Dear Chuck,
We anticipate two of our girls will be getting married in the near future. Due to the uncertainty with COVID and the economic setback in our family business, we are unsure how to proceed. Any advice?
Father of the Brides
Dear Father of the Brides,
These are in fact strange times for those who are planning a wedding. Two of my four sons are married. My experience is that it is a lot easier being on the groom’s side of planning. One had a church wedding and the other eloped. The second told us ahead of time. They came to our house afterward where we surprised them with cake and wedding gifts. Both events were celebrated. One was far less expensive for the bride and groom’s family than the other and both marriages are doing fine.
I once read an article that argued the higher the cost and the lower the attendance at a wedding, the less likely the marriage would work out. The inverse was also true, the lower the cost and the higher the number of guests in attendance, the more likely the marriage would last.
I’m a firm believer in planning for a marriage, not just a wedding. Far too many people invest tens of thousands of dollars in weddings with very little thought of future financial stewardship.
My advice: keep it simple with the focus on Christ and the wedding covenant.
In 2019, Trip Savvy reported the average American wedding costs just under $35,000. That’s a WHOLE lot more than Ann and I spent on our wedding! Most couples don’t have that kind of cash, and it’s a lot to ask of parents. Here is a good way to avoid the financial stress of your daughter’s marriage: don’t borrow money for a wedding. Instead, create a reasonable wedding budget and let your children use every dollar saved for their future. If you can afford $5,000 and they can do it for $3,000 then bless them with the $2,000 saved.
Humility and beauty under the umbrella of faith will testify of God’s goodness on their wedding day. The example you set could bless many. My observation is that the simpler the plans, the less stress is typically involved. The Bible says, Anxiety in a man’s heart weighs him down, but a good word makes him glad. (Proverbs 12:25 ESV)
First, make a budget for the rehearsal, wedding, and reception. Then, involve family and friends to help with everything from food and flowers to invitations, music, and photography. You will be surprised at how much friends from church or family are willing to do to help make the day special.
Marriage Preparation: One way to help your children prepare for marriage is by getting them started off on the right foot financially. Our Money Dates will give them a firm foundation in Biblical stewardship.
The Dress: 80% of Western wedding dresses are manufactured in China. One of my nieces is a bridesmaid for an August wedding. Her dress was ordered months ago but was recently informed that her dress would not be ready until that month. If you have a daughter, I recommend buying a dress off the rack. We attended a beautiful simple wedding where the bride wore a dress she found on sale at Anthropologie. Think outside the box and don’t let the world dictate your decisions. Years ago, my wife loaned her dress to two people: a good friend and a relative. One of my sisters-in-law wore her grandmother’s.
Guest List: Some experts predict the coronavirus to increase due to travel, ongoing protests, and virus mutation. This could impact the size of the weddings. Considering flight restrictions, think about your out-of-town guests. Remember that older people are the most susceptible to the virus, so precautions will be needed. Consider allowing people to join the wedding from a distance by streaming it live on the internet.
The Location: With the increase in destination wedding locations such as on the beach, in a barn or outdoor venues, costs can vary greatly. Consider lowering your cost by going the old fashioned way of using your home church. If your wedding and reception can be managed at your church, you will likely save lots of money. One simple wedding we attended in a church just a few years ago had the wedding party singing a beautiful hymn as they proceeded down the aisle. The bride and groom joined in the final stanza as their guests stood and sang along. I can hardly remember the other elements of the wedding, but that feature was so beautiful that it has remained in my mind.
Honeymoon: The average couple spends more than $4,000 on their honeymoon, but it is not necessary. If you already have credit card debt, and need help eliminating it, reach out to Christian Credit Counselors to help you get started on a debt management plan before the weddings. With the travel restrictions experienced this year, a honeymoon planned in a safe location within driving distance may be less stressful. If you know someone who has a lake house, cabin, or second home, ask if you can use it. People are typically thrilled to provide in such a way. If that is not an option, inexpensive vacation options are available. A weekend away may fit the budget now with the hope of a later trip when the economy rebounds. Many couples enjoy a later honeymoon after they have a few months to adjust to being married.
This is a one-day event so keep an eternal perspective. Don’t allow the world to dictate your plans. My prayer is that you and your daughters are pleased with the wedding, avoid financial stress, and set them up for a wonderful marriage.
This article was originally published on The Christian Post, June 26, 2020.
