Monthly Archives: February 2012

Federal Student Loan Repayment Options

Week #4 of Dave Ramsey’s Financial Peace University: Dumping Debt was a great motivating lesson. Since that class I have received numerous questions about Federal student loans. Therefore I put together the following brief about Federal Student Loans various repayment options to foster your additional research and consulting with your advisors. Please keep in mind, this subject is complicated and further investigation about someone’s particular situation is recommended.

When you are out of school (graduate, leave school, or drop below half-time enrollment), monthly repayment installments are required. The rate of interest that is charged depends upon when the loan was disbursed, type of loan and whether graduate or undergraduate degree. There are various options for making, consolidating and stopping payments, and some of them are as follows:

Loan Payments Stopping

  • Grace period of 6 – 9 months  from the date school ends, depending upon the type of federal loan
  • Total forgiveness for death, total and permanent disability, and other severe hardship
  • Deferment of loan payments for specific situations or hardship, depending upon the type of loan you may not have to pay interest during deferment, or you might have to pay it or have it added (capitalized) to the loan
  • Military deferment for active or post-active service
  • Forbearance with interest accruing
  • Partial forgiveness after 10 years if employed by a “Qualifying Public Service Organization,” remaining balances of loans granted under the William D. Ford Federal Direct Loan (Direct Loan) Program are forgiven after making 10 years of Qualifying Repayments (Income-Based Repayment (IBRP) Plan or the Income-Contingent Repayment (ICR) Plan, or the 10-year Standard Repayment Plan or repayment plan where the monthly payment amount equals or exceeds the 10-year Standard Repayment Plan
  • Partial forgiveness after 25 years for Income Based Repayment eligible borrowers but not employed by Qualifying Public Service Organizations, this is new

Loan Repayment options (example used $100,000 at 5%)

  • Standard level for 10 years $1,060.66 for a total of $127,279
  • Standard graduated repayment plan, for 10 years, the first payment is $706.10, and total payments would be $132,496
  • Extended months for 25 years of $584.59 for a total of $175,377
  • Extended graduated repayment plan, for 25 years, the first payment is $416.67, and total payments would be $191,558

Income Based Repayment

  • Income based repayment programs, base the repayment on various factors, including family size, household income, and spouses student loans. Repayment will change as someone’s situation changes, including income. Using the online calculator for a family of four, earning $60,00 the payment is only $330 per month.

New Student Loan Consolidation

  • In October President Obama announced a new loan consolidation plan, it seems to have a few benefits: slight reduction in fees, interest rates and complexity

Lastly, someone asked me even if there are financial benefits to doing IBRP and forgiveness, are there any behavioral, ethical or financial disadvantages?  Negotiating payments or bankruptcy I think gets into the ethics and behavior issues more than federal forgiveness programs, however some may argue this point, because forgiven payments will have to be paid by tax payers ultimately. From a financial perspective it is possible that someone could end up paying more with a IBRP than a standard 10 year repayment plan, with longer term payment plans especially if their income increased quite a bit over time.  To estimate this one would have to run 20 different reports.

Monday AM Launch: Gone Fishing

Simon Peter was a fisherman. I imagine he was like a lot of us. We get up everyday and go to work and hope for a good day at work. In our minds some of us may aspire to be really successful at what we are doing, be given more responsibility and make more money. Sometimes though work can like drudgery. I friend of mine would say, “Just another day in the salt mines.” We wonder if we are making headway.

One day as Jesus was standing by the Lake of Gennesaret, the people were crowding around him and listening to the word of God. He saw at the water’s edge two boats, left there by the fishermen, who were washing their nets. He got into one of the boats, the one belonging to Simon, and asked him to put out a little from shore. Then he sat down and taught the people from the boat. When he had finished speaking, he said to Simon, “Put out into deep water, and let down the nets for a catch.” Simon answered, “Master, we’ve worked hard all night and haven’t caught anything. But because you say so, I will let down the nets.” When they had done so, they caught such a large number of fish that their nets began to break. So they signaled their partners in the other boat to come and help them, and they came and filled both boats so full that they began to sink. Luke 5:1-7

Peter knew how to fish, and he supported himself with his trade, yet after a long night of fishing he caught nothing. That must have been extremely frustrating.  Then Jesus comes along, and they go back out. He must have been tired, but he was willing to take the advice of that guy on the shore who probably didn’t look much like a fisherman, but he was willing to try anything. Peter then had a bountiful harvest. More than he could haul in, in fact another boat couldn’t do it either. Peter didn’t dream of becoming rich at that moment, and receiving the praise from his fellow fisherman or town people.

When Simon Peter saw this, he fell at Jesus’ knees and said, “Go away from me, Lord; I am a sinful man!” For he and all his companions were astonished at the catch of fish they had taken, and so were James and John, the sons of Zebedee, Simon’s partners. Luke 5:8-10

Peter got down on his knees in a boat, probably on top of smelly greasy fish at Jesus’ feet. He humbled himself in front of all of his friends. Later on after Jesus was crucified, and Peter was in a state of depression most likely, again Jesus came to Peter at work.

