For all kinds of reasons, people are declaring bankruptcy in record numbers. People used to avoid bankruptcy if at all possible because of the stigma of financial failure. Today, however, it has become more socially acceptable and people are filing for it in droves.

God’s Perspective on Bankruptcy

The Bible never prohibits bankruptcy, but it does discourage it. Psalm 37:21 reads, “The wicked borrow and do not repay, but the righteous give generously.” We should make every effort to avoid bankruptcy. However, I believe bankruptcy to be permissible for the following reasons.

1. A creditor forces the borrower into bankruptcy.
2. The borrower experiences such extreme financial difficulties that there is no option. There are occasions when bankruptcy is the only viable option when the financial challenges become too extreme to reverse. That option needs to be exercised only after all others have been explored.
3. If the debtor’s emotional health is at stake because of inability to cope with the pressure of aggressive creditors, bankruptcy can be an option.

 The Downside of Bankruptcy

Declaring bankruptcy should not be a quick decision. It remains on a credit report for ten years, and it often impairs the ability to obtain future credit at reasonable interest rates. Potential employers and landlords are also likely to learn of a past bankruptcy. It can haunt people for years, and although it provides relief, it is not the fresh start that some advertise.

Bankruptcy is a relatively complicated legal procedure. Since it is a court-monitored activity, several people are involved including the bankruptcy judge, a trustee, and the person’s creditors. Depending upon state law and the form of bankruptcy chosen, people may get to keep some or most of their assets.

Most people are not able to discharge all of their debts through bankruptcy. They are still obligated to pay child support, alimony, most student loans, and taxes they owe. Consulting a bankruptcy attorney will help you sort out all the issues.

Types of Bankruptcy

There are three types of bankruptcy. Chapter 11 is business bankruptcy and Chapter 7 and Chapter 13 are the two types of personal bankruptcy.

Chapter 7 is the more radical of the two personal bankruptcies. It provides for complete elimination of personal debt and is sometimes referred to as total liquidation. Any possessions that the law does not allow to be kept are sold, with the cash proceeds going to the creditors. The bankruptcy is then discharged and creditors can no longer try to collect payments. Chapter 7 usually takes three to five months from the date of filing to the final discharge, and it can only occur once in any six-year period.

Chapter 13 involves a reorganization plan that enables people to make repayment according to their income. Foreclosures and collections are suspended while the repayment plan is drafted. A trustee appointed by the court receives a portion of the borrower’s income and pays back all or part of the debt—usually over a three-to-five-year timeframe.

In 2005, Congress approved a new bankruptcy law that established a new test for measuring a debtor’s ability to repay. If a borrower’s income is above the state’s median income, the bankruptcy judge can require a Chapter 13 repayment plan. The plan mandates repayment of at least $100 a month for five years to the creditors.

The law also requires people filing for bankruptcy to pay for credit counseling, and restricts homestead exemption to $125,000 in those states that allow debtors to keep their homes.

Top priority among creditors is given to a spouse’s claim for child support, and there are special accommodations for active-duty service members, low-income veterans, and those with serious medical conditions. All in all, personal bankruptcy may be an option, but there are many issues you need to understand before proceeding.

What if I’ve declared bankruptcy?

Bankruptcy can provide the opportunity for people to regain their financial stability. But here’s something important to understand: If you’ve declared bankruptcy, don’t carry a load of guilt. Learn what the Lord wants to teach you from the difficult experience. And—are you ready for this—even if you are no longer legally obligated to repay the debts terminated through bankruptcy, you should seek to repay them. That’s what God really desires.

Following through and repaying your debts will develop your character and you will be a godly example to your creditors. Interestingly, some of the most successful people I know in business—and in life—have made the hard decision to repay debts extinguished by bankruptcy.

Seek counsel from a competent attorney to determine the legal way to attempt repayment. For large debt, that may be a long-term goal largely dependent on the Lord’s supernatural provision of resources.

A recent survey found that 51 percent of Americans would like to launch a business within the next five years. If you sense that God may be leading you to start your own business someday, there are several steps you should take to position yourself to succeed.

1. Prepare yourself financially.

It is important to have your personal finances as stable as possible when starting a business. When you no longer have credit card or consumer debts, your monthly expenses are lower. And set aside three month’s living expenses so you have a margin in case you need income from the business during some of its lean months.

This may surprise you: It is preferable to start your business before you buy your home. The Bible says, “Build your business before building your house” (Proverbs 24:27).In other words, create your source of income; then acquire your home.

One of the most common reasons for the failure of start-up businesses is lack of capital—not enough cash saved up. When you begin a business with lots of borrowed money, you invite added pressure to be profitable quickly. Many businesses require several years to become profitable.

This is my recommendation:

• Be patient!
• Save as much as you need before launching your business.
• Use as little business debt as possible, and pay it off as quickly as possible.

When you operate with little or no debt, you have a competitive edge against businesses saddled with large monthly payments. You also have more financial stability to weather unexpected challenges.

2. Identify a good business opportunity.

Research business opportunities for which you are well suited—ones that you think you would enjoy, that you can afford to start, and that meet your personal goals. When you discover one, gain some experience in the business before launching into ownership.

3. Pray for a mentor.

Ask God to provide you a mentor who really understands the business you are considering. I did this when I started in real estate, and it was the best decision of my business career. I took a cut in pay to work for my mentor, but it was well worth it. He was so experienced that he taught me more in two years than I could have learned in ten years doing it on my own.

4. Draft a business plan.

Unfortunately, about 80 percent of all business start-ups do not survive beyond the second year. Many fail because they do not have a written business plan. One of the advantages of writing it down is that it forces you to think clearly. For example, the business plan may reveal that you will need to start smaller than you originally thought.
Pray regularly when developing the business plan. Remember, God is the owner of the business, and you are its steward. Ask the Lord for his insight. This is the most important thing you can do. The Bible says, “I [the Lord] will instruct you and teach you in the way you should go; I will counsel you and watch over you” (Psalm 32:8).  One of God’s names is “Wonderful Counselor” (Isaiah 9:6). Pray. Take advantage of his willingness to offer you direction.

Address these issues when you create a business plan:

Funding: Determine how you will finance the start-up costs of the business—inventory, equipment, buildings, advertising, etc.

• Organization: Choose between a sole proprietorship, a partnership or corporation.
• Marketing: Identify your competition and determine how you will promote the business.
• Employees: Decide how many and what skills will they need.
• Financial projections: Estimate your income and expenses.

When it comes to planning, gather all the facts you can. Good planning is always based on accurate information, and that takes work. World War II military leader General George S. Patton constantly preached to his soldiers about gathering facts. When reviewing the reasons for his commanders’ recommendations, he would frequently ask, “How do you know that?”
One of the general’s principles was, “Know what you know and know what you don’t know. Every plan is based on a mixture of known facts, unknowns, and assumptions. Many assumptions can be turned into facts with a little research.”

5. Set up your accounting.

Many start-up businesses fail to keep accurate accounting records. This is dangerous because you will be unable to track your profitability and tax liabilities. I recommend using a business checking account for depositing all business income and paying all expenses. Record a description of every transaction in a check register or an accounting software program. At the end of an accounting period, it will be easier to compute the profit or loss.
If you are self-employed, a good rule of thumb is to set aside about 30 percent of your net income for taxes and withholding so you won’t be forced to use debt to fund your tax payments.

Parents have the responsibility to teach their children how to handle money God’s way. The Bible says, “Train up a child in the way he should go, and when he is old he will not depart from it” (Proverbs 22:6). And while the best time to start is when your children are young, it’s never too late.

The most effective way parents can train their children is to become MVP Parents. MVP is an acronym that describes the three methods to teach children God’s way of handling money: Modeling, Verbal communication, and Practical opportunities. All three are needed to train your children. Let’s look at each method.

Modeling

Since children soak up parental attitudes toward money like a sponge soaks up water, parents must model handling money God’s way. The apostle Paul recognized the importance of modeling when he said, “Be imitators of me, just as I also am of Christ” (1 Corinthians 11:1). Nothing influences children more than watching parents live out what they believe. That’s especially true in the area of finances. Your kids watch how you spend money, pick up on your attitudes toward buying on credit, and observe your patterns of giving and saving. What you do with money must be consistent with what you say about it. Your children are listening and watching you. Albert Schweitzer observed, “Example is not the main thing in influencing others, it is the only thing.”

