07Mar 2014

The Best Place to Stash Your Emergency Fund

Josh Financial Growth & Habits

“Where is the best place to stash an emergency fund?”

If you are still taking baby steps in your personal money revolution, then this may not be a huge pressing question on your mind. You may be more concerned right now about how you’re going to pay your light bill this month. But that’s okay. You are working toward your goals. You are paying down debt through your Christian debt relief program, and you are slowly but surely building that all important emergency fund that will insure you against the horrific, “borrowing from family” scenario should your hot water heater blow up next month!

However, for those who are a little bit further along on this financial quest, it may be time to consider the best place for this emergency fund that you have worked so hard to establish.

An ideal emergency fund should be three to six months of regular expenses. This is quite a bit of cash, so it would do you well to put it somewhere in which it can gain the most interest for you. This is especially true when you consider that this money is going to stay put, hopefully.

Emergency funds are different than investment funds. You want investment funds to be active and flowing and accomplishing as much for you as possible. Investment funds are money at work. Emergency funds need to stay put, be still, and be safe. You do not put your emergency fund at risk in any way. However, you also do not want it to just sit there for five years and not earn a penny either.

The balance between risky action and stagnant inaction is to place the money in the highest yield type of savings plan possible.

Online Savings

Online only accounts have increased in popularity in the last few years. Many online only banks such as Ally or Capital One 360 can offer higher interest rates on their savings programs because they are not dealing with the overhead of running a brick and mortar establishment.

This translates into only good things for their customers.

Many of these banks offer a full range of savings products including Money Market Accounts. These online money market accounts offer higher interest rates than regular accounts, plus have limitations in place which will discourage you from touching the money except in true emergencies.

The drawback is that all types of savings plans, including online only money market, are seeing really low interest rates right now. This can improve with time, and something is always better than nothing.

Breakable CDs

Breakable CDs offer a higher interest rate right now than most online savings plans. This is because your average 5 year CD will charge you a small fee for early withdrawals. Your money is not quite as accessible as it would be with a money market account, but you will be earning more on money that is just sitting there.

The drawback is that the money is not immediately available like it would be from savings or money market.

I-Bonds

Series I US Savings bonds are a great low risk place to store cash.

If you have already established a great emergency fund putting some of the money in I-Bonds could be a wonderful option. However, putting all of your emergency fund money is not wise as I-Bonds cannot be cashed out until after the first year. However, the interest rates are better than just about any other low risk product available.

05Mar 2014

But God, Did You See My Budget?

Josh Budgeting & Hardship Strategies

Christians, who are starting a financial revolution in their life, face a unique set of circumstances that perhaps non-Christians do not face.

We have certain Biblical standards to live by, and sometimes these Biblical standards or obligations feel like they contradict our financial plan. Tithing is one such principal that a lot of people would look at and say, “Well, hey! If you want to get out debt you need to be putting that tithe money on your debt payments too for now.” But as Christians we know that it is far better to work that into the top slot of our budget rather than try to skimp.

Most of us, even those who are in a Christian debt consolidation program understand the importance of tithing and don’t question it too much. However, there are other forms of giving outside of tithes.There are love offerings, fund raisers, missions and sometimes just personal giving that God leads us to.

How do we handle these types of giving when we feel like we have already stretched ourselves to the limit? Why would God lead us to give more if the budget is already maxed?

The Widow’s Offering

The story in Mark chapter 12 tells of an old widow who wanted to give. She had so little that any offering would be a sacrifice, so she decided to just give it all.

Sometimes God leads us to give more than we imagine possible or even wise, just so we can prove to ourselves that we can let go.

You may think that revolutionizing your finances is all about hanging on to your money. It is about letting go; letting go of bad habits, letting go of stuff and letting go of the hold that money, or the appearance of money, has over you. When you stretch in your giving you are letting go.

Miracles Still Happen

When God says give and you whip out your calculator, sometimes the numbers will not add up.

In God We Trust

Just as Elijah asked another widow in the Old Testament to make him a little cake first, even though she had only enough for her and her son. God already knew what kind of miracle he had in store for this woman, and it sure beat her plan of eating her last meal and dying.