“I’m going out to fish,” Simon Peter told them, and they said, “We’ll go with you.” So they went out and got into the boat, but that night they caught nothing. 4 Early in the morning, Jesus stood on the shore, but the disciples did not realize that it was Jesus. He called out to them, “Friends, haven’t you any fish?” “No,” they answered. He said, “Throw your net on the right side of the boat and you will find some.” When they did, they were unable to haul the net in because of the large number of fish.  Then the disciple whom Jesus loved said to Peter, “It is the Lord!” As soon as Simon Peter heard him say, “It is the Lord,” he wrapped his outer garment around him (for he had taken it off) and jumped into the water. The other disciples followed in the boat, towing the net full of fish, for they were not far from shore, about a hundred yards. When they landed, they saw a fire of burning coals there with fish on it, and some bread. 10 Jesus said to them, “Bring some of the fish you have just caught.” So Simon Peter climbed back into the boat and dragged the net ashore. It was full of large fish, but even with so many the net was not torn. Jesus said to them, “Come and have breakfast.” None of the disciples dared ask him, “Who are you?” They knew it was the Lord. John 21:3-10

These two stories I think have all sorts of links. One is regarding our work. Everyday we go to work and do a great job, and it is easy in our minds to compartmentalized and separate our faith and our work lives. Yet Jesus cares about our labors, and is with us at work. Sometimes we don’t remember it maybe until we are under a lot of pressure. In both of these examples, it didn’t seem like Peter was mindful of Jesus, until Jesus nudged him to work some overtime, after he was tired to try once more. Jesus is telling us today the same thing I think, to not quit, continue to work, to risk more and try, even though at times our efforts don’t seem successful. He may bless us in really cool ways at work and possibly in many other ways too. We just need to remember Christ at work, that he cares for us and is with us wherever we are. Lord help me to be mindful of you all day, to serve you at work, and to seek your success, not for my own good but yours.

IRS Issues its Annual Dirty Dozen Tax Schemes 2012

The Internal Revenue Service recently issued its annual “Dirty Dozen” ranking of tax scams to remind taxpayers to use caution during tax season

  1. Identity Theft. The IRS is seeing more identity thieves using legitimate taxpayer’s identity and personal information to file a tax return to claim a fraudulent refund. If you receive an IRS notice that more than one return was filed it may be a tip-off. If you believe that has happened immediately contact the IRS Identity Protection Specialized Unit, see the special identity theft page at
  2. Phishing. Phishing is done through unsolicited email or a fake website that pretends to be a legitimate site to lure people to provide valuable personal and financial information. If you receive an unsolicited email that looks like it is from the IRS, government website, forward it to
  3. Return Preparer Fraud. Some fraudulent ‘professional’ tax return preparers sometimes skim off their clients’ refunds and or charge too high fees. Starting in 2012 paid tax preparers must have a Preparer Tax Identification Number (PTIN) that they enter when the return is filed. You may be dealing with a bad preparer if they: Don’t sign the return or place a Preparer Tax Identification Number on it. Don’t give you don’t get a copy of the return. Over promises a large tax refund. Get a percentage of the refund, or splits it as their fee. Ask you to use false information on your return, such as false income, expenses and/or credits.
  4. Hiding Income Offshore. Evading U.S. taxes using offshore financial accounts to hide income. Sometimes foreign trusts, employee-leasing schemes, private annuities or insurance plans are utilized for these schemes.
  5. “Free Money” from the IRS &  Tax Scams Involving Social Security. Flyers and advertisements for free money from the IRS, suggesting that the taxpayer can file a tax return with little or no documentation, have been appearing in community churches. Low income and elderly people are often victims of fees using the false hope of money.
  6. False/Inflated Income and Expenses. In order to maximize refunds some people include income that was never earned, or expenses not paid
  7. False Form 1099 Refund Claims. “In this ongoing scam, the perpetrator files a fake information return, such as a Form 1099 Original Issue Discount (OID), to justify a false refund claim on a corresponding tax return. In some cases, individuals have made refund claims based on the bogus theory that the federal government maintains secret accounts forU.S. citizens and that taxpayers can gain access to the accounts by issuing 1099-OID forms to the IRS.”
  8. Frivolous Arguments. Promoters of this scheme encourage people to make outrageous and frivolous claims to avoid paying the taxes they owe. The IRS has of some frivolous tax arguments to avoid. These arguments are false and have been thrown out of court, and some have served prison time.
  9. Falsely Claiming Zero Wages. “Filing a phony information return is an illegal way to lower the amount of taxes an individual owes. Typically, a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 is used as a way to improperly reduce taxable income to zero. The taxpayer may also submit a statement rebutting wages and taxes reported by a payer to the IRS. Sometimes, fraudsters even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation.”
  10. Abuse of Charitable Organizations and Deductions. Tax-exempt 501(c)(3) organizations are sometime used to avoid paying tax by shielding income or assets from taxation. Some donators maintain control or receive income from donated assets, or donating overvalued assets.
  11. Disguised Corporate Ownership. Improper use of corporations to obscure the true owners to under report income and claim fictitious deductions, avoid filing tax returns, participate in listed transactions and facilitate money laundering, and other financial crimes.
  12. Misuse of Trusts. Trust promoters (not true estate planners) use ‘special’ trusts to own assets to provide income and estate tax savings. There are hundreds and maybe thousands of legitimate uses of trusts in tax and estate planning, that have protection and tax advantages, however some trust promoters use them to illegally avoid taxes and hide assets.


