Christian Finance

In today's economic data release...

The catalyst igniting the strong stock market rally today was news that existing home sales in October were at their highest level since February 2007.  A major reason for the large jump was likely due to the recently extended homebuyers tax credit.

While this is good news, it is unfortunate that a large number of homes sold were those in foreclosure proceedings - 30% to be exact.  The only positive light from this is that 'excess housing inventory' is being worked through and gradually being reduced.  We can only hope that this trend continues.

Healthcare Reform in the United States

By now, you've likely heard of yesterday's vote in the United States Senate where the senate version of the healthcare bill 'won' with a vote of 60-39.  What exactly happened however?

The United States Senate, being a very old institution, has some very arcane rules and procedures.  One was the procedure yesterday - a vote for "cloture" to begin debate on a bill. Cloture is a vote that effectively ends a process - in this case, the process of debate on whether the senate should even debate the bill.  I know it sounds kind of unusual - a debate on whether something should even be debated - but that is indeed what happened.

The unique part about cloture votes is that they require a super-majority of 60 out of the 100 voting US Senators, rather than the usual 51 required to pass legislation.

So has the healthcare bill passed?  No - it has not.  As I indicated above, this vote was only to allow debate (and amendments) to proceed on the full bill.  Another cloture vote will be required to end debate on the bill - and bring it to a final vote for passage.  This second cloture vote is important for both sides because without getting another 60 votes to end debate, the bill will have become filibustered and die on the senate floor.

No matter which side of the healthcare debate you are on, this is a very important process going on right now.  If you want your voice to be heard, contact your United States Senators and let them know what you are thinking.  They represent you and are accountable to you.  Healthcare reform is a very significant fork in the road for our nation right now - and there are effects no matter what form the legislation passes (or doesn't pass).

2010 Retirement Plan Contributions

This entry is applicable only for readers in the United States.  For my international readers, feel free to continue, but I'm afraid this will likely not be applicable to your personal finance situation.

Many sections of the Internal Revenue Code - whether it be personal exemptions, other deductions, or retirement plan limits - are generally indexed to some type of inflationary index each year.  This generally results in an increase of applicable amount from year-to-year.

Whether it be in an IRA, 401(k) or other workplace plan, if you are currently maximizing your retirement contributions, then you will not be happy with this news: the 2010 contribution limits are going to remain unchanged in 2010.  This means that you will be limited to the following contributions next year:

IRA - Roth or Traditional $5,000

401(k) $16,500

403(b) $16,500

457(b) $16,000

In addition, if you are over age 50, the additional 'catch-up' contribution limits will also remain unchanged:

IRA - Roth or Traditional $1,000

401(k) $5,500

403(b) $5,500

457(b) $5,500

If you were planning on increasing your 2010 contributions but are unable to do so, I would suggest putting the additional funds in the appropriate savings or investment vehicle so that you can still retain the savings benefit - albeit without the tax-free growth of earnings.

Dollars in your wallet - Part 6: Homebuyers Credit

The $8,000 tax credit for first time homebuyers was set to expire on November 30, 2009. However, congress has approved an extension that was recently signed by President Obama. The program will now continue for contracts entered into by April 30, 2010 and close by June 30, 2010.

But, the news gets even better.  Existing homebuyers - those who have owned a primary residence for at least five consecutive years out of the past eight - also qualify for a new credit of up to $6,500.  The same dates for purchase and closing apply.

The best part about these tax credits is that they are refundable - which means that if your federal tax liability is less than the credit amount, then the difference is refunded to you!

While I realize that not all of you are thinking about making a home purchase right now, the incentive of this credit must be kept in mind if you are considering it.  Happy house hunting!

Dollars in your wallet - Part 5: Low Interest Auto Loans

So your car is on its last legs and you've decided to take the plunge and purchase something new... In today's money saving tip, I want to show you a super low interest rate of 3.99% on new vehicle loans for terms up to 60 months!  Such an offer is available from Pen Fed Credit Union - as in Pentagon Federal Credit Union.  Yes - it is available to military members, but if you or a family member is not in the military or a volunteer with the Red Cross, then you are still eligible to join (and receive the loan) by becoming a member of the National Family Military Association (it costs just $20 to join this).

Financing costs can become a major portion of any vehicle purchase - so it is important to obtain the best interest rate possible when making your purchase. This rate is pretty much unbeatable outside of the occasional low interest rates offered directly by certain automakers.  So this becomes more dollars in your wallet - courtesy of Christian Finance!

How is your economy?

There's an old saying particularly relevant to our economic times - a recession is when your neighbor loses his job, while a depression is when you lose yours. While I hope that you don't find yourself in this situation, there is a good possibility that you know somebody who is in the middle of their own economic depression because they are without a job.

