Do you know your net worth? Do you know how to figure out your net worth? Do you even care? What Is Net Worth And Why Does It Matter? Net worth is basically that which you’ve stored up here on earth. It’s the tangible things that you have to show for all your work. I understand that it might seem funny, or even sacrilegious, to be discussing this with pastors. After all, doesn’t the Bible say to store up treasures in heaven and not here on earth? Well, yes, but it also says to learn from the animals that store up food for the winter. I believe (and I think the Bible supports it) that it is wise to have some stores here on earth, but our focus should be on storing up treasures in heaven. And I don’t think anyone embodies that better than pastors. No one goes into the ministry for ...

I recently had a friend run some reports on my website to see how people are finding me. One of the most popular things that people search for, I learned, is “minister housing allowance calculator.” Now, I’ve written a lot about the clergy housing allowance, how to take one in retirement, what to do if you take too much, and things like that. But people weren’t looking for articles about the minister housing allowance. They were looking for a calculator. They were saying, “C’mon, Amy, don’t just tell me how to do it. Give me the tools to actually do it!” And I’m so obedient that I did just that. You asked for it, and now you have it: The Pastor’s Wallet Housing Allowance Calculator You can follow that link to try it out or just click on it from the menu at the top of this website. How To Use The Minister Housing ...

While premarital counseling addresses a lot of expectations that we enter marriage with, anyone who has been married for over a day knows that there is no end to the surprises of how our spouse sees things. There are so many things in life that we take for granted and don’t even realize there is another way of viewing them. Until we get married. Personal finance is a typical area for this. Usually, we assume that the way we grew up is normal. The way our family did things and viewed things is how everyone does. But that’s simply not true. There are a lot of areas where spouses can have different opinions without ever realizing it. Unfortunately, those differences usually wait to reveal themselves in the heat of the moment when emotions are high and a decision has to be made. Save yourself some trouble and have these discussions now, ...

Last week we discussed the value of an accountable reimbursement plan for churches now that pastors can no longer deduct their unreimbursed business expenses. Today, I will tell you how to actually set one up. What Makes A Reimbursement Plan Accountable The confusing thing about accountable plans is that you don’t need to file any forms or get any kind of permission from the IRS. We’re used to needing authorization for things, like Form 4361, so we get nervous when we don’t have the IRS’s official stamp of approval. However, you don’t have to communicate with the IRS about an accountable plan, you just have to follow their rules. What makes a reimbursement system an accountable plan is that it complies with these three IRS rules: Expenses Must Be Ministry-Related The expense that you’re seeking to be reimbursed for must have been incurred while performing services as an employee of your employer (the church). ...

If you’re like a lot of clergy members, you had an unpleasant surprise this tax season when you learned that you can no longer deduct unreimbursed church business expenses with your itemized deductions. You’re probably used to covering a lot of church expenses yourself, knowing that you’ll get some kind of reward for it come tax time. Except this year it didn’t come. Why not? What Happened To The Unreimbursed Business Expense Deduction Part of the 2017 Tax Cuts & Jobs Act was the elimination of the unreimbursed business expense deduction. The goal was to simplify taxes as much as possible, so a number of deductions were eliminated or changed. Before 2018, you could deduct unreimbursed business expenses if you itemized your deductions. The deduction amount would be calculated on Form 2106 and then deducted on Schedule A so that you wouldn’t have to pay income taxes on it. That line (line 21) ...

As a parent, have you ever seen one of your kids walking down the hallway with a large stick and been forced to ask, “And what are you planning on doing with that?” You don’t ask because you’re particularly interested in the stick. You ask because that stick is a sign that something is going to happen soon. And you’re going to have to deal with the consequences. The Growing Popularity Of Modern Monetary Theory Well, some prominent left-leaning politicians are waving around a new stick these days: Modern Monetary Theory (MMT). The theory is quickly gaining popularity, so it is important for you to be familiar with it, regardless of your political persuasions. MMT is popular because it allows for seemingly unlimited government spending and deficits without negative consequences. Understandable, right? Don’t we all wish that money grew on trees? How Modern Monetary Theory Works Well, according to MMT, money grows on printing presses. ...

The ministerial housing allowance is the biggest tax benefit available to pastors. It allows you to exclude your housing costs from gross income for your federal income taxes. Thus, all of your housing expenses, from your mortgage payments to your light bulbs, are income tax-free. (You still have to pay self-employment taxes on them, though.) Ministerial Housing Allowance Limitations There are nevertheless limits to how much can be excluded with the housing allowance. Your clergy housing allowance is limited to the lesser of: the amount actually used to provide or rent a home;the fair market rental value of the home (including furnishings, utilities, garage, etc.);the amount officially designated (in advance of payment) as a housing allowance; oran amount which represents reasonable pay for your services. While each of these criteria is important, today we are only going to address the fair market rental value of the home, which is the most difficult of the ...

“Then he looked across the table at us, disappointment written all over his face, and said, ‘If only you had worked more…’” The dean of women and a beloved professor at the Bible college I attended was telling us about an encounter she had with her financial advisor. While her children were young, she chose to put her career on hold in order to raise them. Now that they were grown, the financial advisor was telling her and her husband that they were not on track to retire with their peers. When she told us this story, I wanted to jump out of my seat and tell her, “They aren’t all like that! There are good ones out there!” It pained me to hear that a financial professional had made her feel like a failure simply because he had a different worldview. She and her husband may not have enough money ...

A student loan is a student loan, right? Well, not really. There are a lot of different kinds of student loans; subsidized, unsubsidized, undergraduate, graduate, federal, private, parent, etc. Each type of loan has unique features, both advantages and disadvantages, so it’s important to understand the differences. Many seminary students take out loans not realizing that they are any different than their undergraduate loans. That can be a costly mistake. So, today we are going to discuss the difference between graduate (what you use for seminary) and undergraduate student loans. The Government Treats You Like An Adult When you filled out the FAFSA to apply for government aid for your undergraduate degree, you had to include all of your parents’ financial information. Even if you’re living on your own and supporting yourself, the government sees everyone below a certain age as a dependent. Now that you’re old enough to go to seminary, the ...

Though it took five months, the Seventh Circuit Court of Appeals has finally ruled in favor of the clergy cash rental housing allowance (the parsonage allowance was not at issue), declaring it to be constitutional. Here at Pastor’s Wallet, we have been following this story for over a year. Background The drama actually began back in 2013 when the leaders of the Freedom from Religion Foundation (FFRF) sued the US government because they believed the ministerial housing allowance to be a violation of the separation of church and state. The judge agreed with them, but it didn’t last long. An appeals court found that the FFRF lacked standing in the case. Basically, they had no right to sue because they had not been harmed by the clergy housing allowance. Determined as ever, the FFRF leaders tried to claim a ministerial housing allowance. As expected, they were denied. However, that denial gave them standing ...