Do you want a pay raise?

Who wouldn’t want a pay raise? Extra money each paycheck could help you build up your emergency fund or put towards paying off debt. I found a way you may be able to increase your take home pay.

Do you know what happens to that big tax refund you get year after year? Many people get one but aimlessly spend the money and really have nothing to show for it. Ask yourself this challenging question, “how many times have I received a $3,000 or $4,000 refund check and within weeks it was gone and I still had no savings or decreased debt to show for it.” Refund checks can cause you to be financially lazy if you are not careful because you see it as “free money.” It is your money but it’s still not healthy to spend without any type of plan.

A tax refund is the money the government held for you according to the W-4 form you filled out with your employer. However, if you are working towards paying off debt or trying to achieve financial stability you should start having that money put into your check each month rather than taken out. One reason is because the government is holding your money but they are not paying you interest on that money. Another reason is because, if we are honest, you need that money now, it’s extra cash in your pocket.

You will need to fill out a new W-4, Employees Withholding Allowance Certificate, with your employer and adjust the number of allowances you are claiming. Kiplinger’s quick ‘n’ easy withholding calculator only asks three questions to give you a solid estimate about how you should adjust your allowances and how much more money you would receive in your paycheck as a result of that change. Doing this would give you an automatic raise if your household receives a big refund each year.

I hope you are amazed by how much “more” money you could be getting in your paycheck each month and it encourages you to take immediate action.

The deception of debt

Deception is the act of deceiving which can mean “to give a false impression.” It deceives because the consumer feels he has gained but anytime we sign our future earnings into the hands of a lender, we have enslaved ourselves. Proverbs 22:7 says “the borrower is servant to the lender.” So what makes debt deceiving?

Debt tells you this is your special day and your wedding should be perfect so you must have everything that will make you happy. You put things on credit cards, take out lines of credit or maybe borrow from family. What it doesn’t tell you is that once the honeymoon is over a stack of bills will be waiting on you. Most of us know that but the power of debt convinces us that everything will be ok. The problem is most couples spend more time discussing the day they will be married rather than their finances once they get married. The false impression is that if you have everything you want on your wedding day your day and your marriage will live happily ever after.

Debt tells you that you have endured four years of undergraduate school. You have worked hard, maintained a respectable GPA and finished with the other 51% of college students who graduated from a four year institution. You deserve that new car and new wardrobe or whatever your heart desires. What it doesn’t tell you is that 65% of 4-year undergraduate students graduate with some debt and the average student loan debt is nearly $20,000 or more and this does not include car note, credit card payments or lines of credit that may have been opened. Debt levels are rising year after year and starting salaries are not keeping up. The false impression is that once you have graduated you deserve to “treat” yourself to a better life because of your new accomplishment.

Debt tells you that you work hard for your money. You deserve to splurge. Who wouldn’t want a new car, bike, boat, furniture for the living room or bedroom set? You have already talked with the lender and he explained 0% financing, 90 days same as cash or no payments for six months. You don’t necessarily need something new, you have just been using what you have for so long, it’s going to drive you crazy. The false impression is that if it’s newer it will make you feel better and satisfy an emptiness that has been nagging at you for a while now.

Debt tells you to get a rapid refund loan. You could really use the money for a variety of things that need to be done. It’s a great way to file your taxes and get the check in your hand instantly. What a deal, right? Wrong, the false impression is that you can get your money right away without the hassle of waiting weeks. You can get your money within a couple of days but the interest they charge is ridiculous. Not unless your kids are starving or there is an eviction notice on your door, these loans are a bad financial choice. Example…a taxpayer with a $600 refund would pay about $75 in finance charges, plus $50 in tax prep fees just to get a check for only $475 nine days sooner. The annualized interest rate would be about 450%! I think its worth it to wait.

You can choose not to be deceived by thinking clearly and using wisdom with your purchases. I don’t just think about the “right now” purchase but I also think about the long term consequences. Why become a slave of men when you can practice delayed gratification and be free of financial bondage. I like to remember, my income is my most powerful wealth building tool so who do I want to make rich, myself or lenders? Is your income making someone else rich?

Don’t be deceived, if you are making payments, the lender has the upper hand plus interest!

Merry Christmas

I would like to tell all my readers to have a Merry Christmas! I pray you take time to enjoy the true meaning of Christmas…Christ and Family! I believe getting out of debt is very important but I encourage you to take time to enjoy your family, friends and have fun this Christmas season.

Luke 2:11 – Today in the town of David a Saviour has been born to you; he is Christ the Lord.

MERRY

CHRISTMAS!!!

Save by spending?

You see it everytime you walk through the mall or on nearly every commercial that comes on tv. “Come now and save 15-30% this weekend only.” It’s very tempting to make your way to that store on saturday morning and shop til you drop and walk out with your receipt in hand showing you saved $150.  While this sounds good, to save that $150, you had to buy $300 worth of stuff. If you have managed your money with purpose and planned to use $350 for “stuff” then it is fine to buy things and save money in the process.

However, when we don’t have a spending plan in place and we decide to buy something because we can save money, we are missing the true meaning of “saving money.” Saving is putting money aside and avoiding unneccessary expenses. If an item is not in the spending plan or it hasn’t been discussed in a budget meeting then it is unneccessary. Spending money without a plan is the main reason we find ourselves in debt.

Think about it. Many people are driving cars they can’t afford because the dealership was having a big one day sale where they slashed $5,000 off the price. Many used their credit cards to purchase clothing or certain items because of a weekend sale. Some used money that was not accounted for in their spending plan and because of that their plan has failed and the money is off track again because of a 45% off sale. Does this sound familiar? Are you spending money without thinking and justifying it with how much you saved?

The truth is you really didn’t save money, you spent money. Money that could have went toward savings. I know it’s not sexy, cool or hip to save money but it will keep you out of debt and be the reason you achieve financial success. Proverbs 21:20 says “the wise have wealth and luxury but fools spend whatever they get.” So the next time you want to buy that item because you can save a certain percentage of money, you should ask yourself…

• Is this already in my spending plan to be purchased?
• Am I putting money aside monthly or weekly to add to my true savings?
• Could the money I use to buy this be used more responsibly by putting towards my debt payoff?

Is it a good thing to save money when you buy something? Yes, but if you haven’t planned to buy the item and you are justifying it because you are buying it on sale then you aren’t really saving at all.

Readers of Carmoncents

My last blog entry was on December 10th. I wanted my readers to know I have not stopped blogging. I will continue to provide information on the topics of money that will empower us to go forward financially. I encourage you to continue paying off debt, maintaining a budget, saving and being a good steward of the money God has allotted you.

It pleases him when we are faithful in our finances. 1 Samuel 26:23 tells us “The Lord rewards every man for his faithfulness…” Be diligent, detailed and determined! Don’t continue to allow your money to control you, God has equipped you with power to change your finances. I believe if you continue you reading Carmoncents’ blogs, stay focused, pray and take action you can systematically change your financial future.

As I continue to read, research and write for myself and my readers I ask that you pray for my strength and determination to change generations. It’s not all about doing better for us but so we are able to bless others as well. I will pray for you as you fight, struggle and press your way to debt freedom.

Yes you can!