The Trouble with Tithing

trouble with tithingAs Christians we’re called upon in scripture to be generous both to our churches and to those in need. That giving is often codified into the tithe, generally interpreted to mean 10% of your income. There are many open questions in regard to tithing, including should you tithe based on gross or net income or whether or not the contribution should extend to include an equal portion of unearned income, such as capital gains.

We can spend as much time as we like debating the finer points of tithing, but perhaps the bigger question is the tithe itselfâ”are we truly required to tithe and what troubles might be involved if that’s how we believe we need to handle our giving? Troubles? What kind of troubles?

Misinterpretations, first and foremost. That we’re to be generous in our giving is beyond questionâ”the issue is whether or not that giving takes the form of a legal requirement with very specific guidelines, as the tithe is thought to represent. From that we can and often do open the door to even greater misinterpretations that take us still farther from God’s intended purpose for our giving.

What are some of the tithing misinterpretations and what troubles may they bring?

 

Tithing is NOT a requirement for salvation

Notice that the issue of tithing doesn’t appear in the Ten Commandments, nor does Jesus make mention of it in the Sermon on the Mount. In fact, in the New Testament, where lessons on money and giving abound, there is no command to tithe. Where tithe❠appears, it’s usually incidental to another teaching. For example, in Luke 18:10-14, Jesus seems to be taking us in quite a different direction:

Two men went up to the temple to pray, one a Pharisee and the other a tax collector. The Pharisee stood by himself and prayed: â˜God, I thank you that I am not like other peopleâ”robbers, evildoers, adulterersâ”or even like this tax collector. I fast twice a week and give a tenth of all I get.’ But the tax collector stood at a distance. He would not even look up to heaven, but beat his breast and said, â˜God, have mercy on me, a sinner.’ I tell you that this man, rather than the other, went home justified before God. For all those who exalt themselves will be humbled, and those who humble themselves will be exalted.â

Clearly Jesus is telling us here that tithingâ”among other ritual actsâ”is not the key to salvation. The implication in the parable is that the tax collector didn’t titheâ”he didn’t do anything except throw himself on God’s mercyâ”and yet he went home justified before God.

 

We should never measure our standing before God by our giving

In prosperous cultures, there’s often a tendency to belief that money is the highest good, that we can gain access to what ever we need simply by writing a check for the proper❠amount. To a large degree that may be how things work in the world, but clearly the Kingdom of God works on different rules. From an eternal perspective it could be dangerous to assume that we’re walking with God mainly on the strength of a faithfully given tithe.

In Matthew 9:13, Jesus tells the Pharisees:

But go and learn what this means: â˜I desire mercy, not sacrifice.’ For I have not come to call the righteous, but sinners.â

Tithing is a form of sacrifice (giving something we value to God), but Jesus is making it clear that at a minimum, mercy is more important. This doesn’t mean that giving has no place in the life of the believerâ”it is stressed elsewhereâ”but it does mean that we have to be careful not to elevate it just because it holds a special place in the human realm.

 

10% may not be the right amount for everyone to give

It’s generally believed that tithing is the giving of 10% of ones income to the Church and to other Kingdom activities. But is this percentage set in Eternal concrete? For many poor and even working class people, giving 10% of their income may be an unsustainable burden. Conversely, for many of the wealthy, giving 10% would hardly qualify as sacrificial.

We have an example of this in Mark 12:41-44:

Jesus sat down opposite the place where the offerings were put and watched the crowd putting their money into the temple treasury. Many rich people threw in large amounts. But a poor widow came and put in two very small copper coins, worth only a few cents. Calling his disciples to him, Jesus said, â˜Truly I tell you, this poor widow has put more into the treasury than all the others. They all gave out of their wealth; but she, out of her poverty, put in everythingâ”all she had to live on.’ â

There’s an imbalance here that Jesus highlights as a message to his disciples and to us.

 

The corollary: Tithing is not some sort of God Taxâ

If we come to believe that the giving of a titheâ”of 10% of our incomeâ”is a Christian obligation, then we have effectively created a tax. Now in the Old Testament, that’s exactly what the tithe was, a tax to support the clergy and even other societal functions. However that was a time when mankind was under law, not grace, and acts of obedience and obligation were part of what defined the people of God. Is that still true post-Calvary?

The problem with elevating the tithe to a tax is that no one likes to pay taxes! If we see the tithe as a requirement, then we’re unlikely to be cheerful givers❠(2 Corinthians 9:7). Is this how the God who looks at the heart (1 Samuel 16:7) wants us to give?

 

We will not become prosperous because we tithe

There too many hints that prosperity can be had as a result of tithing. The danger here is that we might be tempted to tithe primarily for the purpose of personal gainâ”and we know that can’t be right. The scriptural basis for the prosperity interpretation comes from Malachi 3:10:

Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,❠says the LORD Almighty, and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it.â

Now if we take that verse as a standalone declaration from God, the connection between tithing and prosperity is possible, but that’s not exactly what’s happeningâ”in fact that isn’t remotely what’s happening.

