Faith, Family,

1. Faith, Family, and Finances:How to Live Faithfully within Your Means and Keep Peace in the Family Nevin Dulabaum Brethren Benefit Trust ndulabaum@cobbt.org

2. How to live faithfully within your means… • Planning Debt • Credit reports Socially Responsible Consuming • Looking at Scripture • …and Keep peace in the family • Listening & asking open questions • Engaging a difficult issue

3. What can we do in a 1-hour seminar?

4. What can we do in a 1-hour seminar? Questions to ask Ideas Resources

5. Church of the Brethren Benefit Trust was established as the Pension Board in 1943 to set aside retirement dollars for pastors and missionaries. • BBT Ministries — • Brethren Pension Plan • Brethren Foundation • Brethren Insurance Services • Socially Responsible Investing • Stewardship Education Seminars

6. Presented by Nevin Dulabaum

7. Live Faithfully Within Your Means • Live as a Good Steward of God’s Resources • Plan Adequately for the Future • Live Simply • Save Regularly • Use Credit Responsibly • Nurture Conversation, and StewardshipWithin the Family

8. Attitudes toward money • Spender • Builder • Giver • Saver More about these attitudes and others: • http://newsblaze.com/story/20060313102554nnnn.nb/topstory.html • http://newsblaze.com/story/20060313102612nnnn.nb/topstory.html • http://www.savingadvice.com/articles/2008/09/22/102761_money-attitude.html • http://lifeinc.today.msnbc.msn.com/_news/2011/05/10/6612696-4-unhealthy-attitudes-toward-money • http://www.familymoneyvalues.com/index.php/wealth-builders/60-working-on-wealth-1/179-why-you-need-to-understand-your-money-attitudes

9. What price do we pay for not being content with what we have? • We get tired. • We acquire, and perhaps get saddled by, debt. • We worry. • We find ourselves in conflict. • We experience dissatisfaction

10. What price do we pay for not being content with what we have? • We get tired. • We acquire, and perhaps get saddled by, debt. • We worry. • We find ourselves in conflict. • We experience dissatisfactionWhat is the cost of this discontentment at work?

11. What price do we pay for not being content with what we have? • We get tired. • We acquire, and perhaps get saddled by, debt. • We worry. • We find ourselves in conflict. • We experience dissatisfactionWhat is the cost of this discontentment at home?

12. Financial Planning vs. Budget • Financial planning — long-term look at your financial situation and how you want that financial situation to look in the future. • Budget — steps you are taking right now to achieve your long-term financial goals.

13. It all starts with a plan: • Short Term Plan = Budget • Start with monthly income • Allocate your first fruits • Determine what needs to be spent • Assess how you are spending your money • Allocate savings and discretionary funds • – Separate Accounts? Envelopes? • Live as a Good Steward of God’s Resources

14. Vision for the Future: • Goals & Financial Plan • 1 year • 5 years • 10 years • 20 years • Beyond • Your will • Your beneficiaries • Adjust and update as time goes on

15. Categories to consider

18. Budgeting Process • Review and track spending • Review and track income • Determine areas that must be adjusted to accomplish goals • Make adjustments and start the process again

19. Review and track spending • Most people don’t track everything “inconvenient” • Identify ongoing, vs. emergencies • Include debit/credit card expenses • Tools and resources to help; ultimately you need a version that works for you. • Paper • Electronic • Garbage in/garbage out. • Don’t make it too complicated.

20. Review and track income • Smaller number of areas to track. • Be aware of the frequency or other variations that can complicate it. • Taxes and deductions need to be addressed properly in your budget.

21. The moment of truth • Subtract the expenses from the income. • If your expenses are higher than the income, start to figure out what to reduce or eliminate. • If your income is higher than your expenses, make sure you have a plan to save and invest.

22. Warnings about debt: Hebrews 13:5 (NRSV) Keep your lives free from the love of money and be content with what you have, because God has said, “Never will I leave you, never will I forsake you” Proverbs 22:7 (NRSV) The rich rule over the poor, and the borrower is the slave of the lender.

23. Money, by itself,is not the problem… …the problem isthe love of money

24. Money, by itself,is not the problem… …the problem isthe love of money

25. Is Debt Unavoidable? • Living beyond our means is unsustainable. • Debt limits your options. • Debt adds stress on you and your family.

26. More $$$? • Will a larger paycheck solve a budget crunch? • The money ending before the month is a cash management issue. • Quantity of money is not the issue, control of the money is the issue.