Dear Chuck,
I wasn’t ready for the pandemic. My health has been fine but my finances have not. How can I get ready if we are faced with another crisis?
Prepping for Another Pandemic
Dear Prepping,
I am sorry you were not ready for the pandemic but I am grateful that your health is fine. By the way, nobody saw this coming and thus it was very difficult to be prepared. However, we can go through some Biblical financial advice that will help you prepare for the next round or the next pandemic or whatever the Lord brings our way.
2020 has been a year of the unexpected. Experts say we need to brace for a rise in coronavirus cases due to travel, ongoing protests, and virus mutation. We have political and social unrest, fear, and insecurity on many levels. It is definitely time to get your financial house in order. This will give you the freedom to make wise decisions and reduce stress.
Do you remember the story of the humble man who surprised his community by dying with millions of dollars? Ronald Read, of Vermont, served in WWII. He returned home to work at a service station for 25 years, then as a janitor for 17. The unassuming man grew up poor but had an incredible work ethic. He drove a used Toyota Yaris and was known for his flannel shirt and baseball cap, sometimes holding his coat together with safety pins. What people did not know about this incredibly frugal man is that he studied The Wall Street Journal and bought stock. Upon his death at 92, he left six million dollars to his local library and hospital.
There are some lessons to be learned from his life. He was not interested in “keeping up with the Joneses.” He made sacrifices to save and invest so he could give – generously. Spending less than he earned gave him the margin needed to accomplish his goal. He not only survived many crises in his long life; he thrived.
Last year, GoBankingRates.com conducted a survey and reported that nearly half of all Americans live paycheck to paycheck. Income isn’t necessarily the problem; spending is a key factor. A survey by global advisory firm Willis Towers Watson found that 18% of people earning more than $100,000 live paycheck to paycheck.
The three costliest items for Americans are housing, transportation, and food. Finding ways to reduce these can significantly improve your financial condition.
Get a group of trusted friends to join you. No plan is the same for everybody, but we all benefit from encouragement and accountability. Seek ways to increase your income while decreasing your expenses. Sell what you don’t need and ask God to grant insight in ways to boost your income.
The wise man saves for the future, but the foolish man spends whatever he gets. (Proverbs 21:20 TLB)
A great way to get started is to use tools designed to help you move toward healthy saving habits. The Eli app is a tool that helps automate your savings for you. You could also try using an envelope system or budget spreadsheet. There are other free resources on the Crown website.
The Bible teaches that we are to give first and save second. Support your local church and organizations committed to helping the poor. See how your church can partner with other churches or organizations to help. Then volunteer your time.
Our hope is in the future promises of God. We can joyfully make sacrifices now so we are prepared for tomorrow. The margin we create allows us to help others who do not have the capacity or ability to help themselves.
Stay healthy! Stay prepared! Thanks for writing.
This article was originally posted on The Christian Post, June 19, 2020.
Dear Chuck,
My home’s air conditioner went out. We’re getting by with some fans but need to replace the unit soon. Should I use a low interest rate credit card or borrow from my 401(k)?
Hot in Texas
Dear Hot in Texas,
Having grown up in Texas myself, I understand this is a need and not simply a want! The summers can get dangerously hot.
Our unit has gone out several times over the years, so I know it can be expensive to fix or replace it.
Before you make a final decision, consider paying for a repair that will keep it running long enough to postpone having to borrow money to replace it. We have a unit right now that simply leaks coolant so we have it refilled until that option is no longer working. We’ve been able to keep it running for a couple years but know the day is coming when it will have to be replaced.
If you know for sure it has to be replaced, be a wise consumer. There are lots of options and costs can vary dramatically for the equipment and labor. Do your homework. Check out any deals from big-box stores like Costco, Sam’s or Home Depot before selecting the replacement unit or repairman.
401(k)
Withdrawing funds from a 401(k) before you are 59 ½ will cost you a 10% penalty. Plus, you will have to pay taxes on the money you withdraw.
If you can prove that your income was negatively impacted by the COVID-19 pandemic, you may qualify for a hardship distribution under the CARES Act. You can withdraw up to $100,000 without the penalty and the IRS will grant you three years to pay taxes on the money you withdraw. The taxes, however, can be avoided if you repay the account within three years.
Problems with borrowing from your 401(k):
This is the last option I recommend that you choose. Before you borrow from your retirement account, consider ceasing or decreasing your 401(k) deposits until you pay for the new air conditioner.