There are two obvious facts missing from the popular interpretation of Malachi 3:10. The first is that the verse itself is part of a chapter that deals not with the individual, but with the entire nation of Israel. As we know from the Old Testament, God is constantly trying to draw a renegade Israel back to Himself. He points out their sins and shortcomings (in this case a lack of generosity) and offers promises if they’ll repent and come back to Him. I believe that is the central teaching of Malachi 3, not any sort of promises or guarantees of personal prosperity if only we tithe according to Old Testament law.

The other point of contention is the promise, and what is it that God promises? Blessing. There’s no mention of riches! Blessings can be all kinds of things, including health, long life, large families and even favorable weather! In fact, in the very next verse, God defines some of those blessings as keeping away pests and vines that will not drop their fruit until it’s ripe.❠Now we can interpret that to mean prosperity in an agricultural society and perhaps it is, but nowhere are riches of any sort even implied.

 

We should never judge others by how much they give

If we consider tithing to be a command from on high, we can easily find ourselves sitting in the judgment seat, feeling superior to others who are less generous than we are. Conversely, if we aren’t able to give as much as others, we might be judged by them or even feel inferior to them.

In a twisted way, this is a process of elevating money to a higher position than it deservesâ”which itself is a form of idolatry. We have a commandâ”many of them throughout scriptureâ”to give and be generous, but when we assign a percentage benchmark we’re also creating a fixed standard by which to judge ourselves and others.

 

Giving can also be in the form of time and effort

Giving can be done in ways that don’t involve the transfer of money. In fact in biblical times people often had no money at all! We can give of our time and talents, and that can be even more sacrificial than writing a monthly check to the church. In Matthew 9:37 Jesus tells his disciples, “The harvest is plentiful but the workers are few.❠Jesus wasn’t calling for moneyâ”he was calling for workers!

That’s time and talent, and anyone can give those. There is no hierarchy establishing money as the preferred way to give, and by giving directly of our time and talent we can come that much closer to fulfilling a true command that is beyond interpretation:

Therefore go and make disciples of all nations, baptizing them in the name of the Father and of the Son and of the Holy Spirit, and teaching them to obey everything I have commanded you. And surely I am with you always, to the very end of the age.ââ”Matthew 28:19-20, The Great Commissionâ

What do you think about tithing 10% of your income? Was it an Old Testament law that no longer applies? Does it still apply today? What are your thoughtsâ”I could be all wrong about this!

How to Find Work Fast During a Down Economy

find work fastThe economy continues on a path of mediocrity, the stock markets present almost daily doses of whiplash to investors, and just this week the U.S. Census Bureau released a report on poverty in the United States (hint: it’s increasing). If you or someone you know is unemployed or under-employed, it’s time to evaluate every income producing option available – even those options that are less than ideal.

I’ve worked for well over 100 employers (no, that’s not a typo or an exaggeration). I know a few things about finding a job, and quickly, when the chips are down. So if the landlord is banging on your door, your car is running on fumes, or you just need to pay for a decent sandwich – then I’m your own, personal “expert” at finding work in a hurry. Read on…

Swallow your pride and do something “beneath” your abilities.

This is no time to think that “you’re too good” for whatever it is that you don’t want to do. Here’s one trick to use when searching for so-called “low status” jobs: try looking for work in towns located some distance from your normal “stomping grounds”. This way, people you know won’t find out that you’re delivering pizzas or working at McDonald’s (the ones that they might patronize, that is.)

No matter how rotten the economy is, the same industries always seem to be seeking workers. Many businesses involved in the retail, restaurant, seasonal, leisure, agriculture, and trucking industries are always hiring. And don’t forget call centers, also. (By the way, if you decide to look for work at a call center, try to grab a position that involves “inbound” vs. “outbound” calls. “Outbound” means: you’ll be cold calling people just as they sit down for dinner. Not fun.) Remember: a little “hard time” at the crummiest greasy spoon in town may well help you get a management position at a respectable nightclub in the future.

Deliver pizzas

This one really isn’t bad, and probably gets a worse rap than it deserves. To get paid to deliver a major staple of the American diet, you’ll need three things: wheels that you don’t mind putting some mileage on, a reasonably decent driving record, and insurance. Don’t bother with this type of gig if any one of these is missing. You’ll get tips, which means you’ll have cash – always.

You can work whatever schedule is convenient for you (though, obviously, weekends will be more lucrative). Bad weather means better tips. You can listen to whatever you want on the radio, and pull over and use the cell phone at your convenience. Bonus benefit: free food! And, if you’re single: you’ll certainly encounter cute members of the opposite sex, either co-workers or customers.

Start a hauling and/or moving business

I did this once – and wound up with a business that lasted over two years. There are now national franchises that are making millions from hauling away junk from homes, garages, and storage units. If you have a pickup truck and/or trailer, a cell phone, work gloves, and a willingness to get paid to excercise – you can be in the hauling business. When I ran a junk hauling business, I used local weekly small-town newspapers to advertise.

