Hope for your financial life and beyond

Give the Gift of Investing This Holiday Season

I’m happy to welcome today the Debt Free Guys. Enjoy their guest post on how the gift of investing may be the best present a child could receive this holiday season.

Christmas presents under the treeAmericans are expected to spend between 4 and 4.5 percent more this coming holiday season than in 2013 or $981 to $986 billion between November and January, excluding auto and gas sales. The lion’s share of that money is expected to be spent on technology, led by Apple’s iPhone 6 and 6+.

Already this month we’ve seen personal finance blogs with advice to manage expenses this holiday season. Expect to see lists of all sorts on financial blogs and websites, such as “25 Gifts Under $25”, “Gifts You Can Make” and “The Art of Re-Gifting”. We’ll kick off our 2014 holiday shopping advice to give the gift of investing this year.

There will be the exceptions, but most American children will have their fair share of gifts beautifully wrapped and lovingly placed under a Christmas tree or next to a menorah. They’ll excitedly un-wrap their gift, play with their new toy or wear the new piece of clothing, but eventually the gift will be forgotten. Some possibly forgotten before the day is over. Others will be forgotten by the end of the holiday season or a few months later. Even iPhones lose their luster after several months.

What won’t be forgotten is education. As we’ve discussed frequently at Debt Free Guys, we believe there is a gap in education in that kids don’t sufficiently learn enough about money management, saving and investing.

Educate the children in your life and give the holiday gift of life-long investing. There are three ways to do this.

Open a UTMA/UGMA Account

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Proof It’s the Thought That Counts

Hidden Nuggets Series #58 – “Then the disciples, each according to his ability, determined to send relief to the brethren dwelling in Judea.” – Acts 11:29 

two penniesThe reign of Claudius Caesar, the fifth Emperor of Rome, was marked by a series of famines. Several touched the city of Rome, one occurred in Greece and another impacted the countryside of Judea in Israel. It is to the last famine listed that the Bible specifically speaks.

We are told that when this famine in Judea occurred, the leaders of the church decided to send assistance to the region. We can only assume this meant food and supplies, as money would have been quite useless during a time when there was so little to buy. Once accumulated, the supplies were sent to those in need by the hands of the missionaries Paul and Barnabas.

What’s remarkable is that there was no squabbling on who was sending what or how much. The Bible says each person determined to send relief “according to his ability.” In other words, people gave what they could – some gave more…others less.

Thus proving that when giving it’s the thought that counts.

Taking Their Cue From a Poor Widow

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8 Questions to Ask When Setting Up A Family Inheritance

family inheritanceIt’s hard enough to deal with the topic of our own death let alone what will happen to our possessions once we pass away. Setting up a family inheritance can get complex and technical.

The aftermath of what we do could lead to a potential mess as this 2012 article from Fox News demonstrates:

“Heirs of a wealthy New York art dealer were left a $65 million sculpture [named “Canyon”]…The bequest comes with a $29 million tax bill, but since the piece includes a stuffed eagle, it can’t be sold…federal law makes it a crime to possess, transport, sell or otherwise convey a bald eagle, whether it is alive or, as in this case, stuffed…placing a value on an item that cannot be sold is no easy feat. The venerable auction house Christie’s placed the value of “Canyon” at zero. The IRS initially put it at $15 million, then jumped the figure to $65 million…”

Most of us will never have to deal with numbers that large. But it’s no wonder we get confused with our heirs, the courts and the IRS to account for. It all seems like a big tangled mess.

So what should we do?

Well, the wrong answer is to ignore the wealth transfer process. With better planning the wealthy art dealer mentioned in the article above could have avoided placing this conflict in the lap of her family. Perhaps asking some relationship and technical questions would have eliminated some confusion and helped the inheritance pass with greater ease.

Family Inheritance Relationship Questions to Ask

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The Two-Faced Giver: When It Looks Like Rain It’s Supposed to Pour

Hidden Nuggets Series #45– “Whoever falsely boasts of giving is like clouds and wind without rain.” – Proverbs 25:14

the dark clouds of a thunderstormPopup thunderstorms dot the landscape of summertime. You know the kind that develop as the afternoon heat and humidity build. Atmospheric conditions can change quickly producing dark clouds and high winds. The next thing you know, a torrential downpour is watering your garden or causing gridlock on the roadways as you drive home from work.

