where we have the most control and the most ability to save. Let’s face it, there is probably not much you can do quickly to change your mortgage costs. But there are many things you can do to affect your spending on food. And if you are unaccustomed to budgeting, focusing on just one category makes the concept less daunting.

The next month she suggests you add a few more categories for a bare bones budget and then by month 3 you can take the plunge into a full-fledged budget.

I think this is a helpful approach, especially for those just getting started because it is a gradual approach and puts the focus immediately on a category where budgeting can probably provide you with the most benefit.

Use cash

Crystal strongly encourages the use of cash, especially when getting started. There have been many studies that have shown that we spend less when we use cash. Plus, the beauty of cash is you can’t overspend. When the cash is gone, it is gone. You have to stop spending.

I know from personal experience how powerful this advice is. We used to use a debit card for grocery spending and I was absolutely convinced our spending would not change a bit if we used cash. I thought we were already very careful about what we spent. We shopped sales. Used coupons. I thought we had pretty good control over what went into that shopping cart. Then we decided to give cash a try, and I found I was completely wrong. Using cash did change the way we spent our grocery budget, and the truth is the things that were eliminated were things I really haven’t missed anyway.

Eliminate clutter

Crystal has a complete chapter on the benefits of eliminating clutter.

When you are first attempting to get your finances under control it can be difficult to find the extra margin you need to move the needle. One great way to do that is to sell some stuff to get the process started. Most of us have enough stuff sitting around that we never use that could be sold to get a pretty good jump on getting some debts paid off.

The other benefit of de-cluttering is organization. Have you ever been late paying a bill because you lost it? Have you ever had to buy an item that you know you already had, but you simply can’t find it? These are signs that you probably need to get more organized with your stuff.

Saving at the grocery store and when eating out

There are three chapters in the book devoted to ways we can save on the food we purchase. There are sections on using coupons, playing the drugstore game, maximizing sales, and many other techniques you can use to make your grocery budget stretch as far as possible.

Gain back control of your life

If you feel like your financial situation is a little out of control, The Money Saving Mom’s Budget is a good place for you to get started learning the tools you need to take back control. It is relatively short and Crystal does a good job of presenting the information in a clear easy to understand fashion.

One final note on the book. Crystal is donating all proceeds from the book to Compassion International. Compassion is a wonderful organization that helps children in under developed countries with their physical, spiritual, and educational needs. So by purchasing the book you will not only get financial wisdom to help better your life, you will also be contributing to the needs of impoverished children in other parts of the world.

I think Crystal is doing some great work and I encourage you to check out her web site and this book.

5 Financial lessons from Mr. Spock

As a  long time Trekker, I was saddened last week by the death of Leonard Nimoy. So in honor of Mr. Spock, here are a few of his more famous quotes from the series, with a little financial twist to each one.spock

“After a time, you may find that having is not so pleasing a thing after all as wanting. It is not logical, but is often true.” – Star Trek:The Original Series, “Amok Time”

The problem with stuff is that it rarely provides real happiness. We think if we only had that this or that, then we’d be happy but it isn’t really true. We may be happy for a few days but the problem is there is always another thing we want just around the corner. It never ends.

This is also the problem with impulse purchases. We see something and we want it. Then two days later we see it sitting on the table at home and wonder what we were even thinking.

Next time you are tempted to make an impulse buy, I challenge you to wait at least 24 hours or better yet maybe even a week. If you still want it and it fits in your budget then go ahead and buy it. But I suspect more often than not you’ll find you didn’t really want it that much after all.

 

“Insufficient facts always invite danger.”  Star Trek: The Original Series, “Space Seed”

When it comes time to make a purchase, the person with the most facts almost always will come out ahead in the deal. This is another problem with impulse purchases, because usually by their very nature you will not have had time to do any real research.

If you are planning to make a purchase, especially larger ones, take the time to do a little investigation first. Shop around so you know what a fair price is. Search for reviews online. Amazon is a great place to do this, even if you choose not to buy it there. Ask friends or family.

Take your time. If you have done your research so that you have a good idea of a fair price and you know the quality of what you are buying, you are much more likely to get a great deal on an item that will serve you well.

 

“In critical moments, men sometimes see exactly what they wish to see.” – Star Trek: The Original Series “The Tholian Web”

This is true in so many areas of our lives. It can be especially true of financial matters.

On some level we kind of know we have a mess, but we’d really rather not face that. So we continue on with what we want to do. Retirement? We’ll worry about that later. New car? Well my neighbor just got a new one so I have to keep up. Had to buy this bigger new house, because there is a chance they might have a missionary come speak at church some day and well I could let them stay here since I have those extra bedrooms I never use.

