Hope for your financial life and beyond

Should I Cosign? Here Is the Truth About What God Says

“Do not be one of those who shakes hands in a pledge, one of those who is surety [ cosign ] for debts.” – Proverbs 22:26

If you’ve ever had a situation where a friend or family member asked you to cosign a loan, you know it’s a tough spot to be in. On the one hand, you want to help. But the idea of being responsible for someone’s debt has you a little squeamish.

cosignSay “No” to them and it seems like you don’t care.

Say “Yes” to them and you are opening yourself up to financial risk.

Maybe as you thought about what to do, you should have considered asking this question: “What does God have to say about it? Would He want me to cosign for this loan?” It may never have occurred to you to seek advice from a higher power.

The truth is God talks a lot about money in the Bible. He even has advice about cosigning which really surprised me when I found it. For anyone really, the real world application is sound. But especially for people of faith, His advice is worth listening to.

God’s Advice on Whether to Cosign

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Tips for Managing Your Debt Responsibly

Whenever you look for financial advice, you probably see articles that advise you to avoid debt. In fact, I’ve written a lot about that here on this site. In fact, getting out and staying out of debt is a common characteristic that is listed among those who have reached millionaire status.

With that being said, it is becoming increasingly difficult – if not impossible for some – to get a college education or buy a house without borrowing money. College tuition continues to escalate, putting the funding of it out of reach for those families who did not start saving early enough. So many turn to the federal student loan program to fund part or all of their college education. 

Additionally, many see renting as “throwing away money.” I’m not one that subscribes to that. There are times when renting is the wisest choice. But it’s a hard mental hurdle to overcome. A mortgage where you can have a forced savings plan by paying yourself each month through the reduction of the principal, seems like the best course of action.

In many people’s eyes, the two types of debt listed above are considered “good debt.” In other words, they are the type of debt that can lead to further benefits down the road. Let’s explore that concept some more. And let’s look at some tips that can help you know when it might not be such a bad idea to borrow and how to manage the debt that you have.

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4 Reasons Why Paying Off the Mortgage Early Was Right for Us

Paying off the mortgage early is a hot topic when it comes to money management. There seems to be a good amount of quality logic for keeping it and equally valid logic for paying it off early. So what’s a homeowner to do?

paying off the mortgage earlyAfter we bought our first house, I began to look into this issue. I read many opinions and ended up agreeing with the major arguments for NOT paying off the mortgage early. These points seemed solid to me. The logic goes like this:

“You have such a low interest rate.”

“You could invest instead and get a better rate of return on your money than putting into extra mortgage payments.”

“More of your money is tied up in your house and you can’t get to it for a big emergency.”

“You are getting tax breaks for carrying a mortgage.”

“A mortgage is a hedge (protection) against inflation, especially with a fixed rate mortgage.”

Then during 2010, my wife and I went through some life changes. We began to rethink many money related things including our mortgage. After a lot of back and forth, we decided to pay off the mortgage early. The reasons may surprise you because only one of them is based on a mathematical concept or equation.

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FACT: The Rich Rule Over the Poor and the Borrower is Slave to the Lender ― Proverbs 22:4

The society we live in today revolves around being in and remaining in debt. Don’t believe me? In the early 1900s, most people owned their house with no mortgage

what does the bible say about debtIt wasn’t until after WWII that debt became a more popular way to make purchases when loan requirements were loosened and lenders became protected by federal law. When the opportunity for mortgages expanded, debt went through the roof. 

At the beginning of 2020, more than 50% of Americans make just enough money to pay their bills each month. If something were to happen and they missed a paycheck, some of their bills wouldn’t be paid that month. In fact, 40% of Americans can’t cover $400 in the case of an emergency.

The questions regarding debt that are the most important have nothing to do with what others are doing or thinking. For Christians, it is important to ask what the Bible says about debt

The four most important lessons the Bible teaches about debt are:

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2 Milestones You Need to Reach Before Investing Money

investingWhen it comes to investing money in the stock market, time is your greatest ally and your greatest enemy. The longer you are investing money the greater likelihood you’ll generate great wealth. Shortening that time period by just a few years could significantly reduce the amount of wealth you’ll create.

That’s why it’s important to get started early – in fact, the earlier the better. Time is the most critical element in the investing equation. It doesn’t matter if you are a high school student making minimum wage at a summer job, a college student figuring out how to pay your way through school or married with your first child on the way. The earlier you start investing, even in small amounts, the more one can maximize big returns in the long run.

