Your Money Priorities

08/17/23 • 24 min

James 4:13 and 14: “Come now, you who say, ‘We will go into such and such a town and trade and make a profit’— yet you do not know what tomorrow will bring.”

A lot of folks are feeling uneasy about the future. How many more interest rate hikes can the economy take before sliding into recession? And what about the rollercoaster stock market?

Well, if you don’t know what the future holds, it just means you should prepare and set certain priorities for managing your money. We’ll share some of them now. Not all will apply to you, but there’s probably something here for everyone.

MONEY MANAGEMENT PRIORITIES

1. Tackle that debt. First, if you’ve been procrastinating about getting out of debt, now’s the time to buckle down and do something about it. Interest rates on credit cards and variable rate loans like HELOCS have risen dramatically, so make paying down consumer debt an absolute priority.

You can avoid the sting of rising credit card interest by contacting Christian Credit Counselors. They have pre-negotiated agreements in place with credit card issuers to lower your interest rates, and you can take advantage of them when you sign up for a debt management plan. They’ll help you get rid of credit card debt 80% faster than trying to do it by yourself. You can get more information at ChristianCreditCounselors.org.

2. Re-adjust your budget. We say “re-adjust” because you’ve probably already tweaked your spending plan to allow for last year’s breathtaking inflation. But even though we’re told inflation has fallen to below 4%, food prices have increased close to 7% over last year. So check to see where you’re overspending and make adjustments.

By the way, if you haven’t downloaded the FaithFi app yet, this is a great time to do it. It offers three different ways to budget your money and provides the best biblically-based financial content on the web. So download it today.

You might also have to add money to your housing category. Lenders are raising monthly mortgage payments to accommodate higher property taxes. Those tax hikes are the downside of rising property values, which are only on paper. Property tax increases are quite real, however, so you have to account for them.

Now, you’ll probably need to make up for these higher costs, and you can do that by shopping more carefully. Take advantage of weekly sales and coupons at the grocery store. For online purchases, use an app like Honey or Capital One Shopping to find the best deals and coupon codes.

Now, if you’ve done all that and find you now have a few extra dollars, don’t throw a party. Use the extra cash to ...

3. Beef up your emergency fund. If you don’t have an emergency fund, that’s your number one priority now. You’ve got to start putting money away for unplanned expenses, or you’ll always be forced to borrow and go into debt when they occur.

Open a savings account at an online bank to get the best interest rate, and start tucking away something from every paycheck. Set a goal of $1500. Then one month’s living expenses. Eventually, you want to have 3 to 6 months’ worth of living expenses. That way you’ll be able to ride out a job loss or medical condition that prevents you from working for a time.

4. Don’t let interest rates keep you from buying a home - IF - you’re ready. If you’re a prospective homebuyer, especially if you’re looking to purchase your first home, don’t let current interest rates scare you away. But again, that’s IF — and ONLY if — you’re in a good financial position to buy a home.

What does that mean? You should have 20% saved for a downpayment to avoid private mortgage insurance. You also need to work up a budget that reflects your total housing costs, including your mortgage. It should not exceed 25% of your take-home pay.

That will show you how much house you can afford within that budget. Stick to that number. Many lenders will be willing to loan you more than that number, but don’t get carried away. Keep your payments within your budget, not the bank’s.

5. If you’re considering switching jobs, NOW may be the time to do it. Employment remains relatively strong, but monthly job creation numbers are starting to come in below expectations.

That tells us two things: First, if you’ve been planning to look for a new job, do it now while the economy is still creating jobs. And second, if you plan on staying where you are, do what you can to increase your skill set to make yourself more productive and valuable to your company.

It’s always a good time to do that — but now especially. Ask the boss for an opportunity to do more an...

James 4:13 and 14: “Come now, you who say, ‘We will go into such and such a town and trade and make a profit’— yet you do not know what tomorrow will bring.”

A lot of folks are feeling uneasy about the future. How many more interest rate hikes can the economy take before sliding into recession? And what about the rollercoaster stock market?

MONEY MANAGEMENT PRIORITIES

Now, if you’ve done all that and find you now have a few extra dollars, don’t throw a party. Use the extra cash to ...

5. If you’re considering switching jobs, NOW may be the time to do it. Employment remains relatively strong, but monthly job creation numbers are starting to come in below expectations.

It’s always a good time to do that — but now especially. Ask the boss for an opportunity to do more an...

Previous Episode

Still a Seller’s Market

The National Association of Realtors reports that in the first quarter of 2023, home prices actually rose in 7 out of 10 metro markets around the country. That happened even as the Federal Reserve continued to raise interest rates, pushing the average mortgage rate to nearly 7%.

This isn’t how things typically work. When mortgage rates increase, prospective buyers typically bow out, resulting in fewer sales, which then causes prices to fall. That’s Economics 101. When demand falls, so do prices. But that’s not happening, partly because demand is not falling.

Prospective home buyers have apparently gotten used to the higher rates and are staying in the hunt. Meanwhile, prospective sellers are shying away from listing their properties because they don’t want to pay those higher rates when financing their next home. The net result is that inventory or supply remains low, and with demand steady, prices will stay up.

