Ready To Buy a House? 3 Questions To Ask Yourself.

Ready To Buy a House? 3 Questions To Ask Yourself.The “American Dream” that we are all encouraged to chase includes the purchase of your own home.

With mortgage interests rates still reasonably low, it seems like a great opportunity and you might be thinking that this is the right time for you to buy a house.

Of course, I believe that everyone should strive to reach the goal of home ownership.

As you consider this major decision here are a 3 questions to ask yourself to determine if the time to buy a house for you is now.

1. Are you on firm financial ground?

  • Are you completely debt free (credit cards, medical bills, student loans, car loans, etc.)?
  • Do you have an emergency fund of 3-6 months of expenses (preferably 6 months)?
  • Are you saving for retirement (15% of your annual household income) and for college expenses?

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2. Can you really afford to purchase a home?

  • Could you make the home purchase with a 15 year mortgage at a fixed interest rate?
    • Avoid mortgage loans with adjustable interest rates and balloon payments.
    • Remember, there is a large difference in interest paid between a 15 year loan and a 30 year loan over the life cycle of the mortgage.
  • Have you saved up for a down payment of between 15% and 20%? With a 20% down payment you will avoid paying for Private Mortgage Insurance (PMI) which protects the lender in case of default on the mortgage.
  • Will your monthly mortgage payment (taxes and insurance included) be equal or less than 25% (or 1/4) of your monthly take home pay? A mortgage payment that takes too much of your monthly take home pay will put a lot of strain on your budget.
  • If you want additional guidance on the process of getting a mortgage, this article from The Simple Dollar is a great resource.

3. What are your purchasing goals?

  • Have you made your list of “must have” elements vs. those which are “nice to have”? For example:
    • Do you need 4 bedrooms or could you be all right with 3?
    • What about bathrooms: is it 2 or 2.5?
    • What is more important to you: size or location?
    • What about the quality of the school district?
    • Make a list and evaluate the potential houses against that list.
  • Do you have to buy the first one you see?
    • Take your time when looking and guard against “house fever”.
    • For my first home purchase in 1996, I looked at around 25 houses.
    • For our second home purchase, my wife and I looked at 20 different homes.
    • There is no need to rush the decision on this investment which will be one of our largest purchases of your life.
  • Who is helping you?
    • It is a very big decision so you should seek professional help.
    • Secure the services of a good realtor that knows the area and has sold many houses and helped many buyers.
    • Interview 2 or 3 before you make the selection.

“Prepare your work outside; get everything ready for yourself in the field, and after that build your house.”
Proverbs 24:27 (ESV)

What to Give to Caesar, what to Give to God?

What to Give to Caesar, what to Give to God?Recently I completed one of “favorite” tasks of any year: filing my annual tax return. I was prepared with all of my documents and I took care of it, even though I never, never enjoy the process.

An in spite of my problems with the U.S. Tax System, I know is a responsibility I could not avoid. Remember this passage in Matthew:

15 Then the Pharisees went and plotted together how they might trap Him in what He said.
16 And they *sent their disciples to Him, along with the Herodians, saying, “Teacher, we know that You are truthful and teach the way of God in truth, and defer to no one; for You are not partial to any.
17 Tell us then, what do You think? Is it lawful to give a poll-tax to Caesar, or not?”
18 But Jesus perceived their malice, and said, “Why are you testing Me, you hypocrites?
19 Show Me the coin used for the poll-tax.” And they brought Him a denarius.
20 And He *said to them, “Whose likeness and inscription is this?”
21 They *said to Him, “Caesar’s.” Then He *said to them, “Then render to Caesar the things that are Caesar’s; and to God the things that are God’s.”
22 And hearing this, they were amazed, and leaving Him, they went away.
Matthew 22:15-22

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In His answer to the Pharisees, Jesus makes it very clear to us that paying taxes to the government (represented by Caesar in this case) is something we should do. Paul in his letter to the Romans tells us the same thing:

6 For because of this you also pay taxes, for rulers are servants of God, devoting themselves to this very thing.
7 Render to all what is due them: tax to whom tax is due; custom to whom custom; fear to whom fear; honor to whom honor.
Romans 13:6-7

However, I believe the issue goes deeper than a simple manner of a money exchange. Aside from paying taxes, what do owe the government? And what do we owe God?