Low Interest Rate Credit Card
A credit card is a good option for those who pay off the balance each month. See if you qualify for a 0% promotional offer. The problem for many is the temptation to use it for things other than needs. Your credit score can temporarily drop a few points when you apply for any type of credit, but timely payments will protect it.
Considerations:
Personal Loan
A personal loan provides a lump sum of money that is paid back with monthly set payments. This is a good option if you qualify for a low rate and need to finance one large expense. Compare online rates and options with local banks or credit unions. Make sure you know all fees and compare this with the cost of a credit card. It is possible to pre-qualify in minutes.
Payback Plan
Sell items you do not need. Take on a part-time job and apply that income to the debt.
Be Creative
If these options do not work well for you, consider a private loan or help from your church. There may be people you know that would gladly loan you the money interest-free right now. This is also a circumstance where the benevolence ministry at your church may want to make the loan to you.
No air conditioning in the heat of summer is miserable. Here are some ways to stay cool while waiting to make your decision. They can also help you save money once the new system is installed. A high-efficiency unit can reduce your energy consumption and monthly bills. So again, do your research and hire a reputable company for installation.
When money is set aside in an emergency account, you can cover repairs and maintenance without fear or worry. God does not prohibit using credit, but He gives clear guidelines for using it wisely. There are three basic principles God’s people should remember:
I hope this will help you get the A/C on again soon and avoid financial hardships down the road as well.
This article was originally published on The Christian Post, June 12, 2020.
Dear Chuck,
I can retire in two years at age 65. Our home is paid for but we have almost nothing saved for retirement. We can get by on Social Security but it will be tight. How are others getting by who are in this shape?
Retirement Planning
Dear Retirement Planning,
It is great that you are thinking about your options now. There is still time to make some adjustments to put yourself in a better position.
The typical approach to retirement negates an aspect of God’s design for man: work. It normalizes something that was never intended to be normal – not working. Now, I don’t think retirement is wrong. But I do believe that retirement for Christians means having time to serve others more fully without the necessity of being paid for it. It is a time to repurpose the how and why of time and resources.
47% of workers are relying on Social Security as their primary retirement income. The average benefit for a retired worker in 2020 is $1,503 per month. Many of those with only Social Security income live with family members, in low-income senior housing, or in small apartments. If they own a home, they have to budget wisely to pay for taxes, maintenance and repairs. Some depend on the generosity of others. Creativity, community, and frugality are vital.
There are several things to consider in planning for your future:
The amount needed in retirement is different for everyone, but many worry they will outlive their money. In fact, the number one financial regret of older Americans is that they did not begin saving sooner.
Knowing ahead of time that “it will be tight” is an important reason to continue working. Remember, work is a blessing from the Lord. It keeps our bodies active and our minds sharp. Like ants, we can store up for the day when we want or need to cut back on hours. Aim to max out a 401(k) plan and a health savings account (HSA) if available. Because life expectancy is increasing, consider extending the date that you plan to retire. By working until you are 70, you could set aside a substantial amount of retirement funds to supplement your Social Security benefits.
You can increase your monthly benefit by waiting to draw until your full retirement age, but it is not always the most beneficial choice. Your health, financial condition, lifestyle and retirement plans will influence the decision. Do your research. Run the numbers and make a choice when is best to begin drawing your benefit. I can see advantages to both sides of the argument of whether to draw early or delay.
My father owned his own business. This enabled him to work full-time until he was 83. His mind is still very sharp as he has remained active and involved in the community.
The knowledge, experience and wisdom accumulated over a lifetime can be shared with others. The Bible emphasizes helping younger generations to grow in faith, to live godly lives and to strengthen the family unit. It grants purpose and structure to your days. I have personally benefited from several retired men who have served on our board of directors.
Regardless of your income, retirement is a matter of making lifestyle choices. By lowering your cost of living, you can stretch available funds to meet your needs.
Financial planning is essential, especially in an environment of low interest rates on low-risk savings products.
Get on a budget and reset your financial habits. Recruit a wise person to hold you accountable. Quiz older friends to learn what to expect financially. Don’t forget the cost of inflation, taxes, travel and long-term care. Will you want to move near family?
Eliminate debt. Negotiate your bills and find ways to cut back. Sell what you don’t need and consider downsizing unless your home is appreciating. Find ways to save with joy and multiply income streams if possible.
