Written by Mike Larkin

Have you heard someone say “Patience is a virtue”? Being patient is not a quality I possess but it is one that I knows works. Scripture says in James 5:7-8, “Dear brothers and sisters, be patient as you wait for the Lord’s return. Consider the farmers who patiently wait for the rains in the fall and in the spring. They eagerly look for the valuable harvest to ripen. You, too, must be patient. ”

We are told to be patient and endure by God. Truthfully, I am not very good at being patient, but yet it is that process that calls us to “plant” first, wait patiently, and then sometime later reap the rewards or the “harvest”. When I do something I want to immediately see the results of my doing. It’s just my human nature to want it that way.

So why do we need to wait? Why is there a “gap” or waiting period in the process? I suppose the wholesome answer is to build character, but truthfully it is just the way life happens. In reality, there is no “gap”, it’s just a part of the process or sequence of events… and it’s the law of nature. Just like gravity, there’s no getting around it. The law of gravity always works the same way for everyone (what goes up must come down). So it is with the law of sowing and reaping. It’s a fixed principle that God built into His creation. I imagine He did this for our personal growth and benefit.

Let’s look at a few ways we can apply this to our finances and life:

1. Understand that we all have to work under the same law as everyone else. Every action will have a predictable event. If we fail to build an emergency financial pot of money and we have an emergency we are going to have a tough time. Proverbs 30:25 encourages us to be like the ant: “Ants-they aren’t strong, but they store up food all summer.” Do what you can now to prepare for the future. Trust God, but you should do what you can do. God warns us not to be lazy or careless. I Timothy 5:8 warns, “But those who won’t care for their relatives, especially those in their own household, have denied the true faith. Such people are worse than unbelievers.”

2. If we personally invest (time, talent and treasure) in things like doing good to other, we will reap the benefit. It might not be right away but the Bible says we do reap what we sow. Sow seeds of good deeds. Paul offers these encouraging words in Galatians 6:9 to people who spend their lives sowing love, kindness, and generous provision, “Let us not become weary in doing good, for at the proper time we will reap a harvest if we do not give up.”

3. God encourages us to invest in things that have an eternal perspective. When we invest in this area, God promises to always to repay with interest. Remember it’s the law. We may not always receive what we want, and it may not be physical riches, but God’s reward on our investment will go beyond our wildest dreams. Luke 6:38 says, “Good measure, pressed down, shaken together, flowing over will be poured into your lap!” The real key, though, is asking God where He wants us to sow, and then obeying his voice. He’s full of His own “hot tips” and is just waiting for us to ask! He knows where the growth potential is and He wants to bless us with His abundance.

Sow generously, because the more you sow, the more you’ll reap!

That’s a promise you can bank on!

Came across this cool website this week and wanted to share it with you if you haven’t seen it before.  It tracks our National Debt second by second…Looking at this web page for long and it will make your head spin and get depressed at the same time.  The National Debt flying up so fast, you can’t even say the number once (if you can actually say a number that large….I had to try 3 times) and it goes up 1 million dollars just like that.  You try it…$12,438,019,736,051.   It’s out of control and way beyond my comprehension.

Here are some numbers that may interest you,make some sense and possible encourage the average Joe out there:

Average income per family: $61,780.

Total debt per family: $678,761 (total National debt divided by the number of US families)

Savings per citizen:  $1,008.  Wait a minute, only a $1,008 dollars!!!  That can’t be, Well maybe not for you.  This number comes from the total liquid cash in personal savings divided by the number of US citizens.   Sure doesn’t seem like much. But have you looked lately at your savings lately?  Do you know how fast your savings rate is…or is not?  Is it even growing?  Hopefully you have more than $1,008.  That’s a good number for your starter emergency fund.  If you made a clock for your savings rate, how fast would it grow?  Is it going forward or backwards?

Have you set a target for your savings this year? I have.  Currently my savings rate is going backwards.  Yes, even for us planners and savers, our emergency fund is getting smaller every month.  Our cash flow is negative.  But that will soon change.  My goal this year is to beef up our emergency fund to a full 6 months of living expenses and to put away in ROTH accounts the max for our income.  For me that’s $6,000 and Mari, $5,000 (I get to catch up cause I’m over-the-hill old. +50) **See ROTH notes below for more info.

That may be a bit of a challenge, but one that is doable.

If you haven’t sat down with your spouse yet to discuss a savings goal like this, now is the time to get started!  Sure, times may be tough, but taking the time to make a written plan will put you ahead of most people just by doing that one little thing…planning!