As Christians, I think what we owe the government is very clear:

  • Obeying the law.
  • Respect to authority (Judges, police, government officials).
  • Participation in the democratic process via the vote (where available).
  • Seek out the wellbeing of the city in which we live.

The apostle Peter summarizes these points very well:

13 Submit yourselves for the Lord’s sake to every human institution, whether to a king as the one in authority,
14 or to governors as sent by him for the punishment of evildoers and the praise of those who do right.
15 For such is the will of God that by doing right you may silence the ignorance of foolish men.
16 Act as free men, and do not use your freedom as a covering for evil, but use it as bondslaves of God.
17 Honor all people, love the brotherhood, fear God, honor the king.
I Peter 2:13-17

Of course as Christians, our obedience to those laws should be limited to those laws that do not contradict God’s express will and His commandments.

Like the Apostles in the book of Acts (Acts 5:24-29) in the moment of persecution and oppression, we should be willing to obey God rather than men and we should already be willing to suffer the consequences.

So, what should we give God then? This is of course the most fundamental question and goes way beyond an issue of money.

As Christians, I believe we owe God:

  • All honor and glory. Total worship. He is the only one worth of all our praise.
  • Obeying His commandments.
  • Service motivated by heart full of gratitude for His many blessings.

So yes. Year after year, I will pay my taxes. I will give Caesar what is owed to Caesar.

However, for me the most important thing is to give God all that I owe to Him. He paid a debt that I could not ever pay by myself.

So the only thing left for me to do is to live every day doing what I can to advance His Kingdom. And to bring Him glory.

He has told you, O man, what is good; And what does the Lord require of you But to do justice, to love kindness, And to walk humbly with your God?
Micah 6:8

The Temporal, The Eternal, and Your Money

The Temporal, The Eternal, and Your Money

Today I want to speak directly to my Christian brothers and sisters. And more than just an educational post, I want to start a conversation.

I want you to meditate on the topic and I want to hear your opinions on this topic which has been on my heart and mind for a few weeks.

And here is the topic: as Christians, how can we balance the focus on our financial wellness here on earth with the heavenly and eternal purposes God has for us?

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First of all, I want to affirm that I have not changed my stance on the importance of achieving the control over our money. How critical it is to learn to live on less than we make, to save money, to get out of debt, to have a plan for financial victory.

I have not changed my mind and my opposition to the idea that “money is evil and wealth is not God’s plan for us.

There is more than enough evidence in the Scriptures to show that God rejoices in blessing His people with material wealth. This is true, even though that’s not the only or the primary way in which God takes care of His people.

But the issue that has concerned me lately is this, how as a Christian I can balance temporal and eternal priorities, and how that is reflected in my money management.

How do I best take care of the money god has put in my hands?

And for me, the best way to find that balance is to search the Scriptures. For example, let’s look at this passage in Matthew:

19 “Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal.
20 But store up for yourselves treasures in heaven, where neither moth nor rust destroys, and where thieves do not break in or steal;
21 for where your treasure is, there your heart will be also.
Matthew 6:19-21

What do you think the Lord is telling us? That we should not have savings or investments? That all the money we earn should go to the church, a 100%?

I don’t think that’s the case. I believe Jesus is speaking about priorities. Is it our priority the advancement of His kingdom or the advancement of our kingdom?

Are we more worried about what we are going to eat, what we will wear, what we will get to do tomorrow, than making sure the gospel is preached to every creature on earth?

We are talking about earthly priorities vs. heavenly priorities. Hear what the message from the apostle Paul to the Colossians:

Therefore if you have been raised up with Christ, keep seeking the things above, where Christ is, seated at the right hand of God.
2 Set your mind on the things above, not on the things that are on earth.
Colossians 3:1-2

So I believe Paul is helping us to really understand the issue. Every day we can get distracted with all of those things that cause us to worry.

Not only money distractions, but also work priorities, family issues, relationships, fun activities, etc.

And that happens. It happens to me every day. That’s because we are used to deal with the tangible, the immediate, with what we can see. But all of that is temporary.

As Christians, the battle to put God’s priorities at the top of our list is a daily one. It is a challenge to maintain our spiritual priorities every single day.

Still, we should remember that God’s priorities are eternal.

However, I don’t want to leave you with a guilty feeling or without hope. What I want to do is to make you think and make me think about that elusive balance between the temporary and the eternal.