Don’t believe me? Read on and check out the following example.

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Should I Borrow Money to Get What I Want?

There is no denying it. Credit is available everywhere. Our cultures screams “Have It Now!” to us at every turn. “Borrow money now to get what you want!” people say.

We expect fast food within 5 miborrow moneynutes or less in the drive-thru.  We want to make quick money for as little work as possible. And we are first in line for the newest technology gadget the day it is released. Simply put, most of the time we can’t wait. We gotta have it.

This “Have It Now” culture has skewed our reasoning ability, in that it has masterfully helped us change our “wants” into “needs.” Our brains have reclassified the things that we desire to have into things that are priorities. And in some cases, our wants are taking precedence over issues that are needs.

So why don’t we just go ahead and borrow the money to get the things we want? Seems like a logical step. However, blindly borrowing money to satisfy all your needs can cause great damage to finances, as well as your mental and emotional life.

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What is a Line of Credit and How Does it Work?

From time to time, you might find yourself in need of additional money to fund a project, pay a medical bill or cover for an emergency. It can be hard determining where to get access to the cash you need. It may be that a line of credit is just the thing to get you by.

A line of credit (LOC) is an agreement between a bank and an individual that is geared towards establishing the maximum amount of money a customer can borrow. Once agreed upon, the customer is allowed to access the borrowed funds from the financial institution through their bank accounts. They are then required to make repayments on the loans per the terms established with the bank.

Here is how a line of credit works.

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The 3 Main Advantages of a Debit Card

advantages of a debit card

Are there advantages of a debit card that makes them better than using a credit card?

Debate rages sometimes in the personal finance world over which one of these payment options is better. I see how both can be used responsibly to assist people with their money management. The key word in that last sentence though was “responsibly.” Of these two options, credit cards by far have the most potential for abuse.

Advantages of a Debit Card

Banks and other financial institutions issue debit cards as a way for customers to access their accounts to pay for goods and services. The card links to your checking account at the bank. When you swipe it at a business, the amount of the transaction is withdrawn from your account to pay the merchant.

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Why Online Loan Applications Can Boost Your Financials

It doesn’t matter how hardworking and frugal you are, life is going to throw you a sudden curveball. An instance like that can change your financial security immediately. Be it some illness, the need for a vehicle, a house renovation or something else, it is not uncommon for such needs to arise.

Oddly enough, they seem to happen exactly when your bank balance is slim. That can leave you scrambling to figure out how to pay for it. If you don’t have an emergency fund set up, you may not have many other options than to see help elsewhere.

And for decades now, the solution to such problems would be a loan.

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6 Signs You Are Living Above Your Means

Let’s face it. We live in a fast paced, consumer friendly, debt-driven society. Spending money has never been easier.

That might be why more than 60% of Americans deal with credit card debt on a daily basis. Access to credit has never been more available to the general public. Unfortunately, it is a main reason why living paycheck-to-paycheck is an unfortunate reality for nearly half of Americans.

However, that reality doesn’t have to be inevitable. Your situation can improve with some quick refinements to your spending habits. I’ve done it before and so can you. You don’t have to live above your means.

It does come down to a simple choice. But first you must be able to recognize that you have a problem. With that in mind, here are a few warning signs you may want to look out for when you’re worried you’re not living within your means.

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Emergency Fund Basics: The Step On Which All Other Success Is Built

If you are just getting started with the “getting-my-financial-act-together” bit, you might not know where to begin. Have I got good news for you. It’s time to cut through all the clutter and for you to realize one important truth. The first step to success in all other areas of personal finance is creating an emergency fund of cash. Then you need to save it for a crisis.

emergency fundThat may seem like a bold statement. I can attest though, from personal experience, having money set aside strictly for emergencies is the #1 strategy that has propelled my wife and I forward in paying off debt, saving for retirement and college and investing in the stock market.

Why is that you ask?

Because it’s a fact – emergency situations in life are going to come. We cannot escape them. So it just makes sense that we learn how to manage through a crisis.

If we don’t have cash that is easily accessible to take care of the emergency the moment it hits our door, then we are really only faced with one alternative – going into debt to deal with the situation. And it’s this constant accumulation of debt that hinders our ability to accumulate great wealth over time.

You must break the going-into-debt-to-solve-the-emergency cycle.

In this article, I’ll outline the basics of having an emergency fund. You’ll learn when to start one, what to use it for, how much to save and the best ways to fund it.

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