Running classified ads in these types of papers is pretty cheap, and they always yield at least a handful of phone calls. You can use online classifieds like Craigslist, of course – but so is your competition. Besides, many homeowners don’t bother calling service businesses listed in Craigslist because they don’t trust those businesses, or take them seriously.

Play the numbers game

It’s obvious that you should be using the web to look for work. But try the old school method of “pounding the pavement” – since so few others do this these days. Find the area near you where the half-dozen (every town has this area) fast-food joints are located near one another.

Or go visit your local mall. Grab applications at each store, take them home, then fill them out (it’s a more laborious process than you think – do it at home, trust me). Then return those completed applications in person. Try to hand your application over to the store manager on duty. This will leave an impression on that particular manager that you’ll never be able to deliver via cyberspace. You may even receive an interview on the spot – I’ve had this happen to me several times when the business in question needed workers immediately.

Get a commercial driver’s license

This idea only applies if you have a decent driving record, no felonies, and you’re single. If you aren’t single, you soon will be – if you go OTR (trucker parlance for “over the road”). You’ll be away from home for weeks. In fact, some drivers don’t bother having homes and instead live out of their trucks. Which, actually, will save you huge amounts of money – but cost your social life dearly.

Now, you can also drive “local”, but these driving gigs are far more difficult to get, especially for newer drivers. Most local driving gigs involve 10-12 hour days anyway, so even these will greatly impact your non-working life. I’ve worked mostly local gigs, and made great money doing them. But, I like my downtime. A LOT. Which is why even the most lucrative local driving gig, for me, only lasted three years. (However – I paid off huge debts during that period.) Having a “CDL” means you’ll always have work (if you want it).

Use temp firms

Yes, there is a lot not to like about temp firms. Most treat applicants like ten-year-olds, take a cut of your hourly pay, and will waste a lot of your time before sending you to a gig. Temp firms tend to want you at their office, in person, so that they can run you through a battery of tests to prove you aren’t a complete moron. Ironic, since many temp staffers are. (I’m not a fan of temp firms, in case you didn’t notice.) On the other hand, maybe you don’t care, since you need cash immediately.

Let’s face it – in any economy, the temp firms usually have something (anything!) Don’t kid yourself, though – many temp firms are trying to fill lousy gigs with warm bodies – the kinds of gigs that in-house H.R. departments gave up trying to fill. Some firms, of course, are worse than others. The worst part about applying for work via a temp firm is watching the dummy videos that nearly every temp agency forces prospective employees to watch. Painful.

Volunteer, or work for free

If money isn’t really that pressing, and/or you’re fortunate to have a side income or partner who brings home the bacon, then thank your lucky stars. Go visit a volunteer website and offer your time to someone less fortunate (there is always someone less fortunate than you.) Find a cause you can get into and help out. Even a couple hours a month is welcome. You can also work for free (Different from volunteering; I’m talking here about donating free work to a for-profit organization.)

I’ve noticed that sometimes “experts” on job hunting will occasionally suggest that you work for free. This may (“experts” claim) lead to a paying gig. I suppose that might be the case, sometimes. I doubt it, though. I’ve worked for “free” as a freelancer on several occasions. Not once did doing so get me paid work. I don’t recommend doing this, but it’s an idea worth including here.

Some job hunting sites are better than others

I have had good luck finding full-time and part-time work through classified sites like Craigslist and Backpage.com; not so much with the larger job-related “megasites” like Monster.com or CareerBuilder. The latter two sites are overloaded with listings from recruiters, who will waste your time more effectively than actually find you paid work.

The former two sites, however, are filled with job listings from employers looking for help and who need to hire quickly. Beware of scams, however – especially with Craigslist. Never send a prospective employer your Social Security number via e-mail or via an online job application until you are sure of who you’re dealing with. That said, there are far more legitimate job opportunities on the online classified sites than scams – just be careful. If a job opening sounds to good to be true, it’s likely a scam.

Just because you’re a college graduate (and especially if you aren’t) doesn’t mean a good job is your birthright. Quit expecting your “dream job” to fall out of the sky, and look for work beyond “your field” (do people still use this phrase?) Your field is wherever the work is, right now. A paycheck derived from driving a taxi is better than no paycheck at all.

(This has been a guest post by Matt Henterly, a developer of The BuckTrak Budget Planner, a free online financial manager for individuals and small businesses.)

Let Savings Fall Onto Your Lap

savingsI’ve always believed that as long as your vacation is ahead of you, summer is clearly not over. It’s not unusual for me to wait until the fall, September or even October to make my yearly escape from the everyday grind. After all, I live in New York, so jaunting off during the summer months simply to lie on a beach is no enticement to me; we are frankly surrounded by beaches.