Medicare Premiums Increasing in 2014 247%?

There is an email circulating that claims Medicare Part B premiums will increase 247% in 2014 to $247 from the present rate of $99.90. According to the AARP website and others, this is a myth that has been circulating since 2010.

A little background: Medicare is federal health insurance for those age 65 and older (and others with certain health conditions), and consists of 2 main parts A & B, in addition to C (gap coverage) and D (prescription coverage).

  • Medicare Part A considered hospital coverage, covers  such things as (with deductibles, co-insurance and limits) blood, home, health care, hospice care, hospital stay, and skilled nursing facility. Part A is paid for through payroll deductions from employees and contributions by employers during working years. Individuals who pay into Medicare Part A for a full 40 quarters requires no payments during retirement, however if they haven’t paid into for 40 quarters, it can be purchased by paying a premium that varies depending on how many quarters of Medicare taxes were paid. For example, in 2012 those with 30 – 39 quarters of Medicare-covered employment the premium is $248 or $451.00 for those who are not otherwise eligible and have less than 30 quarters of Medicare-covered employment.
  • Medicare Part B is to pay for medically necessary physician’s charges, outpatient hospital care, preventative care, and some other medical services not covered by Part A. Part B is offered to those who have Part A. The cost is paid for by tax revenues and by the Medicare Beneficiary and is generally deducted from Social Security checks. The premium the Beneficiary pays depends upon a persons income, for example it is $99.90 for individual tax filers making $85,000 or less on the low-end, and on the high-end for is $319.70 for those with incomes above $214,000.

The premiums mentioned above sometimes increase with inflation, but what that will be for 2014 no one knows at this point. Checking this rumor out with AARP and this appears to be a myth.

New Unearned Income Tax Coming in 2013?

You may have received a chain email about a new real estate sales tax of 3.8% in the President’s health care bill. Is this true, you may be wondering?  Kind of, the tax is on unearned income, and is part of the ObamaCare to help generate revenues for the Medicare Trust Fund, but it only applies to a limited number of people. 

Starting in 2013, the new 3.8% tax is on unearned income of those with a high incomes, defined as those whose Adjusted Gross Income (AGI) is more than $200,000 or married couples filing jointly with AGI of more than $250,000. Unearned income is money received from some business income, capital gains, rents, dividends and interest income, offset by expenses.

Real estate sale’s capital gain, or profit, or the amount of money the property sells for over the purchase price is currently exempt from capital gains tax for  $250,000 (single)/$500,000 (joint), and this exemption remains. So the tax will not effect a sale unless the profit exceeds this amount AND the seller’s income exceeds the AGI limits.

For example, if a married couple sells a house for $400,000 that they purchased for $200,000, they realized a profit or gain of $200,000.  If their income exceeded the AGI threshold, they would pay 3.8% tax on $150,000 the amount that exceeded $250,000. This amounts to a $5,700 tax, not $15,200 as the chain email reported would be due on the entire amount.

With depreciated real estate values and lower personal incomes, probably only a small percentage of people will have to pay the tax. Remember, the amount of outstanding first and second mortgages doesn’t play into this calculation, even if the total loans exceed the sales price. So it is possible if the property was highly leveraged, and profits are consumed by loan re-payment, there could still be a tax due.


12 Great Financial Tips for Stay-at-Home Moms

Stay-at-home moms face a myriad of challenges; not the least of them is managing family finances on only one income. This is just a short list of issues. Self education regarding family finances is crucial for homemakers because of reduced income, lack of retirement accounts, increased need for self-discipline (possibly more time to shop), and the fact that if the finances become an issue, homemakers may have to return to work. We wish you the best and hope that these tips are helpful.    By Laura D. Irwin