Verbal Communication

We should verbally instruct our children in the ways of the Lord. The Lord said to his people, “These words, which I am commanding you today, shall be on your heart. You shall teach them diligently to your sons and shall talk of them when you sit in your house and when you walk by the way and when you lie down and when you rise up.” (Deuteronomy 6-7). Look at this passage carefully. Parents are instructed to talk of the truths in the Bible when they are hanging out at home or traveling around; from first thing in the morning until time to go to sleep at night.

Consistently tell your children how God’s practical truths apply to their finances. Use natural times, such as when you’re grocery shopping or walking through the hardware store or waiting in line at the bank—these are perfect opportunities to instruct your children on the wise use of money.

Practical Opportunities

Give your children opportunities to apply what they have heard and seen. Design these experiences to be appropriate for their age and unique personality. Young children, for example, are not yet able to grasp abstract concepts, so their practical experiences need to be tangible and easy to understand. The more hands-on the experience, the more children will learn.

Graduating to greater responsibility

The fundamental strategy for training children to handle money is the Little-Big principle. The Bible says, “He who is faithful in a very little thing is faithful also in much” (Luke 16:10).

When children become faithful with small amounts, they are prepared to assume greater responsibility. After they learn to handle quarters wisely, they are ready for a few dollars. Parents should be as systematic in equipping children to handle money as teachers are in teaching them to write. First, children learn the alphabet and then how to spell their name. Each year they learn more complex words and grammar. Eventually, they are able to write essays. Learning to handle words—or money—is a process that happens in stages.

Steadily increase responsibility so that your children are independently managing all their finances—with the exception of food and shelter—by their senior year in high school. That way, parents are available to watch and advise as their children make increasingly important financial decisions while still at home.

Unfortunately, most young people are unprepared to handle money when they leave home. One college student admitted how shocked he was to learn that credit card purchases actually had to be paid for later! That surprise paled in comparison to how stunned his parents were when they received his credit card statement with an outstanding balance of $11,350!

By the time your children are in their junior year of high school, they should open a checking account and get a secured credit card. Parents can then show them how to reconcile their checkbook each month, coaching them to use the credit card wisely and pay it off in full and on time every month. Once those habits are in place, they will likely stay in place for a lifetime.

Setting goals together is indispensible for great communication. I recommend that a couple take time away to enjoy each other and identify their long-term goals. What do they most want to accomplish as individuals and as a couple? Discovering dreams and setting goals help you learn more about your mate and how to prioritize spending.

For instance, perhaps you are a working wife who wants to have children someday and stay home to raise them. Consider the steps you will need to take. These become your goals. One of your long-term goals would be to make ends meet on just your husband’s income. Short-term goals might include paying off debts, increasing savings, perhaps selling a vehicle or even downsizing to more affordable housing.

Effective goal setting begins by identifying long-term goals and then establishing shorter-term goals as intermediate steps. For example, if you know your ten-year goals, it will be easier for you to determine the goals you will need to accomplish this year.

Let me assure you of something that I have seen proven true time after time. The simple act of sitting down together and really thinking through your priorities as a couple will be a powerful bonding tool. You would be stunned to learn how many couples go through their whole lives together without ever looking each other in the eyes and talking about what is most important to them!

May I say one more thing about that? For a couple who are both followers of Jesus Christ, this is a marvelous opportunity to invite the direction and counsel of God’s Holy Spirit. The apostle James says, “If you want to know what God wants you to do, ask him, and he will gladly tell you, for he is always ready to give a bountiful supply of wisdom to all who ask him; he will not resent it” (James 1:5, tlb).

So, it’s a perfect time to pray together and say, “Lord, what do You want for us? What are Your desires as we seek to set our goals and priorities?”

I love the promises that Jesus made regarding the Holy Spirit in the gospel of John. Just before He went to the cross, Jesus said to a group of bewildered disciples: “I will ask the Father, and he will give you another Counselor to be with your forever—the Spirit of truth…. The Counselor, the Holy Spirit whom the Father will send in my name, will teach you all things…. He will guide you into all truth” (John 14:16, 26; 16:13).

The key? Ask Him! Seek His counsel, His perspective, His guidance. Spread out your lives before Him, and ask Him to guide you into all truth, as He has promised.

As I said, the very process of writing down your goals together is a powerful but often neglected step that helps clarify and prioritize them. The mystery fades as you monitor your progress and make midcourse corrections. Written goals create momentum, helping you both focus on the priorities that will enable you to achieve your purpose. And God will help you to achieve those goals if you have first made sure they are honoring to Him.

Jess and Angela Correll have done the best job of goal setting and planning I have ever seen. Each year they hold a weekend planning retreat to discuss their goals for the coming year. As each one shares, the other asks the question: How can I help you succeed in reaching your goals? Then, they meet for several hours each quarter to review their progress. This has been a powerful tool for them to get to know each other in a deeper way and to keep their spending on track.

Long-term goals

With that in mind, begin by writing down your long-term goals for each of the areas that follow.

Relationship with God:

Family and Friends:

Service to others:

Career/Skills/Education:

Long-term financial goals

Giving:

Spending/Lifestyle:

Saving and Investing:

Debt:

Other:

This year’s goals

Once you have established your long-term goals, work backwards and write down what you want to achieve this year. A word of caution: Don’t be discouraged if you aren’t successful in accomplishing all of the goals you’ve set for a particular year. I rarely reach all of mine. However, when you know your goals, you know what you want to get done. You have a target. With God’s help, you will make progress.

Relationship with God:

Family and Friends:

Service to others:

Career/Skills/Education:

This year’s financial goals

Giving:

Spending/Lifestyle:

Saving and Investing:

Debt:

Other:

Cosigning relates to debt. When a lender does not feel an individual is a safe enough risk for credit another person can cosign on the loan as a guarantor. Anytime you cosign, you become legally responsible for the debt of another. It is just as if you went to the bank, borrowed the money and gave it to your friend or relative who is asking you to cosign.

In effect, by cosigning, you promise to pay back the entire the loan if the borrower does not.

A Federal Trade Commission study found that 50 percent of those who cosigned for bank loans ended up making the payments. And 75 percent of those who cosigned for finance company loans ended up making the payments! Those are pretty good odds that if you cosign, you’ll pay.

Proverbs 22:26-27 vividly describes what can happen when the payments can’t be made. “Do not be among those who give pledges, among those who become guarantors for debts. If you have nothing with which to repay, why should he take your bed for under you?”

Fortunately, Scripture gives us clear direction concerning cosigning. Proverbs 17:18 reads, “It is poor judgment to co-sign a friend’s note, to become responsible for a neighbor’s debts” (NLT). The phrase “poor judgment” is literally translated “destitute of mind!” God wants us to avoid making this sort of pledge, even though it can feel kind-hearted. The risk is too high. So, please use sound judgment and never cosign a loan.

Cosigning for Children

Parents often cosign for their children’s first automobile or some other form of credit. However, parents should model for their children the importance of not cosigning and discourage them from using debt.

Instead, train them to plan ahead and save for the purchase of their first car.

What to do if you’ve already Cosigned

If you have already cosigned for a loan, the Scripture gives you advice. Proverbs 6:1-5 reads, “If you co-sign a loan for a friend or guarantee the debt of someone you hardly know—if you have trapped yourself by your agreement and are caught by what you said—quick, get out of it if you possibly can! You have placed yourself at your friend’s mercy. Now swallow your pride; go and beg to have your name erased. Don’t put it off. Do it now! Don’t rest until you do. Save yourself like a deer escaping from a hunter, like a bird fleeing from a net” (NLT).

In other words: Do whatever it takes to get out, quickly! Beg if you have to. That’s urgent counsel, isn’t it? But you can see how strongly the Lord feels about his type of high-risk debt. Don’t even go there!

Your credit score (FICO score) determines whether you can get credit. And your score may be high enough to get credit but not high enough to get a decent interest rate—whether you’re looking for a mortgage, a car loan, or some other type of credit. Without good scores, your application to rent an apartment may be turned down. Your scores can affect your car insurance premiums and even getting a job.

Often, only husbands have credit in their names and therefore wives do not establish good credit. This is a mistake! If a husband dies before his wife, she won’t have a solid credit score. Bev and I solved this problem by each securing a credit card in our name that we pay on time and in full every month. When we receive the credit card statements, we meet to review them so our communication remains intact.

A credit score is a number designed to help lenders and others measure your likelihood of making payments on time. The FICO score ranges from 300-850, with the average score around 680. Higher scores are better. FICO scores above 700 indicate a good credit risk, while scores below 600 indicate a poor risk.

A low score can lead to much higher interest rates. For example, if you apply for a 30-year home mortgage and your credit score is too low, you could pay as much as three percent more. On a $200,000 mortgage, that three percent difference will cost you $400 per month. Over the life of the loan it adds up to $144,000!