It’s time to get serious about how you can get rid of debt and start growing your emergency fund.  It’s time to talk about it.  Hey, even if you get that Emergency Fund to $1100, you are beyond the average American out there.

By the way, in the time it took to write this article, the Nation Debt went up by $248,580,771. (note the number in the paragraph under the picture)

Want some good calculators to play with? We suggest going to BankRate.com.

As our National Debt ticks away does something inside of you get “ticked off”? Want to get mad about something? Get mad at your debt, and get rid of it once and for all!

~Mike

**Contributions to a ROTH 2010: Married Filing Jointly
If you’re married and filing a joint tax return, you can contribute a maximum of…

• $6,000 if you’re over 50 and your combined earned income is $167,000 or less
• $5,000 if you’re under 50 and your combined earned income is $167,000 or less
• $0 regardless of age if your combined earned income is more than $176,000
• If your earned income is somewhere between $167,001 and $176,000, your 2010 Roth IRA contribution limit phases out.

Mari was sitting in a salon getting a hair cut when a woman there was ranting about all of her credit cards and how they have raised the rates, slapped on fees, and made it impossible for her to keep up.  Others started piping in about how one credit company charged one fee after another using sly methods, to the point that they closed the account out.  The laws were supposed to “HELP” us weren’t they? We were all hoping…but it doesn’t seem like all is well in credit card land.  Read on:

A law with unintended consequences

“It wasn’t supposed to turn out this way.” So we wrote in our November 2009 article about the unintended consequences of the Credit Card Accountability Responsibility and Disclosure (CARD) Act, signed into law last year by President Obama. The law takes full effect today.

AP Personal Finance writer Eileen AJ Connelly picks up the theme:

During the past nine months [since the bill passed and before it took full effect], credit card companies jacked up interest rates, created new fees and cut credit lines. They also closed down millions of accounts. So a law hailed as the most sweeping piece of consumer legislation in decades has helped make it more difficult for millions of Americans to get credit, and made that credit more expensive.

It wasn’t supposed to be this way….

[The new law is expected to sharply] cut into future profits [for credit card issuers]. FICO Inc., the company best known for its credit scores, projects the average card will generate less than $100 a month in revenue within three years, down from $200 a month before the law.

That helps explain why the industry reacted so aggressively to the legislation.

No kidding.

“It’s unprecedented that the government will come in and restrict the ability of [a company] to price the product the way they want to,” Ben Woolsey, director of consumer research for CreditCards.com told the Atlanta Journal-Constitution. “But the fact that credit cards touch so many American households, the political pressure was so great that something had to be done,” he said.

(Now that the precedent has been set, President Obama wants the federal government to have the authority to block insurers from making premium rate increases. Story here from today’s Wall Street Journal.)

Going forward, the CARD law does offer new protections for consumers. Here is a list from the Journal-Constitution:

1. 45-day notice: Card issuers must give a 45-day notice to cardholders in advance of an interest rate change.
2. If you opt out of card changes, you have five years to pay off your balance at the existing rate.
3. Monthly statements must be mailed or delivered 21 days prior to the due date. Card issuers can no longer set a deadline before 5 p.m., cannot charge for online, phone or mailed payments unless it is made on the due date or the day before.
4. Card issuers cannot issue cards to anyone under age 21 unless they have a co-signor [sic] or can prove they are able to repay debt.
5. The pay-off period when making a minimum payment must be disclosed, along with how much would need to be paid per month to pay off the balance in 36 months.
6. Card issuers can no longer employ double-[cycle] billing.
7. Cardholders must opt-in to be able to exceed their credit limit.

CreditCards.com has additional details on how the new law is likely to affect card users.

~Excerpt from Sound Mind Investing

One of the best ways you men can show your love to not only your wife but to your family is by leaving them a “Love Drawer” or a “Love File”. It has been called a few different names, but the meaning is still the same…share all of your financial information with your family in one place so in your absence they could carry on without any problems or hassle.

Dave Ramsey calls it a “Legacy Drawer” and says:

What’s the Point?

There are a few big reasons to have a Legacy Drawer:

• Leave no hassle or fuss. When you die, your family will be overcome with grief. The last thing they need at that point is to have to sort through a mess of papers and forms to find out what happens to your estate. By organizing everything into one simple place, they can find what they need when they need it without getting stressed out.
• Organize other areas of your life. When you realize that you don’t have a monthly budget (one of the things that goes into the Legacy Drawer), it can motivate you to sit down with your spouse and make one. Also, a Legacy Drawer can get you to open up emotionally to your family.
• Communicate with your family. If you communicate to your spouse, children or other loved ones about what to do with your things when you die, it can help you talk to them about other important things.