  1. Accountability – You must plan finances together with your spouse. This way, no one gets to play the ‘blame game’ when things go wrong. When both spouses work on finances on a weekly basis, overspending by either spouse will become apparent. You will also get the chance to congratulate each other on your successes. You are in this together. We all know that money is a huge cause for stress in relationships, and working together will help prevent years of financial stress. This may also help you both learn self-discipline and how to live on less. Remember the commercial where the guy owns everything and he says, “How did I do it? I am in debt up to my eyeballs!” Accountability helps you not be that guy
  2. Keep depositing money in your IRA – Even though you may not be earning an income. Women are poorer in retirement than men are because they earn less, live longer (79 compared to 72), take time out for child rearing without contributing to retirement accounts, and receive less in Social Security benefits because of the time-out for child rearing and lower earnings. This is statistically even more important for women in minority groups.
  3. Budgeting, Debt Reduction and Saving – Proper budgeting and debt reduction will help you meet your goals of being able to live on one income. Some women are naturals at budgeting, but if you are not one of them, a budget is simply a spending plan that helps you keep track of regular monthly expenses and savings for planned purchases and the future. If you have never created a budget, you may consider using software, an Excel spreadsheet, or simply paper and pencil. You will be spending a lot of time with it, so use whatever makes you comfortable. Put your debt reduction plan into your budget.
  4. Fifty Dollar Limit – Or any amount you both decide on together. This tip has saved us many unnecessary purchases because spouses must communicate about a purchase before spending over the limit. (This does not apply to the weekly bills like grocery or utilities.) At times, this rule may seem too restrictive, but we have found it to be a huge budget saver. It also helps to get a second opinion. Recently, I called my husband from the check out line about purchasing an item, and I was reminded that we already own one!
  5. Understand marital financial mindsets – What happens when opposites attract? They get married, then begin to fight about money! Consider the following ways people view their finances: There are optimists, pessimists, spenders, savers, planners, procrastinators, and any combination of these. Perhaps his parents were well off financially and she was raised in poverty. On the other hand, perhaps her parents taught her sound financial principles and his parents kept their finances a secret, or worse, he has copied their example of bad financial habits. Open and honest communication about both of your mindsets may help you work through any pre-conceived views or bad financial habits. Remember that this must be done without finger-pointing and with the goal of financial harmony. Perhaps reading a good book together about marriage and money would be helpful.
  6. Houses and Cars – These are the biggest expenses for most marriage partners. Ideally, if you can plan to have your mortgage paid off before your first child goes to college, you will feel less stressed about paying tuition. Another great way to save money is to buy great low-maintenance cars and drive them for a long time. There is no freedom like driving a car that is ‘paid for’. Many experts recommend that you put the amount of your payment into savings after you have paid the car off to save for the next one. From personal experience, we also recommend planning for what kind of car you will need several years from now. In other words, do not buy a two-seater if you plan on having children in two years. Also, do not sell the minivan after middle school because the kids are not in sports anymore. You may need it to haul your child’s belongings to college.
  7. Get Organized – Buy a file cabinet for financial and other important papers. This central location will allow you both to understand where anything important belongs. You can avoid many financial mistakes by keeping papers and bills well-organized.
  8. Understand your Health Insurance – Health insurance costs have risen for everyone. If you have employer-provided health insurance, take the extra time to understand your coverage, especially during enrollment time. Understanding your coverage may help you save a lot of money. Figure out which policy is best for your family. For instance, if you have a high monthly prescription expense you may research which plan pays the most for prescriptions. If your medical and/or dental expenses are very high, you may be able to deduct them (7.5) of your adjusted gross income.
  9. Set long and short-term goals together – Creating goals together is a wonderful marital exercise. You will learn what each partner finds most important both now and in the future.
  10. Determine areas of overspending – Each month as you both check your budgeting progress, watch for recurring overspending in any categories. You will probably find one or two areas that go over each month. If you are within your overall budget, you may want to raise your budget amount in those areas or find ways to lower your spending. Many busy families find that eating out regularly exceeds their budgeted amount. This one requires extra self-discipline to plan ahead and create freezer meals that you can fix in a matter of minutes. Tired moms will hate this suggestion at first, but it really can save hundreds of dollars.
  11. Do not let grocery shopping be a budget buster – A penny saved really is a penny earned when it comes to grocery shopping. For decades, women have come up with creative ways to save on groceries. I remember my mother-in-law saying that any money she saved from groceries went toward birthday and Christmas gifts. Somehow, through hard work she was able to feed three growing boys and still have money left over! My family preserved produce from a large garden and from local fruit growers. Others use coupons, shop for sales at multiple stores, or plan meals around sale items. All of these ways are wonderful – do whatever works for you. I recently read a huge stack of books from the library about saving money and discovered one recurring theme about grocery shopping. Most books recommended keeping a book of regular prices for each item you usually purchase. That way you can see if it is really a great sale price, or if they simply put it in the grocery flyer at the regular price. If that sounds like a lot of work to you, visit The Grocery Game. After entering your zip code and your local grocery store, you will be able to access a computerized list of best deals at your store that week. The first three weeks of doing this amounted to $200 in savings and help to start a nice stockpile of groceries in the pantry.
  12. Judge the long-term benefit of purchases. Our children are grown, so we have had a chance to learn from our mistakes and wish we had done some things differently. One of our regrets is overspending on toys, and watching the toys be neglected, eventually ending up in a garage sale. Another example of this is purchasing children’s furniture, which will have to be replaced as the child grows. An inexpensive bed rail can make an adult-sized bed usable from toddler age to adulthood.

Dave Ramsey FPU Week 3: Cash Flow Planning

It is hard to believe that we have completed 3 classes already starting 2/2/2012 and there are only 10 to go. One question I often get after lesson #3 “Cash Flow Planning” is regarding cash flow planning from folks who are self-employed or have some self employment income. Read the post below for more information.

Budget Workshop: Some of you attended the workshop this past Saturday. We had a lot of fun. The Excel spread sheet that we use, it doesn’t ‘look’ exactly like Dave’s but is does the exact same thing, but more: helps to add up what you think you are spending (estimated), and then a column to change (proposed) so that you will reach the $0 based budget. There are also monthly tabs for tracking spending. For those of you with debt, there is also a tab that uses your numbers to calculate your Debt Snowball, which you will learn more about in this weeks lesson #4 “Dumping Debt!”

Commingle Personal and Business Finances? Never!

Today’s post comes from Mary Hunt of Debt Proof Living, and author of 7 Money Rules for Life

Dear Mary, I am reading your book, “Debt-Proof Living,” and have begun tracking my expenses. I have a home-based business. Should I include business expenses or just personal expenses in the tracking? Lucy, Vermont

Dear Lucy,You should keep your personal and business finances completely separate. As a business owner, you have to think of yourself as two people: 1) Employer and 2) Employee. You the Employer should be tracking all of your business expenses and income separately, in a business-like manner. And You the Employee should be doing the same with your personal finances. You’ll thank me one day when you get audited (you will, sooner or later) that you’ve been diligent to keep your business completely separate from your personal finances.