See your work as a means to glorify God, to serve your employer, to help your customers, and to provide for your future.
Whatever you do, work heartily, as for the Lord and not for men, knowing that from the Lord you will receive the inheritance as your reward. You are serving the Lord Christ. (Colossians 3:23-24 ESV)
This article was originally posted on The Christian Post, June 5, 2020.
Dear Chuck,
With interest rates so low, should we refinance our house? We bought it in 2014 for $220,000. We put 10% down and still pay PMI. We think it is worth $240,000 now. We also have some troubling credit card debt we want to pay off in the refi.
Refi Now?
Dear Refi Now,
Many people are asking the same question for a variety of reasons. Some want the historically low rate; others need a lower monthly payment by getting a longer term on their loan; others want to take some equity out of their home.
I hate for anyone to pay private mortgage insurance (PMI). Rates for this insurance can range from 0.15% to 2.5% of your loan amount depending on your credit score. Conventional loans require 20% down to avoid it. Since you paid $22,000 down in 2014 and would likely have another $18,000 in equity if your appraisal is correct, you could probably get rid of it in a refinance.
I also think it is a bad idea to use debt to pay off other debt. More about that later.
While it seems like a no-brainer to go for it, it is not. Plus, since I don’t have all the numbers or a full financial picture of where you are right now, I’ll offer some pros and cons for you to consider before making your decision.
Home purchase applications are up. Some analysts believe buyers are fleeing cramped urban apartments and heading to suburbs with backyards and space for home offices. Refinance applications fell 0.29% last week but are still 176% higher than a year ago. Joel Kan, a Mortgage Bankers Association economist, said that conventional refinance applications rose 2% and government refinancing applications were down nearly 7%.
Since more interest is paid in the early years of a mortgage, refinancing a home early can be helpful. Keep in mind the difference between refinancing and recasting a mortgage. A couple factors to consider are the number of years you plan to keep the house, and if there’s a penalty for early payoff. To reduce the total cost of your home (principal + interest), your goal is to pay off the mortgage as quickly as you can.
Pros
Cons
You may face the same costs you paid in your original mortgage: origination fees, title insurance, appraisal, application and closing fees. These can be covered three ways: with cash, by accepting a higher interest rate for a “no-fees, no-costs” loan, or by adding the costs to the total loan (which I do not recommend, by the way).
First, determine your breakeven point. This is the length of time that savings (with a lower rate) will exceed your closing costs. The calculation is found by dividing total closing costs by monthly savings. For example: a $6,000 cost divided by $250 monthly savings will take 24 months to breakeven. If your income is stable and you plan to stay in your home more than that time, refinancing can be justified.
Short-term mortgages mean lower rates but higher monthly payments. A lot of flexibility is forfeited with higher overhead.
Longer terms equal lower monthly cost but higher overall cost. This can be justified if you plan to make extra payments over the course of the loan.
If (and when) rates rise, a fixed rate will prevent higher payments.
Generally, I recommend refinancing if you plan to stay 5-7 years. If you desire to eliminate the mortgage faster, make extra payments on your existing mortgage. If you have no other loans against your home, you may be able to eliminate PMI. Ask your lender how you can cease this additional payment without refinancing.
Do your math and factor in your overall financial condition. Our refinancing calculator may help you with your decision. If refinancing is beneficial, then get several quotes, including credit unions. Just do not overextend. More than 4.1 million homeowners are in forbearance plans, meaning borrowers can skip or make reduced payments. The rates for 15-year mortgages are lower than those for 30 years. Just make sure you have the ability to make those higher payments so you can avoid financial stress in the future.
The overall picture that you paint in your question concerns me. You stretched to get into your home in 2014 and you are carrying expensive credit card debt. My guess is you likely have some other financial practices that are preventing you from being totally financially free.
One of the best things you can do is work towards eliminating your credit card debt once and for all. Set up a plan to do that using our Debt Snowball Method. If you feel you need help, Christian Credit Counselors is the group I recommend. They can help you with any challenges you are having paying off your credit cards.
Next, you need to be sure you have emergency funds set aside. A funded emergency savings account of 3-6 months is highly recommended. This will improve your credit score, give you more funds for refinancing costs and keep you out of financial danger in the short and long term.
Seek wise counsel from several sources. It will benefit you now and in the long run. Proverbs 1:5 says A wise man will hear and increase in learning, and a man of understanding will acquire wise counsel (NASB).
