Interest Rates are on the Rise!

Interest rates are on the rise. That is because inflation is at its highest level since the early 1980’s. You know this reality by how much more you have to pay to fill your car with gasoline. It hit me the other day when I had to pay $13 for a hamburger at a local dive. That supposed gourmet burger used to cost $10. But $13!! That gives me pause. I need to change my eating-out and spending habits to combat this assault on my cash.

 

The Federal Reserve uses a variety of weapons to fight against rising prices and rampant inflation. Their main weapon is to raise interest rates. They’ve done that once already, and have signaled many more rate increases to come. What does this mean to you?

 

When the Fed raises rates, Banks respond by raising the interest rates they charge on loans. The first loan category that gets hit with that increase is credit cards. Credit card rates are already high. But they are set to skyrocket in this inflationary environment. If you carry any credit card debt, brace yourself. 

 

Why should you be wary? Consider the average credit card scenario. The average balance carried on credit cards is $5,500. If just the minimum required payment is made, at the average 16.3% interest rate, it will take 16 years to pay off and cost over $6000 of interest expense. Think about that. That is an extra $6000 cost for you to enjoy the $5,500 worth of stuff and fun you financed. Could that $6000 be put to better use? 

 

Higher interest rates will only exacerbate this impact. The same calculus is true for student loans and adjustable-rate mortgages and home equity lines. You need a sense of urgency  to get rid of this debt. And you need a plan. You could play the game of transferring credit card balances to promotional rate come-ons of zero percent for six months. But it is far better to pay off these balances. 

 

Snowball Your Debt

To eliminate debt, financial planning best practice is to employ a strategy commonly called “Snowball your Debt.” The first step is to list your debts from smallest to largest, and include columns for “actual payment” and “minimum payment.” The first objective is to get that smallest debt paid off pronto. Use cash reserves if you have enough. Sell assets if you can. Do everything possible to pay off that smallest debt. Then, apply that debt’s payment to the next smallest balance. Also, pay just the minimum on all the other balances, applying the excess payments to that next smallest debt to get it paid off as soon as possible. When that is accomplished, apply that payment to the next debt, and so on. Here is an illustration of how this strategy works:

 

Snowballing your debt is a tried-and-true strategy. It is hard work. It demands commitment and discipline. But, it is worth it. And being debt free is Biblical. Proverbs 22:7 says that the borrower is a slave to the lender. No one wants to be a slave. But debt enslaves you by obligating you to pay back the debt – no matter what. So, pay it back and be free. Think about how much better your life will be when you are debt free!

 

I asked earlier if that $6000 of interest expense could be put to better use. What more could you do to help build God’s kingdom if you were debt free? You could redirect some of those payments to help ministries that serve the poor and the most vulnerable. You then become a participant in their mission. What a great opportunity to be a part of something so impactful. 

Time is of the essence. Rates are going higher. Please get serious and take the necessary steps to pay off your consumer debts. There are a few entities that can guide you if you want help developing a plan tailored to your needs. One in particular is Compass Catholic Ministries. They have great resources to help you. Their six-week Bible study Faith and Money Matters will walk you step-by-step along your pathway to financial freedom. Learn more by visiting their website www.compasscatholic.org

#Inflation #RisingInterestRates

Tithing is like Tailoring

The reflection in The Word Among Us for Sunday’s 10-15-17 Gospel reading suggests that the wedding garment in Matthew 22: 1-14 represents the essential elements of our life in Christ. It is a garment of obedience, of repentance and purity.

Garments often require tailoring. Pant and skirt lengths need hemming, waist lines (hopefully) need taking in, cuffs shortened. When we examine our actions and motives, what alterations are necessary? Are they obedient to God’s word? Are they pure, seeking the good of others? The wedding garment is a proxy for repentance, the change of heart required for entrance into the Kingdom. What change, what tailoring do we need – especially regarding our finances?

Tithing is like tailoring our budgets. Every spending choice is a stewardship decision. Lifestyle expenses may need to be hemmed so that our budgets better fit with God’s will for how we use our money.

Tithe in obedience to God’s word.

