__Your neighbor walks you up to their brand-new car, sitting in the driveway. It is pristine.__ 

The outer surface is smooth, unlike the surface of your car, covered with chips and small dents. 

He opens the door, and you immediately catch a whiff of the new car scent, unlike the whiff of stale french fries you just smelled in your car. 

You look inside and view the modern, untouched interior, unlike the “kids-clearly-ride-in-this-car” look of your car’s interior. 

They tell you about all the new safety features the car employs. The car seems invincible, unlike the apparent death trap you drive. 

You smile and congratulate them on the new purchase. And you mean it. But as you walk back to your house, envy beings to creep in. Envy is a feeling of discontentment resulting from another person’s possessions. You long to have what they have. You deserve the new car scent. 

Before you start browsing Cars.com or Autotrader.com, let me provide three quick thoughts to consider:

__1. The Bible tells us not to envy.__ 

Galatians 5:10-21 identifies envy as a deed of the flesh. Instead, we are to find contentment in what God has provided us. Contentment can be found by first realizing that God owns everything. Possession does not determine ownership. Everything you possess—money, house, car—is God’s, not yours. While God entrusts us with certain things, there is never a shift in ownership. The same is true for your neighbor.

Contentment can also be found by focusing not on what we do not have, but on how to steward what we do have. To some, God provides much. To others, He provides little. But to all, He requires stewardship (Matthew 25:14-30). Focus on how you are leveraging what God has already entrusted to your care for the advancement of His Kingdom and watch the discontentment fade. 

__2. Keeping up with the Joneses is real.__

“Keeping up with the Joneses” means to keep pace with the lifestyle of those around you. It is a real phenomenon. A [research project](https://www.cnbc.com/2018/05/31/theres-now-analytical-proof-behind-keeping-up-with-the-joneses.html) by the Philadel phia Federal Reserve studied the neighbors of lottery winners. Their findings revealed that neighbors of lottery winners were more likely to take on additional credit card and mortgage debt. Bankruptcy rates also increased amongst neighbors during the following three years. They tried to keep up and found themselves in financial ruin. 

So, be careful when you find yourself envying your neighbors car or any other costly item. The feeling of discontentment has real financial consequences. Stay within the bounds of your own finances. Don’t try to keep up with the Joneses. 

__3. Your neighbors probably used debt to get that car.__

It is very likely that the brand-new car you are envying came with a brand-new debt. According to [Statista](https://www.statista.com/), eight- five percent (85%) of new car purchases are financed, with $26,000 being the average loan for a new car. It is not likely that your neighbors got a bonus at work or have significant margin within their existing budget. No, they probably could not afford the car without taking on debt. That new car doesn’t always represent status but financial burden, a burden you want to avoid. 

__So, don’t envy your neighbor’s new car. The Bible warns against such discontentment. It can lead you to make unwise financial decisions. And you are likely envying a façade of status propped up by debt.__

You were meant for more. Your money was meant for more. You and your money are meant for an exciting, adventurous, and satisfying purpose. You were designed to live and give generously. And deep inside you know this and want this.

Art Rainer

Debt

Your neighbor walks you up to their brand-new car, sitting in the driveway. Here are 3 thoughts to remember.

Don't Envy Your Neighbor's New Car

__The New Year is upon us and you know what that means. It’s time to finalize your 2022 resolutions.__

Anyone can *make* New Year’s resolutions. *Keeping* them is the hard part. There is one resolution, however, that you’ll never regret keeping.

If you’re trying to decide how many pounds you want to lose in the coming year (a worthy endeavor, to be sure), why not add something else to your list of resolutions? In addition to reducing your waistline, how about reducing your debt?

## For many people, the thought of getting out of debt is overwhelming, so they don’t try or they give up too easily. You don’t have to do it all at once. The important thing is to set a realistic goal and get started.

Focus only on consumer debt (credit cards and auto loans), not your mortgage. If you can’t see yourself getting completely out of consumer debt in the next 12 months, consider *some* amount of progress instead.

The first thing you need to do is write down all of your debts and their amounts. Pull out all of your credit card statements, auto loans, and outstanding bills. Then total it up. That’s never a fun thing to do, but it’s essential.

When you’ve totaled up your debt, make a plan to pay off some part of it. Start by figuring out where you can trim spending from your budget to create margin. That’s money left over after all necessary spending.

Of course, if you’re not on a budget you’ll need to draw one up. If you need help setting up a spending plan, sign up with one of our volunteer __[coaches](https://apisource.moneywise.org/connect)__.