If you can get rid of the credit card debt, improve your savings and eliminate the PMI by talking to your lender, you may not need to refinance your mortgage. In most cases, it is best to use the money you save by not refinancing to pay down your principal and make extra payments as you are able.
This article was originally posted on The Christian Post, May 29, 2020.
Dear Chuck,
I have not spent my $1200 stimulus check since I have no real savings. I am insecure about losing my job but really want to do something else anyway if I get laid off. Should I invest in getting training for a future job or just keep the money in an emergency account?
Save It or Go For It?
Dear Save It or Go For It,
Many, like you, are wisely using the pandemic to ponder their careers. I commend you for saving your check; your question is important.
I believe that investing in your future right now will be worth far more than your $1200 stimulus check will be if it is sitting in a bank account. At the same time, you need to have some savings whether or not you do get laid off. Let’s dig deeper on your question.
Financial defense allows you to stay within your comfort zone. It protects what you already have. However, going on offense means developing new skills, learning how to network, negotiating raises and pursuing high-level opportunities. This increases your skill, your capacity and your earning potential.
Proverbs 16:9 (ESV) says, The heart of man plans his way, but the Lord establishes his steps. To cultivate a healthy, secure financial life that supports you and your family, you need a strong defense and a solid offense.
Do you know what career you would like to pursue? Cultivate your self-awareness and discover what’s causing the dissatisfaction at your current job. Can you carve out a new role for yourself there? Or is it indeed time to step out?
Unclear career direction can cost you a life of purpose. Employers may be unaware of your talents. God gave you those to develop them in order to bless others and bring Him glory. Have you settled for mediocrity but desire to work with excellence?
Now is an excellent time to go on the offense and build your capacity for the future. I recommend using your stimulus check to get training, licenses, or equipment you may need for future opportunities.
Investing in yourself will help you become the masterpiece God created you to be (Ephesians 2:10). You will gain confidence, knowledge and marketability that will benefit your career, volunteer roles and relationships.
Aim to be a lifelong learner. Make it part of your morning routine, a part of your day, and before you go to sleep. Incorporating small doses of learning throughout the day will help you be more informed and intellectually invigorated in no time. Never grow complacent and never stop learning.
Replace your free time with a massive open online course (MOOC) from places like EdX, Udemy and Coursera. I’m currently taking a class in finance by Nobel Laureate, Dr. Robert Schiller. It is a fantastic course from Yale hosted at Coursera and it is free!
Millennial Money lists five essential job skills and the free or low cost online tools for training in each area:
Strengthen your skills or learn new ones to enhance your marketability in today’s competitive environment. They will improve your career options and help you thrive during uncertain times.
Employers want people who are responsible and self-directed. A resume is one of the first opportunities to reveal who you are. Enhance your LinkedIn profile. Candidates who clearly understand their path and what they want in their career demonstrate focus and goal-orientation. Knowing your strengths and having the ability to point to your success at work or elsewhere are important. Most important is the ability to work well on a team.
These qualities will be evident in the answers you give to interview questions. Just as important are the questions you ask your interviewer. You do not have to talk about your character traits; they will be obvious in the way you present yourself. Spend some time researching the company and prepare some informed questions.
You may want to pursue a specific trade or professional certification. I’ve spoken to several men in service industries since being sheltered in who have more work than they can handle.
A friend told me that far too much of our higher education system is designed to convince students to borrow money they cannot repay, take classes they cannot use, to get education they do not need, for jobs that do not exist. He is convinced that the economic reset will change this. Trade schools equip people with something they can use. Also, many community colleges offer courses and programs that lead directly to jobs that are in local demand. Crown offers career assessments and coaching via our Career Direct tool. Career Direct has helped thousands of professionals and recent graduates discover the work they love. If you are looking for a practical step toward discovering your best career fit, meet with one of our thousands of trained consultants who can help you gain clarity of your vocational calling.
Originally posted on The Christian Post May 22, 2020
Dear Chuck,
I’m fatigued from all the “fake news,” flawed forecasts, imagined scenarios, and conspiracy theories that are circulating in the world today. How do I know what is true or false anymore! I am trying to decide what to do with my investments but feel paralyzed right now.