And on and on it goes. We are very good at rationalizing our poor decisions. If we try hard enough we can find an excuse for almost anything.

The truth is for many we never really make lasting change until we reach the point where the pain of staying where we are is greater than the pain of changing.

 

“Live Long and Prosper” – Star Trek:The Original Series, “Amok Time”

This is the greeting from one Vulcan to another that perhaps became Mr. Spock’s most iconic phrase.

It is what I wish for you my readers as well. But how does one do that?

The secrets of financial success really aren’t that complex.

  • Have a plan. When you let life happen to you, you will always get to the end of the month and wonder where your money went. A spending plan or a budget is simply deciding ahead of time how you will spend your money so that you spend it on what matters most to you.
  • Live on less than you make. You can never reach prosperity by spending more than you have coming in.
  • Save. Little by little over a long period of time. There are no get rich quick schemes. You build wealth gradually over time by consistently saving and letting the power of compounding interest work for you.

 

“The needs of the many outweigh the needs of the few, or the one.” Star Trek: The Wrath of Khan

If “live long and prosper” isn’t Mr. Spock’s most famous quote, this one probably is.

The bottom line is that it isn’t all about you. It is good to build wealth and there is nothing wrong with enjoying some of the blessings God has given you. Our Heavenly Father loves us and I think it gives Him joy to see His children enjoying the gifts He has given them.

But that is not the only reason He blesses His children. We are most often blessed so that we can be a blessing to those we come in contact with. After we have met our basic needs and a few wants within reason, the purpose of building wealth is it gives us the opportunity to help those who have been less fortunate.

It is very hard to lend a helping hand to one who is drowning when we are sinking up to our necks ourselves. And yet that is where so many people find themselves. If you see someone in need, but you are up to your eyeballs in debt and having difficulty paying your own bills, there is little you can do to help.

By making wise financial choices and building wealth over time we have the opportunity to look around, see the needs of the many, and lend a helping hand.

Photo credit: geraldford (Creative Commons)

Underestimating the price of integrity

The supreme quality for leadership is unquestionably integrity. Without it, no real success is possible, no matter whether it is on a section gang, a football field, in an army, or in an office. – Dwight Eisenhower

Brian Williams has been in the news much lately, though not for the reasons that he would have wished. Williams claimed that during the US invasion of Iraq many years ago, he had been on a US helicopter that was shot down by ground fire. It turns out that was not entirely accurate. While he was on a helicopter in Iraq, the one he was riding in was not hit by ground fire.

As a result, Williams has been suspended for 6 months from his job as anchor for NBC’s Nightly News. The fallout from the scandal has continued as he has had to resign from other positions he held, had speaking engagements canceled, not to mentioned suffered perhaps irreparable damage to his reputation.

Integrity matters

Williams is hardly the only famous person to suffer for a lapse of judgement. Almost 15 years ago George O’Leary Integritywas hired as head football coach at the the University of Notre Dame, one of the most prestigious jobs in all of college football. Five days later he was forced to resign after it was found he had lied on his resume about an academic degree he really didn’t have.

Pete Rose was famously banned from baseball many years ago when it was discovered he had bet on baseball games. Despite knowing this was considered a cardinal sin of the baseball world, he chose to break the rules and threw away a career, a passion and a spot in the baseball Hall of Fame.

Incredibly, Lance Armstrong won an unprecedented 7 consecutive Tour de France titles. Add to that overcoming cancer and becoming a world famous fund raiser for cancer research, and he became one of the most famous and respected athletes in the world. Yet it all crumbled when it was discovered he had cheated through doping to win those titles.

My point here isn’t to cast stones at Williams or O’Leary or Rose or Armstrong. The point is integrity matters. Seemingly small decisions can change the course of our lives, ruining a lifetime of hard work.

Living a life of integrity

The book of Proverbs has much to say about integrity.

The integrity of the upright will guide them, `But the crookedness of the treacherous will destroy them. Proverbs 11:3

Whoever walks in integrity will be delivered, but he who is crooked in his ways will suddenly fall. Proverbs 28:10

Whoever walks in integrity walks securely, but he who makes his ways crooked will be found out. Proverbs 10:9

What is the price of your integrity? How valuable is your reputation?

It might be tempting to exaggerate the truth just a little to make ourselves look a little better. To cut a few corners or bend the rules just a little to gain an advantage.

We make little choices that we don’t think have much impact. But in truth when we do that we are selling little bits of our integrity.

In his book, The Millionaire Mind, Thomas Stanley studied a group of deca-millionaires. That is those with a net worth of at least 10 million dollars or more. He studied what characteristics were most common among these people.

You might think that for some one to amass that kind of wealth that a high degree of intelligence or education would be the most common traits. What Stanley found though was the most common characteristic among these deca-millionaires was actually exceptional levels of integrity.