In fact, many New Yorkers save their vacation time for the winter months; that’s about when we start to get homesick for our beach-lying days. As a massive money-saver, I really enjoy the fact that my off-season vacationing can lead to a lot of savings, but most of all I appreciate dealing with a lot less crowds! Does anyone feel like Disney?

Vacation when no else is

The Travel Industry Association estimates that 23% of people report taking their vacation in the fall, which is a sharp drop from the 38% who reported a preference for vacationing during the summer months; fortunately, as the masses reduce, so do the prices. In resort areas known for their postcard-worthy beaches, the price drop is particularly noticeable. The Caribbean and Florida are two prime examples of this; hotel rates alone can see their rates drop almost 40% compared to peak season.

There are some places where tourism never seems to cease, big cities like New York and Chicago never seem to offer a prolonged period of off-season rates. But I live in New York and assume Chicago is pretty similar. Why would I want to go there?

Utilize credit cards to your advantage

I also fill out a lot of credit card applications throughout the year, simply to enhance my vacation savings when the time comes. Like many, I only associated the frequent flyer miles on my credit card with vacation savings, over the years I have expanded my repertoire, using different credit cards for everything from gas to hotel stays, each with their own built-in savings. Of course the flyer miles are probably still the best savings there is, but even with that, I no longer settle for just the typical 20,000 miles or so. Why would I when there are offers out there of up to 100,000 miles. They are not as easy to come by, but they do exist.

Do your research first

A lot of cards offer hotel programs:   these can lead to major savings, but it does take a little more work to do a proper comparison shopping on these cards. Often they will have a lot of blackout dates and capacity limitations. The ones that claim there are no blackout dates will instead have some strong capacity restrictions. Do your homework on these and you can save some serious cash. For local trips I, of course, have a gas card credit card that I use. Of course, with the high price of gasoline over the past several years, I often think it would be cheaper just to fly. Sometimes taking the scenic route can end up being the best part of your vacation. If it makes you feel any better, think of it this way:  using a gas card which earns money back means the more that you spend, the more you are actually saving. OK, so it’s a bit of a justification, but it is true nonetheless.

One other tip I learned the hard way: it you are going overseas on your vacation, make sure you use a card that at doesn’t charge a foreign transaction fee. Most do and you will end up paying more for every purchase that you make â“ a real vacation killer for me!

Percentage of Income to Save Each Month

income percentageThe Perfect Percentage

If you’re looking to prevent overspending, you will need to develop a method that fits your budget. One common method involves tracking all expenditures during the month and adjusting them to ensure that expenses never exceed income. This may work for some, but others want something more concrete and ambitious. So what percentage of your earnings should you save each month?

Unfortunately, there is no perfect, one-size-fits-all number, but 40% provides a good starting point.  Make sure to plan according to what you can afford to set aside; your number might need to be different.   If you hit your perfect percentage, you won’t have to count every penny, and you’ll have plenty of extra cash at the end of the day.

The Key to Putting Money Aside

Contrary to common belief, it rarely matters where you’re overspending. After all, it’s all debt. But, it is important to understand your committedâ”or fixedâ”spending so you can be ready for   unforeseen expenses. Big, irregular expenses can drain the remainder of your emergency cash reserves. If you set aside 40% percent of your total earnings, you may be able avoid flat-lining your accounts when you take a vacation or fix the roof.

How you handle committed expenses often determines whether or not you’ll hit your 40% savings goal. Try not to spend any more than 60% of your income on fixed expenses. Many things  fall into this category, including food, clothing, essential household expenses, insurance, bills, and taxes.

 

Your Allocation Scheme

Once you have figured out how to budget your way to 40%, you’ll need to put that extra money in the right places. Here’s one way to divvy it up:

Long-Term Savings Goals: Make deliberate steps to create a long-term savings goal. A certain percentage of the 40% should go into your retirement account. Aim high and scale it back if needed. Start with 10% to be safe. Drawing money from this bucket should be your last resort.

Irregular Expenses: This is the big one. You will need to set aside 20% for vacations, repairs, appliances, gifts and other irregular and unpredictable expenses.

Entertainment Expenses: Everyone needs to live a little. Set aside 10% for fun. This includes weekend trips, amusement parks, movies, bars, restaurants, and whatever else you’re into.

 

Make Your Mark

As you probably know, there’s no perfect percentage for the masses. You’ll need to test the waters and figure it out for yourself. But, if you start at 40%,   you’ll probably find your mark rather quickly.

By saving regularly, you’ll put yourself in a better position to meet future financial challenges head on. Of course, it’s not all about helping yourself. When you set a goal now, you can make your mark on your children’s lives, too. Be sure to set realistic expectations, and always maintain a lifestyle that fits your budget. The Jones’s aren’t that cool, anyway.