When an entire weather system crosses through your area, it is obviously going to rain. The front can extend for hundreds of miles, drenching everything in its path. When we see the prediction of 100% rain on the morning news it’s easier to plan the day around the approaching weather. We anticipate and know almost for certain rain is going to come.

Not so with the pop up thunderstorm.

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God Wants the First Bite of Pie

Hidden Nuggets Series #42 – “Honor the Lord with your possession, and with the firstfruits of all your increase; so your barns will be filled with plenty, and your vats will overflow with new wine.” – Proverbs 3:9-10

blueberry cheescake and hot coffeeEver let someone else take the first bite off a piece of your pie?

I don’t understand it but a psychological thrill ride occurs when I slide a fork through the tip of a triangular shaped slice of pie. It’s as though I’m embarking on a slow, taste sensation journey, the first step of which is to destroy the perfectly symmetrical geometric figure.

When someone else takes the first bite, the whole pie eating experience is diminished. The rest of the piece doesn’t taste quite the same. When I’m polite enough to let this happen, I’m totally bored eating the rest of it. It’s as though my mind is saying, “Eh…it’s just pie.”

A part of me is happy for the person I gave that first bite to. I know they appreciate it. The look of pleasure on their face as the piece dissolves in their mouth gives that away.

Deep down, I’m envious and selfish. It was my pie after all. Shouldn’t I enjoy the pleasures of the first bite?

That’s right…it’s all about my needs.

How can I stop thinking like that?

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3 Tips for Taking a Charitable Deduction on Your Taxes

The following is a guest post by Kim, otherwise known as Mrs. Luke1428. She is a CPA at Loggins, Kern & McCombs in Jonesboro, Georgia. The following is intended to be a general tax discussion and not tax advice. If you have questions about your specific situation, please consult a professional.

ID-10096025Feeling a little charity-minded? Here are some tips that may help you come tax time.

Do Not Give Simply For The Tax Benefit

I am making this the #1 tip because that is how strongly I feel about it. Giving should come from my heart and not because of any perceived benefit come tax time. It’s a spiritual issue for me based on teachings like this one from the Bible:

“So let each one give as he purposes in his heart, not grudgingly or of necessity; for God loves a cheerful giver” – II Corinthians 9:7

Knowing how to deduct the charitable gift on your taxes is important to make sure it is done right, but the tax benefit should not be the motivation for the gift. Suppose you can’t decide whether to give to a charity or to a person in need, and maybe you feel led to give to the individual person. Even though you can’t deduct gifts to individuals, the right thing to do is to give how your heart is leading you despite losing the deduction.

Keep Good Records For Cash Gifts

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Giving to Charity in Secret…Because It’s Not About Me

Hidden Nuggets Series #29 – “Therefore, when you do a charitable deed, do not sound a trumpet before you as the hypocrites do in the synagogues and in the streets, that they may have glory before me. Assuredly, I say to you, they have their rewards. But when you do a charitable deed, do not let your left hand know what your right hand is doing, that your charitable deed may be in secret; and your Father who sees in secret will Himself reward you openly.” – Matthew 6:2-4

giving to charityJesus was calling out some pretty crusty characters in the Bible verses I quoted above. The “hypocrites” he mentioned were actually the religious teachers of the time known as the Pharisees. Even though they were the church leaders, they were actually very poor spiritual role models. On this occasion, Jesus was blasting them for their practice of giving to charity openly for all to see.

The Pharisees would give only to get noticed. They would make sure people were watching them at church when they put their offering in the collection box. They looked down on people who didn’t give as much. One could even find them on the street corners bragging about how much they had given, even though it was a small percentage compared to their overall wealth.

To an outsider, their giving to charity looked very religious and sacrificial. Jesus saw right through the motives and exposed their hypocrisy. In reality, he said their purpose in giving was to gain status, power and the favor of men. Needless to say, they didn’t like Jesus much for saying this.