Tithe to support His works of mercy serving the poor and vulnerable among us.

Tithe because It’s Not Your Money.

Standing in the Breach

In the months since the 2016 Presidential election many articles in Catholic publications seem to have a common thread of concern for reduced government funding of social service programs. One such article from the Catholic New Service contained interviews of Catholic Charities USA CEOs who spoke about their March 29 “Hill Day”. On that day, Catholic Charities leaders pressed Congress to support federally funded social services for affordable housing, food programs at schools and in rural areas, immigration and refugee protection, senior citizen needs, and more.

Their concern stemmed from a preliminary budget plan that called for $54 billion in cuts to discretionary spending, thus putting aid to the social programs in jeopardy. What if money is taken from the departments and organizations that serve people who depend on these vital programs? One CEO said of the likely increased burden on organizations like Catholic Charities caused by reduced government aid, “I don’t think you can expect charitable organizations to do it all.”

That caused me to think, why can’t the Church and charitable organizations do it all? Further, if I am, and we all together are the Church, what does it mean to be a member of the Church?

The US Conference of Catholic Bishops tell us what church membership requires. In a word, it is called stewardship which they define as:

What it means to be a disciple of Jesus Christ. A generous sharing of resources including money is central to its practice. Helping the Church’s mission with time, talent and money—what membership in the Church involves.

So I wonder, should government be the preferred provider of social welfare?  What if the government does cut aid to social programs? Will we—the Church stand in the breach like Moses did in protecting and providing for the Israelites (Ps 106: 23) and share our resources, including money, in support of the Church and charitable organizations to pick up the slack and provide for the poor, government support or no?

Robert McCann, CEO of Catholic Charities of Spokane urged Congress to view the budget as a values-based document. He suggested that our budget reflects what’s most important to us.

I agree. Our household budget does, in fact, reflect what is most important to us. In reviewing our budgets, would we find a priority for supporting the mission of the Church—what the Bishops tell us is required of us as stewards in grateful response to the many gifts God has given?

McCann goes on to say, “We can solve homelessness in the country, but it’s going to take an intentional effort.” The emphasis is mine. Can’t we solve any social/charitable need with intentional effort?

Amen! If our budgets are to reflect a priority of supporting the Church’s mission, we must intentionally include giving to the Church and other charities. It should not be an afterthought. Where our hearts are, so is our treasure.

In thanksgiving for all the gifts and benefits God gives; in recognition that God is the source of all we have, all we are, and all we will be; in our effort to be authentic Christians, will we step up and give in support for the least of our brothers and sisters by feeding the hungry, clothing the naked, sheltering the homeless, welcoming the stranger? Will we give intentionally and proportionately?

Give in support of the Church’s mission to serve the poor.

Give because It’s Not Your Money.

Fearfully Generous

There is no better example of trust in God’s provision than the widow in Mark 12: 42. How could this woman be willing to give all she had except that she trusted that God would provide for her somehow—even if she didn’t understand how.

Many of us put only left-over change into the collection plate, and maybe give token amounts to a few charities. We reason that if we give more, then we won’t have enough for our own needs. Or we may believe the old adage that God helps those who help themselves. Or we may feel it is the government’s responsibility to care for the needy.  After all, we pay taxes that support government welfare programs.

What drives these attitudes?
I submit it is because we live in a general spirit of fear. In my work as a Financial Advisor, I often hear clients’ concerns for our country and how our political dysfunction and its financial mismanagement will lead to the imminent collapse of our economy. Their fear is that chaos worse than the depressions of 2008 and the 1930’s will result in government confiscation of accounts and even lead to soup lines. The general sentiment of these clients is a feeling of being overwhelmed. They envision a bleak retirement of having to work as a Walmart greeter.

Who benefits from this kind of outlook? Who is set to gain by having a significant number of our citizenry scared and paralyzed by fear?

I agree we have much to worry about in our world and our country, including a general decaying of morality in our society. But remember, none of this is new. Solomon assures us in Ecclesiastes 1: 9 that there is nothing new under the sun. There is always something going on in our world to cause worry.