The primary things that will harm your credit score are late payments or non-payments of bills or debts, bankruptcy, foreclosure, repossession, bills or loans sent to collection. To improve your score, the two most important actions you can take are to pay your bills on time and reduce your total debt. Once you start doing this, your score will begin to improve in about three months. Look at the factors affecting your score.

Late or missed payments, foreclosures or repossessions remain part of your credit report for seven years. You’ll have to wait ten years for a bankruptcy to be removed, and fifteen years for a tax lien. Even though these remain on your credit report, over time they have less impact if you pay your bills on time and reduce your debt.

Credit Report

Everyone should get a copy of their credit report once a year. Review it to make sure there are no mistakes or that you haven’t been the victim of identity theft. You can order a free copy of your credit report once every twelve months. To order, log on to AnnualCreditReport.com.

The free copy of your credit report does not contain your credit score. Any of the three main credit agencies will sell you your score.

There are three simple rules to follow when dealing with creditors.

1. Communicate, communicate, communicate

It is best to run toward your creditors, not away from them. As hard and embarrassing as it may be, always take the initiative in keeping your lenders informed. It is almost impossible to negotiate with a creditor you have ignored. Communicating with a creditor sooner rather than later tells them you are responsible and serious about resolving the problem. They document each contact you make with them, whether it is by phone, letter, email, or fax. The more you communicate the better. Silence is deadly.

2. Offer Lenders a Written Plan.

Most creditors respond best to a request that is backed by a written copy of your budget, a list of your debts, and your proposed repayment plan indicating how much you are able to pay each month. It is important to present a realistic plan, yet to demonstrate you are will to make sacrifices to pay the debt.

I recommend a cover letter similar to the one below when first communicating with a creditor. You can tailor it to each lender, but putting something in writing is the key.

Dear Sir or Madam:

I am writing to you about my account _________. I am sorry that I have failed to abide by the terms of our agreement. I am committed to full repayment of my debt.

Attached you will find my current budget and a list of my debts. As you can see, my debt totals $______ and my monthly payments $_____.

My present monthly income of $_____ less my taxes and expenses leaves me only $______ to pay toward my debts.

I have received assistance in assessing my financial situation to determine what I can afford to pay my creditors at this time.

Enclosed please find my check for $______. I will be able to pay this each month for the next ____ months. After that time, I will review my finances and may be able to increase my payments.

Also, I respectfully request that the interest rate you are charging be reduced so a greater portion of my payment may go toward principal reduction.

If you are unwilling to accept my proposal, please return the enclosed payment. Contact me at __________, if you have any questions.

Thank you in advance for your help in this matter.

Sincerely,

3. Exercise integrity

When you communicate with your lenders, always be completely honest. The Bible repeatedly stresses the importance of honesty. Leviticus 19:11 says, “You shall not steal nor deal falsely, nor lie to one another.” Proverbs states, “The Lord loathes all cheating and dishonesty” (TLB).

Remember, the Lord loves and cares for you. He wants the best for you. Your honesty gives the Lord maximum freedom to work on your behalf.

After home mortgages, car loans are the largest debts most people carry. And most people have them. More than 70 percent of all the cars purchased in this country are bought with borrowed money. And many auto sellers discourage paying by cash because of the potential loss in revenue if you were to finance through their finance companies. So beware.

Let me be blunt. Car debt is one of the biggest roadblocks for most people on their journey to true financial freedom. It is especially dangerous because most people never get out of it. Just when they get to the point of paying off a car, dazzled by the thoughts of a newer model, they trade it in and purchase that newer one with credit.

Unlike a home, which can appreciate in value, the moment you drive a car off the lot it depreciates, or decreases in value. It’s worth less than you paid for it by the time you hit the first intersection. You’ve probably heard the expression, “upside down on a car loan.” The meaning is simple: You owe more for the car than it is worth. If you had to sell it, you couldn’t get enough to pay off the loan.

Escaping the Auto Debt Trap

There are three steps to get out of auto debt.

1. Decide to keep your car at least three years longer than your car loan.
2. Pay off your car loan and after your last payment, keep making the payment, but pay it to yourself. Put it into an account that you’ll use to buy your next car.
3. Buy your next car with cash. When you’re ready to replace your car, the saved cash plus the trade-in value should be sufficient to buy a car without credit. It may not be a new car, but you should be able to buy a low-mileage used car without any debt.

In theory, consolidating a number of higher-interest loans into one lower-interest loan makes sense. Consolidated loans typically offer lower monthly payments, and making just one payment is simpler.

If you have outstanding credit card balances, student loans, auto payments and mortgages, you may be a candidate for loan consolidation. You have many options from which to choose: taking a personal loan from your bank or credit union, rolling your credit-card balances to a low-rate card, or borrowing against the equity in your home.

There is one huge downside in consolidating your loans, however. If you haven’t solved the problems that put you into debt in the first place, you’ll end up worse off. Surveys confirm that about two-thirds of those who borrow against their home equity to pay off plastic run up more credit card debt within two years. So here’s the big sticking point: couples should not consolidate until they have changed their habits. Do yourself a favor: Hate debt; start paying it off; spend less than you earn. Then, consolidate your loans.

There has been an explosion in the number of credit cards for only one reason: the credit card companies make a ton of money charging high interest! They also know that people spend about one-third more when they use credit cards rather than cash. The average household with an unpaid balance has about $10,000 in credit card debt

Here are some suggestions to help you pay off your plastic.

Snowball the plastic

Snowball your way out of debt! In addition to making the minimum payments on all your credit cards, focus on paying off the smallest balance card first. You’ll be encouraged to see its balance go down and finally to be completely paid.

Then, after the first credit card is paid off, apply its payment toward the next smallest one. After the second card is paid off, apply what you were paying on the first and second toward the third smallest. That’s the snowball in action!

So…where do you start? List your debts in order with the smallest remaining balance first. Every time you pay off one don’t forget to celebrate!

Perform plastic surgery

We started with nine credit cards, and today we carry two that we pay in full each month. Fewer credit cards makes life simplier! So, cut up the cards you do not really need. If you can keep the cards you’ve had the longest it will help your credit score.

Also, opt out of receiving telemarketing calls and credit card offers by mail.

Log on the Web site of the National Do Not Call Registry at www.ftc.gov/donotcall to stop telemarketers. To stop junk mail, call toll free 1-(888)-5OPT-OUT. You’ll be really glad you did.

Lower the interest rate!

There is a lot of competition among credit card companies for your business. If your company is charging a high interest rate, phone and ask them to drop it. You may have to call several times, but 75 percent of the time, they will lower the rate.

Another alternative is to transfer the balance to a card that charges less interest. Before switching to a lower-rate card, confirm that the new card has no transfer fee, no annual fee, and that the interest rate on transferred balances is not higher than the advertised rate. But remember, if you miss a payment or make a payment late, your interest rate will automatically skyrocket in most cases.

Home equity loans are simply additional mortgages. They use the equity in your home as the collateral to secure a loan. There are two main ways to tap into your home equity: through a home equity loan (second mortgage) or a home equity line of credit.

Home equity loans are attractive because lenders often charge a lower interest rate. Tax-deductible interest is another carrot lenders use to entice homeowners into using home equity loans.

Don’t get a home equity loan without understanding the risks. If you can’t pay a credit card bill, the issuer can take you to court and sue you for recovery. With a home equity loan, however, failure to pay could cost you your home.

Home Equity Line Of Credit

Think of a home equity line of credit (HELOC) as a giant credit card. You can borrow whenever you want and as much as you want—up to the credit limit. Your monthly payments are based on the amount you borrow.

The advantages of a HELOC are similar to a home equity loan: lower interest rates, tax-deductible interest, and lower closing costs than with refinancing a mortgage. The major downside to using a HELOC is that it can be a huge temptation. Just like a credit card, the tendency is to use it too often, rather than spending carefully.

College loans are one of the fastest growing areas of debt with the average senior graduating with about $20,000 in school loan

Your objective: Graduate from college (or help your children to graduate) with as little school debt as possible and pay it off as quickly as possible. Here are ways to help you limit or even avoid college debt.

Paying for a college education presents a great opportunity for parents and teenagers to grow closer together as a family and with the Lord. As soon as your child is old enough, schedule a regular time to meet together and pray for the Lord to provide the necessary funds for their education. Ask God for creative solutions that will eliminate or reduce the need to borrow.