Think this still applies to us today? I do. It’s not like human nature has changed. We battle against the same self-seeking motivations that characterized the Pharisees.

Giving to Charity Privately

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An Open Hand: The Most Powerful Money Visual Ever

Hidden Nuggets Series #20 – “…you shall not harden your heart nor shut your hand from your poor brother, but you shall open your hand wide to him and willingly lend him sufficient for his need…” – Deuteronomy 15:7-8

money in open handGiving is especially on my mind as we enter the holiday season.  I recently talked about why people give for the wrong reasons and how dangerous that can be. I followed that up on Wednesday by describing the five step giving plan my wife and I use to decide where our money goes.

What I’ve realized is that personal finance is all about making intentional and wise decisions with your money. Giving is no different.

Through it all, there has been one common theme related to giving – our attitude.

Several years ago I heard someone speak about our mental attitude in relation to how we view money. This person used a powerful visual that has stuck with me ever since. I’d like to share it with you today because it has revolutionized how I think about money and the opportunities I have to give.

The Open Hand Symbolism

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Giving for the Wrong Reasons This Christmas (Or Anytime)

salvation army bucket

Image courtesy of salvationarmyusa.org

The calendar has now turned into December and that means our thoughts are shifting focus towards Christmas. There will be so many activities to attend, so many destinations to travel to, and so much delicious food to consume.

And there will be so much giving that takes place.

December is the month specifically devoted to giving. We regularly give in many ways throughout the year, but it all seems to come focused together during the December holiday season. Schools have students bring in clothing items for distribution to children from low-income families. Pastors preach sermons and urge their congregation to fill local food pantries. The Salvation Army kettles show up outside department stores. And of course, families celebrate the season by gathering around the tree on Christmas morning.

These are all good things designed to meet needs and bless people at a special time of the year.

However, if we are not careful, we can get hooked into giving for inappropriate reasons. This can have a negative impact on our budget, not to mention our emotional and psychological makeup. That’s why it’s important to analyze to whom we are giving and why.

Giving For the Wrong Reasons

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The Boy vs. the Blog – Exercises in Giving

Hidden Nugget Series #10 – “And whoever gives one of these little ones only a cup of cold water in the name of a disciple, assuredly, I say to you, he shall by no means lose his reward.”  Matthew 10:42

800px-Football_on_groundToo often my thoughts degenerate into believing that only quantity has value. In other words, I mistakenly believe that when giving, it needs to be done in great amounts. While there are times and places to give generously, perhaps even exorbitantly, I’m convinced that isn’t the norm.

Last week I’m seated one evening at our downstairs computer pounding out another Luke1428 blog post. I’m on a roll as each sentence is coming quickly. (Oh if it were only this easy to write every blog post.) Then half-way through my glorious blog-writing experience, disaster struck.

My 10-year old son peeks around the corner and asks me to throw the football with him.

Ugh. Major cognitive dilemma.

Do I go play with him and risk losing my train of thought? (It’s incredible frustrating to have a writing groove interrupted.) Or do I simply tell him “Sorry bud, daddy is working and can’t play right now?”

What would you do?

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Attachment: The Giving Killer

Hidden Nuggets Series #4  – ”You shall not delay to offer the first of your ripe produce and your juices…” – Exodus 22:29

1993 JeterMy baseball cards are pretty special to me. My first ones were collected in the early 1980s as rewards after our Little League games. Our coach would give us each a dollar to use at the concession stand when we won. I always purchased a small Barq’s cream soda and two packs of baseball cards. The trip home from the ball field was spent shuffling through the cards to locate my favorite Cincinnati Reds players, all the while chomping on the stale gum from the card packs.

That began a favorite hobby of mine that has continued off and on to this day as I’ve amassed around 12,000 cards. If you came to my house though, you would never know it because for the last 10 years 98% of them have been boxed away in the basement, tucked neatly into baseball card pages and three-ring binders. The other 2% are in the fire safe box, also basically locked away from view.

Every so often, I think about selling the cards, thus ridding myself of the torture of always moving the boxes when they are in the way. Something holds me back though.

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