We just received our “Success” magazine monthly issue and as usual it is packed full of great, motivating articles.  The following is part of the interview they did with Fox News anchor Neil Cavuto.

“I think people are realizing they can live with less as long as they have more quality time with their families and they have things that money can’t buy or define.” ~Neil Cavuto

Cavuto’s Keys for Attaining Success and a Healthy State of Mind:

• Keep it simple
• Stay positive
• Find the silver lining
• Treasure you time on earth
• Wake up early
• Be informed
• Define your goals
• Critique yourself
• Always be prepared
• Know when to admit you’re wrong
• Follow your passion
• Shut out the naysayers
• Get your priorities right
• Don’t take success for granted
• Be humble
• Be a student of history
• Learn from others
• Don’t blame others for your problems

“No matter how bad something gets, something good can come out of it.” ~Neil Cavuto

Great advice and encouragement as we enter into 2010 to implement!

Be blessed.

Along with your Goal setting for the New Year, consider taking a full day aimed at taking a break from your business of life, work, household duties, and put together a financial to-do list that will reap financial rewards in the year to come.

Here are some of the things on the financial task list to consider doing on this “Financial Health Day”:

• Open a high-yield savings account. Why should your savings languish in a low- or no-yield account? (Check into ING online.)
• Get a cash-back credit card. Now we don’t recommend credit cards in general, but if you use one, why not have one that benefits you with rewards or cash back that you WILL use. The key is to always be sure you pay off your balance each month…or else, cut it up! (Go to www.bankrate.com and check into credit card offers.)
• Shop for cheaper insurance. Check into health, life, home and auto. (We personally used Bob Adams of HomeStars in Plant City, and saved about $600/year by making some smart changes.)
• Cut back on phone service/ Change the family cell phone plan.  Consider getting rid of phone features you never used but for which you are paying a monthly fee.   This may take some amount of time, as there may be long waits and/or many different departments needed to check with.
• Make progress on getting a will completed.  If you don’t have a will…do it now! At a bare minimum, go to LegalForms.com and get a bare bones basic one.
• Fill out a “here-is-what-you-need-to-know-about-our-finances-if-I-die” form.  This is a wonderful thing for your family to have during an emotionally wrenching time. Ask your husband to do this for you as a gift of love.
• Set up automatic monthly contributions to non-profit groups.  Maybe this will end your “end-of-the-year scramble to get donations out.”
• Check gift cards to see how much money is left on them; then go ahead and spend that money! The longer gift cards sit you may start to accrue a monthly fee if you don’t use them soon, as well as the bigger chance of you misplacing the card.
• Organize insurance paperwork. Many of us are adrift in a sea of forms that need to be sorted and organized. Take the time to get a system in place that will help you get organized and more efficient.
• Back up your computer.   A preventative step that can save you down the road: make sure your computer has an ongoing backup plan in place — either to an external hard drive or to a vendor such as Carbonite.com. There’s a good chance a crashed computer will cost more to restore than one of these systems. It only takes this to happen to you once for this to mean something!
• Asking the cable company for a lower rate.   Doesn’t hurt to ask…sometimes they give it to you.
• Automating payment of bills for insurance, electricity, gas, water.  This is a significant time saver.
• Setting up an auto-draft for monthly savings.   Easy to do online.
• Closing any unused/old bank accounts.  Why keep what you don’t need?
• Find an online budgeting system, or some budgeting software.  Should be one that you will use and be proactive to track not only your expenses but to have a spending PLAN and track how much you have in each category – not just your checkbook balance. (Mint.com, Crown Money Map software)

If you truly take the time to evaluate where you stand financially and do a check up each year in these areas, you can comfortably estimate that the time invested in tackling her to-do list will pay off each year in savings and earnings. It helps you to reevaluate decisions and prevent the money leaks or drains that have come on unnoticed and gradually into our lives. It’s a reality shock and a chance to get back on track.

Of course, no two people will achieve exactly the same savings. But for most of us, taking the time to do a financial checkup (even just one day out of the year) is well worth the investment of time. Indeed, the return could be so substantial you might even start looking forward to facing your financial to-do list and getting more fiscally fit.