The cost of integrity

For Williams, O’Leary, Rose and Armstrong these mistakes may have literally cost them hundreds of thousands if not millions of dollars.

For you, the stakes may not be that high. You may never have the earning potential and endorsement opportunities that they had, but a lack of integrity can still do great harm to your finances.

Think about it. If you were looking to hire you and you found some “exaggerations” on your resume, would you go through with the hire? Or would you wonder what other half truths might there be that you had not yet discovered?

If it is time for promotions and you were the one making the decisions, do you promote the person who has shown themselves trust worthy or the one you have to watch closely because you are never quite sure what they are doing behind your back?

Now I know that there are exceptions. You may know someone that has tried to cheat the system and seemingly got away with it. But I think those who do that are usually found out eventually. Honesty and integrity almost always win in the long run. You can see that in the study Thomas Stanley did. There is a reason that integrity was the number one character trait of those deca-millionaires he studied.

Priceless

But more important even than financial considerations, what is the value of a good name? What is it worth to be  known as someone who can be counted on? Is there a price for your integrity?

We can spend a lifetime building a good name, but sadly we can throw it all away in a few moments with a lapse of integrity.

21 financial quotes from our past Presidents

In honor of President’s Day which we celebrate this week in America, here are 21 quotes from some of our former Presidents, on money, debt, work, and success.Financial Quotes from our past Presidents

All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation. -John Adams

A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned – this is the sum of good government. -Thomas Jefferson

In today’s knowledge-based economy, what you earn depends on what you learn. -William J. Clinton

 

“In a nation that was proud of hard work, strong families, close-knit communities, and our faith in God, too many of us now tend to worship self-indulgence and consumption. Human identity is no longer defined by what one does, but by what one owns. But we’ve discovered that owning things and consuming things does not satisfy our longing for meaning. We’ve learned that piling up material goods cannot fill the emptiness of lives which have no confidence or purpose. ” – Jimmy Carter

Government always finds a need for whatever money it gets. -Ronald Reagan

The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life. -Theodore Roosevelt

Worry is the interest paid by those who borrow trouble. -George Washington

I would rather belong to a poor nation that was free than to a rich nation that had ceased to be in love with liberty. – Woodrow Wilson

I favor the policy of economy, not because I wish to save money, but because I wish to save people. The men and women of this country who toil are the ones who bear the cost of the government. Every dollar that we carelessly waste means that their life will be so much the more meager. Every dollar that we prudently save means that their life will be so much the more abundant. Economy is idealism in its most practical form. – Calvin Coolidge

The consequences arising from the continual accumulation of public debts in other countries ought to admonish us to be careful to prevent their growth in our own. – John Adams

Honor lies in honest toil. – Grover Cleveland

I pity the man who wants a coat so cheap that the man or woman who produces the cloth or shapes it into a garment will starve in the process. – Benjamin Harrison

Work is about more than making a living, as vital as that is. It’s fundamental to human dignity, to our sense of self-worth as useful, independent, free people. – William J. Clinton

The supreme quality for leadership is unquestionably integrity. Without it, no real success is possible, no matter whether it is on a section gang, a football field, in an army, or in an office. – Dwight D. Eisenhower

You must pay the price if you wish to secure the blessing. – Andrew Jackson

It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world. – Thomas Jefferson

Always bear in mind that your own resolution to succeed is more important than any other. – Abraham Lincoln

We can’t help everyone, but everyone can help someone. – Ronald Reagan

With self-discipline most anything is possible. – Theodore Roosevelt

Wealth can only be accumulated by the earnings of industry and the savings of frugality. – John Tyler

You are not here merely to make a living. You are here in order to enable the world to live more amply, with greater vision, with a finer spirit of hope and achievement. You are here to enrich the world, and you impoverish yourself if you forget the errand. – Woodrow Wilson

 

Learning to practice “And” compassion

compassionYou are watching the news one night and you see a tragic story about a family in town that had their home destroyed by fire. They got out safely but have lost all they own.

Or perhaps you are sitting at church one Sunday and the special guest is a missionary from an underdeveloped country talking about the orphans in their community that have literally nothing.

Perhaps you hear that the young lady with two young kids and a husband serving in the military overseas who lives just down the street is really struggling to make ends meet and her car just broke down.

We hear about situations like this from time to time. Our hearts go out to those who we hear are struggling and hurting. While we may feel compassion, the question is what do we do about it?

Too often we hear of someone who is struggling. We feel sympathy for them. We might even think about how we might be able to help. But then life gets busy. Pretty soon it is forgotten. Lost in our maze of work and family responsibilities. I don’t say this to lay a guilt trip on anyone. I am often guilty of this as well.