Should we throw up our hands, sigh in exasperation, and give up in despair? No! Rather, we should do all we can with our God given talents and abilities to work for the common good. And like the poor widow, we should do so with an unshakable trust that God will provide.

Fear is the Enemy
Fear is the enemy of a generous spirit. It is the manifestation of our lack of trust. It paralyzes us from acting and makes us want to hoard our resources. Consider the widow in 1 Kings 17: 9. She was resigned to the belief that she and her son would eat the last of what they had, and then die. Elijah told her, “Do not be afraid.” He instructed her to give him that last of her resources; that if she did, God would provide.

Why would she trust Elijah, a total stranger? How could she justify giving the last of her food to him, believing the ridiculous promise Elijah made that if she did so, her flour and oil would not run out? It had to be that by Grace, she trusted that God would honor her generosity.

What great examples these two women are for us today. They refused to succumb to fear and acted generously beyond reason, beyond what their resources would seemingly allow. And why not? What good would hoarding have done for them? As Solomon warned, it would all have been chasing after the wind.

We, too, should heed their example. We should cultivate an attitude of generosity. We are not to allow fear and greed to direct our actions, or be excuses for inaction. Greed saps us of any sense of generosity we may have. It causes us to be cynical and to question God.

Being generous is not dependent on the amount of wealth we have. Many of us can relate to the rich man in Mark 12 who gave out of his surplus, knowing that he still had plenty for himself. However, lack of wealth is not justification for parsimony. Jesus did not run after the widow and say something like, “Oh honey, really. Take your money back. I appreciate your gesture, but you’re too poor. Why don’t you just keep your money?” Instead, He praised her generosity for all generations to come.

As to the idea that God helps those who help themselves (not in the Bible, by the way), how would God do that? Isn’t it our generous actions in service to others the help that God sends?

Generosity is a disposition of our spirit. It reflects our general outlook on life. Do we trust God’s promises or not? Do we acknowledge that all we have is because of God’s generously giving to us the talents and abilities that allow us to earn and serve?

If so, our grateful response is to give of all of our resources, including money. Let us give and give lavishly. Let us give and trust that God will honor our generosity.

Ad-lib this Advent

Fr. Louie recounted a report of a children’s Christmas play from some years ago. If you have children, grandchildren or friends with children, you have been to this play. You know the story. You can imagine the scene.

The Joseph and Mary characters knock on the door of the Inn, seeking shelter for the cold evening. The young innkeeper answered, and staying true to his lines bellowed –

 There Is No Room For You In The Inn.
Watching a dejected Joseph and Mary move slowly across the stage, ostensibly to seek other accommodations, the innkeeper grew very concerned. He could see anxiety in their faces and could tell they were tired from their long journey.

The audience could see that the boy was becoming increasingly uncomfortable. His fidgeting was palpable. Finally, he couldn’t take it anymore. He ad-libbed. In a loud, clear voice, the boy innkeeper cried out again –

 There Is No Room For You In The Inn. But, you can have my room.
Isn’t that what Advent is about—making room for Jesus? And isn’t that what stewardship is about? Making room for Jesus in every facet of our lives—including our financial life.

As we approach Advent, let’s reflect on the various rooms in the Inn of our lives – our family time, our prayer life, our finances, our work environment, our community activities. Do we make room for Jesus?

Specific to the money arena, the season of Advent often gets swept off the back porch as we react to the stresses of holiday gift shopping. Television, newspaper and internet ads constantly barrage us with enticing images of what presents we need to buy in order to make others happy and ensure we have a joyful holiday. Many budgets get whacked this time of year as credit card balances get stretched to their limits. Financial resources get diverted as those debts must be repaid.

Instead, can you ad-lib your Christmas gift budget to make room for Jesus? And throughout the year, when analyzing your check book register, do your spending decisions reflect the priority God has in the economy of your life? Can you ad-lib like the little innkeeper and find a way to make room for Jesus in your budget?

This Advent as you prepare for Jesus’ coming into the world, clear out some space and make room for Him. Instead of worrying that you don’t have enough money to give to building His kingdom, trust in His provision and give anyway, in the truth that—It’s Not Your Money.

Happy Advent and Merry Christmas.