You can also download the __[MoneyWise app](https://app.moneywise.org)__ wherever you get your apps. It’s based on the tried and true envelope system, and it makes setting up a budget a snap.

Now that you know how much money you have to attack your debt each month, continue to pay the minimum due on each debt, but take your “surplus” money and put it toward the smallest debt each month. This is the “snowball method’ for paying off debt.

When the smallest debt is paid off, take your surplus money (you’ll have a bit more of it now) and apply it to the next smallest debt. When that’s paid off, repeat the process.

You’ll begin to pay off debt faster and faster, like a snowball getting bigger and gathering speed as it goes downhill. As each debt is paid off, you have more and more money to apply to the remaining debt.

## To be successful, you must also resolve to not take on new debt. Otherwise you’ll undo any progress you’ve made. Stop using your credit cards. If you can’t do that, cut them in half.

Remember to choose an amount that you can reasonably expect to pay off in the next 12 months. That may not be all of your consumer debt. Maybe it’s only a thousand dollars, or two, or three. It has to be a goal you can reach.

__Researchers say that 90% of people making New Year’s resolutions fail to keep them. Do the steps we’ve laid out and you’re likely to be in the 10% that do.__

You can __[listen](https://www.moneywise.org/moneywise/series/moneywise-with-rob-west)__ to th e related podcast on this topic.

Biblical Wisdom For Your Financial Journey

MoneyWise

Articles

Do the steps we’ve laid out, and you'll be your way to more healthy finances  this year.

New Year, Less Debt

There haven’t been many bright spots in the COVID pandemic, but banks tightening requirements for home equity lines of credit may have been one of them.

When the pandemic hit in late 2019, many of the nation’s leading lenders began scaling back HELOCs. That was then. Now, plenty of lenders are willing to make them and their cousin, the home equity loan. The names are similar and both tap into the equity of your home, using the house as collateral. There are at least two significant differences, however.

First, a home equity loan sets a fixed amount to be borrowed all at once, with fixed monthly payments for a determined amount of time, maybe up to 10 years.

A home equity line of credit, or HELOC, is more flexible. It’s a revolving type of account that sets a maximum amount to be borrowed, but you’re able to draw on that as needed and your monthly payments are determined by how much you’ve borrowed. The more you borrow, the higher your monthly payments.

Second, while home equity loans have a fixed interest rate and you know how much the loan will cost you, a HELOC will have a variable interest rate, which might be very low in the beginning to make the loan seem more attractive. Also, rates are very low right now. They can only go up.

Why are these loans making a comeback? First, many signs indicate the economy continues to recover slowly, with some 10,000,000 unfilled jobs. People who want to work can work.

Plus, with home values sky high these days, total equity in American homes is the highest ever recorded, well above $7 trillion. That’s a lot of money to back these loans and lenders feel secure about making them.

Borrowers must be aware of the dangers involved with either of these loans. If you’re taking out one to pay off credit cards, for example, you’re exchanging unsecured debt for secured debt. Your home is now collateral for the loan and you can  lose it if you’re not able to make the payments, just as you would with your mortgage.

These loans also often come with high origination and maintenance fees. They’re often what are called “demand notes.” That means the lender can call, or demand full repayment of the loan under certain circumstances, so check the fine print.

Why would a lender do that? There’s nothing to prevent lenders from checking your credit after a loan is made. They might do that if they’re thinking about offering to lend you even more, for example.

If they see that you’re making late payments somewhere else, it could trigger a demand for the loan to be repaid.

Is it always unwise to take out a home equity loan? No, because there may be circumstances where a financial calamity overwhelms your emergency fund and you really have no choice but to tap into your home’s equity. 

An example might be significant damage to your home not covered by your insurance. Those events are rare, but they do happen. 

By far the most legitimate reason to take out a home equity loan, not a HELOC, is to make repairs or improvements to your house and then only if the payments are well within your budget and you pay it off as quickly as possible.

So home equity loan, maybe sometimes. HELOC, never.

Banks are tightening requirements for home equity lines of credit--what this means for you.

Return of the Harrowing HELOCs

The average American has four credit cards. Some they may use rarely, or not at all. Closing those unused accounts is a good idea, but you have to do it right.

People often procrastinate on this because they know it will affect their credit score, although very often they’re not sure why.

As Christians, we take Proverbs 3:27 seriously, *“Do not withhold good from those to whom it is due, when it is in your power to do it.”* Closing out an account with a zero balance means you’ve already paid back the money.

Why then should your credit score drop? It seems like you’re being punished for doing a good thing, but it really comes down to mathematics and complicated computer algorithms.