In a Holding Pattern
Dear In a Holding Pattern,
I too have struggled with the very same fatigue. It has caused me to question if we are experiencing a “great delusion” that God sends when the lie becomes the truth and the truth becomes a lie. (See: II Thessalonians 2:11)
Whatever God’s purpose is in this time, we must be vigilant to guard our minds from deception. Let’s talk about that, and then I will offer some investment advice.
Jeff Hancock, founding director of the Stanford Social Media Lab and a professor of communication in Stanford’s School of Humanities wrote an article that reveals the reasons why people are deceived in the uncertainty about the coronavirus and how to guard against it.
Hancock says social media is a platform that provides information quickly. Because we are naturally drawn to bad news, anxiety builds within us. We believe wrong or deceptive information to reduce uncertainty. Conspiracy theories, for example, allow us to place blame somewhere, making us feel better.
The motivation for fake news, misinformation and disinformation:
Do your homework. Don’t believe it or share it until you verify it. Coronavirus news (or any topic for that matter) should be double-checked. Look for cues like unknown sources, unusual number of endorsements, and a focus on partisan topics. Do research to see if there is any contrarian opinion or thoughts about an issue or data or theory. Often, I will search for information about the writer or author as well as the people in the story. After learning more, ask yourself, should I increase or decrease my confidence in the story based upon what I learned about the individual?
Imagine that you are hiking on an unfamiliar trail and suddenly realize that your map is not accurate. What it is showing you and reality do not match. Here is what would most likely happen next: You would stop hiking and slowly try to determine reality. Pausing is okay. Pausing is normal. That does not mean you are fearful; it means you are taking the time to discern what to do.
Next, you would resume your hike based upon the best information you have available to you: the knowledge of your circumstances and what you believe is best to get to your destination. No doubt, you would be praying for His guidance to get you safely out of the woods while you cautiously take the next steps.
Since we are in a time of unknowns, it can be helpful to watch the market to determine what others are sensing regarding reality. If nothing else, financial markets tell us when people are generally optimistic (markets are going up) or when people are generally pessimistic (markets are going down). I have found this simple analysis to help me with investment decisions.
If we compare the stock market to a roller coaster, we took a sharp dive then climbed quickly back up the next hill. I think we are in for another big drop through the summer. The economic damage is far-ranging, and political solutions look too slow and misguided. This will likely begin to reflect in the markets. Get good, professional advice before making a hasty decision. If you are squeamish, be sure your investments or retirement funds are in a defensive posture. If you are an aggressive investor, many more opportunities for buying low will likely happen in the near term. Diversification was Solomon’s advice and remains an important strategy. (Ecclesiastes 11:2 and 11:6)
I’m reminded of a man who questioned God and struggled with how to live during turbulent times. The man: Habakkuk. Impending judgement and questions run throughout this Old Testament book, but he ultimately rests in the Lord.
In the middle of the book we read “…the righteous shall live by his faith.” (Habakkuk 2:4 ESV)
This is a dependency on a sovereign God whose ways we cannot understand with our finite minds.
Habakkuk demonstrates a trust that results in the reality that no matter what happens, we can rejoice in the Lord. Though we lose our jobs, though we lost money in the stock market, though our retirement fund fades away (etc.) God will be with us and He will enable us to carry on.
Though the fig tree should not blossom, nor fruit be on the vines, the produce of the olive fail and the fields yield no food, the flock be cut off from the fold and there be no herd in the stalls, yet I will rejoice in the Lord; I will take joy in the God of my salvation.
God, the Lord, is my strength; he makes my feet like the deer’s; he makes me tread on my high places. (Habakkuk 3:17-19)
God Provides is a Crown video teaching series of six short films, each portraying a biblical account of God proving Himself to be a faithful Provider. The series has reached millions of lives around the globe and is now available for free on Crown.org. I hope it will be an encouragement to you in times of uncertainty. God is our ultimate strength, joy, and help. May He also be our source for wisdom as we navigate the information that comes our way.
This article was originally published by the Christian Post, May 15, 2020.
Dear Chuck,
Many we know have been hurt financially due to the coronavirus shelter-in policies. What should I know to encourage others as they try to survive this?
Trying to Help My Neighbor
Dear Trying to Help,
The coronavirus has created a lot of uncertainty in every sector of the population. I cannot address them all, but here I will address some segments that you can be prepared to help.