You cannot know what God has planned. His ways are above our ways. Giving is often an exercise in faith.

Where is the Line?

It’s never a wise thing to start drawing lines in front of God; however, we do have to draw lines in front of ourselves.

In the area of sacrificial giving, great care must be taken to never stray into the realm of foolishness. There are ways to detect foolishness, however. Usually if there is any hint in our hearts of gaining something for ourselves through the act of giving, then it was not God speaking to your heart. If people are pressuring you rather than God speaking to you, beware also.

Trust in God to lead your heart and your giving, and you can trust that your giving is appropriate.

03Mar 2014

7 Ways to Do Lent Differently

Faithworks-Author Financial Growth & Habits

Chocolate. Meat. Sugar. These are some of the most common indulgences given up for Lent, the 40-day season of preparation that leads up to Easter Sunday.

It’s a time when many Christians honor Jesus’ ultimate sacrifice of giving up his life by making a small sacrifice of their own.

Because Lent has long been associated with traditional fasting, it’s no surprise many people turn automatically to food when choosing how they’ll recognize the season, which begins on Ash Wednesday (March 5th this year).

lent icon with message If giving up candy for 40 days works for you, keep it up. However, if your Lent sacrifice has become routine and expected—or if you’ve never tried giving something up for Lent—perhaps you should consider doing something a little different this year, like making a sacrifice that hits your wallet more than your waistline.

Let’s be clear: Lent in its purest form is about growing closer to God. It’s about being thankful for what we have and recognizing that all of our best efforts will never come close to matching the sacrifice Jesus made 2,000 years ago. At its heart, Lent is about our spiritual state.

That being said, a 40-day sacrifice can naturally have a positive effect on our physical, emotional and even financial health as well.

Here are seven Lent-inspired ideas that could help get you back on spiritual and financial track at the same time.

If you carry around cash that inevitably ends up in a vending machine or fast food restaurant, commit to giving up $5 a day during Lent. Set it aside and drop it in the offering plate on Easter Sunday. You will have accumulated $200 by then.

Have you fallen into the habit of using a credit card the wrong way? Consider Lent your chance to get a fresh start. Fast from all plastic-swiping and only use cash or debit. This will give you a chance to pay down those credit card bills that get out of hand so quickly.

Fast from TV, or from a particular show you’re especially fond of watching. Use that extra time to pray, study what the Bible says about money or sit down with your family to set some financial goals for the rest of the year.

Stop eating out for 40 days. If you eat out once a week, you’re only sacrificing five or six trips to your favorite restaurant, but that could add up to hundreds of dollars in savings. Force yourself to get creative on nights when you’d normally go out. Then use the money you save to pay down debt, beef up your savings or give to a worthy cause.

Fast from the mall. Shop only for groceries and other essentials. Skip any frivolous clothing, home décor and electronics purchases, even small ones. “Retail therapy” usually isn’t therapeutic in the long run. If you tend to turn to the store for stress relief or entertainment, find an alternative that’s free, like going for a walk or calling that friend who always makes you laugh.

Temporarily say goodbye to social media and/or addictive games. Have you ever logged how much time you spend on Facebook, Farmville and the like? Sure, most social media and internet games are technically free, but they tend to be huge time-wasters. What could you be doing instead of crushing candy, killing pigs and aimlessly scrolling through your news feed? Maybe you could pick up some odd jobs and make a little extra cash. Or do any number of other things that are far more productive than staring at a computer screen.

If you buy Powerball or scratch-off tickets on a regular basis, fast from the lottery during Lent. (Click here to see why you may want to make this a permanent fast).

Whether you give up chocolate, red meat or Instagram, remember not to do it in your own strength. When you’re tempted to indulge, pray for help. God promises to provide a way out (see 1 Corinthians 10:13). And if you do stumble, don’t be discouraged. Give your plan a reboot and keep going, and you may find yourself making—or breaking—a habit by Easter.

27Feb 2014