(Check N Go is the fourth largest consumer financial service institution offering installment loans, check cashing and online payday loans in the United States. As a founding member of the Consumer Financial Services Association (CFSA), Check N Go has always been committed to responsible lending and works with legislators to improve the credibility of the cash advance industry. Check N Go has check cashing and payday loan locations in 28 states, with online locations in an additional 3.)

photo by debs-eye’s

Create an Epic Budget and Become Rich

budget plan

Do you ever feel out of control when it comes to money? There are times when nearly everyone feels this way, usually during a period of reduced income or unusually heavy expenses. But if you find yourself feeling this way most of the time then your financesâ”and even the little voice insideââ”may be crying out for a budget.

To some, being on a budget is like being on an allowance. It’s very limiting and makes you feel as if it’s something to be rebelled against. While that’s a legitimate analogy, limits are exactly what are needed in order to get control of your finances. The sooner you do and begin getting used to it the easier it becomes to live with.

The ultimate payoff of a budgetâ”almost ironicallyâ”is more freedom. That’s because a budget puts you in control of your money, and that always gives more freedom and flexibility than it takes.

How do you start a budget if you’ve never had one in the past?

Track your spending

Before establishing a budget, you first need to determine where it is you’ve been spending money so far. It would be best to do this by tracking your spending over the past several months. I’d say that a three month look-back is the minimum, but six would be even better. A full year would be optimal since it may reveal seasonal spending patterns that could be important.

You have to be sure that you track your spending from all sourcesâ”checking accounts, credit cards and even cash if you keep your receipts. An Excel spreadsheet will be a great help in this effort, as you’ll need a way of recording and sorting a large number of transactions. Sort all spending by general categoryâ”food, housing, utilities, insurance, entertainment, credit card payments, car payments, etc. You’ll need this to identify spending patterns.

You may even want to analyze certain categories in greater detail to find areas of excess. For example, how much of your spending on food also included restaurant meals? Or how much of your utility expense might be hiding movie rentals or online games?

Figure out what expenses to cut

Once you’ve determined where you’re spending your money, you’ll be in a position to know where to start cutting back. Hint: the largest expense categories will present the greatest sources of savings. This will help you to clear the deck so you can begin establishing priorities.

Variable expenses, like food and entertainment, are the easiest to cut back on. But if you’ve never tracked your spending patterns in the past, you may be surprised at what you find. You may discover, for example, that your money problems are due to high structural costs, like housing and debt, rather than careless excesses. This will require a very different approach to expense cutting.

For example, if housing is consuming a disproportionate amount of your monthly incomeâ”say more than 30%–you may need to consider moving to a less expensive home. If two car payments are choking your cash flow, you may need to focus on eliminating one of them as a priority. Excessive credit card payments may require a concentrated effort to begin paying them off, or even to work out a debt settlement.

Establish your priorities

After you’ve tracked your spending patterns and identified where to cut expenses, it’s time to determine your priorities.

If you’re carrying too much debt, then that has to be the priority. Debt is about paying off yesterday’s bills, and that needs to change as quickly as possible. Also, as you pay down and eventually begin paying off debt, you’ll free up cash flow for other priorities.

If it’s never been a priority in the past, saving money needs occupy a prominent position in your budget. A well stocked bank account provides budgetary flexibility as well as a cushion in emergencies, and having one is the beginning of financial security.

Charitable giving should be given a place as well. If you’ve been blessed with any measure of prosperity in your life at all, you need to give some backâ”to church, to the less fortunate, to those facing crisis. Balance this with your debt position first however, otherwise you may be unknowingly giving with borrowed money.

Commit to it!

Once you’ve prioritized your spending, cut excessive expenses and have begun paying debt, saving money and giving, you have the makings of a budget. Congratulationsâ”you’re almost there!

Now you need to apply it consistently! And this is where most budgets either succeedâ”or crash and burn. In order for the budget to work you need to commit to following through on it. You may never have had a spending plan in the past, but now you do, and it needs to be guide in all things money. And not just for you, but for everyone in your family.

Being on a budget is like being on a dietâ”there’s self-denial, discomfort and a long period of adjustment. In fact, if none of these are present, you probably don’t have a very solid budget in place.

Fortunately, as time goes on and you settle into your new way of handling money, it will get easier, and that’s when the biggest payoff comes. You’ll be comfortable and you’ll be in control!

(Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry. He lives in Atlanta with his wife and two teenage kids and can be followed on Twitter at @OutOfYourRut.)

photo by alan cleaver_2000

Earn Big Cash Back With PerkStreet Debit Card

 

PerkStreet Financial is a relatively new company.  It’s not often I recommend financial companies on this website, but I just had to write a review on PerkStreet Financial.  PerkStreet is now offering a 2% cash back debit card plus 5% on select categories and retailers.  I know other companies like Discover and Chase offer credit cards with these deals, but who offers a debit card that can do the same thing and not take the risk of overspending on a credit card?

Simply put, there truly is something special and unique about a debit card that offers such great rewards.  Not only that, but PerkStreet is renown for fantastic customer service.  Let’s get into some of the benefits of using this card.

 

Benefits

-Free checking account with your new PerkStreet debit card

-Unlimited free checks

-No minimum balance and no fees when your account is being used

-$25 bonus when you open your first account!