Monday AM Launch: In God’s Hand

Financial pressure ever get you down?  Sometimes it feels like we take one step forward and three back.  We makes great strides to set up a budget, have several good weeks of following it by never exceeding our spending limits, put money in savings, make extra-payments on loans. Then wham: car repair hits us, then we have to work extra to make up for time off for being sick, tired we don’t spend time budgeting or during fatigue we buy something we shouldn’t have. This gets us down and we want to forget it all, we wonder if that is always going to happen why is it worth the effort.

The other day a friend of mine was feeling down and defeated and I felt led to let her know, despite the present situation that she is in God’s hand. I was reminded of the image of the recent discovery of the smallest of all 23,000 species of reptiles, birds, and mammals. This picture shows the lizard on the top of a man’s fingernail. This reminded me how much I am like a child in Christ’s caring hand.

Then I thought of the large statue of Jesus in Rio de Janeiro, with outstretched arms over the city and was reminded not only are we small in His loving hands, but He is really big.

I then recalled the Bible verse about our hairs and sparrows: Are not five sparrows sold for two pennies? Yet not one of them is forgotten by God. Indeed, the very hairs of your head are all numbered. Don’t be afraid; you are worth more than many sparrows. Luke 12:6,7

Encouraged and lifted up by this, I knew He was speaking to me too in my fatigue: “Come to me, all you who are weary and burdened, and I will give you rest. Take my yoke upon you and learn from me, for I am gentle and humble in heart, and you will find rest for your souls.  For my yoke is easy and my burden is light.” Matthew 11:28-30

He is telling us that he values us greatly and he provides rest and nothing else will. As I do His will as a faithful steward, I will still face financial difficulty, but my soul will be rested in Him. I can have courage to take up my yoke again, and not the old burdensome ones, and move forward and put my faith in Him for whatever outcome that may be. Lord help me to take the yoke that you have, not anyone else’s, and follow you faithfully everyday.

Friday 2/17/12 Blog Roll, Great Reads from Other CPF Blogs

The following are good articles from this past week from other Christian Personal Finance blogs that I follow:

Dave Ramsey FPU Week 2: Comments about “Relating With Money” & Forgiveness

The 2nd of 9 Dave Ramsey Financial Peace University Classes is Relating With Money. I love this class, because it helps couples understand their differences and work together. This is probably one of the reasons why about 75% of married couples that attend the class report this has helped improve their marriage.  Just understanding that we approach money with unique styles, non-judgmentally, is good to open up the doors to be able to cooperate and work together. For singles, this class is excellent too, because many of the recommendations for relating can be applied to accountability partners, and it is always helpful to better understand our strengths and weaknesses.

Some couples are carrying lot of relational money baggage. It can range from feelings that their spouse totally failed them to just disappointment because one is either too obsessive about this, or not interested enough. There may be hurts over mistakes the other made, bad purchases that both are not paying for. How do we get past this? Forgiveness is the answer. There is really no other way to resolve this. Punishment, resentment, ridicule and bitterness just sow the seeds of division. Let’s admit that all of us have made some mistakes, or haven’t managed things wisely, so it is really fair to just let go of those hurts.  Love forms the basis of your marriage, and forgiveness is an act of self-less love and grace towards the other one. This fresh start helps couples work together better.

Rich Nathan preached a wonderful sermon on this 2/5/12, so if you want to go into this a little deeper check out this out, you can listen online or download a MP3 or read the narrative.

Spouses will either work together on finances or work against each other.  You need the other person’s wisdom, strength, support and unique set of gifts and talents that you don’t have to do this together.  If you do this I promise not only will your finances improve, but so will your relationship. Is it easy?  Heck no, someone once said that marriage requires death to some parts of our self. I think that is true; we sacrifice what we want, for the benefit of the other person, to children and to what He wants. The other does the same for us. In the end it isn’t loss, but we get back much more than we give up. This is love in action.

I hope this is helpful, now be encouraged, work on this together, you will achieve a lot together.

Monday AM Launch: Financial Lord’s Prayer Matthew 6:9-13

Jesus taught us how to pray in the Lord’s prayer in the 11th  chapter of Luke and the 6th chapter of Matthew. The prayer can function for us in our private devotional life in several ways: pray it exactly as it is, as an outline for talking to God, and a focus of meditation. I think it can be used as an outline to pray for certain subjects and modify it for a specific things we are praying about, such as the financial aspects of our lives. Why not, God cares about every aspect of us, and finances touch just about every one of them, so this is an important area to get this right, and we need his help. Therefore for today’s financial devotional I am using this model for some brief suggestions for our prayers.