SO WHAT CAN YOU DO ABOUT IT?

How do you buy a home in this market without breaking your budget?

Start by not “going it alone.” Interview at least three real estate agents and pick the sharpest one. You want someone with a track record of helping folks buy homes in the neighborhood of your choice and who’ll stay on top of new listings.

You or your agent may want to make a list of the other real estate agencies in your area and make frequent calls to them, checking to see if they’re working on potential houses that haven’t been entered into the Multiple Listing Service yet. You might be able to make an offer before a house hits the market. But be ready to make a quick decision.

You also want to get pre-approved for a mortgage before you set foot in the first house on your list. That’ll give you a leg up over the competition that hasn’t bothered to look into financing.

But understand that the lender will likely approve you for a bigger mortgage than you’ll be comfortable with. Work up an estimated budget that allows 25% or less of your take-home pay for housing expenses.

Also, you have to realize that in this market, buyers can’t be choosers. The goal is to find an affordable home that meets your needs, not your dream house. Be flexible with your “must haves” and be willing to make changes. Location is probably the most important thing to hold out for. Other things, like a finished basement, you can do later.

Here’s one that should go without saying: Don’t bother trying to lowball a seller. With most homes selling near the asking price these days, making an offer well below that won’t get you anywhere.

To be competitive, you’ll have to come in very close to the asking price, if not a little above. Here again, your agent can help you come up with a realistic opening offer.

It’s happening less and less these days, but you could find yourself in a bidding war where emotions can run high. You’ll need to keep your wits about you or you’ll find yourself with a fat mortgage payment and eating a lot of Spam. Know the absolute upper limit of what you can spend and have the discipline to stop there.

And don’t try to put a lot of conditions on your offer. Sellers aren’t in the mood to throw in a major appliance or give you a new roof allowance if you feel the house might need one. You have to keep the seller’s interests in mind. For example, agree to a closing date of the seller’s choice, not yours.

And one final thought: You might consider doing nothing. That means waiting until the market moderates even further. Don’t expect home prices to fall significantly in the future, but eventually, inventory should catch up with demand and you’ll have less competition.

You definitely should wait if you haven’t saved up 20% for a downpayment yet. There’s no sense in adding the cost of private mortgage insurance to your mortgage payment, which is likely to be high to begin with.

PMI is required if you can’t put 20% down, and it could run as high as $70 a month for every $100,000 you borrow. It only protects the lender in case you default. It has no value for you at all.

So those are some tips for surviving a seller’s market. We hope you find them useful.

On today’s program, Rob also answers listener questions:

Is a balance transfer to a credit card offering 0% interest for a period of time a good way to pay off debt?
When do you have to start taking a minimum required distribution and what’s the best way to go about that?
Are annuities a wise investment?
What is the best way to tap into home equity?

RESOURCES MENTIONED:

ChristianCreditCounselors.org

Next Episode

Is Your Bank Unbiblical? With Aaron Caid

Aaron Caid is our go-to guy for what’s happening in the banking industry. He’s the Chief Marketing Officer at Christian Community Credit Union, an underwriter of this program.

Aaron says we are starting to see what could be the next big exodus for Christians in the marketplace today, and that is Christians choosing to bank with their values.

CCCU has been hearing from new members who have joined the credit union after becoming fed up with their secular bank. So they decided to go out and find out if this feedback was more than just anecdotal.

They surveyed over 1300 professed Christians across the country. Here’s what they found:

Over 30% had considered switching their bank in the last 12 months. And Christian values were one of the top three reasons why they wanted to do that.
Over 60% cared deeply about managing their finances biblically, they want to honor God with their finances, not just the rest of their life.
And over 50% said, it's now more important than ever, that their bank reflects and supports their Christian values.

Many CCCU members saw the politically motivated decisions that their former banks were making that were at odds with their Christian beliefs.

CCCU also learned that many people switched from their banks over dissatisfaction with rates, fees, and poor customer service. But these were a statistical tie with the conflict with their personal beliefs. That means that alignment with Christian faith and values carries the same weight among Christians as bread and butter rates and fees.

Christian Community Credit Union offers customers a way to address both of those concerns. They are unapologetically Christian and have been following Christ followers for more than 65 years. We are unapologetically Christian.

Learn more at JoinChristianCommunity.com.

On today’s program, Rob also answers listener questions:

Is there a good way to get rid of a timeshare?
What is the best way to go about giving?
Does a whole life insurance policy make sense as a way to ensure a death benefit if you have a child with special needs?
What is the best way to go about meeting the financial needs associated with caring for a foster child?

RESOURCES MENTIONED:

Remember, you can call in to ask your questions most days at (800) 525-7000. Faith & Finance is also available on the Moody Radio Network as well as American Family Radio. Visit our website at FaithFi.comwhere you can join the FaithFi Community, and give as we expand our outreach.

Remember, you can call in to ask your questions most days at (800) 525-7000. Faith & Finance is also available on the Moody Radio Network and American Family Radio. Visit our website at FaithFi.com where you can join the FaithFi Community and give as we expand our outreach.