Our students and soon-to-be-graduates have seen internships and fellowships vanish before their eyes. Some positions have changed to work-from-home scenarios. Summer employment may be limited but there will be opportunities for those who are creative, flexible and patient. Some can continue their education this summer or seek certification in skills for future work.
“The coronavirus could change where students go to college, if they go at all,” one report states. Moody’s Investors Service predicts that college enrollment will drop next year because of the coronavirus. The impact of that will affect several sectors of the economy. It is possible that more students will stay home, attend community college, or postpone college. Trade schools may become more and more appealing.
How You Can Help Them
If your children or grandchildren are looking for a summer job, an internship or just a way to get volunteer experience this summer, take the time to interview them to find out what they hope to find. Once you have something specific, seek out opportunities within your network to help them succeed.
If all else fails, consider what I have done in the past. Call a friend and ask them to interview your loved one and give them a part time job or internship. Privately and confidentially offer to pay for their salary if hired. This will help the company and your child/grandchild alike. While it may cost you more than you wanted to pay, you have invested in their much needed development for the future. In my case, I have opened doors for interviews this way; my sons were hired but I never paid for their salary since the employer was very happy with their work.
There are 54 million U.S. workers aged 50-plus. According to AARP’s Public Policy Institute, 51% of Americans over 50 have no emergency savings. Laid-off older workers who are less educated or skilled, with no experience in telework, may find it difficult to find jobs soon reports Chris Farrell at MarketWatch.com
The Urban Institute’s Age Disparities in Unemployment and Reemployment During the Great Recession and Recovery said that half of people age 25 to 34 who lost their jobs during the last recession were reemployed within six months, while it took more than nine months, on average, for the unemployed ages 51 to 60 to get hired.
How You Can Help Them
When counseling those over 50, encourage them to stay active, improve their skills, and highly connect with their network. Relationship-based referrals remain the very best way to find employment. This group will benefit from online training in areas where they have existing skills or interest. I recommend training in technology for possible work-from-home opportunities or sectors that are overworked during the crisis: healthcare, logistics, grocery stores.
This segment of society has faced extremely difficult days during the weeks of coronavirus. The single mother knows she cannot get sick because she has children depending on her. She needs her income to pay the bills, feed and diaper children and try to save for their future. Many are still waiting for the arrival of stimulus checks. If she is working from home, she may also be homeschooling and/or taking care of infants or toddlers.
There are more than 15 million single moms in America today raising more than 22 million of our nation’s youth. Single moms include highly educated women, those without a high school degree, widows, and those who fled abusive relationships. Many did not choose to raise children on their own. In addition to the threat of losing work, the coronavirus may disrupt child support payments. Many whose families helped with child care are now social distancing adding more stress to these homes. One single mother said, “To go a month or more without a paycheck is terrifying.”
How You Can Help Them
Recognize the stress they are already experiencing. Suggest that they are open and transparent with their employer. Recommend that they seek help from their employer with flexible hours, support for child care or a raise. Offer to help them with simple tasks like grocery shopping or running errands so they can rest. If they need a budget coach, suggest they contact Crown for help.
Many other groups exist that are being affected. Those facing a crisis of this proportion need guidance, patience, and hope. Let’s join together to pray for wisdom and discernment to help those God puts in our sphere of influence.
This is an opportunity for the body of Christ to serve in love. Those who have not been financially impacted should pray for discernment in helping the vulnerable. The church must educate the body in the Biblical principles of stewarding time and money as well as properly viewing work as a means to worship the Lord.
This article was originally published on The Christian Post, May 8, 2020.
Dear Chuck,
I just don’t understand how America can implement another massive bailout/stimulus without some long-term consequences. Aren’t we already carrying too much national debt?
Stop the Debt Please
Dear Stop the Debt Please,
You and I agree that we have a long-term problem. America is carrying almost 25 trillion dollars in national debt. We produce approximately $20 trillion/year in GDP (gross domestic product), so our debt is more than 100% of our annual economic output. It is significantly greater than the annual income of the federal government.
There are those who believe that federal debt doesn’t matter since they can just print more money to pay their debts. I am doing more research on this problem and will write about in the future. For now, I will tell you a true story to illustrate my point.
We like to play Monopoly at our house. We can get very competitive. A number of years ago, we did an experiment with our classic version of the game of Monopoly. We allowed anyone to borrow as much money from the bank as needed (zero-interest loans) and to create as much debt between players as they wanted.
