Center for Excellent Living
Holistic Living: Family & Finance Coaching and Quality LifestyleCelebrate Financial Literacy Month!
April! Today is the first day of Financial Literacy Month! It’s also April Fool’s Day, so let’s start there. Who is a fool?
You’ve heard, “A fool and his money are soon parted.” A Bible verse backs this up with, “There is precious treasure and oil in the dwelling of the wise, But a foolish man swallows it up (Prov. 21:30).
A fool spends his money as it comes in, saving nothing for the guaranteed emergencies in life, and saving nothing for a later age, when work is less feasible. This puts the fool in the position of burdening others.
Who is the fool? The fool has to ask parents, friends, and banks for bailouts. Who is the fool? The fool assumes others will take care of them during hard times. Who is the fool? The fool is the one who thinks adult life includes “do-overs” or says, “I deserve it!” or “I need it!”
Don’t get me wrong, we all experience times when we need to lean on others, and we all know of exceptional cases; major accidents or illnesses that literally take every dime from the victim. These are the people we need to support and serve. These are the ones we were created to serve. But a fool is one in good body and mind who expects the same treatment as a real victim, often feigning sorrows (even if those sorrows are real in their own mind).
Thus enters the next thought (Prov. 22:7): The borrower is servant to the lender.
A borrower becomes indebted to a lender. After all, the borrower is using the lender’s money for his/her own pleasures. Get it out of your mind that borrowed money is your own money. It’s not! The payment of interest proves this. If it were your own money, you wouldn’t be paying to use it. Borrowing puts a person into a position of risk—the lender can now decide what, when and how the borrower uses money he/she has earned by taking it away from the borrower as repayment, and taking more for interest. Interest is money you will NEVER be able to use. Interest is money used by lenders to convince fools that they NEED to borrow more money to get the stuff that they NEED.
Besides, “No servant can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.” (Luke 16:13)
The fool is the person who thinks that money will buy them out of trouble. Quite the contrary. Trouble teaches us wisdom, and wisdom produces wealth. If you’re thoughts say, “If I can win the lottery, life will be good,” it’s time to start rethinking your values and philosophy. Start telling yourself, “If I can learn how to manage money wisely, I won’t need a lottery to be a success!” Then start looking for that wisdom. Ask God to help you, not the banks.
As a parent, the best thing we can do for our kids is to teach them to own their own loads, carry their own responsibilities, and endure a certain amount of hardship because that’s what life holds and what strengthens us. Who helps us through our struggles? God. How? By helping us learn better ways and by giving us other people to help us. Teach your kids to ask for help when they need it (not when they want it); so others will receive the blessing of helping them.
As givers, the best thing we can do for family and friends is to NOT bail them out unless their load has become a burden. Don’t allow them to be harmed, but it’s OK if they hurt. Why be a contributor to a fool? Why interfere with God’s lesson for that person? Just remember the old adage, “A lack of planning on your part, does not constitute an emergency on my part.”
6 reasons NOT to use credit cards
I just read an article on MSN Money titled, 6 reasons to keep using credit cards. I almost hate to share the link, but I will so you can reference it. While everyone has a right to their own opinion, I’d like to propose an alternate view to the six given points made. Here’s the site. Now on to the debate…
Credit cards help your credit scores
If you never use debt, you don’t need a credit score (FICO score). FICO is simply a mathematical algorithm that tells bankers whether you’re a good money risk for THEM. It simply means they can make more money off of you than someone else. It’s like marking an elk as an easy target.
Sadly the FICO is now being used for some jobs and for apartment rentals. You can have $5 million in savings & be considered a bad risk because you have a low FICO score. Don’t fall for the FICO scheme. Be prepared to proudly explain why you have no FICO identity. The cost of debt is always greater than the rare cost of a low or non-existent FICO score.
Credit cards offer consumer protections
So do VISA debit cards. As long as you have a VISA debit card, you have all the same protection as a credit card. ‘nuff said.
Credit cards offer safer automatic bill payment
No, they don’t. Automatic bill payments can be made straight from your checking account. Granted, if you have concerns about venders pulling straight from your account, you can schedule your payments monthly. It’s always safer to schedule a payment yourself than to do auto payments anyway. Or, if you really like the convenience, you can set the automatic payments up with your VISA debit card & receive all the perks mentioned in the article.
