<![CDATA[REALIGN CLASS - Questions]]>Wed, 26 Jun 2024 13:49:07 -0400Weebly<![CDATA[How do I Start Investing?]]>Mon, 22 Jun 2015 18:50:51 GMThttps://www.realignclass.com/questions/howdoistartinvestingWhen it comes to investing, many people first think about putting money into the stock market and they immediately feel overwhelmed! But it doesn't have to be that complex. Here are a few simple steps to get started. 
1. The first step I would encourage everyone to do before you start trying to invest is to pick up a copy of James O'Donnell's short but clear book, "The Shortest Investment Book Ever." Now doesn't that just sound incredible! It honestly is one of the most helpful books I have read on the topic and is perfect for the beginner investor. 

2. Decide on your financial goals. Do you want the money immediately? (If so, investing is probably not for you. It's not a get-rich-quick arena) Do you want to save for college? Or do you want to invest for retirement? Set clear financial goals and allow your investment strategy to follow. An example would be: I want to save $50,000 for my son's college by August of 2030.

3. Meet with a professional. Sometimes people in the financial industry get a bad wrap because of a few bad apples. But if you don't understand investing, then I would highly encourage you to find an advisor that you can trust and ask them for their advice. Ask around for who other people use (or don't use) and then set-up a meeting with 3-4 options and interview them. Ask what their strategies are, their fee structure, and their minimum investment. 

4. Start Slow... Before you begin investing into something make sure that you understand it. If you are investing in a 401(k), do you know how to explain a 401(k) to your grandma? Do you know what they money is going to inside of that 401(k)? Do you know what the fees are? Take your time and start slow. A simple strategy to help you start slow, but invest consistently is called "Dollar -cost averaging." This is where you choose a set amount per month and invest it in a particular fund or stock and do it consistently. This can be as simple as $10 or $100 per month. Again, make sure you know what you are putting the money towards. 
]]><![CDATA[Is debt a sin?]]>Mon, 15 Jun 2015 22:17:17 GMThttps://www.realignclass.com/questions/isdebtasinWhile the Bible discourages people from going into debt and says that you are actually a slave to the lender, the Bible never overtly refers to debt as a sin. 

However, the Bible does refer to the heart issues that often lead us into debt - like gluttony, envy, pride, and comparison- as sin. So the better question for us to ask is not "Is debt a sin", but instead is "why am I going into debt?" 

Are you going into debt to try and make money fast? Are you trying to buy something you can't afford that isn't really a necessity? Are you leveraging out your family's future and happiness? 

Those are the bigger questions I would start by asking yourself. 
A. The past couple of decades there has been an incredible movement in our country to push back against the tide that debt is normal. Many people have been ruined by debt, so they have become the biggest proponents of a debt-free lifestyle. 

Now, we are all for living free from debt, but many people will go so far as calling debt a sin. So is it true? Is debt really a sin? 
]]><![CDATA[Is it okay to give even while you are in debt?]]>Mon, 08 Jun 2015 22:31:26 GMThttps://www.realignclass.com/questions/okaytogivewhenindebtA. I am all for it! Some might argue that it doesn't make financial sense, but I have seen generous giving while being in debt become a secret key that unlocks an even greater place of provision in a person’s life. Remember that this isn't just a financial journey, but it is also a faith journey. Sometimes God will invite us to give generously while we are getting out of debt, but He also has a great plan for provision on the backside of it. 

The key is that this should all be done in the context of community and wise counsel.

But instead of just cutting giving first, why not start by cutting other expenses like cable, eating out, cell phone, landline, faster than needed internet, etc. 
]]><![CDATA[How much should I save? ]]>Mon, 01 Jun 2015 15:04:26 GMThttps://www.realignclass.com/questions/howmuchshouldisaveWhen it comes to the question of how much you should be saving each month or what percentage of your budget you should dedicate to savings, there are a few variable to consider. 
The first variable to consider is your income. You can save a larger percentage of your income if you have more coming in. For lower income (>$35k), we encourage you to get to the point where you are saving around 5% each month. 

Above that a good rule of thumb is 10%. As your income increases, be sure to increase your savings (and giving), while trying to keep your spending low. 

When we are talking about savings, these are for medium and long-term needs. Short term savings (within 1 to 2 years) should be taken out of your monthly percentages. You want to start with the $500 to $1,000 emergency fund and then after that work towards the long term savings. 

