We believe that there are 5 questions everyone needs to answer regarding their finances in order to know if they are where they need to be financially.  The goal is to be able to answer “yes” to every question.  If your answer is, “no” or “maybe” then you might need to do some homework to make that answer, “yes.”  The 5th of the 5 questions is:  Are you and your family prepared for the impact of death or disability? 

For most of us that is a question we would prefer not to answer but burying our head in the sand does not negate the truth highlighted in this quote:  

One out of one people die.

 - Ron Dunn  

This video is a sobering but encouraging reminder of why the 5th question is so important.

If we are honest with ourselves, we all want our fair share - and sometimes more.  Nowhere is this more clear than in issues that arise over an inheritance.  In this commentary, John Piper takes a biblical look at this issue and rightly challenges where our treasure is and where it should be. This Christmas season we should prayerfully make the same statement as Mephibosheth when it comes to inheritance issues we face …or anything else we own.

Regardless of your political perspective, one question many people are asking is, “Since I am paying taxes for all this government stimulus activity, how do I take advantage of the benefits?”  Generally speaking, if you are not behind on your mortgage payments and/or in financial trouble on a personal or business level there isn’t much to take advantage of.  However, the Federal Tax Credits for Energy Efficiency are available to anyone regardless of income.  Usually tax credits are phased out with higher income, but not in this case.  Also, a tax credit offsets your tax liability dollar for dollar, so it is much better than a simple deduction.

These credits go toward things like windows, doors, insulation, etc.  Before making any purchase be sure the product in question qualifies for the credit.  However,  to get the credit, you still have to spend money. Consumers should consider the real value of the energy related products in their individual situation. If replacing windows or an old repair-prone heating and air conditioning system was something that you had already planned to do in a few years, then the available credits may be good reason for you to accelerate your purchase.  You can learn more about the program and the products that qualify here.

One of the challenges we face, especially in Western culture, is our level of affluence that goes far beyond our daily needs.  It is a challenge because we become too distracted with all the things of “life” which ultimately have no eternal significance.  This link takes you to a six minute video that puts a face on this issue with perfect clarity.

A renowned fashion photographer recently took up the challenge of using his gifts for the purpose of advancing the kingdom and ended up developing a series of photographs that capture parables and other spiritual truths.  The collection he has put together is amazing and can be viewed here:  http://www.thejourneysproject.com/

Of all the photographs, there are two that speak powerfully to the relationship we have with our money and possessions.  You can view them here and here.  Be sure to click on the video story for each image which is about a 2 minute commentary.

There is no doubt that the current environment is mentally arduous for most of us and difficult in a very practical way for those who have lost jobs, homes, etc.  An important question for us is, “If God owns it all and is sovereign over our lives what is the purpose of all this?”  In many ways, the specific answer to that question is beyond our ability to know, but in this post on the Desiring God blog there is an outline of 5 possible faith-based reasons for us to contemplate as we experience this recession.

We would do well to consider the implication of these not only in the financial decisions we face but also for the whole of our lives.  To listen to the full sermon you can click here.

There is no lack of negative economic news these days.  To help counter the some of the negative, you might find this blog an interesting read.

H/T - to the Sound Mind Investing Blog

The term “layoff” has become all too familiar in this economic season but it is actually a good reminder to us of things we may want to layoff ourselves - namely some of our bills.  Regardless of your personal situation, it is a good idea to sit down once a year and examine your bills (fixed or regularly recurring expenses) such as insurance, utilities, etc.  With a few phone calls or web inquires, you will likely find opportunity for savings and in some cases it may be significant.  Start with your largest bill first and ask yourself, “Is there a way to reduce this?”  With utilities there may be other providers you have not considered, or other options such as phone service now being offered by many of the cable companies.  By going through this exercise, some people have realized they don’t even need a home phone and have chosen to use cell phones exclusively.  However, there are some considerations with that decision as 911 service in an emergency could be delayed while they pinpoint your location, and the pizza company may not deliver.

In going through this exercise you might even have some fun as you begin to add up the savings.

For people who maintain healthy savings account balances and for those dependent upon fixed income investments and deposit account withdrawals, low interest rates are discouraging.  However, if you have mortgage debt, low interest rates can provide great opportunity.  Right now if you are paying over 6% for a mortgage loan there is a good chance you can save money by refinancing.  Every situation is unique, so you have to do your homework, but you may find an opportunity to lower both your monthly payment and the total interest paid over the life of the loan.  On the Bankrate.com website you can find general mortgage information and rates as well as a calculator to help you determine if you should refinance.

It is important to identify and minimize the transaction costs of refinancing.  Generally, they all fall into three categories:

1. Prepaid expenses are applied to your escrow account for homeowners insurance and taxes.  Typically there is a balance in your current escrow account at closing with your prior lender, and you will receive a refund.  This refund will offset your out-of-pocket prepaid expenses with the new lender.

2. Closing costs are fees you will pay as part of a standard closing that go towards local taxes, title insurance, attorney fess, etc.  Don’t be afraid to question and negotiate these expenses.

3. Lender fees are everything else not included in the above two categories and include origination fees, document prep fees, processing fees, etc.  You have to be careful with these as the lender may say there is no cost, but when you add up some of the “administrative” fees the number might shock you.  Carefully examine the Good Faith Estimate (GFE) for a list of these costs.  Also, check on these costs at closing as they could change from the original GFE.

By sorting all the costs into these three categories, you are more likely to make an apples-to-apples comparison between lenders.  When you begin looking for a lender to refinance, it is always good to start with your current mortgage company because they may offer to refinance your loan with a reduced amount of paperwork and expense.  Also, consider credit unions as a potential source for a mortgage refinance.

Lastly, don’t forget to examine other debts for possible reductions in interest cost.  If you have good credit you may find a different credit card or home equity loan can be found with lower interest costs.

Historically the church has the laid the foundation in caring for others. From starting hospitals and caring for the sick to taking in and providing for the widows and orphans in need, the church was the place to turn when help was needed.  This help and service provided a tremendous opportunity for both practical and spiritual care.  These days, at least in American culture, we seem to have become more obsessed with our own affluence on a personal and organizational level than caring for the needs of others.  A daunting question is: What would others not be surprised by when learning more about us?  This story highlights how one person is standing in the gap for another in the midst of a foreclosure.  What is missing from this story was the motivation of the person helping, but when explaining her husband’s response to having made such a radical decision her explanation was simply that “he is used to it.” 

Will someone at the end of our days say they were not surprised by an act of radical generosity on our part, and in fact “were just used to it?”