  • 9 “This, then, is how you should pray: “‘Our Father in heaven, hallowed be your name, Lord you are wonderful and holy creator and above all things, I lift you up, I lift my eyes to you for you are my God. Money is not my god or the things it buys, I worship you and you alone, not money or possessions.
  • 10 your kingdom come, your will be done, on earth as it is in heaven. Lord bring your Kingdom swiftly to earth, establish your eternal city as you describe in Revelation where you will reign for ever with us. There we will have perfect union with you, with our eternal bodies where there will be no suffering, disease, tears, death or injustice. Until the time of total restoration, bring your Kingdom today to us, help us to manage the financial resources you have intrusted us, according to your purposes and direction, and towards Kingdom causes. 
  • 11 Give us today our daily bread. Lord provide for us food, shelter, clothing, prescription medication, health care, tithes, heat for cold homes, and dependable transportation; for today. I ask for daily sustenance, not long-term riches so that I might have these things for ever without depending upon you. Lord miraculously provide for my needs, and as you did for the Israelites when their sandals didn’t wear out for 40 years as they walked through the desert, protect the things I have such as automobiles from breakage. Lord give me the energy to work hard, serving you in everything I do, with a good attitude, for a good wage. Lord provide a little extra for savings for emergencies, when I grow old and cannot work, and for some wants.
  • 12 And forgive us our debts, as we also have forgiven our debtors. Lord forgive me for the financial mistakes I have made. I have forgiven those that I stole from me, and who have caused me financial difficulty such as a business or spouse.
  • 13 And lead us not into temptation, but deliver us from the evil one. Lord help me to not be tempted to purchase things that you don’t want me to, are not wise, not tithe, or borrow instead of depending upon you. Help me to get out of debt quickly so I am not longer in this bondage. Lord protect my job and things that I own from attacks from Satan. 

There are many other things that could be added to these, allow the Holy Spirit to guide you towards greater intimacy with God even as you pray about financial matters.

Is the Recession Over?

A few days ago there was another report of slight improvement in employment, for three months it has decreased from 8.9% to 8.3% lowest in about 3 years. This is a short-term calculation, and doesn’t take into consideration all of those not working or those working part-time and desire full-time employment.  5% is normal, anything north of 10% is really bad, the great recession saw 25% unemployment.  My sense talking to a lot of people, that the job market is slowly recovering which is great.  Sadly black, especially inner-city youth the number is much higher. For some alternative unemployment statistics go to, which may illustrate the real much higher unemployment picture, which also shows improvement.

Are we still in a recession?  Recessions by definition are a business cycle retraction of two down consecutive quarters of GDP, or a 12 month 1.5 rise in unemployment. So technically the country is not in an official recession. There have been other positive indicators from industry that our economy is improving, so I have reason to be a guarded optimist.

From a personal finance perspective, many households are in a recession, because it will take more than a few good economic quarters for many to recover to pre-recession finances. Household finances recover when savings are replenished, debt is reduced, salaries increase- all allowing for more disposable income, which fuels consumerism and thus the economy.

Some people have the expectation in the back of their minds that they hope for the good old days of the mid 1980’s of nearly 10% GDP, or the later years of the 1990’s that had several peaks above 5%: Source  It would take quite a bit of economic change for us to enjoy a high GDP, when you consider; economic growth is very slow, debt is massive individually and many countries, and entitlements are a huge problem in many industrialized nations. This all weighs things down, such as hiring, and wage increases making personal household finance’s recovery long-term.

The current value of some foreign currencies increasing, has been good for the US economy, such as Honda’s plans to move more manufacturing here. The other day I saw an article about a company headquartered in India opening a call center in Texas. Other economic things to be positive about are low-interest rates, personal debt decreasing and savings increasing.

I don’t expect any boom times again for the foreseeable short to intermediate term, for Americans to ride a wave to financial recovery. We are not unmoving ship at sea in the doldrums, there are winds in the sails, and some economic storms ahead.  Households would be wise to extract whatever wind that hits their sails, and stick to wise foundational personal finance habits: saving, living below means (spend less than make), giving, re-paying all debt and acquire no new debt, beware of schemes to get rich, and some start micro-businesses. In fact these are good habits to exhibit in all economic environments, we just are being forced to now. These are character, wisdom, learning and faith building times.

Christians should have peace no matter how bad things get, and level heads if the economy booms. God is in control, and he is the source of our daily bread, no matter what the headlines of the daily paper read.

Friday 2/10/12 Blog Roll, Great Reads from Other CPF Blogs

The following are good articles from this past week from other Christian Personal Finance blogs that I follow:

Book Review: 7 Money Rules for Life

The Great Recession that started in 2007 has thrown millions of families into financial disarray.  I have been looking for a timely book to recommend to people to provide the tools, motivation, learning, change and inspiration people need.  The wait is over.

Mary Hunt, one of the top 3 greatest personal finance writers of our age, author of over 15 books and nationally syndicated columnist, owner of a popular website, and founder of Debt Proof Living recently published a new book entitled the “7 Money Rules for Life.”

What makes Mary such a good writer about this topic?  The answer is easy, she has lived through disastrous financial decisions, learned how to dig herself out using the wisdom of the ages and has a heart for helping others recover from what that she experienced to enjoy financial hope, peace and joy of a reclaimed life.

You will read more about her story in the second chapter and throughout the book, as she pours out her heart. Her style of writing makes relating to the issues easy and will encourage readers to set the course toward a new life.

The 7 rules she lays out are not secrets or surprises, yet the supporting information is jam-packed with key information in a format that makes reading about them seem like seeing them for the first time. I became more convicted with each turn of a page even though the concepts are part of my daily life as I try to live them, and write, teach and counsel others about these issues almost every day.  Provided are countless stories and practical ideas to help anyone become transformed with wise foundational principles.