An algorithm lives inside a computer model and  is just a set of rules that solve a problem in a limited number of steps. Among other things, those computer models give you more credit score points for having three things: long standing accounts, more available credit and more *kinds* of accounts, such as a credit card, auto loan and mortgage.

The longer you have an account open, the more credit you *don’t* use and the more *types* of accounts you have, the higher your score. Those three factors alone make up 55% of your FICO score. That’s because having older accounts, a lot of unused credit and more kinds of accounts tells lenders that you’re likely to pay them back.

Do you really need to worry about this when you close an account that results in a slight drop in your credit score? Usually not, but there’s one occasion when it could be important.

If you’re shopping for a mortgage or some other kind of loan, you want the highest score possible. Lowering your score by even a few points could put you in a lower range of scores and that could affect the interest rate you get on the loan. A higher interest rate means money out of your pocket every month.

In most cases, though, when you’re not seeking a loan, a slight drop in your credit score doesn’t mean much. You’ll quickly make that up if you keep the outstanding balances below 30% on remaining accounts and you make your payments on time.

Despite the temporary drop in your score, it still makes sense to close an unused account, for two reasons. First, it eliminates the *temptation* to use it if you run into an unexpected financial problem. That’s what your emergency fund is for and you should use that money if the car breaks down or the water heater springs a leak.

The second reason is the plague of *identity theft* we’re experiencing. If an unused account with available credit is hacked, it will cause you a lot of headaches.

However, you don’t want to close several accounts at once. That would multiply the negative effect on your score. The best way to close multiple unused accounts is *gradually*, no more than one or two every six months or so. That way you spread out the negative impact, while at the same time minimizing it by keeping low balances and making on-time payments for the accounts you keep.

Bottom line, even though closing an account lowers your score for a time, do it anyway, as long as you’re not in the market for a mortgage or car loan and you don’t close multiple accounts at one time.

Closing those unused credit card accounts is a good idea, but you have to do it right.

The Best Way to Close Credit Accounts

If you've made the decision to pay of some debt, Rob West has a couple of approaches to consider in taking that mountain!

The MoneyWise Minute is a great way to be reminded of God's financial principles with actionable items you can easily apply to your daily life.

MoneyWise Minute

If you've made the decision to pay of some debt, Rob West has a couple of approaches to consider in taking that mountain!

2 Options for Paying Off Debt

It’s New Year’s Eve, and you know what that means: There's a few hours left to decide on your 2022 resolutions. Anybody can make New Year’s resolutions - it’s keeping that them that’s the hard part. But in this episode of MoneyWise Live host Rob West has one that you’ll never regret keeping.

Listen to MoneyWise Live each weekday at 4pm EST on Moody Radio.

MoneyWise Live

It’s New Year’s Eve, and you know what that means: There's a few hours left to decide on your 2022 resolutions. Anybody can make New Year’s resolutions -  it’s keeping that them that’s the hard part.