What Parents Can Do

It is a blessing when parents are able to help pay for their children’s education. Saving options that you might consider: State-sponsored 529 Plans, State-sponsored Prepaid Tuition Plan, Coverdell Educational Savings Account and Roth Individual Retirement Account. Each of these options has strengths and limitations. Regardless of which you choose, the earlier you can begin to save, the better. Time is your friend because your savings grow through compounding interest.

What Children Can Do

Work. When children are old enough, have them to begin working to save for their college—and the sooner, the better. They may work part or full time during summer vacation, and perhaps part time during the school year. When they enter college, encourage them to work part-time, and consider seeking a summer job. When students work to help pay for college, they appreciate the experience more and are more serious about their studies.

Help Reduce the Cost of College. Attending a community college near home for the first two years, typically, is less expensive than enrolling in a four-year college, especially if it is possible for the student to live at home.

Also, explore grants and scholarships because many colleges and states offer substantial savings.  I recommend Tom Shaw’s excellent book for parents and their teens called College Bound (Moody, 2005). It offers several helpful strategies for stretching finding and stretching tuition dollars. Another fine resource is Gordon Wadswroth’s Cost Effective College (Moody, 2000), which includes tips for completing scholarship applications and essays, and locating public and private scholarships. And if your child is considering service in the military, all branches offer educational benefits.

Paying off school Debt

Where can someone with student loans go for help? For people who have more than one school loan, loan consolidation options may be your best place to turn. It can reduce your interest rate and lower your monthly payment.

The government has established an excellent website that will allow you to apply for government funded student loan consolidation directly over the Internet. Check out loanconsolidation.ed.gov for more information.

Even if you can’t consolidate your school loans, establish the goal of paying them off as soon as possible. Remember: The goal is to be free of all college debt!

Lotteries and gambling of all types are sweeping our country. Internet gambling is exploding. Each year one in four Americans gambles at a casino. The average church member gives $20 a year to international missions while the average person gambles $1,174 annually.

Sadly, more than 6 million Americans are addicted to gambling, with consequences that are heartbreaking for their loved ones. Although the Bible does not specifically prohibit gambling, its get-rich-quick motivation violates the steady plodding principle. “Steady plodding brings prosperity, hasty speculation brings poverty” (Proverbs 21:5).

In my opinion, we should never participate in gambling or lotteries—even for entertainment and even for one penny. We should not expose ourselves to the risk of becoming compulsive gamblers, nor should we support an industry that enslaves so many.

Obviously a gift benefits the recipient. The church continues its ministry, the hungry are fed, and missionaries are sent. However, if a gift is given with the proper attitude, the giver, surprisingly, benefits even more. “Remember the words of the Lord Jesus, that He Himself said, ‘It is more blessed to give than to receive’” (Acts 20:35). The giver receives three extraordinary benefits.

Increase in Intimacy

Above all else, giving increases our affection for Christ. The Bible says, “Where your treasure is, there your heart will be also” (Luke 12:34). This is why it is necessary to mentally give each gift to Jesus Christ. When you give your gift to him, your heart will automatically be drawn to the Lord. And nothing in life compares to knowing Christ well.

Increase in Heaven

Jesus wants us to know that when we give, we are investing treasures in heaven that we will be able to enjoy for all eternity . . . forever and ever! He told us, “Store up for yourselves treasures in heaven, where neither moth nor rust destroys, and where thieves do not break in or steal” (Matthew 6:20).

Imagine that you’ve been offered a high-paying job for two years in Switzerland, but there’s a catch. At the end of two years, you have to leave behind all your Swiss currency and everything you’ve purchased. The only money you can keep is what you have converted to U.S. dollars and sent home.

So what do you do with your Swiss currency? If you’re smart, you’ll keep only enough Swiss currency to meet your needs, and you’ll convert the rest to American dollars and send it home.

Something similar to this will happen when you die—you’ll leave everything behind. And while it is true that you can’t take it with you when you die, you can send it on ahead! Paul wrote to some contributors, “Not that I am looking for a gift, but I am looking for what may be credited to your account” (Philippians 4:17). We each have an account in something comparable to the First National Bank of Heaven. Every time we give, we are making deposits to a heavenly account that is ours to enjoy forever.

Increase on Earth

In addition to laying up treasure in heaven, there is a material increase flowing to the giver. The Bible says, “One gives freely, yet gains even more; another withholds unduly, but comes to poverty. A generous man will prosper” (Proverbs 11:24-25).Another passage about giving says, “Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously” (2 Corinthians 9:6).

When we give, we should do it with a sense of expectancy—anticipating God to provide an increase even though we have no idea when or how he may choose to do it. In my experience, he can be very creative!

Remember that you receive the advantages of giving only when you give out of a heart filled with love. This rules out the motive of giving just to get.

Let’s survey what the Bible says about how much to give. Before the Old Testament Law was given there were two instances of giving with a known amount. In Genesis 14:20 Abraham gave ten percent, a tithe, of the spoils to Melchizedek after the rescue of his nephew Lot. And in Genesis 28:22, Jacob promised to give the Lord a tenth of all his possessions if God brought him safely through his journey.

Under the Old Testament Law a tithe was required.  The Lord condemns the children of Israel in Malachi 3:8-9 for not tithing properly: “Will a man rob God? Yet you are robbing Me!  But you say, ‘How have we robbed Thee?’  In tithes and offerings. You are cursed with a curse, for you are robbing Me, the whole nation of you!”

In addition to the tithe there were various compulsory and free-will offerings. Furthermore, the Lord made special provisions to provide for the needs of the poor: every seven years all debts were forgiven; every fifty years the land was returned to the original land-owning families; and there were special rules for harvesting that allowed the poor to glean behind the harvesters and along the edges of the fields. Ruth is an example of a needy person who gleaned in the field of Boaz.

God made another significant provision for the poor in Deuteronomy 15:7-8: “If there is a poor man with you, one of your brothers, in any of your towns in your land which the Lord your God is giving you, you shall not harden your heart, nor close your hand from your poor brother; but you shall freely open your hand to him, and shall generously lend him sufficient for his need in whatever he lacks.” Under the law the extent of one’s giving was not limited by a fixed percentage but was in part dictated by the material needs of the surrounding people.

In the New Testament the tithe is neither specifically rejected nor specifically recommended. What is taught is giving in proportion to the material blessing one has received with special attention and commendation for sacrificial giving.

What I like about the tithe or any fixed percentage of giving is that it is systematic, and the amount of the gift is easy to compute. The danger of the tithe is that I can treat it as simply another bill to be paid, and by not having the correct attitude I do not put myself in a position to receive the blessings and advantages God has for me in giving. Another potential danger of tithing is the view that once I have tithed, I have fulfilled all my obligations to give. For many Christians, the tithe should be the beginning of their giving, not the limit of their giving.

How much should we give?

To answer this question, first give yourself to the Lord. Submit yourself to Him. Earnestly seek His will for you in this area, asking Him to help you obey Christ’s leading. In my family we are convinced that we should tithe as a minimum and then give over and above the tithe as the Lord prospers and/or directs us.

God’s attitude in giving is summed up in John 3:16: “For God so loved the world, that he gave his one and only son.” Note the sequence. Because God loved, he gave. Because God is love (1 John 4:16), he is also a giver. He set the example of giving motivated by love.

It’s also crucial for us to give with an attitude of love. The Bible says, “If I give all my possessions to feed the poor . . . but do not have love, it profits me nothing” (1 Corinthians 13:3). It is hard to imagine anything more commendable than giving everything to the poor. But if it is done without love, it is of no benefit to the giver.

In God’s economy the attitude is even more important than the amount. Jesus emphasized this point: “Woe upon you, Pharisees, and other religious leaders—hypocrites! For you tithe [give 10 percent] down to the last mint leaf in your garden, but ignore the important things—justice, mercy and faith (Matthew 23:23).

The religious leaders had been careful to give precisely the correct amount. Yet, in spite of this, Christ rebuked them because of their attitude. For giving to be of any value, it must be done from a heart of love.

The only way we can consistently give out of love is to give our gifts to the Lord himself. If giving is merely to a church, a ministry, or a needy person, it is only charity. But giving to God becomes an act of worship. Because he is our creator, our Savior, and our faithful provider, we can express our gratefulness and love by giving to him. Whenever we give, we should remind ourselves that we are giving our gift to the Lord himself.

Stop. Examine yourself. Are you giving with an attitude of love?

Our experience with tens of thousands of homebuyers has led us to define an affordable home using two rules of thumb:

1. Save up at least 20 percent of the purchase price for the down payment. This way you will avoid paying for expensive PMI insurance which does not benefit you at all.
2. Your total housing expenses should be 30- 40 percent of your gross income, and should never exceed 40 percent.