-24/7 customer support

-2% cash back with 5% in select categories

-Free fraud protection

-Your funds are FDIC insured

-One of the largest ATM networks in the country.  Over 37,000 ATM’s within their network

-Their online banking system is full featured and easily accessible

 

More on rewards

The cash back rewards program with PerkStreet is pretty straight forward but I should go over some details. PerkStreet has a vested interest in having you keep a balance in your PerkStreet checking account.  So, PerkStreet gives you an incentive.  If you have under $5,000 in your checking account, you will receive 1% cash back on all your debit purchases.  If your account has more than $5,000, then you receive 2% cash back on all your purchases.  Also, when you shop at select retailers, you will receive 5% cash back.

It’s important to point out that only non-PIN debit purchases count as eligible purchases.  In reality, many purchases require a PIN.  So, you will have to choose to buy something with a “credit card” and use your PerkStreet instead.  PerkStreet has basically found a loophole to provide massive value to their customers in the form of cash back!

Get your money back on each purchase.Compare the best cash back credit cards.

 

Their site is awesome

I don’t know about you but I can’t stand most bank or credit card sites.  It’s full of boring information and repetitive ads about their latest card offers.  PerkStreet does things a little differently.  With the various corruption stories lately, PerkStreet is out there to prove the skeptic wrong and become the “go-to” company for checking and debit cards.

They truly are dedicated to providing the best.  They financial blog is no exception.  It has a more personal feel to it and is very similar to other personal finance blogs.  Their writers clearly know what they’re doing.  The blog covers topics other than banking so it goes to show they are worried about your big picture personal financial life.

 

Should you open an account?

To answer this question, you have to decide what you are trying to accomplish.  If you are looking to build your credit, then this card is clearly not for you, since it’s a debit card, not a credit card.

Now, if you’re trying to avoid the temptation of credit debt, then this PerkStreet debit card is for you.  I’m actually thinking of switching to this card.  Knowing you have a cash limit definitely limits one’s spending.  I see this as a huge plus if falling into debt is something you struggle with.

I’d love to hear from the readers.  Who currently has the PerkStreet debit card?  What are your thoughts?  Good, Bad?  Share below!

Budget Better By Turning Expenses Into A Routine

For most of us, the vast majority of our cash outlays come from those things that happen repeatedly and at frequent intervals. We pay our mortgage and our bills at the same time every month. Our membership to the health club needs to be renewed once a year. Car insurance payments? Perhaps every six months.

Even those expenses that don’t have due dates still tend to follow routines. We might go out to a nice restaurant a couple times a month, go grocery shopping after work every Monday, and take a vacation for a weekend in the summer and a week in the winter. Let’s face it: humans are creatures of nature, and our affinity for routine and predictability comes through all the time â“ even when it comes to our expenses.

Of course, there are always those expenses in life that cannot be predicted and don’t fit into a routine. Most of these are costs we would rather not have in the first place, and thus can’t prepare for: there are the hospital bills, the bail bonds, and the new laptop when the old one unceremoniously dies. Certainly, few crystal balls can see these costs coming.

Still, we generally follow a routine with our bills and expenditures. Since we’re already inclined to act this way, we might as well take advantage of it. Start by conducting a trial: for a few months, keep detailed track of your expenses on a calendar. Every time you pay a bill or buy yourself a bagel for lunch, be sure to write it down. Analyze your data carefully after the trial is over. What was your monthly entertainment spending? When during the month did most of this spending occur? After asking those questions of all facets of your expenditures, you can then work backwards to create a budget. This budget should allocate your spending per month, by category, and it should note the particular days when spending should occur, thus giving you the ability to see those costs as they approach.

In this manner, we can make our budget in a more natural way. Instead of determining arbitrary numbers (say, $300 per month on food), we can instead build our budget off of our natural routine. Of course, if your spending exceeds your means you’re going to want to force yourself to adapt new routines. But most of are probably pretty responsible on a routine basis. By locking into that routine, then, we can eliminate some outliers without cutting our quality of life, thus allowing us to save some money while also anticipating those expenses on the horizon.

 

Emergency Fund – How Much is Enough?

 

How much is enough for an emergency fund, you ask? Well, that’s a highly debated topic.  The answer is, it DEPENDS.  Before I get into how much is enough, let’s back track and talk a little about the purpose of an emergency fund.   Webster’s dictionary says that an emergency fund is “an unforeseen combination of circumstances or the resulting state that calls for immediate action.”  That “call for action” is the second part of this topic, FUND.

So, what kind of emergencies are we talking about?  Here are four common emergencies that come to mind:

1-You lose your income. This one is all too familiar to Americans in this economy. When you lose your job, what do you do?  Most take out unemployment benefits. Unfortunately, the government’s unemployment check will barely cover the food bill. To make up the difference, an emergency fund would help ease the strain of unemployment while you search for a new job.