If are our hearts and intentions are right, we can achieve the financial victory and we can also glorify God with our money management.

The important thing is not let money become an idol in our lives that replaces Christ as Lord of our lives.

Our finances, just like everything else in our Christian lives, should be used to advance God’s priorities.

So yes, it is important to reach financial wellness. Once we get there, we should think about the best way of glorifying Christ in how we use what He has given us.

Let’s take care of our families. Let’s plan so we don’t have to depend on the government or anyone else. Let’s use money to help others in need.

Let’s also make sure that as far us is concerned, our churches have the resources needed to complete their mission.

And every day, let’s include this question in our daily prayers:

Question: Lord, how do You want me to use Your money today to advance Your kingdom?

10 Years of Financial Peace

10 Years of Financial PeaceDo you remember what your financial situation was 10 years ago? I do and very vividly. It was not a good situation at all. Let me share with you where we were:

I had a very good stable job, with a great income. But we like many people, were living paycheck to paycheck.

We were using credit cards to make up the difference at the end of each month.

We also had almost $50K in consumer debt (car loan, credit cards, student loans, medical bills, etc.) and had no savings for emergencies or retirement and no plan to pay for college for our son.

Worst of all, my wife and I were not working together as a couple and we also realized that we were not honoring God in managing the money He had entrusted to us.

However, and most importantly, we also realized that we needed help to change our situation.

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What Did We Do?

It is true that the first step in solving a problem is admitting that you have a problem. Once we did, we turned to God for help. I prayed for a way to change our situation and He answered in a big way.

In September of 2005, our church offered Dave Ramsey’s Financial Peace University (FPU) course and I attended the course (which back then lasted 13 weeks).

I started learning and applying biblical principles for sound financial management. My wife joined me in the process and we began a life transforming journey for our family.

What Happened?

The changes we made paid off. We are still living on a budget. We still have a plan for our finances. We have learned to live on less than we make.

In 29 months we paid of all of our consumer debt ($50K). We now have a 6 month emergency fund. We were also able to pay for our son’s college education without borrowing money and without him borrowing money.

We have a structured plan for retirement savings which we know will give us options and control of when and how to move on to the next stage in our lives when the time comes.

More importantly: we are honoring the Lord with our financial management and we are working together as a couple in every area of our lives including our money.

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What Have We Learned?

As I reflect on how our lives have changed over these past 10 years, several thoughts come to mind.

First of all, I am always going to be thankful to Dave Ramsey for his FPU course and his financial teachings.

You may not agree with him on everything he teaches or on his methods and you may not like his personality, but for us, what he does was life changing and I know that he has helped millions of people more. So Dave, thanks for what you have done for us and what you continue to do for others.

You truly led us to have financial peace. I hope I can join you in helping others to win with their money.

Second: once I understood the incredible power of learning to control your money I knew I had to share what I learned with others.

That’s why I became a financial coach. That’s why I blog. That’s why I do a Podcast.

I want you to have hope for the future!

If we could achieve victory with our finances, you can too! All you have to do is decide that you need help and that you will do what you need to do to change your financial destiny.

Third: I am fully convinced more than ever that if you are married, you need to work as a team with your money. You can’t have the view that it is “my money” and “your money”. Or “your debt is your problem”.

You have to be all in as a couple. If you are engaged to be married, start talking about money now. Your goals and dreams. Your fears about money. Your mistakes with money. Your view on money.

Put it all on the table and begin your life journey together by getting together on a plan for your money.

And finally, the most fundamental lesson I have learned is that we are to honor and serve God by managing our money well.

It is not only about giving tithes and offerings although that’s important for those of us who claim the name of Christ.

It is also about honoring God in how we use our money. How we save, how we plan for the future.

And it is also about having a lifestyle of generosity. If you are in a position of strength, you are in a position to really help those who are in need. Only the strong can help the weak.

We are designed to be givers. To be rivers through which the blessings of God can flow to others.

Regardless of where you are today, decide that generosity will always be an essential element of your financial plan.

So what about you? Where will you be in 10 years with your money? Or where will you be in 10 months?

Will you have financial peace? Will you be in your way to financial peace or will you simply stay where you are?

The last lesson I have for you: It is all up to you!!!!

Question: What would financial peace look like in your life?