If you are finding it hard to save, I'd encourage you to take a hard look at where all of your money is going. Cut down on "now expenses" so that you can save for expenses that will happen in the future. 
]]><![CDATA[Is it better to have car payments or pay cash for a junk car that I keep having to fix?]]>Mon, 25 May 2015 22:27:29 GMThttps://www.realignclass.com/questions/junkcarvspaymentsA. I hear this one often when I tell people that car payment are a big drag on their finances. The normal argument is that you are paying the same amount in keeping your junker going than you would be in car payments for a new car. 
Cars depreciate FAST. So going into debt for a depreciating asset is not a smart choice on any spreadsheet. If you want to get out of the monthly payment, very rarely will you be able to sell it for more than you owe.

Although spending money on a junker and pouring money into it does not sound appealing to anyone, over time the numbers work much better.


Remember, a junker is NEVER a long-term strategy. Sure it is stressful and inconvenient, but so is carrying around a $200 to $500 monthly car payment.

If you buy a $1,500 junker and save your $300 car payment. Within 10 months you could buy yourself two more junkers or a little bit nicer car. And within 10 months, that $1,500 junker will still be worth $1,500.
]]><![CDATA[Is it worth it to keep your mortgage, even if you can pay it off, to get the tax credit? ]]>Mon, 11 May 2015 16:49:35 GMThttps://www.realignclass.com/questions/q-is-it-worth-it-to-keep-your-mortgage-even-if-you-can-pay-it-off-to-get-the-tax-creditMany people believe that it is worth it to not pay off your mortgage because of the tax break that you receive for the interest you pay on your mortgage. So, is it wise to pay off a mortgage and not receive the tax break? 
I'd say pay off the mortgage if you currently have enough money to do so and retain a solid emergency fund. The tax break is only a mortgage-interest deduction which means you can't write off the entire amount spent on interest each year. However, if you pay off your mortgage, you will not have to pay any interest! 

My only warning would be to not empty out all of your life savings in order to pay off the mortgage. One of the hardest things I have seen is people who are house rich but cash poor. Meaning you have a $200,000 house that's paid for, but you can't fix the A/C unit if it goes out. 

]]><![CDATA[When Do You Make Large Purchases in the process of paying off debt?]]>Mon, 20 Apr 2015 16:33:34 GMThttps://www.realignclass.com/questions/largepurchasesanddebtA. When it comes to purchasing non-essential items like furniture, appliances, etc. where the item would be over $500, where does that fit into the debt snowball process? 
What I have often found is that we consider these items necessary and emergencies. For things like the car going out or an appliance breaking, I would say that is an emergency which should be taken care of by your emergency fund. 

But for other things like furniture and non-emergency items, I would encourage you to put these off until you are completely debt free. Just remember, any money that spend on something other than debt means you are basically paying interest on that money. 

Attack your debts and worry about buying non-essentials until you are completely debt free. 
]]><![CDATA[What if I don't want to use cash to pay for things?]]>Mon, 13 Apr 2015 22:18:30 GMThttps://www.realignclass.com/questions/idontwanttousecashA. Over the years, we have found that one of the best ways to stay on budget is to use cash for those categories that are discretionary - or you have the ability to spend whatever you want on. Some of these categories include groceries, dining out, personal allowance, and clothes. 

But we often hear in our REALIGN classes that people don't like the idea of carrying around a ton of cash. They either feel like it isn't safe or they are afraid that they will lose it. 
If this is you, then we encourage you to purchase a gift card for the stores that you normally shop at for groceries. 

For dining out, you can still use gift cards, by purchasing a card from a store like Walmart or Target. However, you want to make sure that these gift cards don't allow for overdraft charges. 

If you are having a tough time with cash or the gift cards, then it is always an option to go back to the bartering system! Then you will really know what you can or can't spend. But I hear fur isn't going for much these days. 
]]><![CDATA[Should we have separate checking accounts?]]>Mon, 06 Apr 2015 22:21:24 GMThttps://www.realignclass.com/questions/q-should-we-have-separate-checking-accountsA. Managing your money can be really frustrating to do when you are trying to do it with someone else. Some married couples have said that they think the best thing for them is to just have separate checking accounts. So, is it really that bad to have separate checking accounts? 
We believe that once you are married, you become one as a couple, therefore you should merge all of your accounts. This is challenging, but once you get married nothing is really "mine" but "ours." 

Having one checking account also prevents hiding money, and allows for more openness and honesty. 

You should set up one person to be the manager of the bank account, but remember that this person does not have "supreme authority." Marriage is about serving one another's interests and coming into agreement on what should be done with "our" money. 

But if you are engaged or dating, we encourage you to keep your checking accounts separate until you have tied the knot. 
]]><![CDATA[How do we save and payoff debt?]]>Mon, 23 Mar 2015 22:33:20 GMThttps://www.realignclass.com/questions/q-how-do-we-save-and-payoff-debtA. When getting out of debt you want to start by putting aside a small baby fund for emergencies of $500 to $1,000. 