It’s New Year’s Eve and you know what that means, you only have a few hours left to decide on your 2022 resolutions. Anybody can make New Year’s resolutions. It’s keeping that them that’s the hard part. But today on MoneyWise, we’ve got one for you that you’ll never regret keeping. <ul><li>Right now, a lot of folks are trying to decide how many pounds they want to lose in the next year. That’s a worthy endeavor, but why not add something else to your list of resolutions? In addition to reducing your waistline, how about reducing your debt?</li><li>We’ll get into that in a bit, but did you know that making New Year’s resolutions is actually a strong Christian tradition? Many cultures make them, but Christian New Year’s resolutions are grounded in a centuries-old tradition called “Watchnight.”</li><li>These were services held at the end of the year by some Christian denominations, and they inspired believers to reflect on the past year and resolve to do better in the one ahead.</li><li>About 30-percent of Americans make resolutions each New Year, but by March, only about 30-percent of them are still following them strictly. And in the long run, only 10-percent of folks making resolutions keep them permanently.</li><li>So years ago, someone came up with an acronym to help when setting goals. It’s S.M.A.R.T. That stands for Specific, Measurable, Attainable, Realistic, and Timely.</li><li>So keep those in mind as you work out the specifics of resolving to reduce your debt in the New Year. </li><li>RESOLVING TO BECOME DEBT-FREE</li><li>The thought of getting out of debt may seem overwhelming, but you don’t have to do it all at once. The important thing is to set a realistic goal and get started.</li><li>And to be clear, we’re only talking about consumer debt like credit cards and maybe auto loans, not your mortgage.</li><li>The first thing you need to do is write down all of your debts and their amounts. So pull out all of your credit card statements, auto loans, and outstanding bills. Then total it up. That’s never a fun thing to do … but it’s essential.</li><li>When you’ve totaled up your debt, make a plan to pay off some part of it. Start by figuring out where you can trim spending from your budget to create margin— that’s money left over after all necessary spending.</li><li>Of course, if you’re not on a budget you’ll need to draw one up. If you need help with that, <a href="https://apisource.moneywise.org/connect">sign up with one of our volunteer coaches at MoneyWise.org</a>.</li><li>You can also download the MoneyWise app wherever you get your apps. It’s based on the tried and true envelope system, and it makes setting up a budget a snap.</li><li>So after you’ve done that, you’ll know how much money you have to attack your debt each month. While still paying the minimum due on each debt— take that “surplus” money and put it toward the smallest debt each month. This is called the “snowball” method.</li><li>When the smallest debt’s paid off, take the surplus money and apply it to the next smallest debt. When that’s paid off, repeat the process.</li><li>As you keep going, you’ll begin to pay off debt faster and faster, like a snowball getting </li><li>Now, to be successful, you also have to resolve to not take on any new debt. Otherwise it will wipe out your progress. So don’t use your credit cards. If you have to, cut ‘em in half.</li><li>Remember to make your goals attainable. One step at a time! </li><li>Do those things and you’re far more likely to be in the 10-percent who keep their New Year’s Resolutions.</li></ul>On this program, Rob also answers listener questions: <ul><li>After cashing out a life insurance policy, what should you do with the money? </li><li>If you sell a product for full price rather than at a discount, is that usery? </li><li>Do extended vehicle warranties make sense? </li><li>What is the best way to budget your money? </li>


</ul>RESOURCES MENTIONED DURING THIS PROGRAM<a href="https://app.moneywise.org/">MoneyWise app</a><a href="https://www.ally.com/bank/online-savings-account/?CP=ppc-google-bkws-bank-ally-bank-bmm-desktop&amp;source=Paid-Search-Web&amp;d=c&amp;ad=507876515675&amp;gclid=CjwKCAiAh_GNBhAHEiwAjOh3ZLOC17clrJDhkNxtvqPlll8DZCiLhsOT11pOEm0GmLUe58L1clfcWBoCmiYQAvD_BwE&amp;gclsrc=aw.ds">Ally.com</a><a href="https://www.capitalone.com/bank/checking-accounts/online-checking-account/?external_id=360B_MM_SEM_71700000084658431_GOOGLE_58700007149712681_43700064287423092&amp;06136_SE000912_AlwaysOn=&amp;gclid=CjwKCAiAh_GNBhAHEiwAjOh3ZHfUHKcIibcYZZn4mVmbETHFuLLwivQssW_yeVGzBUZFdGjkTmpxshoCAowQAvD_BwE&amp;gclsrc=aw.ds">CapitolOne360</a><a href="https://www.marcus.com/us/en/savings/high-yield-savings?prd=os&amp;chl=ps&amp;schl=psg&amp;cid=1897659318&amp;agp=71134111820&amp;cre=481084204270&amp;kid=marcus%20online%20banking&amp;mtype=e&amp;adpos=&amp;gclid=CjwKCAiAh_GNBhAHEiwAjOh3ZEKYoo9pwr_tBvWEU2yCL2AzpOnpSJ32eM7zP7gYxkg9CdfTum_9WhoC2NkQAvD_BwE&amp;gclsrc=aw.ds">Marcus.com</a>Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to Questions@MoneyWise.org. Also, visit our website at MoneyWise.org where you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app. Like and Follow us on Facebook at MoneyWise Media for videos and the very latest discussion! Remember that it’s your prayerful and financial support that keeps MoneyWise on the air. Help us continue this outreach by clicking the Donate tab on our website or in our app.

MoneyWise is a daily radio ministry of MoneyWise Media. Hosted by Rob West and Steve Moore, the program offers a practical, biblical and good-natured approach to managing your time, talents and resources.

MoneyWise with Rob West

If your loved one dies with credit card debt are you required to pay it? Rob West shares that the law says one thing, and the Bible may say another.

If your loved one dies with credit card debt are you required to pay it? Rob West shares that the law says one thing, and the Bible may say another.

Credit Card Debt After Death

The Ron Blue Institute seeks to be a thought leader with great influence committed to changing the way Christians think, act, and communicate about financial stewardship, empowering the church, and changing the world.

Important Links

Company