Practicing “And” compassion

I recently heard a message where it was noted that Jesus practiced “And” compassion.

Note the scriptures below, my emphasis added.

When Jesus landed and saw a large crowd, he had compassion on them and healed their sick. – Matthew 14:14

Jesus had compassion on them and touched their eyes. Immediately they received their sight and followed him. – Matthew 20:34

And Jesus, when he came out, saw much people, and was moved with compassion toward them, because they were as sheep not having a shepherd: and he began to teach them many things. – Mark 6:34

Jesus often had compassion on the people he came in contact with but it didn’t stop there. His compassion led him to take action. He had compassion and he did something about it.

Actions matter

James tells us:

What good is it, my brothers and sisters, if someone claims to have faith but has no deeds? Can such faith save them? Suppose a brother or a sister is without clothes and daily food. If one of you says to them, “Go in peace; keep warm and well fed,” but does nothing about their physical needs, what good is it? – James 2:14-16

Compassion doesn’t do much to help the hurting. Compassion only matters when it spurs us on to action.

The real problem of debt

I believe many times the real problem for most of us is not that we don’t care or that we turn a deaf ear to those who are hurting. I believe most people would like to be able to help, but the problem is we are barely making it ourselves. It is very hard to lend a helping hand to the drowning when we are treading water neck-deep ourselves.

This is one of the real problems with debt. Debt is a thief. It steals our peace. It steals our ability to succeed. And maybe most importantly it steals our ability to be a blessing to others. I hate what debt does to us, and I want you to learn to hate debt too.

This is the real purpose of the wealth God blesses us with. Sure part of it is so we can take care our family, plan for our future, and enjoy some of what God has given us. But after those basic needs are met we can turn our eyes outward to those around us that are in need and hurting. That is only possible though when we have a surplus to give from. When we are enslaved to debt, it is hard to be generous.

Learn to practice “And” compassion

If you are buried in debt, I urge you to use your compassion as a driving force for getting out of debt knowing that if you had a little more margin in your life you would be able to help those in need.

If you are doing OK financially, then I really challenge you to open your eyes to those around you. Don’t be satisfied with simply feeling compassion for those you see in need. Do something to help!

If anyone has material possessions and sees a brother or sister in need but has no pity on them, how can the love of God be in that person? Dear children, let us not love with words or speech but with actions and in truth. 1 John 3:17-18

Who could you show “And” Compassion to this week?

How to make the lower gas prices really count

If you are like me, you are probably loving the lower gas prices we have experienced in the last two or three months. Honestly, I did not expect I would ever see gas drop below $2 a gallon again in my lifetime. When I have been accustomed to paying $40 to $50 to fill up, struggling to get $20 worth of gas in my vehicle is a pretty cool feeling.gas prices

If you don’t drive that much then perhaps the lower gas prices haven’t affected you too much, but if you are like me and have a fairly significant commute each day, the lower gas prices are really significant.

So the question is, what are you doing with the money you are saving by having the lower gas prices? If you don’t have a plan, that extra money is probably just slipping away a little here and a little there.

Lower prices not here to stay

I don’t know when it will happen, but I can be fairly confident in saying that two dollar gas will probably not be here to stay. I will enjoy it as long as possible, but eventually gas prices are certain to rise. Hopefully, it will be a while before we see four dollars a gallon again, but no doubt it will come.

So when the inevitable happens and gas prices rise, will you be prepared? Or have you found other ways to spend that extra money so that when gas prices rise will you be hurting financially?

Continue to plan as if gas prices were higher

What if instead you were to continue to budget as if gas prices were still near four dollars a gallon?

When gas prices do rise back up to more normal levels you will be prepared because you are already budgeting that amount.

Until that happens you could take that extra savings and:

  • Pay extra on some of that debt you have
  • Start a car replacement fund so that the next time you need to buy a vehicle you can pay with cash
  • Beef up your emergency savings. If you have none today, use this money to get started. If you currently have 3 months of savings see if you can get that up to 4 to 6 months of savings.
  • Start a vacation fund so you can pay cash for your vacation this summer and not have the bills follow you home.
  • Start a Roth IRA.
  • Give a little extra to your church or a favorite charity.
  • Save for some needed home repairs
  • And lastly but just as importantly, enjoy some of the money. Buy something you have been wanting for a while.

Be intentional

The key is whatever you do, be intentional about it. If you do much driving, these lower gas prices have been a real boon for your monthly budget. Use that extra money to make a difference either for yourself or for others, or use some for your enjoyment. Just don’t allow this blessing to fritter away a few dollars at a time.

How are you using the extra money you have in the budget each month while we enjoy lower gas prices?