Paul McWilliams is a pastor’s kid turned financial advisor specializing in helping pastors and churches make wise financial decisions that align with their mission.Many pastors spend the early years of ministry pouring everything into their calling—often at great personal sacrifice. They plant churches, lead with limited or no salary, and make do without retirement benefits because the church simply isn’t in a position to offer them. Fast-forward 20 or 30 years, and those same pastors are heading toward retirement with little saved and not much time left to catch up. Here’s the good news: your church may be able to help in a very meaningful way—without breaking any IRS rules—through something called a Non-Electing Church 403(b) plan. Why This Matters Churches have a unique opportunity to make tax-advantaged contributions directly into a pastor’s retirement account. This isn’t just theory—it’s built into IRS rules specifically for churches.Even better, these contributions: Are not subject to Social Security ...

On July 4, President Trump signed into law the One Big Beautiful Bill Act (OBBBA). It’s an 870-page piece of legislation that contains some things that are relevant to your life, many things that aren’t, and a lot of language that would go right over your head.I have not read the bill, nor do I intend to. As a financial planner, I know who I trust in my industry, and some of them are happy to read long legislation and parse it out for the rest of us. I thank God for those people, and this blog post would not have been possible without them.   This article will provide a summary of the elements of the OBBBA that are likely to be the most relevant to you. With each aspect of the bill, there are caveats, nuances, and many details that I am leaving out. My goal here is to give ...

A while back, I wrote about how to calculate how much life insurance you need. That kind of article usually makes stay-at-home parents tell their spouses, “Honey, you need more life insurance!” or maybe even just, “Honey, you need life insurance!” (After all, only about half of American adults even have life insurance in place.) But what about you? Do you have life insurance? Do you even need it? View post

Recently, I explained to you what financial planning is. Just like pastoring is a whole lot more than just preaching, financial planning is a whole lot more than just investments. If you haven’t read that article, I would recommend reading it here before continuing on.  I gave an overview of the different areas of financial planning in that article and now today we will do a deep dive and look at some examples of how that plays out for pastors and the strategies that we use that are unique to people in your position. Let’s start with the clergy housing allowance. That’s an easy one, right? Just maximize it and save on taxes? Not always. Let me show you how a financial planner approaches these things. Housing Allowance Sometimes maximizing your housing allowance can actually cost you money. Take, for example, the child tax credit. A portion of the child tax credit is ...

When I tell people I’m a financial planner, they usually say something like, “So you do investing?” Most people think that financial planning is managing people’s stock and bond investments and some think it involves selling insurance. But it’s not that at all. It’s just like when you say you are busy and people say, “Well what do you actually do besides preach on Sunday? What could possibly keep you busy Monday through Friday?” Sometimes that makes you want to smack your forehead or curl up into a fetal position and cry out, “Why, Lord?” Doesn’t it? That’s because you are not a preacher, you are a pastor. Your job is to shepherd the people of God into Christlikeness and preaching is just a tiny part of that. If all you did was preach, the vast majority of the people under your care would not get to where God wants them to ...

As a PK and a personal finance coach, Amberlee Rich has a heart for helping pastors and the church steward their resources to further God’s kingdom. She and her husband, James, developed Steward Lab, an online coaching program for churches, the Steward Lab Podcast, and their 1-on-1 coaching business, Rich Living Coaching. There’s an unrealistic expectation out there that pastors need to have their lives perfectly put together. Yet, we all know that we’re sinners, and far from perfect. Many people expect that their pastor is good with money. However, statistics reveal that around 40% of pastors experience financial stress, and many are struggling to meet their basic needs (Center for Stewardship Leaders, 2019). Many pastors are struggling financially and don’t feel like they can openly share that with people in their congregation.  After coaching forty pastors on their personal finances for multiple years, we’ve been able to see what’s really going ...

Your 2024 taxes are due tomorrow. That means an envelope with your check has to be postmarked by midnight on April 15, 2025. Or you’re late.  What if you owe money you don’t have? Maybe you calculated things poorly. Or you didn’t realize you were supposed to be paying quarterly self-employment taxes. You owe, but there isn’t enough in your bank account to pay the bill. What do you do? File Your Return Anyway First of all, FILE YOUR TAX RETURN ANYWAY. Yes, I put that in all caps on purpose. It’s that important. Why? It’s bad enough that you can’t pay your taxes, but not filing your return is double-bad. Penalties You see, the IRS has two different penalties related to this. One is for not filing your tax return and the other is for not paying your taxes. Filing your tax return is a free and easy way to get out of one ...

This is a guest post by Nate Skelly, CERTIFIED FINANCIAL PLANNER™ professional and founder of Financial Pathway. He is passionate about providing financial education from a biblical worldview. Nate lives in the Tampa, FL, area with his wife, Charity, and their three kids: Jaden, Judah, and Juliet.You know what they say about things that sound too good to be... they usually are! But let me assure you, if you're a licensed, ordained, or commissioned minister, this article is worth 10 minutes of your time! The bottom line is this: if you are a pastor and you are not contributing to a church-sponsored 403(b) you are likely missing out on thousands in tax savings over the coming years. Understanding the Church-Sponsored 403(b) Plan A 403(b) plan is similar to a 401(k), but it is only available for nonprofits.One key advantage is that church-sponsored 403(b) plans don’t have to follow the fairness rules that apply ...

Keep your mortgage so you don’t lose your housing allowance and mortgage interest deduction! How many times have you heard that advice? A reader recently asked me about it. Is that really good advice? I know for most people, keeping a mortgage just for the mortgage interest deduction doesn’t make financial sense (though a lot of people do it). But you pastors have an amazing benefit in the ministerial housing allowance. It made me wonder, could the housing allowance be enough to turn the tables and make a mortgage worthwhile? Example Mortgage I decided to calculate it out to see for myself and to share with you. Here are my assumptions for this exercise: Home Price: $200,000 Loan Amount: $160,000 (20% down payment avoids private mortgage insurance) Mortgage Type: 30-year fixed rate Mortgage Interest Rate: 5% Income Tax Rate: 12% Based on those assumptions, I calculated out the amount you would save in taxes with the housing allowance and mortgage ...

The following is an excerpt from my book, The Pastor’s Wallet Complete Guide to the Clergy Housing Allowance: Calculating By now you understand who is allowed to take a clergy housing allowance and the process by which you can do so. But here’s the big question everyone has: how do you know how much of a housing allowance to request? First of all, there are limits to the amount of housing allowance that the IRS will allow you to claim. Your maximum allowed housing allowance is the least 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; or an amount that represents reasonable pay for your services. That means that even if your mortgage payment is $2,000 a month, if you could only rent the home (furnished, with utilities) for $1,500 ...