Credit cards offer protection against identity theft
Credit cards actually increase your risk for identity theft. The more cards you carry, the higher the risk for identity theft. What the article is describing is protection from loss on credit cards, not identity theft. This loss protection is received AFTER your card number has been stolen. Again, VISA debit cards offer the same protection.
Credit cards can help in an emergency
How horribly sad that this was recommended. An emergency is something that isn’t planned. Very rarely do we have emergencies, but very often we have poor planning. For example, all cars break down eventually, so car repairs should be planned. A flat tire might be an emergency if it happens after the warranty and before a planned replacement, but this should be covered by an emergency savings fund. An auto accident or sudden illness might be an emergency, but with proper planning we should have enough money set aside to carry us in event of lost income and medical expenses. What we don’t have covered in savings, we buy insurance to cover. The more we can cover ourselves, the less insurance is needed. NEVER use debt to cover an emergency because it sets you up for greater harm should you lose income.
Credit cards reward savvy users
The author was correct here, people spend more using a credit card than when they pay cash. But she goes on to say that savvy users don’t spend more, don’t carry balances on their credit cards, and get the perks. Well, most people deceive themselves if they think they’re not spending more. Even if you spend only 2% more, you’re only receiving 1% back. And that 1% is often in the form of goods and services that you might not use normally. Do your math carefully before buying into this and be totally honest with yourself. There’s a reason they offer the rewards…it’s because they make more money. It’s like an older brother saying to his younger brother, “If you buy me this candy bar, I’ll give you a piece!”
Entrepreneurialism Pt 5–Licenses and Registration
Licenses & Permits
When starting a business, you must know what regulatory agencies oversee your business, and what licenses and permits are required. There are three primary levels of government that regulate business. They are the Federal, the State, and the local (city and county) governments. If you’re working from home, you may also need to consider your HOA regulations as well. If your business involves international commerce, you may also need to research information relating to the countries you’re doing business in, and any treaty that may impact that business.
Each level of government has its own set of regulations, and regulations are replete with license and permits. On the U.S. Federal level, these are the agencies you may need to get licensed with or get permits from:
Federal Licenses and Permits
The U.S. Department of Agriculture (USDA)
Permit
If you import or transport plants or animals between states.
Alcohol and Tobacco Tax and Trade Bureau (TTB)
Permit & taxes
If you manufacture or sell alcohol or tobacco
FAA
Licenses and certifications
If you fly or work in aircraft mechanics
Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)
Licenses and permits
If you manufacture, import, sell or firearms or ammunition, or use explosives.
U.S. Fish and Wildlife Service
Permits
If you import/export wildlife and derivative products, or fish or raise fish
U.S. Department of the Interior , Minerals Management Service (MMS)
Permit
If you mine or drill for any mineral resources on federal lands
The U.S. Nuclear Regulatory Commission
License
If you create, cycle, distribute or dispose of nuclear waste.
The Federal Communications Commission (FCC)
License
If you broadcast information by radio, television, wire, satellite or cable
National System of Interstate and Defense Highways
Permit
Regulates transportation weights
This page of the U.S. Small Business Administration website gives more details about each of these regulatory agencies.
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State Licenses and Permits
Scroll to the bottom of the page listed above, and you’ll find links to every state. Every state has its own set of regulations. Study your State’s website and find out specifically what is required. Common requirements include:
State Department of Revenue
Sales licence
This may be called a transaction privilege tax (TPT) license, a sales and use tax certificate of registration, or any other name. It allows you to resell goods. If, and only if you are selling products, you’ll need this for every location.
Professional Licensing Agencies
Licenses and Permits
Specific Professions have regulating agencies. These may include the State’s Department of Public Safety, Department of Agriculture, Registrar of Contractors, Corporate Commission, and many others.
If, and only if you are selling products, you need a sales & use tax Certificate of Registration for each business location is needed from the State Dept of Revenue.
It’s a good idea to register your business name with the state. This makes your business name “official,” and also allows you to open business bank accounts. Registration is usually around $20.
You do NOT need an EIN if you don’t have any employees other than yourself. The EIN is for employers and used for employee payroll taxes. Until you have employees, don’t worry about this one.
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Local Licenses and Permits
Again, every local jurisdiction has its own laws and regulations. Most cities, counties, and other localities require at least a business license, which allows you to open a bank account in your business name & file taxes with the county. They vary in price, but usually run around $20 or so. Do your research to find out what is permitted in your locality and, if you work from home, within your neighborhood!
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Links
US Small Business Administration
Scripture
Romans 13:1-7
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