Essentially, nobody could go broke so the game went on and on and on. Property prices got crazy, rents inflated, and it took a spreadsheet and calculator to keep track of all the debits and credits. It was all fun and games until somebody got tired of it and wanted to be paid with something other than another paper entry (magic money created out of thin air). People began to lose properties, houses, hotels, utilities – everything they had – to pay back debt. So, the suspension of the classic rules worked until one player no longer wanted to go along with the scheme or lost confidence in one of the other player’s ability to ever really pay them back.
If a player owned hard assets like Boardwalk and Park Place they were much better off leveraged to the gills than owning Baltic and Mediterranean Avenue. Confidence in the ability to repay became one of the key factors in the fiat money version. Even if playing the banker (the issuer), it only works to the point that people retain confidence in the fiat money (i.e. the true value of the currency).
Some argue that we should have adjusted the interest rate or the tax rate of the revised game to keep the bank healthy and regulated the money supply. There was resistance to that idea (taxpayers like lower taxes) and neither modification could counterbalance the total amount of funds being issued. Players begged for bailouts when they were in a pinch and wanted to keep playing. The bank became way over-extended and was swamped with bad loans.
This version of the game, although an imperfect example, makes a simple economic point. Fiat money only works so long as people have confidence in it.
Without constraint in the money supply, fiat money loses its value because people stop believing in it. History is replete with nations who destroyed the “good faith and credit” of their own currency. I own a $100 Trillion Zim dollar bill. It reminds me that $100,000,000,000,000 could not buy toilet paper in Zimbabwe in 2008.
Consider this from a 2010 article titled The Trouble With Modern Monetary Theory at the Business Insider:
Thus, government cannot just spend and spend and spend or the extra dollars in the system will chase too few goods and drive up prices. It’s important to understand that the government cannot just spend recklessly. This is important so I’ll say it again. This does not give the government the ability to spend and spend and spend. If they spend too much and tax too little they can create mal-investment and inflation.
Moses instructed the nation of Israel in Deuteronomy 28 that by following God’s principles, they would lend to others but borrow from none. The lender is described as the “head,” while the borrower is the “tail.” The Bible also says in Proverbs 22:7 that the “borrower is a servant to the lender.”
We cannot stop the practice of government overspending and ever increasing deficits other than by our vote for elected officials. Even then, both parties have been responsible for reckless spending for years and years. What we can do is to save and prepare for more challenging economic difficulties in the years ahead. Someone will have to pay for this via taxes or the government will inflate their way out of it and thereby punish the saver.
Proverbs 22:7 reminds us all, “The prudent see danger and take refuge, but the simple keep going and pay the penalty.” Be watchful and be prepared. You have identified a troubling danger that should concern us all.
Originally published by the Christian Post, April 24, 2020.
Dear Chuck,
The coronavirus has caused economic and societal changes I never thought I would see in my lifetime. What do you think will be the long-term effects of this and what adjustments to my finances should I be making now?
Pondering the Future
Dear Pondering the Future,
I hear a lot of people saying America “has been forever changed,” but I don’t see a lot of detail around what those changes might be. Uncertainty has prominently ruled in this crisis and will likely continue to do so until we have more accurate data. Of that we can be certain!
The Bible informs us that no man knows what tomorrow will bring. Yogi Berra famously said, “It is hard to make predictions, especially about the future.” So I can only offer you my opinion of what I think is likely to change and what you need to be doing about it.
First, assuming the virus has been contained and we are returning to a more normal lifestyle soon, two basic questions deserve answers regarding the future: What will you leave behind? What will you take forward?
These are the things that spiked during the crisis that I hope we will not drag forward with us:
“For the protection of wisdom is like the protection of money, and the advantage of knowledge is that wisdom preserves the life of him who has it.” (Ecclesiastes 7:12 ESV)
Personal
During this period of sheltering, many have come to realize how little they really need. The fear of not being able to pay expenses has become reality. Misplaced priorities have been revealed. Hopefully, this brings about major lifestyle changes among Christians who choose to follow Biblical financial principles. Ideally, this would increase giving and security among the Body of Christ. In addition, I believe we may see the following trends:
Business
Churches
Thank you for writing. Hopefully this gives you some clarity as you ponder the future. Crown has a helpline for those hurting financially: 1-800-722-1976. We also have many free resources at Crown.org/coronavirus. Let us know how we can best serve you.
Originally published by the Christian Post, April 17 2020.