Reading 7 Money Rules for Life will equip you to improve your financial life and deal with some of the most important and foundational aspects of money. But even better, it will help you grow in your faith, wisdom, and character.

I’m very excited about this new book and hope that you will check it out (go to Thank you, Mary for writing such an outstanding book and for your sacrifices to help so many people.  I will highly recommend this book to everyone, just as I do for every other book you have written!

10 Financial Tips for people with Chronic Health Conditions

In 1989 and 1991 we had our two babies at a cost of $10 each. We made a $10 co-pay at the first pre-natal visit, and all expenses including birth up through the baby’s 3-month checkups were covered by that first co-pay. Few people, perhaps other than Senators, receive health care today at such a low-cost. Fifteen years ago my wife was diagnosed with a chronic illness. Since then we have gleaned first-hand knowledge of how ongoing prescriptions and procedures can put a huge dent into a budget. Healthcare for all Americans is increasing at a much faster pace than incomes. If you or someone you love has dealt with a chronic illness, inadequate health insurance, or a costly procedure, the following tips may be helpful in lowering or at least taking control of medical expenses.

  1. Learn all you can about your health insurance and do your research before your annual open enrollment. Compare costs, premiums, deductibles, maximum out-of-pocket expenses, prescription coverage, co-pays, and ‘in-network’ doctors (ask your doctor – do not rely on the insurance Web site or booklet). If you are married, compare all costs with your spouse’s plan. If you have a Human Resources department, make an appointment if you need help, and bring a list of medical expenses from the previous year so that you can make an educated guess of the best coverage for your needs.
  2. If you have a high deductible policy, get a Health Savings Account (HSA) and contribute to it religiously. You may also weigh the benefits of a Flexible Spending Account (FSA) if available. Remember that most FSA’s do not roll over to the next year, so any unused money is lost. Most small businesses cannot afford to offer premium health insurance anymore and many have gone to higher deductible insurance. Single men benefit the most from these policies. When an employer changes to a high-deductible plan, it costs on average $1000/year more for women than for men because of mammograms, the cervical-cancer vaccine, Pap tests, birth control, and pregnancy-related services. Women also generally go to the doctor more regularly for preventive care.
  3. Keep track of your medical expenses – they may be deductible. ‘You may deduct only the amount of your medical and dental expenses that is more than 7.5% of your adjusted gross income’ (see publication 502). Also keep a record of  mileage for medical reasons, and of health items you buy at the drug store.
  4. Organize your medical bills into a folder by the ‘Date of Service’, which is the date you received medical treatment. This is unnecessary for regular checkups, but procedures or injuries are billed with this Date of Service as a reference, and keeping them organized will help. For a 5-day hospital stay a few years ago, we accumulated a 1-inch thick folder of bills from seemingly every department in the entire hospital except possibly the janitorial staff.
  5. Investigate for complex medical billing to manage multiple insurance plans, Medicare, disputes, and payments. It has an appointment reminder, and it can also show you whether you have paid your bill, met deductibles, or qualified for a tax deduction. This might be ideal if you or someone in your family has a large stack of medical bills or perhaps manages parent’s health care.
  6. Shop around for prescriptions. There are several ways to lower prescription prices, including 90-day mail orders, pill splitting, and $4 generics from several retailers. Spend some time calling around to several pharmacies to get their lowest prices, and carefully compare online pharmacies. Some pharmacies, such as Costco, offer a discount for those without prescription coverage. If your doctor is prescribing a new medicine, ask for a sample so that you do not have the expense of unused medicine should you become allergic. Also, discuss your financial concerns with your doctor and pharmacist because they can sometimes prescribe a less expensive alternative or perhaps an over-the-counter replacement. For example we recently saved $40 by buying an over-the-counter drug instead of the prescription. In addition, prescription Claritin used to cost our family $70/month. The generic is still over $1/pill or $30/month. At wholesale clubs the generic is approximately $30/year. Of course, you should not change any medicines or use over-the-counter medicines without talking with your doctor first. Doing these things saved us sometimes many thousands of dollars a year.
  7. Get serious about budgeting. Keep track of your expected medical expenses and make all your budgeting and savings plans accordingly. For example, if you know your ongoing prescription costs will be $150/month, enter that amount into your budget, and find ways to save in other categories. If you have a large bill, ask to pay the bill over time in smaller payments and make sure that you adjust your budget accordingly.
  8. If you are in financial distress and cannot afford your medicine, you might try various assistance programs to see if you qualify for help. You may also speak to your doctor and get the pharmacy representative’s contact information to see if the pharmacy has any programs that may help. Www.prescriptionhope is another good resource.
  9. Live as healthfully as possible. Research indicates that lifestyle (e.g., stress, weight, smoking and drugs/alcohol abuse) are the chief causes or contributors to illness today. This recommendation bothers us a little because she didn’t do anything to cause her illness. However, we should all try to do whatever is in our control to stay healthy.
  10. Most importantly, Glean all the lessons learned from an illness, such as increased compassion, identifying and prioritizing the most important things in life, and discovering unconditional love from family and friends.

Make sure that your overall medical expenses are reflected in your financial plan. Dealing with an illness or injury is difficult enough without the addition of financial worries, but with organization techniques, education about insurance and prescription options, and diligent savings for health expenses, it need not cause you headaches too.