I want to share some thoughts with you so that you are prepared in case the jobless situation does affect you. In economic times like these - where we really are unsure about which direction the economy is heading - it is important to be economical and prudent with your resources.

Think very carefully about any discretionary spending before you open your wallet.  For example, do you really need to see the new movie on opening weekend - with popcorn and sodas of course - easily running up a tab of $50 for two people, or instead can you rent a DVD and save around $45?

How many choices like these to you encounter - whether it be with entertainment dollars, clothing dollars, or even your choice of transportation.

If you made the prudent choice, how much could you save every month?  Let's try this example:

• Avoiding going to the movies once per month: $45
• Eating dinner at home rather than a restaurant: $40
• Taking public transit to work rather than driving (no parking or gas): $150

With three small changes, you've managed to save over $200 per month!  If you were to put this into your savings account, after a year you would have over $2,000 saved - a small but reliable buffer against a personal economic depression.

Spending changes do not have to be dramatic, but they do have to be made. Small wasteful purchases can add up to hundreds of dollars per month - and this is money that you worked hard for!  Be wise - and you will be prepared.

Dollars in your wallet - Part 4: 0% Balance Transfers

In this installment of dollars in your wallet, I want to share with you an excellent credit card that can be used for balance transfers.  That means you can transfer existing - and high rate - credit card debt to this new card and save potentially hundreds of dollars in interest costs.

I found a balance transfer card for you that offers 0% interest for 6 months!  Where does such a card exist?  At Citibank - you can find it right here.

If you decide to transfer existing balances, I want you to use this as an opportunity to pay the debt down - not as an opportunity to charge up your old credit card again. That of course would defeat the whole purpose of doing this!

If you are currently carrying a $5,000 balance at 18% interest, you have the chance to save $450 over the next six months by using this Citibank card!  Enjoy the extra dollars in your wallet!

Guarantee on Tithing

A few months ago, I talked about the "money back guarantee" that our church was offering on those who were afraid to tithe - they of course often think that it would hurt them financially.

Other than talking about it on this blog, I didn't really think much more about it. However, in church this weekend, the subject came up - in front of the entire congregation.

Somebody who was skeptical - and perhaps that is a harsh word - decided to take our church up on the challenge. This individual was facing some difficult financial times - due to poor financial decisions - and felt that he was not in a position to be able to tithe.

Anyway - he started.  And then it didn't seem like it was going well - to the point of him actually complaining to his financial mentor about the outcome - or lack thereof.  This individual encouraged him to continue which he reluctantly did.  And notwithstanding the apparent lack of other changes (e.g. new income), he was able to pull his finances together and pay off half of the outstanding consumer debt that he had!  Needless to say, he did not take advantage of the money-back guarantee that our church had offered.

While I cannot promise to what degree (and form) God will bless you, I do trust that He will - as long as you keep your part of the bargain with Him.  

Dollars in your wallet - Part 3: One Year High Yield CD

Today's savings tip to put more into your wallet - believe it or not, it focusses on the vanilla bank certificate of deposit, otherwise known as a CD.

If you have a need for money in about a year from now - say for a major purchase such as a downpayment on a home, new vehicle, or college tuition - then you can safely lock up your money for a year and earn a higher rate of interest than if you had just parked the funds into a money market or savings account.

A great 1 year CD is at Ally Bank, where - as of today - they are offering an guaranteed CD yield of 2.05%.  Add to that the fact that there is no minimum deposit, and we have another Christian Finance dollars in your wallet winner!

In case you're wondering, Ally Bank is now what used to be GMAC - the financing arm of General Motors.  And no - you don't have to worry about the safety of your money - it is FDIC insured up to $250,000.

Providing good service - Part 2

The last time I talked about good service, the experience that I shared was a rather poor one. I am pleased to say that today I had service at a level that I can rave about.

To give you a little background, for the past couple months, I have been thinking about changing the person/place where I get my hair cut. The reasons for wanting to change were somewhat typical: the level of service I was receiving did not justify the price that I was paying.

Based on a little research and some word of mouth, I took a chance and tried a new place today.  And guess what.... it was amazing!  The service was excellent - it started off with a scalp massage, and after everything was done, ended with a hot towel on my face to help me relax.  However, the best surprise was that the price was actually less than what I had been paying at the old place!

I was fortunate to receive premium service for a standard price - and in this economy, that is welcoming.  Think about this the next time you are providing service to somebody - whether it be in your job, business, or even in your own home.  Going beyond expectations is a great way to solidify your standing with your clients and your boss - you don't want to be mediocre.  Trust me - there are people who will glady step in and do what you do (and then some). Stay ahead and give it your all. The rewards for doing so will follow.