27. More $$$? • Will a larger paycheck solve a budget crunch? • The money ending before the month is a cash management issue. • Quantity of money is not the issue, control of the money is the issue.

28. Types of Debt Mortgage Loans Student Loans Auto Loans Consumer Loans (aka: credit card debt)

29. Beware of the debt trap — especially consumer loans and credit cards!

30. Credit Cards The Good, The Bad, and the Ugly.

31. Credit Cards: The Good Easy to get Easy to use Safer to carry than cash Earn “points” or cash back Give you a credit record

32. Credit Cards: The Bad High interest rates and fees When paid late, interest rate can increase substantially — 29 percent. Easy to use and abuse Increase the amount you spend (12 percent on average)

33. Credit Cards: The Ugly • “Spend now and worry about paying for it later.” • 29 percent of Americans admit to not paying all of their bills on time. (National Foundation for Credit Counseling, 2013 Financial Literacy Survey) • An $8,000 debt at a rate of 18 percent interest and a 2% payment rate, will cost over $22,000. • $15,112 — Average amount of credit card debt per household where there is debt at end of 2013.

34. Discussing card debt is taboo • The topics people say they are unlikely to talk about openly with • someone they just met were: • The amount of their credit card debt (81 percent) • Details of their love life (81 percent) • Their salary (77 percent) • Monthly mortgage or rent payment (72 percent). • Their health problems (62 percent) • Their weight (50 percent) • Their political views (42 percent) • Their views about religion (34 percent) • The price of a tank of gas (9 percent) • The weather (5 percent) • (Source: CreditCards.com research, January 2009)

35. In a recent financial report, consumers had an average of 1.96 cards: CARD CARD (creditcards.com )

36. Keys to getting out of debt: Desire to be consumer debt-free. Figure out what you owe. Cut up those credit cards, one at a time!

37. Pay Off Credit Card Debt Discretionary income$200 Less: ½ to cash reserve $100 Remainder to LOWESTbalance credit card, until PAID OFF! Once it’s PAID, move up to the next card, and REPEAT!

38. Retiring credit card balancesrelieves stress. It is rewarding and encouraging.

39. Keys to getting out of debt: Desire to be consumer debt-free. Figure out what you owe. Cut up those credit cards, one at a time! Take a hard look at your monthly expenses and lifestyle. Be willing to sacrifice in the short term to improve your long term.

40. Keys to getting out of debt: Create a realistic budget and pay as much as you can toward the debt. Plan which will be paid first. Start a regular electronic savings deposit. Set up loan payments electronically. Review your credit report annually.

41. Credit Reports • Your score will impact – • Mortgage and other loan rates. • Premiums set by insurance companies. • Could impact employment. • To have a good score, you must have credit history data that is reported; having no history of borrowing means you will have a lower credit score. • Being debt free could mean that your • credit score will be lower.

42. How the score is calculated— The score is based on the following areas: • Payment history — 35 percent (major derogatory adds a lot). • Debt level — 30 percent. • Length of credit history — 15 percent. • Diversity of credit accounts — 10 percent. • Number of new attempts at getting credit — 10 percent.

43. How to improve your credit score: • Pay bills on time. • Keep debt low — 10 percent of available credit limit is best. 50 percent is maximum. • Don’t apply for unnecessary credit. Review your credit report. • www.ftc.gov/freereports • www.annualcreditreport.com

44. How to improve your credit score: • Close accounts responsibly. • Have a mix of different types of credit (don’t’ only use finance companies).

45. How to opt out of credit card/direct mail solicitation: • Call toll-free 888-5-OPTOUT. (888-567-8688) • Visit www.optoutprescreen.com • For more information see: • www.ftc.gov/bcp/edu/pubs/consumer/credit/cre17.pdf • www.privacyrights.org

46. Tips for avoiding debt: • Eat healthy and exercise. • Be a regular saver — build up an emergency fund. • If you use a credit card — pay it off each month. • Stored value cards could be a wise option. • Plan ahead and save for big purchases, Christmas and vacation club accounts.

47. … and keep peace in the family.

48. Biblical Context James 1:19-20 (NRSV) You must understand this, my beloved: let everyone be quick to listen, slow to speak, slow to anger, for your anger does not produce God’s righteousness.

49. Practice Listening • What messages did you hear as a child about debt? • How do you feel about those messages now? • What experiences have you had with debt? • Identify spending styles: saver, spender, builder, or giver

50. Family Conversation • Couples need to be committed in their approach • Must be open and honest about use of resources • Big decision: how to handle basic finances • Joint or separate accounts?