Then you want to work your budget and continue to save for annual expenses. This way you don't go into debt for emergencies or events that you knew would be coming up. 

But then your focus becomes getting out of debt. By paying off debts with interest rates of 5% and higher, you are actually saving hundreds of dollars each year.
]]><![CDATA[How much should I spend on a car? ]]>Mon, 16 Mar 2015 22:29:26 GMThttps://www.realignclass.com/questions/howmuchtospendoncarToday, people own cars that are worth more than they make each year. That is just ridiculous. Honestly, I'm more of a simple man myself and just like my dad, I just want a car that will get me from point A to point B. 

But not everyone is like me. I would say for the majority of people you should never spend more than $10,000 to $15,000 on the purchase of a car. You can buy a fantastic used car in this range and below. 


I like the rule that you should never spend more than 10-20% of your gross annual income on the purchase of a car. So if you earn $50,000 before taxes, then you should not spend more than $5,000 - $10,000 on a car.

It might make you “feel” important, but throwing that much of your money towards a depreciating asset is not smart. 

This goes against everything that you will see being driven on the road, but if you don't want to have a car payment for the rest of your life, then you need to learn how to DRIVE within your means. 

]]><![CDATA[What budgeting Software Do You Use?]]>Mon, 02 Mar 2015 23:43:33 GMThttps://www.realignclass.com/questions/budgetingsoftwareA. I love the software program YNAB (You Need a Budget). It is the best system in my opinion for working with your budget and allowing everyone to see how much has been spent and how much is left for each budget category. 


Here is an affiliate link to get $6 off your purchase (http://ynab.refr.cc/QMDNBWS). You can try YNAB free for 34 days, but I promise you will love it. 


And just so you know, I don’t just like YNAB for the affiliates, I use it for my personal finances each and every day. Just ask my wife. 

]]><![CDATA[Deeper Questions to Ask Before You Buy a Home ]]>Mon, 23 Feb 2015 23:12:24 GMThttps://www.realignclass.com/questions/deeper-questions-to-ask-before-you-buy-a-homeBuying a home can be a great investment, but all too often people buy a home too quickly and don't count all the costs. So below we've listed some tough questions to ask yourself before you buy a home. 
Heart Questions to Ask: 

  1. Am I content with where I currently live?
    • Be honest with yourself about how much media and what others have is affecting your desire for a new place
  2. Will buying a home put unneeded pressure on your family, marriage, or financial life?
    • Finances are the number one cause of stress and tension in a marriage- Now just throw in there the largest financial decision of your life and you have a great recipe for even more tension! 
  3. How much house do I really need?
    • When put in contrast to the questions of  "how much house do I want" or "how much house will the bank allow me to have" we begin to see just how big of a gap we live in between our needs and wants
  4. Is this the right timing for us to buy a home?
    • Even though it might be realistic for you to purchase a home, sometimes it might not be the best time
]]><![CDATA[Should I consolidate my student loans? ]]>Mon, 16 Feb 2015 23:16:30 GMThttps://www.realignclass.com/questions/shouldiconsolidatestudentloansA. This is the one area of debt that we think it IS okay to consolidate your student loans. Mostly because you will be working with large amounts of debt and the interest rates are going to be in the same range. 

A couple things to remember: 
  • You can only do this once. So, wait until you have all of your loans together and you are not going to be getting any more. 
  • Work to get a fixed-rate. Variable rates will end up costing you more in the long-run, especially since you can only consolidate once. 
  • Don't extend the life of the loans. Once again, this will end up costing you more money in the long run. 
  • GET INTENSE AND PAY THEM OFF! Just because you consolidate does not mean that you can let them linger around. Don't believe the myth that you can make more money using the money somewhere else because nowhere else will you have a guaranteed return that equals the interest rate that you are getting rid of. 
]]><![CDATA[What exactly is a trust?]]>Mon, 09 Feb 2015 23:38:42 GMThttps://www.realignclass.com/questions/whatisatrustA. A trust is an agreement where you set up certain guidelines for how your assets will be handled for your beneficiaries. Usually a trust is set up in order to reduce estate tax liability, avoid probate (or validating a will) and your wishes for your resources beyond your death. 