QUESTION:

Hello Mike and Mari,

During our “espresso” time this morning Sarah and I were talking about the finances and a question came up regarding my Appraisal business.  As you know from our last meeting, Sarah had begun to set up a spread sheet to track and run the Appraisal business.  On our ride home from our meeting with you guys and from our conversation with her this morning, I stated again that I would like to attempt to do the books for my Appraisal business.  She wants to do the business in addition to trying to do our personal budget.  Personally, it is enough for her to learn our personal in addition to everything else she’s doing.  Personally, I feel that I should do my business account.  Not only because I’m alot more familiar with it, but I really do need to get a handle on just how many expenses run through my account.  It would also take some stress off Sarah.  I know that just keeping up with our personal can be stressful for her.  I think her concern is that “someone” should have the overall “Big” picture which would mean in her eyes that one person should be doing all of it.  I disagree with her because there is no reason why I can’t come to her on a weekly basis and present the “Spread Sheet” to her showing my business account on a week by week basis.  Anyway, that’s my feel of the situation but she felt we should run it by both of you.  In a nut shell, she feels the need to do both personal and business whereas I feel I can do the business and she continues to figure out the personal.  This way there is less stress on her and I get even more of a handle on my business during the slow times.  Eventually, my confidence in handling my own business spreadsheet/budgeting could possibly lead to me taking over the personal account as well.  We’re both interested in whatever feedback you can provide.

Jim and Sarah

PS– We have to remember this is a marathon not a sprint.

OUR ANSWER:

Hi Jim and Sarah,

Great question!  We discussed it and will try to explain our response as we see it.

Sarah probably wants to hold on to the workings of the spreadsheets so she stays connected and knows what is going on.  Maybe in the past she was left out of this or that there was no plan to begin with?  Anyway, her need to know what’s happening is very legitimate and should be addressed.  With that said, she is also stressing over it.  Having Jim take over the business sounds very helpful and we think that actually is the best case scenario.  The key is though, that Jim would have to be accountable to having that weekly meeting with Sarah where he brings her up to speed with all the details and numbers, gets her counsel on business issues, and that the two of you can do this regularly without it causing a big fight or tension.  If that is the case, then this really would be ideal.  Sarah wants to know that she can count on a regular amount coming from the business for the personal side and if Jim can give her that level of comfort she will be able to relax and feel secure that her needs are being met and that she understands where you are at financially at all times.   This would actually be a GREAT opportunity for you both to make this happen and this one thing alone will improve your communication and relationship tremendously!!!

As far as Jim taking over all of it down the road…not sure that is what Sarah needs.  But if you do it this way (Jim doing the business and Sarah the personal) for awhile, and it works and you feel confident that Jim could handle the budgeting upkeep on both, and Sarah would like to let him…than by all means go for it.  It’s a process.

You have to take into consideration both of your skills, abilities, and personalities as well.  Who is the “nerd” or the one who likes to track numbers and pays attention to details?  Who is the big picture person, who is more of the “free spirit”?  Once you know this, then it is much easier to decide who will keep the books and handle those details.  The big thing is you BOTH still need to be very much involved in all of the decisions and details of the budgeting process.  There again, those weekly meetings would help in this.

This is GREAT stuff, guys.  Let us know how else we can encourage you both in this.  Hope this helps.

All our best and encouragement,

Mike and Mari

Reposting of an article written by Joseph Slife  on Sound Mind Investing’s web blog that we though would be of interest to all of you!

New research from the National Marriage Project at the University of Virginia shows that “consumer debt…plays a powerful role in eroding the quality of married life.”

Here are excerpts from the Project’s report, “Thrifty Couples Are the Happiest” (PDF), authored by Jeffrey Dew, an assistant professor of Family, Consumer, and Human Development at Utah State University:

“Consumer debt fuels a sense of financial unease among couples, and increases the likelihood that they will fight over money matters; moreover, this financial unease casts a pall over marriages in general, raising the likelihood that couples will argue over issues other than money and decreasing the time they spend with one another….”

Consumer debt is also an equal-opportunity marriage destroyer. It does not matter if couples are rich or poor, working class or middle class. If they accrue substantial debt, it puts a strain on their marriage.

Assets, on the other hand, sweeten and solidify the ties between spouses. Assets minimize any sense of financial unease that couples feel, with the result that they experience less conflict….

Conflict over money matters is one of the most important problems in contemporary married life. Compared with disagreements over other topics, financial disagreements last longer, are more salient to couples, and generate more negative conflict tactics, such as yelling or hitting, especially among husbands…. Not surprisingly, new research that I have done indicates that conflict over money matters predicts divorce better than other types of disagreement….

Clearly, money matters play a crucial role in shaping the quality and stability of married life in the U.S…. In particular, couples who are wise enough to steer clear of materialism and consumer debt are much more likely to enjoy connubial bliss.

~Joseph Slife,  on Sound Mind Investing’s web blog