I’ve always assumed I had good credit based on my behaviors, but I never knew my credit score. Then, we bought a house 6 years ago and had to apply for a mortgage. The mortgage broker was downright giddy when he pulled our credit reports and got our scores. He excitedly told me that he could count on one hand the people that he had worked with with an 800+ score. Yay, I’m a celebrity in his world! View post

Do you feel like your money is all gone before you have a chance to spend it on what really matters to you? Here are 4 steps that you can take to ensure that your spending habits match up with your values. View post

How much do you have saved for retirement? Do you think it will be enough? A quarter of American adults have absolutely nothing saved for retirement. This is why you may have heard talk of our nation's retirement crisis. Most seniors have not accumulated enough money to live on in retirement. This is an even bigger problem among pastors since many have exempted themselves from Social Security. For most people, the majority of their retirement savings are in a workplace retirement plan, like a 401(k) or 403(b). However, many independent pastors and employees of small businesses have no workplace retirement program available to them. How are they supposed to save for retirement? What Is An IRA? If you don’t have access to a retirement plan at work, your only tax-advantaged option is an individual retirement account (IRA). IRAs are available to anyone with an income and their spouse. IRAs are tax-advantaged because depending ...

Last week, I wrote about things you should do after having a baby. One of the things I mentioned was saving for college and I got a lot of questions about it. We all know it's a good idea to save if we want our kids to go to college, but for most of us, that’s the extent of our knowledge. How do you save? What are your options? Where do you put the money? How do you even open an account? Today I’ll go into more detail about what your options are and how you can make the most of the money you are working hard to save. Use A Tax-Advantaged Account Anyone can save money in a simple savings account. There are two problems with doing that, though. First, you hardly earn any interest on your money. When you factor in inflation, your money is actually worth less after sitting in ...

Several months ago, I got an email that had me stumped. The writer was from a church that was exempt from paying FICA (payroll) taxes but wanted to start paying them. Since I was unsure how to answer the question, I referred her to a CPA that has helped me (and a lot of pastors and churches) with ministerial tax issues. She said she had searched the internet and couldn’t find an answer, so today I am solving that problem with the information provided by Wayne Vinson, CPA, of The Vin Group.  Do Churches Pay FICA? First, we have to look at the question of churches paying FICA. Not all churches pay FICA taxes for their employees. Churches have a choice. Churches who are opposed to paying FICA for religious reasons may exempt themselves by filing Form 8274. Employees of those churches have to pay their Social Security and Medicare payroll taxes ...

I recently received an email from a missionary who had just returned from overseas. She was living with her mother for a season and had some questions as to how the housing allowance applied in her circumstances since she was not paying rent.  This situation is probably more common than a lot of us realize. Whether it’s a missionary returning from overseas, a new seminary graduate just starting out in ministry, or a pastor living with a parent in a caretaker role, not all pastors pay for their housing or live in a parsonage. Are they still eligible to claim a minister’s housing allowance? What Is The Minister’s Housing Allowance For? The law itself, Section 107 of the Internal Revenue Code, states that the cash rental housing allowance is provided “to rent or provide a home… including furnishings and appurtenances such as a garage, plus the cost of utilities.” The purpose is to ...

As soon as they are licensed, many pastors jump at the chance to opt out of Social Security. Social Security taxes total about 15.3% of a pastor’s salary, so opting out represents significant savings. However, there are certain benefits that Social Security provides that must be replaced if you opt out. View post

You need help with your finances. This blog just isn’t quite enough. You want advice from someone who knows more than you do but you don’t want to end up with Bernie Madoff. What do you do? There are around 350,000 people in the US who call themselves financial advisors. Some of them are amazing and would make your life infinitely better. And some just want to make money and don’t really care about you. How do you separate the wheat from the chaff?  How To Search For A Financial Advisor Know Your Goal The first thing you should do after deciding you want to work with an advisor is to clarify what it is you want to accomplish. Are you just looking for a life insurance policy? Do you want someone that will help you map out a plan for your finances that you can take and run with? Are you looking for ...

With our current economic crisis brought on by the coronavirus, Congress and the President have been taking action to relieve some of the burdens for taxpayers and businesses. One area where they are providing a break is payroll taxes, the taxes paid to fund the Social Security and Medicare programs. If you have opted out of Social Security, then this article does not apply to you. If you aren’t exempt, then this article is very important for you, since you are a dual status taxpayer. How Payroll Taxes Work For Pastors Being a dual status taxpayer means that even if you are employed by a church, you have to pay your payroll taxes as if you were self-employed. For normal employees, payroll taxes are split evenly between the employer and the employee. The employer pays 7.65% of the employee’s income to the government and the employee also pays 7.65%. When a person is ...

Over the past couple of months, we have looked at the different kinds of fees that mutual funds charge and how some of those fees are calculated. Today, we are going to look at why all of that even matters.  You see, fees matter because every dollar that you pay in fees is a dollar that you cannot invest. Not only do you lose the dollar, but you lose out on all of the potential growth of that dollar. There is an opportunity cost involved. Am I saying that fees are bad? No. Investment managers and financial professionals have to feed their families as well. They deserve to be paid for their work. You just have to be discerning as a good steward of God’s resources. You need to understand the impact of fees on your investments so that you can decide if the services provided are worth both the dollar cost ...