]]><![CDATA[How do you get through college debt free?  ]]>Mon, 02 Feb 2015 23:10:09 GMThttps://www.realignclass.com/questions/debtfreecollegeA. With the cost of college at an all time high, how in the world are you supposed to get through college debt free? It seems impossible right? Well, not so fast my friend. Everyday I hear of another person who sacrificed and worked hard to make it all the way through college debt free. How did they do it? Here are a few different ways to get through college debt free.
  1. Excel in High School -  It might seem like common sense, but the best way to get through college debt free is by making great grades in high school. This means studying harder and longer than all of your friends. It also means trying your hardest on the standardized tests and especially the PSAT. Spending a few hundred dollars on these tests and practice books will end up earning you thousands in scholarships down the road. 
  2. Grants and Scholarships - Each year billions of dollars are given away in scholarships and grants, but did you know that each year billions of dollars in grants and scholarships also go UNCLAIMED! It's free money. Make this your full-time job during your Christmas and Summer breaks and apply for all the scholarships you can. Check out Zinch andFastweb for more help. 
  3. Work - The last time I checked, you can still pay for college with money from your job. Whether this is money to pay for tuition, books, or spending money, millions of young people choose to work through college each year. And they survive. Your grades will be fine and all your friends will still be there. The only difference is you won't have a mountain of student loan debt after college. Work part time during college if you can, or during all of the Christmas and Summer breaks. Many businesses will cover your tuition if you commit to work for them after college for a set amount of time.  
  4. Community College- Take the first couple years of college at a local community college. You will save tens of thousands of dollars in tuition by taking care of your requirements. I would highly encourage this for anyone who isn't sure what they want to study at college. 


It is possible to make it through college debt free. It might not easy or fun, but it will be worth it. For more help, check out Josh Lawson's book, "Don't Get Suckered - How to Graduate College Debt Free... and with Your Shirt." 
]]><![CDATA[When Are You Financially Ready to Buy a Home]]>Mon, 26 Jan 2015 23:15:24 GMThttps://www.realignclass.com/questions/readytobuyahomeMany times people start the home-buying process by asking the questions, "How much house can I afford?" This is usually the wrong question. The better question should be, "Am I at a healthy place financially to do this?" Here are 4 questions to help you answer that major one. 
  1. Do I have an emergency fund in place?
    • What happens when the washer goes out? What happens when the car's transmission goes out? You need to have some type of fund in place for when the "unexpected expected" happens.
    • We encourage you to have an emergency fund of 2 to 9 months worth of bare bones expenses. If you have a home, then you want to make sure that you have an emergency fund that can cover your mortgage for several months in case you lose your job. 
  2. Am I including all of the costs of owning a home in my budget?
    • Purchase price, closing costs, house maintenance costs, increasing property taxes, etc. are all costs that we often don't calculate when just looking at the sales price of a house.
    • When buying a home there are costs that you don't have to pay when you are renting that can blow your monthly budget right out of the water! You think you hate renting? Well, you will hate living in a house that you can afford, I promise you. 
  3. Can I rent for a period of time while saving, so that I will be at a more secure place financially?
    • While you are not having to pay all the expenses to upkeep your own house, put this money aside into a savings account. 
  4. Can I actually afford this?
    • We encourage people to keep their house payments anywhere from 25% to 35%
    • Also, pay as large of a down payment as possible- with a goal of 20% or more (while still retaining an emergency fund)
    • Have enough money to pay for the closing costs and fees with cash- otherwise you will be paying this out over 15 or 30 years with interest
    • The purchase price should be no more than two-and-a-half times the family's gross annual income- but using only the main breadwinner's income
Remember when looking to buy a home: don't go at it alone. Proverbs 24:6 says, "for waging war you need guidance, and for victory many advisors." You need the input of a handful of people whose wisdom you can trust and who have your best interest in mind (not including a real estate agent or mortgage lender). 
]]><![CDATA[Is it better to rent or buy a home? ]]>Mon, 19 Jan 2015 23:25:00 GMThttps://www.realignclass.com/questions/rentvsbuyA. I consistently hear from people who are young and wanting a place of their own that renting is simply throwing money down the drain. They could be building equity in a home of their own, but they feel stuck in paying off someone else's mortgage. So is it better to keep renting or should they buy their own? 
Don’t buy the line that renting is simply throwing money down the drain. Sometimes it is better to keep renting if you cannot afford to buy a house. There is a lot more freedom with renting versus purchasing a home.

I would say if you are planning on being in a place for less than 4 years, then it is wise to rent. The amount of equity that you can build up in the home in 4 years is usually nullified by the amount of money that you will put into taxes, insurance and fix-ups.

More than looking at how long you will be in a house, you need to ask yourself if you are financially ready for the responsibility of being a homeowner. Are you ready for all of the expenses that your landlord is currently covering for you? And do you have an emergency fund set-up and are you living off of a plan consistently? If not, I would encourage you to keep renting. 

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