That 30-40 percent includes all housing expenses: mortgage payment, real estate taxes, utilities, insurance, and maintenance (estimate maintenance each year to be 1–2 percent of the value of the home). If these combined expenses exceed 40 percent of your income, you will need to reduce spending in other categories.

Finding an affordable home is particularly challenging in areas where the cost of housing is extremely expensive. If you are in this situation, there are only three things you can do: save, pray and wait. Save for the down payment; ask the Lord to provide you with an opportunity to buy an affordable home; wait and continue to rent until He does.

Many honest lenders will tell you exactly what you can and cannot afford to borrow. Others care more about their compensation. Since many work on a commission their motivation is to close the deal. They might qualify you for a loan that is too expensive. So, be careful not exceed the guideline of 30-40 percent of income for all housing expenses.

All of us have to make daily decisions about whether to handle money honestly. Do you tell the cashier at the store when you receive too much change? Have you ever tried to sell something and been tempted not to tell the whole truth because you might lose the sale?

These decisions are more difficult when so many around us act dishonestly. People today do the same thing, formulating their own standards of honesty and then changing them when circumstances change. Judges 17:6 describes a similar time in history, “Every man did what was right in his own eyes.”

Honesty in the Bible

Hundreds of verses in the Bible communicate the Lord’s desire for us to be completely honest. For instance, Proverbs 20:23 says, “The Lord loathes all cheating and dishonesty” (TLB). And Proverbs 12:22 states, “Lying lips are an abomination to the Lord.” And in Proverbs 6:16-17 we read, “The Lord hates . . . a lying tongue.”

Truthfulness is one of God’s attributes. He is repeatedly identified as the God of truth. “I am . . . the truth” (John 14:6). And He commands us to reflect His honest and holy character: “Be holy yourselves also in all your behavior; because it is written, ‘You shall be holy, for I am holy’” (1 Peter 1:15-16).

In contrast to God’s nature, John 8:44 describes the devil’s character: “He [the devil] was a murderer from the beginning, and does not stand in the truth because there is no truth in him. Whenever he speaks a lie, he speaks from his own nature, for he is a liar and the father of lies.” The Lord wants us to conform to His honest character rather than to the dishonest nature of the devil.

Total Honesty

God wants us to be completely honest for the following reasons.

We cannot practice dishonesty and love God. Two of the Ten Commandments address honesty. “You shall not steal. You shall not bear false witness against your neighbor” (Exodus 20:15-16). And Jesus told us, “If you love Me, you will keep My commandments” (John 14:15).

We cannot disobey by practicing dishonesty and still love God. When being dishonest, we behave as if the living God doesn’t even exist! We believe that He is unable to provide exactly what we need even though He has promised to do so (Matthew 6:33). We take the situation into our own hands and do it our own dishonest way. We are also acting as if God is incapable of discovering our dishonesty and powerless to discipline us. If we really believe God will discipline us, we will not consider acting dishonestly.

Honest behavior is an issue of faith. An honest decision may look foolish in light of what we can see, but the godly person knows Jesus Christ is alive even though invisible. Every honest decision strengthens our faith and helps us grow into a closer relationship with Christ. When we choose to be dishonest, we are denying our Lord. It is impossible to love God with all our heart, soul, and mind if, at the same time, we are dishonest and act as if He does not exist. Scripture declares that the dishonest actually hate God. “He who walks in his uprightness fears the Lord, but he who is crooked in his ways despises Him” (Proverbs 14:2). The Lord’s primary interest in our honesty is so that we can experience a closer relationship with Him.

We cannot practice dishonesty and love our neighbor. The Lord requires honesty because dishonest behavior also violates the second commandment, “You shall love your neighbor as yourself” (Mark 12:31). Romans 13:9-10 reads, “If you love your neighbor as much as you love yourself you will not want to harm or cheat him, or kill him or steal from him. . . . Love does no wrong to anyone”(TLB).
When we act dishonestly, we are stealing from another person. We may rationalize that it is a business or the government or an insurance company that is suffering loss. Yet, if we look at the bottom line, it is the business owners or fellow taxpayers or policy holders from whom we are stealing. It is just as if we took the money from their wallets. Dishonesty always injures people. The victim is always a person.

Credibility for evangelism. Honesty enables us to demonstrate the reality of Jesus Christ to those who do not yet know Him. Our actions speak louder than our words. Philippians 2:15 reads, “Prove yourselves to be blameless and innocent, children of God above reproach in the midst of a crooked and perverse generation, among whom you appear as lights in the world.”

We can influence people for Jesus Christ by handling our money honestly. Robert Newsom had been trying to sell a car for months when someone finally made an acceptable offer. At the last moment, however, the buyer said, “I have one condition—you don’t report this sale so I won’t have to pay state sales tax.”

Although he was tempted, Robert responded, “I’m sorry, I can’t do that because Jesus Christ is my Lord.” Robert later said, “You should have seen that guy’s reaction. He almost went into shock! Then an interesting thing happened. His attitude completely changed. Not only did he buy the car, but he eagerly joined my wife and me at our dinner table. Rarely have I seen anyone as open to the truth about knowing Jesus Christ in a personal way.”

Because Robert acted honestly, even though it was going to cost him money (“Prove yourselves to be blameless and innocent, children of God above reproach”), he demonstrated to this person (“a crooked and perverse generation”) the reality of a personal faith in Jesus Christ (“appear as lights in the world”).

Confirms God’s Direction. Proverbs 4:24-26 reads, “Put away from you a deceitful mouth and put devious speech far from you. Let your eyes look directly ahead and let your gaze be fixed straight in front of you. Watch the path of your feet and all your ways will be established.” What a tremendous principle. As you are completely honest, “all your ways will be established.” Choosing to walk the narrow path of honesty eliminates the many possible avenues of dishonesty.

The most common type of identity theft is in the area of finances. Someone tries to gain financial benefits using another person’s name. This includes getting credit cards, loans, goods and services, and claiming to be someone else.

These thieves can acquire your financial in numerous ways- from digging through your trash, accessing old phones or computers and even using “contactless” card readers to steal your credit card information.

What to do:

We recommend that anyone who has been a victim of identity theft go to the Federal Trade Commission- Identity Theft Page.

They have great tips on what to do immediately and how to protect yourself in the future.

Additional Resource:

Identity Theft Protection Services & Reviews

Inheritance

Parents should try to leave an inheritance to their children. “A good man leaves an inheritance to his children’s children” (Proverbs 13:22). But inheritances should not be dispensed until heirs have been trained to be wise stewards. “An inheritance gained hurriedly at the beginning will not be blessed in the end” (Proverbs 20:21). Consider sprinkling distributions over several years as heirs mature enough to handle the responsibility of money. Select trustworthy people to help supervise the finances of young heirs until they are capable stewards.  “As long as the heir is a child, he does not differ at all from a slave although he is owner of everything, but he is under guardians and managers until the date set by the father” (Galatians 4:1-2).

Wills

It is important to prepare financially for your death. As Isaiah told Hezekiah, “Thus says the Lord, ‘Set your house in order, for you shall die’” (2 Kings 20:1). One of the greatest gifts you can leave your loved ones for that emotional time is an organized estate and a properly prepared will or revocable living trust. If you don’t have a current will or trust, make an appointment this week with an attorney to prepare one.

The Bible provides us with four primary guidelines for investing.

1. Be a steady plodder

The fundamental principle for becoming a successful investor is to spend less than you earn and regularly invest the surplus. In other words, be a steady plodder. The Bible says, “Steady plodding brings prosperity, hasty speculation brings poverty” (Proverbs 21:5, TLB). Nothing replaces consistent, month-after-month investing.

2. Avoid risky investments

God warns us to avoid risky investments, yet each year thousands of people lose money in highly speculative investments and scams. The Bible says, “There is another serious problem I have seen everywhere—savings are put into risky investments that turn sour, and soon there is nothing left to pass on to one’s son. The man who speculates is soon back to where he began—with nothing” (Ecclesiastes 5:13-15, TLB).

How many times have you heard of people losing their life’s savings on a get-rich-quick scheme? Sadly, it seems that Christians are particularly vulnerable because they trust others who appear to live by their same values. The strategy for avoiding risky investments is to pray, seek wise counsel from your spouse and others, and do your homework.

3. Diversify

Money can be lost on any investment. Stocks, bonds, real estate, gold—you name it—can perform well or poorly. Each investment has its own advantages and disadvantages. Since the perfect investment doesn’t exist, we need to diversify and not put all our eggs in one basket. “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth” (Ecclesiastes 11:2).