Is Wise Grocery Shopping Worth It?

These days everyone wants to spend less money. With increasing costs to healthcare and gasoline, grocery costs seem to be of the things to be increasing faster than inflation, and represent a large percentage of people’s budgets. Monthly expenses are either fixed like rent/mortgage, car payments and utilities, while other areas are variable such as groceries and entertainment. Household budgets are under more pressure than ever today, and people are trying to eliminate debt, save for emergencies in an effort to not live pay-check-to-paycheck, and save for retirement. It may be that more than any area of spending, people can substantially reduce their expenses on groceries.

Is couponing and saving at the grocery store good stewardship? The Bible provides much wisdom about money, including wise spending, caring for our environment, generosity, and reducing debt, so wise grocery savings is not only good financially, it helps us in our Christian walk.

Is there a grocery store conspiracy? Every grocery store chain employs geniuses with PhD’s with one intent, and that is to extract as much money out of your pocket from the time you enter until you leave their premises. Every item has precise packaging, pricing, location, and marketing to appeal to the buyer. The sights, sounds, smells, and advertisements throughout the store are designed to capture your money. This is not a conspiracy, but has been validated by those in the grocery industry.

What happens if you don’t have a plan? If you don’t go to the grocery store with a full stomach, spending limit, grocery list, an understanding of pricing, sales and coupons then the grocery store wins, and you probably end up spending too much money on groceries.

How do I figure out how to do this? There is a lot to learn about various techniques to wise purchasing at the grocery store. Taking classes in person or online, reading books and websites you will get really good at this.

Is this a good investment of time? If you become just okay at it, you can save about 20%. If you are usually spending $100 per week at the store, your savings is $1,040 per year in tax free income. If you get decent at it, you can save about 35% you will save $1,820 per year. This is a nice vacation or a dent in debt repayment, for an hour a week. You don’t have to become a ‘Coupon Queen’, but if you do, you will save a bunch more.

I don’t buy a lot of processed food or I shop at the deep discount stores is this still helpful? You may already be doing a lot of the right things; however we find that just learning some key techniques and secrets, this can really help people save a lot of money on pet food, toiletries, laundry detergent and even regular food items that you do purchase.

If you are not a couponer, or put a lot of effort into saving at the grocery store, consider doing so, it saves our family thousands of dollars every year, and will do the same for you.

Dave Ramsey FPU Week 1: How to Accomplish Baby Step #1

The 1st of 9 Dave Ramsey Financial Peace University classes is Super Saving. This is an excellent class to start with and begin to set the goal to accomplish  Baby Step number one; saving $1,000 in an emergency fund. The emergency fund will provide the safety net, or insurance, when something happens in life like a car repair or the hot-water heater going out. When you have money set aside for emergencies, you will not have to go into debt, fall behind on bills, or pull money out of long-term investments. However some people commented after class last week, since they are living paycheck-to-paycheck how are they going to come up with $1,000?  Here are 15 things that you can consider doing to help you accomplish baby step #1:

  1. Follow a budget and track spending, so that you know where your money goes and you have limits when you shop (you will learn more about this in Lesson #3 “Cash Flow Planning.)”
  2. Tear up credit cards and use cash. Research indicates that people who use plastic end up spending more money than those that don’t- it is a psychological thing (this is covered extensively in lesson #4 “Dumping Debt.)”.
  3. Refinance your home now that interest rates are lower than ever, and a lower rate could lower your payment. Be careful, take your time before pulling the trigger, read this post for more information. This will be covered more in lesson #12 “Real Estate and Mortgages.”
  4. Change tax withholding if you usually get a tax refund. Talk to your tax advisor about the right amount of exemptions for you to take that make sense for you. Your paycheck will go up, and you can use that money for important things.
  5. Shop for lower insurance rates, this may save you $20 – $100 per month.
  6. Reduce grocery spending $100 this month. Most people who don’t pay close attention to this area, can save a lot by becoming a more frugal shopper by using coupons and other means. Your local library has dozens of books about how to save money. We like anything by Mary Hunt of Debt Proof Living.
  7. Cut back on your Cell phone data and time usage, or shop around for better rates. We were able to save $30 per month for two smart phones by switching to Cricket from Verizon. Cricket is owned by AT&T and their network is the second largest, so coverage is pretty good.
  8. Reduce cable to basic or eliminate all together until you are back to where you need to be.
  9. Lower your real estate taxes, start by calling your county auditor and talk with them about how you can go about adjusting the valuation of your home down for real estate tax assessment purposes.
  10. Downsize your home or automobile if you can, this will help you have lower payments, maintenance and utilities.
  11. Obtain a second part-time job.
  12. Use tax refunds to fund, or for debt re-payment, and don’t buy anything unnecessary with those monies.
  13. Do freelance or side work. This has been helpful to me, in the past I painted a friends barn and did other work, and now I do freelance writing.
  14. Sell something: In the last few years we sold old gold jewerly (read this article first), and I sold a few items that I only used a couple of times per year, including Ping golf clubs and a Specialized road bike.
  15. Pray for miracles, they sometimes happen. Also, be sure to pray for strength, perseverance, wisdom and guidance along the way, you need His help and He is willing to help you.

You can have a successful year, it takes ingenuity, hard work and prayer.