2-Unexpected car repairs. How many times have you hard of people complaining about unexpected auto repairs?  Things like transmission failures, blown head gaskets, and serious engine damage.  These problems can cost a pretty penny and most families don’t factor this into their monthly budget.  So when a car repair is needed, where does the money come from?  An emergency fund would be helpful. You could use emergency funds for the car repair and your monthly family budget would be unscathed.

3-Home repairs. Having lived with my parents for 22 years, I’m all too familiar with home repairs.  Septic tanks, water heater, plumbing leaks, upgrading windows, and air handler units come to mind.  These are not cheap to replace by any means.  And what if your house floods?  And what if a fire burns everything you own?  These are issues you need to plan in advance for.  Part of planning in advance is having an adequate emergency fund.

4-Medical problems. We all know how expensive health insurance is.  And even then, almost all insurance plans don’t cover 100% of major procedures and medicine prescriptions.  Oh, have I mentioned medical bills are one of the top reasons why Americans file for bankruptcy?  Step one is to have great health insurance.  Step two is to have an emergency fund on hand.

Now, how much is enough for an emergency fund? This will be up to the individual and unique circumstances.  Many of you know of Dave Ramsey.  He created Financial Peace University.  His program recommends a 6 month emergency fund.  I tend to agree with him.  Some financial experts recommend more than that but most agree that 6 months is a nice cushion to have if an emergency arises.  A 6 month emergency fund should include all typical expenses for a six month period of time.  These things include but are not limited to: groceries, rent, gas, insurance, etc…

Currently, I’m in the process of building my 6 month emergency fund.  Along with saving for getting married someday and saving for retirement, I make my emergency a fund a priority.  Once it’s fully funded, I will be able to funnel additional income towards my retirements accounts.

I also want to point out that it’s better to pay off your debt before you save for an emergency fund.  It’s as clear cut as that.  If you have debt, pay it off immediately. Who wants to be paying a bank interest!  I’d rather be making interest off of them!

So, where should you place your emergency funds? I like to keep life simple. Some people make things complicated and have numerous accounts to make an extra .5% of their emergency fund.  I like having all my accounts in one location.  I’m with a local credit union and have all my accounts with them.  I have a checking account, general savings, and an emergency fund account.  If you so desire, ING and Ally have high interest savings accounts.  It’s important to title your account “emergency.”  This will ward off any temptation to retrieve funds from that account.  The goal is to never touch it unless you desperately have to.

I would like to end this article on a Biblical note. Some Christians believe that you should trust God whole heartedly with finances and to not take it out of his control.  I see it a little differently.  The Bible clearly describes two  contrasts, one who is a fool with his money and one who is wise with it.  The Bible is as clear as day on this topic.  God provides us with tools to be wise with our money.  Saving money is not a bad thing.  As long as you are giving a portion of your money away to His kingdom, saving is a Christian habit.  I believe God wants us to have emergency funds but he also wants us to trust Him for our daily bread.  I’ll end with two Bible verses:

Proverbs 21:10- “In the house of the wise are stores of choice food and oil,  but a foolish man devours all he has.”

Proverbs 27:12- âA prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences.

Now start saving for that emergency fund!

-JE

10 Easy Ways to Save on Car Insurance

When you ask a friend about how much their car costs them, they usually tell you the monthly loan amount.   Unfortunately, your car costs a lot more than just the loan amount.   Think about it.   When it comes to monthly expenses, you have gas purchases, maintenance, and car washes.   Catch what I left out?   Yes, car insurance that is.   If you just thought about the Geico commercials you’re on the right track.   9 out of 10 people spend too much money on car insurance.   Typically, this is due to ignorance and the insurance companies not providing you with the information I’m about to tell you.   Before I go on, I would like to thank the University of Washington for educating me on this topic.   After crunching the numbers, I have saved myself and my family over $100,000 over the long term.

Here are 10 ways you too can save on car insurance:

1-The single best thing you should do is shop around. So many people I run into stick with one company because it’s all they know and trust.   Thankfully, we live in a capitalist society, so car insurance companies are competing for your business!   This means greater savings for you.   Use Esurance.com to compare quotes from multiple insurance companies.

2-If you can, buy car insurance and home insurance from the same company. Typically, companies provide a discount if you do this or just give you a lower rate across the board.   This will save you a significant amount of money over the long term.

3-Ask about special discounts. This is another easy step.   All you have to do is give your insurance company a call and ask them about these discounts.   These discounts aren’t publicly advertised for good reason, they don’t want to give these discounts to everyone!   Some of these discounts include: low mileage drivers, alarm installations, good student grades, completion of defensive driving courses, multiple policy holder, and good driver discount.

4-Decrease your auto deductible. This is a tricky one.   I recommend going as low as possible on your deductible if you have liquid savings you can tap into if you did have an accident.   A lower deductible will significantly lower your auto insurance rates.  Mine is at $250…

5-Keep up a clean driving record. This seems like common sense, but even I struggle with this one!   Slow down and go the speed limit!   Moving violations and/or accidents add points to your license and end up costing you thousands in higher insurance costs.   Keep your risk profile as low as possible.