4. Count the cost

Every investment has costs: financial, time, effort, and sometimes even emotional stress. For example, a rental house will require time and effort to rent and maintain. If the tenant is irresponsible, you may have to try to collect rent from someone who doesn’t want to pay—talk about emotions! Before you decide on any investment, consider all the costs.

Apply the Principles: When and Where to Invest

Now, let’s apply those four investing principles.

When deciding where to invest, you need to consider your goals, timeframe and tolerance to risk. The concept of risk is important because, as the “Time & Risk” diagram shows, investments with the best track record also carry the greatest potential for loss—at least in the short run.

In other words, the more time you have, the more you can afford to invest in stocks, mutual funds or real estate—all investments that can lose value in the short term but historically offer the best opportunity over the long term. If you have ten or twenty years before you need the money, you can probably recover from most market downturns, but if you need it in less than five, alter your approach.

This means using different investments for different goals. An investment that is suitable for a fifteen-year goal is simply not appropriate for money you will need in two years. If you need the down payment to buy your home in two years as opposed to funding your retirement in fifteen years, you will invest the money differently. Move your money into more conservative investments as you get closer to the time you will need to spend it.

With that in mind, here are strategies to consider over the short (less than five years) and long (more than five years) term.

Less than five years. When you need the money in less than five years, invest in what are known as cash equivalents: money market funds, certificates of deposit (CDs), and Treasury notes.

Longer than five years. The most common investments of longer than five years are mutual funds, stocks, bonds, and real estate.

Mutual funds. The biggest advantage of investing in mutual funds is that you can apply the biblical principles of diversification and professional investment advice. There are many kinds of mutual funds. Some are composed of stocks, some of bonds; some contain both. Others mutual funds consist of international stocks or are limited in their selection to a investment, such as real estate. There are also many types of bond funds—those invested in government bonds, corporate bonds or tax-free municipal bonds. A balanced mutual fund invests in cash-equivalents, stocks and bonds. Choose funds that have solid track records for a minimum of ten years.

Stocks. When you buy a stock, you are purchasing part of a company. Generally, stocks have one of the greatest opportunities for profit, but you also can lose a lot if the company does not perform well. Some stocks pay a dividend.>

Bonds. When you buy a bond, you loan money to a business or the government, and they pay you interest. Investors buy government bonds for safety, municipal bonds for tax-free returns, and corporate bonds for higher yields. It is important to realize that when interest rates rise, the value of bonds decline, and vice versa.

Real estate. People buy property for income or appreciation. There are tax advantages for owning buildings because depreciation is deductible. However, unlike publicly traded stocks or bonds that can be sold quickly, real estate may require a long time to sell.

Remember, the name of the game is to be a steady plodder—consistently add to your investments and allow them to compound.

Click here to download “timeless” investment articles.

Click here for current, relevant articles on investing from our friends at Sound Mind Investing.

Thousands of lawsuits are filed each day in our country. Unfortunately, many of these pit Christian against Christian. Suing seems to be a national pastime. A woman accused a man of kicking her at a nightclub and sued him for $200,000 compensation for the injury and lost time on the dance floor!

Many factors contribute to this flood of lawsuits, including an avalanche of new laws and, most disturbing, a growing tendency for people to be less and less forgiving. The court system uses an adversarial process, which frequently creates animosities between the parties involved. Instead of trying to heal, the system provides a legal solution but leaves the problems of unforgiveness and anger untouched.

The Bible stresses the goal of reconciliation. “If you are presenting your offering at the altar, and there remember that your brother has something against you, leave your offering there before the altar and go; first be reconciled to your brother” (Matthew 5:23-24).

Scripture states that when Christians are at odds with one another, they should not settle their disputes through the courts. “Does any one of you, when he has a case against his neighbor, dare to go to law before the unrighteous and not before the saints? Or do you not know that the saints will judge the world? If the world is judged by you, are you not competent to constitute the smallest law courts? Do you not know that we shall judge angels? How much more matters of this life? So if you have law courts dealing with matters of this life, do you appoint them as judges who are of no account in the church? I say this to your shame. Is it so, that there is not among you one wise man who will be able to decide between his brethren, but brother goes to law with brother, and that before unbelievers? Actually, then, it is already a defeat for you, that you have lawsuits with one another. Why not rather be wronged? Why not rather be defrauded?” (1 Corinthians 6:1-7).

Instead of initiating a lawsuit, a three-step procedure for Christians to resolve their differences is set forth in Matthew 18:15-17: “If your brother sins, go and show him his fault in private; if he listens to you, you have won your brother. But if he does not listen to you, take one or two more with you, so that by the mouth of two or three witnesses every fact may be confirmed. And if he refuses to listen to them, tell it to the church; and if he refuses to listen even to the church, let him be to you as a Gentile and a tax-collector.”

1. Go in private. The person who believes he or she has been wronged needs to confront the other party in private with specific claims. If the dispute remains unresolved,

2. Go with one or two others. The person who feels wronged should return with witnesses who can confirm facts or help resolve the dispute. If this is unsuccessful,

3. Go before the church. The third step is mediation or arbitration before church leadership or perhaps a conciliation service sponsored by a church or ministry.

The greatest benefit of following this procedure is not merely reaching a fair settlement of the dispute but practicing forgiveness and demonstrating love.

Scripture discourages business partnerships with those who do not know Christ. In 2 Corinthians 6:14-17 we read, “Do not be bound together with unbelievers; for what partnership have righteousness and lawlessness, or what fellowship has light with darkness? . . . or what has a believer in common with an unbeliever? . . . ‘Therefore, come out from their midst and be separate, says the Lord.’” Many have suffered financially for violating this principle.

In our opinion, we should be careful about entering into any partnership, even with another Christian. With my lifetime of contacts, I would consider only a few people as partners. These are people I know well. I have observed their commitment to the Lord. I know their strengths and weaknesses and have seen them handle money faithfully even in stressful circumstances.

If, after prayerful consideration, you decide to form a partnership, first take the time to commit your understandings into writing. Develop this agreement with your future partner, and be sure to include a way to end the partnership. If you are not able to agree in writing, do not become partners. Remember, do not rush into a partnership!

The dictionary defines retirement as “withdrawal from an occupation, retreat from an active life.” Our culture promotes the goal of retirement and ceasing all labor to live a life filled with leisure. Is this a biblical goal?

Numbers 8:24-26—the only reference to retirement in Scripture—applied specifically to the Levites working in the tabernacle. “But at the age of fifty, they [the Levites] must retire from their regular service and work no longer. They may assist their brothers in performing their duties at the Tent of Meeting, but they themselves must not do the work.”

While people are physically and mentally capable, there is no scriptural basis for retiring and becoming unproductive—the concept of putting an older but able person “out to pasture.” Don’t let age stop you from finishing the work God has called you to accomplish. He will provide you with the necessary strength. For example, Moses was 80 years old when he began his 40-year adventure of leading the children of Israel.

The Bible does imply, however, that the type or intensity of work may change as we grow older—shifting gears to a less demanding pace to become more of an “elder seated at the gate.” During this season of life we can use the experience and wisdom gained over a lifetime. If we have sufficient income to meet our needs apart from our jobs, we may choose to leave work to invest more time in serving others as God directs.

Unfortunately, most people in America are not consistent savers. Look at the graph below. It’s shocking! Americans saved an average of 10.8 percent of their income in 1984. By 2006, their rate of saving had fallen to a negative 1 percent, the lowest savings rate in the past seventy-three years!

The Bible encourages us to save: “The wise man saves for the future, but the foolish man spends whatever he gets” (Proverbs 21:20, tlb).God commends the ant for saving. “Four things on earth are small, yet they are extremely wise: ants are creatures of little strength, yet they store up their food in the summer” (Proverbs 30:24-25, niv). We need to think like ants! Even though they are small, they save. You may not be in a position to save a lot right now, but begin the habit even if it is only a few dollars a week.

Joseph saved during “seven years of great abundance”(Genesis 41:29)in order to survive during “seven years of famine” (Genesis 41:30). That’s what savings is all about: not spending today so that you will have something to spend in the future. Most people are poor savers because they don’t see the value in practicing self-denial. Our culture screams that we deserve to get what we want, when we want it—and usually that’s right now!

The most effective way to save is to make it automatic. When you receive income, the first thing you should do with the money should be a gift to the Lord, and the second should go to savings. An automatic payroll deduction is even a better way to save. Some people save their tax refunds or bonuses. Remember this: if you immediately save, you’ll save more.

The Bible doesn’t teach an amount to be saved. We recommend saving ten percent of your income. This may not be possible initially. But begin the habit of saving—even if it’s only a dollar a month.

Life expectancy is growing and fewer companies provide pensions. And Social Security? Well, don’t bet the farm on it, because the entire system is projected to run out of money. The bottom line: don’t rely solely on an employer or the government; you need to invest for your retirement.

When investing for retirement, here’s a simple rule of thumb: First, take advantage of all employer matches. Second, invest in a Roth IRA. If your employer offers to match your contribution, do it! It’s free money. For example, if your employer will match up to three percent of your salary in a 401k, put three percent in. It’s that simple.

If you don’t have a match, or once you have contributed the maximum that will be matched, fund a Roth IRA. I am a huge fan of the Roth. Although your Roth contributions are not tax deductible, they grow tax free, and after age fifty-nine-and-a-half, all withdrawals are tax free! The downside of a traditional IRA is that all withdrawals are fully taxable. I believe the government’s deficit will lead to much higher income taxes in the future, so using a Roth will be a huge advantage.

You and your spouse can each invest $5,500 to $6,500 every year in a Roth IRA. Since there are limitations based on age and income level, check with your tax preparer to determine what you can contribute.

What a couple spends on lifestyle can have a massive impact on their finances and relationship. Differing expectations, if they are not reconciled, can damage or even destroy a marriage. It is crucial for couples to agree on the lifestyle they sense God wants for them—one that is affordable and enables them to achieve their long-term goals together.

One of the biggest obstacles to reaching unity in lifestyle is the persuasive power of advertising—at the cost of hundreds of billions of dollars every year—all targeted at getting us to spend more. Whether the product is cars, clothing, or even deodorants, the message is clear: the happy, sexy, wrinkle-free life can be ours if we are willing to buy it.

And if we can’t afford it now? No problem; we can always charge it. Advertisers are pros at creating discontentment and turning wants into “needs.”

Five of the six times the word contentment appears in the Bible, it involves money. The apostle Paul said, “I have learned to be content whatever the circumstances. I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want. I can do everything through [Christ] who gives me strength” (Philippians 4:11-13, emphasis mine).

Oh, and by the way. Paul wrote those words from prison. In chains.

The fact is, no one is born with the instinct of contentment. Along with Paul, it’s something we must learn. It resists the urge to buy, buy, buy and enables us to live within our means.

Early in our marriage, we realized that if we were going to reach our long-term goals, we needed to control spending. We needed to be content with a sane lifestyle in spite of our “shop ’til you drop” culture. We decided that short-term sacrifices were unimportant compared to the long-term benefits of making progress toward true financial freedom.

So we asked ourselves these questions about each spending category: (1) Can we make lifestyle decisions that will reduce our spending? (2) Do we need this item? (3) If we need it, can we get it less expensively?

I want to challenge you as a couple to ask the same questions about your spending and prospective purchases. The objective is to reduce spending so you can create more surplus each month—giving you the ability to give more, pay off debt more quickly, and save more. To aid your thinking, let me share some of our decisions.

First, instead of moving to a larger home, we decided our modest starter home would be our finisher one. We lived in the home for twenty-nine years until we moved out of state. We paid off the mortgage as quickly as possible, which eliminated our biggest monthly expense—the house payment. Dream with me: how would you feel if you owned your home free and clear? We came to the same conclusion—it makes an immense difference!

Then, we chose to buy only reliable used cars for cash and drive them until wheels fell off! Bev drove the same car for seventeen years. We used to call it “Puff” because of the smoking exhaust pipe whenever she accelerated.

I once bought a truck that cost only a hundred dollars—and it looked it! A sympathetic neighbor borrowed it and brought it back, painted. Suddenly it looked like a two hundred dollar truck! While driving the truck one morning, I was enjoying a time of special worship and remembered Psalm 16:11: “In the presence of the Lord is fullness of joy.”

It didn’t matter whether I was driving a hundred-dollar clunker or the most expensive car on the market; I could experience fullness of joy because of my relationship with Jesus Christ. Advertisers have led us to believe that our deepest needs can be satisfied only by purchasing the newest and the best. Nothing could be further from the truth.

It’s hard to overestimate the financial impact of driving debt-free cars. The average monthly new car payment is $375. If a 21-year-old married couple drives debt-free cars and save the $375 per month, earning an average return, they will accumulate about $4 million by age 65! Short-term spending sacrifices translate into enormous long-term benefits.

Comparison

Comparing your lifestyle with others often leads to horrible financial decisions. Many couples have suffered by trying to “keep up with the Joneses” whether they could afford it or not. Young couples are especially susceptible, wanting to begin with the same lifestyle their parents took years to build. They often buy homes, cars, and clothing that are just too expensive.

Some want to create an affluent facade to impress others. Don’t fall into this trap! Author George Fooshee observed, “People buy things they do not need with money they do not have to impress people they do not even like.”

Jesus taught, “For not even when one has an abundance does his life consist of his possessions” (Luke 12:15, NASB). Think of your possessions simply as tools to help you accomplish what God wants you to do for Him. He has entrusted you with assets that He intends you to use for His purposes—and that doesn’t include trying to fake it ’til you make it.

Spend to bless your mate

Early in our marriage I focused our spending on what I wanted, without giving much consideration to Bev’s desires. I didn’t understand that Philippians 2:3-4 applied to my marriage: “Do nothing out of selfish ambition or vain conceit, but in humility consider others better than yourselves. Each of you should look not only to your own interests, but also to the interests of others.”

As I have grown in my relationship with Christ, however, my mentality has completely changed. The question I now ask is: What can I do with our finances to be a blessing to my wife? Fortunately, Bev asks the same question: How can our spending be a blessing to my husband?

God has called all of us to bless each other, and this certainly applies to the relationship between husbands and wives. “To sum up, all of you be harmonious, sympathetic, brotherly, kind-hearted, and humble in spirit; not returning evil for evil or insult for insult, but giving a blessing instead; for you were called for the very purpose that you might inherit a blessing” (1 Peter 3:8-9, NASB).

As you develop the mentality of wanting to bless your mate, you are likely to make a discovery: you actually enjoy buying something for him or her more than for yourself. It’s a practical application of what Jesus told us in Acts 20:35: “It is more blessed to give than to receive.”

“Complex—is the word describing most step families. More children, more grandparents, more in-laws, ex-spouses who can be difficult, custody issues, financial problems—the list seems to go on and on. Often there is also emotional baggage. For example, an ex-wife who was addicted to spending, may make it hard for husband to trust his new wife with the checkbook.

But there is very good news. God loves and cares about all families—including step families. He wants them to succeed.

If the words complex and lack of trust describe the major challenges of stepfamilies, then patience, communication, and honesty describe how to overcome these problems.

Successfully merging a stepfamily is more like a marathon than a sprint. In his excellent book, The Smart Step-Family, Ron Deal says it’s like cooking with a Crock-pot instead of a microwave. In other words, stepfamilies need to employ patience—time and low heat—in allowing each member of the new household to adjust to the changes. This is especially true when working through finances. For example, any parent who has been single for very long will have become accustomed to making financial decisions alone. It takes working together over time to get comfortable with making these decisions as a couple.

Communication

It is important for all couples to address their finances before and during marriage. But for stepfamily couples, the need is amplified because spouses often base their money decisions on the experience of their previous marriage. Listen carefully: Do not carry the baggage of hurts and difficult financial experiences with your former spouse into financial discussions with your new spouse. Philippians 3:13 says it this way: “But one thing I do: Forgetting what is behind and straining toward what is ahead.”

Ask each other these questions.

1. What are your financial obligations to your ex-spouse (child support, alimony, other)?

2. How likely are child support payments to increase or decrease in the future? When will they end? Are you responsible for any additional expenses, such as education, for them?

3. When one of us dies, who will receive the assets brought into our marriage? What happens to them when the surviving spouse dies or remarries? What are the financial plans for your children should you die or be unable to work?

4. What expectations do you have for me to support your family?

5. Do you have a retirement plan? If so, how much is in it? Is any part of it obligated to a former spouse?

6. Do you have any financial commitments to your parents, siblings, or other family members?

7. Was your previous spouse a poor money manager? How will we unify our finances?

8. How should we use what we receive in child support and alimony? What do we do when we don’t receive scheduled child support?

9. Will we both work outside of the home? How will we handle childcare?

10. How will we handle the holidays? How do you feel about gift-giving?

Unifying Finances

Although we normally recommend that couples have just one checking account together, some stepfamilies would be wise to start with “yours,” “mine,” and “our” accounts.