6-Improve your credit score. This is simple, manage your money well.   Carry a couple credit cards and pay them in full each month.   The simple things go a long ways.   I encourage you to check your credit score on a yearly basis.   I use www.creditkarma.com and check on a semi-regular basis.

7-Drive a boring car! The faster or higher profile car your drive, the higher insurance rate you will have.   Everything from engine size to whether it’s a two or four door will impact your car insurance rates.   Don’t drive a red corvette, drive a black civic, do you catch my drift?

8-Lower your coverage. Too much coverage is unnecessary.  It’s just a car, nothing more.   I carry a middle of the road auto insurance plan.   Most people have too much coverage and never realize it.   For example, comprehensive/collision insurance might not even make sense if you drive an older vehicle.   This is a judgment call you will have to make.   You have to think about whether or not it costs more to insure the car than it does to replace one.   Then again, if you lie on the poor side of the economic spectrum, it might be wise to insure your car well in case of an accident, especially if you have low savings.  Check the value of your car at www.kbb.com.

9-Group discounts are key! Many times, you can get special deals though credit unions and banks for car insurance rates.   A good place to ask is your employer, local financial institutions and large professional organizations.

10-If you can, insure your car on a family plan. This is a fantastic way to save on your monthly car insurance bill.   I’ve been on my family’s car insurance plan for years.   Even moving away and starting my career, I haven’t left their family plan.

Well, I hope you incorporate these tips!  They’ve  saved me thousands in long term savings and will do the same for you.   Since learning of these tips and tricks, I have a very low auto insurance premium.   If you were interested I drive a 2004 Acura TL with very low mileage.   A typical insurance plan for my car and my age is right around $200.   Because of the aforementioned bullets, I pay a low rate of $105/month.   Most people don’t believe me.   I even have a speeding ticket on my record!   Anyways, that’s enough about me.   I’d love to hear success stories in the comment section below.   Feel free to shoot me a message if you have further questions on this issue.   Thanks for reading.

-JE

Mint.com Review: A Great Budgeting Tool

This is a guest post by Jeff B. whom I graduated high school with.  He is an engineer with a passion for investing and personal finance.   Enjoy!

 

It’s that time of year again, the holidays are approaching quickly and everyone is out shopping for last minute gifts.   This time of the year can be hard on many people while they are trying to squeeze every penny out of their budget to help make this Christmas season a memorable one.

Budgeting can be hard for many people when they have multiple credit cards, joint checking/savings accounts, divided incomes, and a mortgage payment.   It makes it even harder now that you want to surprise your significant other with a gift that will bring a smile to their face.   Well luckily for us, there is an easy way to balance all of these expenses in our life and find out how much money we really have, how much we are saving and most of all how our Christmas shopping will affect our net income this year.

The tool is called Mint (http://www.mint.com). It’s a personal finance website created by Aaron Patzer back in 2006, which imports and displays all your online banking activity.   It has since been purchased by Intuit (creators of Quicken and TurboTax) and been upgraded to support virtually any bank in the US (and now Canada) that supports online banking.   It is feature rich and easy to use, giving you a simple way to find out how much money you actually have.

Features

Mint has a couple notable features I’ll describe briefly here.   The first is the home page; it gives you a rundown on all your financial accounts, whether it’s a checking account, credit card or mutual fund, it’s all shown on the front page in an easy to read and understandable format.

Mint also features a transaction page which resembles that which you would see in Quicken.   Here you can edit your transactions, split, label and categorize them.   This is important for another feature of mint which shows the breakdown of your expenses by category.   The transaction page allows you to view your aggregate transactions or transactions by account.   This is a good way to see what you’re spending and to check for any incorrect charges.

One of the most helpful features that mint boasts is the Trends page.   This is the eye candy that makes Mint what it is and it’s just that: Eye candy.   It’s a way to visualize your money.   It stead of adding up numbers in your head and trying to see where your money is disappearing to, Mint delivers easy to read and informative charts and graphs.

 

Mint offers other features such as budgeting and savings plans that show you how much you’ve put away for a specific goal.   The best part about mint is that it’s FREE to use.   What’s better than a free way to help you manage your money?

Concerns?

When it comes to money many people are apprehensive to giving online banking access to 3rd parties.   Luckily for you Mint is run by the same people that run TurboTax, Intuit.   Intuit is a well established company in the financial world, and they are just as secure as your online bank and are not going to run off with your account information.   They only provide read access through Mint.com, meaning that if someone steals your Mint password they will only be able to see your account balances.   They will NOT be able to make transactions, transfer money or retrieve account specific information.

If you’re still not convinced you can view Mint’s privacy page here: http://www.mint.com/privacy/

If you haven’t yet, visit Mint.com by clicking on the Mint advertisement on the upper right hand side of the website!

-JE

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