One reason for this is security, especially for the woman. Many women who have been left destitute after their husband walked out will find it very difficult to give up the security of having something they can call their own. Their trust account needs plenty of deposits. As a new husband proves his faithfulness, her trust will be won and the finances can be completely unified.

Children

Stepfamilies are created whenever people marry and bring a child or children from a previous relationship. What may feel like an exciting new start for a husband and wife can feel like a loss for children, who enter the stepfamily with their own wounds—and a missing parent.

Think about their challenges. They may have experienced the trauma of their parents divorce or death and the loss of love and stability. Joint custody and a new parent are bound to cause confusion. If they have to move, they will also lose friendships. They may even feel the need to compete with the new stepparent for the time and attention they had previously enjoyed from their natural parent.

Children often react to these changes by becoming jealous of the new parent. They may pit one set of parents against the other or develop an unhealthy sense of entitlement. For most couples, two issues never completely disappear in a stepfamily.

(1) If I can’t make everyone happy, who comes first: my spouse or my children? (2) Do I love my children more than my mate’s children?

• Your spouse must be your top priority. Divorce recovery expert, Laura Petherbridge, has discovered that men often put their children ahead of their new wives. This is a tragic error.
• Express love toward your children and your spouse’s children equally. You might not have the same feelings of love for both sets of children, but you can choose to love them equitably.  Hold them to the same expectations, discipline each evenhandedly, and distribute financial resources fairly.
• Never poison the children by ever speaking badly of an ex-spouse. In surveys, this is the number one request of children of divorce.
• Be a student of all the children, because each is unique and will adapt to the stepfamily differently.
• How the “other” parents handle money is an area over which you may have no control. If the ex-spouse indulges the children or uses money to “buy” affection, it is important to take a unified approach in dealing with it.

Teaching children to be money smart

You and your spouse probably have different approaches to teaching children how to handle money. For instance, you may have required your children to earn money by performing chores. Your spouse may have simply given an allowance.

In teaching children God’s way of handling money and then, it is important to agree on an approach. Remember the “Crock-pot.” Children’s habits do not change easily, and you will need to be patient when you teach them money management.

If your children complain about changes in how money is handled, sympathize with their frustration. Explain that you understand why they’re upset (“It’s another change you didn’t ask for and I’d be upset, too, if I were you.”).  Then share what you’ve learned about managing money from God’s point of view.

Financial Obligations and the Ex-Spouse

Support payments

If you are receiving child support, remember that this money is legally for the benefit of the child and should be used for no other purpose. And when drafting your spending plan, be aware that 59 percent of custodial mothers with child support agreements do not receive the payments due (U.S. Census Bureau).

If you pay child support, 1 Timothy 5:8 expresses your responsibility, “If anyone does not provide for his relatives and especially for his immediate family, he has denied the faith and is worse than an unbeliever.” Make every effort to be faithful with your child support payments even if your former spouse does not use them wisely.

Those who pay or receive child support often feel a lack of control over their ex-spouse. You can’t force them to pay on time. You can’t dictate that they use the money wisely.  Learn to choose your ex-spouse conflicts very carefully.  Trying to control their spending likely damages your relationship and isn’t worth it.  Trust God with what you can’t control.

Insurance

Who is responsible for the children’s health insurance? And what do you do if the other parent does not fulfill his or her obligation? A backup plan is essential.

Future demands or requests

It is not uncommon for an ex-spouse to petition the courts for a change in the support agreement. This can be very difficult for a stepfamily. Though it may never happen, it is smart to discuss this possibility and formulate a plan in case it occurs.

Checklist of things that might need changing

Insurance. You may need to change the beneficiaries of your life insurance policies. It is also wise to review homeowners, auto, and disability coverage to determine if anything needs to be adjusted. Confirm that everyone in the family has adequate health insurance.

Titles. Car titles and deeds to a home and other property may need to be changed.

Wills. Wills should be changed to reflect your current situation.

Debt. A divorce agreement will not eliminate liabilities on debts. If you are liable along with your former spouse for the mortgage or a credit card, you will remain liable as long as the debt exists. Your credit will be damaged by late payments and the lender may hold you responsible if your ex-spouse stops making the payments. It is essential that you try to remove yourself from these joint debts. This may be as simple as closing a credit card account or as complex as refinancing a mortgage.

Practical Financial Issues for Step Families

Social Security. If you were married at least ten years and your former spouse has not-remarried, he or she may be entitled to a portion of your Social Security benefits. However, when your current spouse becomes eligible, he or she is also entitled to the spousal share. Social Security pays the spousal share to each and does not divide the share between the two.

Pensions. A Qualified Domestic Relations Order (QDRO) may include a court-ordered assignment of benefits to a former spouse of a portion of the benefits scheduled to be received from a pension.

Joint tax returns. Should the IRS audit a past tax return of yours, both you and your former spouse remain equally responsible for any past errors or fraudulent returns.

Refunds. The IRS can withhold a portion of a refund to cover unpaid child support. Standard refund checks are also issued jointly, requiring both signatures.

A shared covenant. I don’t recommend that couples execute a prenuptial agreement based on the possibility of divorce, because this sows seeds of deep mistrust even before the marriage. I am in favor, however, of what author Greg Pettys calls a Shared Covenant for couples whose marriage will form a stepfamily. This is a written agreement designed to clarify emotionally charged issues that may become obstacles to their maintaining a close relationship.

For example, they should agree on how the children will receive an inheritance. If one spouse dies, will the children receive anything? If the survivor then re-marries, how does this impact what the children will receive from their parent’s estate?

A Shared Covenant promotes open communication, clarifies expectations and can draw a couple closer together. It protects a marriage by agreeing on a plan for future events.

What is the biblical perspective on paying taxes? That is the same question that was asked of Jesus. “Is it lawful for us to pay taxes to Caesar or not?. . . [Jesus] said to them, ‘Show Me a [Roman coin]. Whose likeness and inscription does it have?’ And they said, ‘Caesar’s.’ And He said to them, ‘Then give to Caesar the things that are to Caesars’” (Luke 20:22-25). This is an example of the contrast between the practices of our society and the teaching of Scripture. Avoid paying taxes at any cost, people rationalize; after all, the government squanders much of what it collects.

I am not condoning the waste found in government. In fact, I believe a citizen should make an effort to influence government to be more efficient. But the Bible tells us of an additional responsibility: to pay your taxes! “Let every person be in subjection to the governing authorities. For there is no authority except from God, and those which exist are established by God . . . because of this you also pay taxes, for rulers are servants of God, devoting themselves to this very thing. Render to all what is due them: tax to whom tax is due” (Romans 13:1, 6-7). It is permissible to reduce your taxes by using legal tax deductions, but we should be careful not to make unwise decisions simply to avoid paying taxes.

Despite what many believe, work was initiated for our benefit in the sinless environment of the garden of Eden. Work is not a result of the curse! “The Lord God took the man and put him into the garden of Eden to cultivate it and keep it” (Genesis 2:15). The very first thing the Lord did with Adam was to put him to work.

After the fall, work became more difficult. “Cursed is the ground because of you; in toil you will eat of it all the days of your life. Both thorns and thistles it shall grow for you; and you will eat the plants of the field; by the sweat of your face you will eat bread” (Genesis 3:17-19).

Work is so important that in Exodus 34:21 God gives this command: “You shall work six days.” The Apostle Paul is just as direct: “If anyone is not willing to work, then he is not to eat” (2 Thessalonians 3:10). Examine the verse carefully. It says, “If anyone is not willing to work.” It does not say, “If anyone cannot work.” This principle does not apply to those who are physically or mentally unable to work; it is for those who are able but choose not to work.

A close friend has a brother in his mid-forties whose parents have always supported him. He has never had to face the responsibilities and hardships involved in a job. Consequently, his character has not been properly developed, leaving him hopelessly immature in many areas of his life.

One of the primary purposes of work is to develop character. While the carpenter is building a house, the house is also building the carpenter. The carpenter’s skill, diligence, manual dexterity, and judgment are refined. A job is not merely a task designed to earn money; it’s also intended to produce godly character in the life of the worker.

All honest professions are honorable

Scripture gives dignity to all types of work, not elevating any honest profession above another. David was a shepherd and a king. Luke was a doctor. Lydia was a retailer of purple fabric. Daniel was a government worker. Paul was a tentmaker. Mary was a homemaker. And, finally, the Lord Jesus was a carpenter.

In God’s economy, there is equal dignity in the labor of the automobile mechanic and the president of General Motors, in the labor of the pastor and a secretary serving the church.