America almost lost its AAA credit rating. Despite the debt deal on August 2nd, the United States was almost downgraded by Standard & Poor’s credit rating agency (they notified the U.S Administration they were thinking about it). But what does this mean for you? What might be impacted due to this downgrade? Let’s explore what’s happening in America, and how you can protect yourself from the perceived federal disaster.

As of this writing, the S&P is considering downgrading the United States credit rating. Government officials are trying to convince them otherwise, but who knows if they’ll be successful.

America Loses AAA Credit Rating: It’s Not A Credit Score!

So what does it mean for the United States if it loses its precious credit rating? To answer this question, you must understand the difference between a credit rating and a credit score:

Credit Rating

A credit rating is the judgement of credit rating agencies how likely a country is going to default on its obligations. A poor credit rating means that a country is more likely to default on its obligations as opposed to a good credit rating that means a country is not likely to default.

Credit Score

A credit score is a mathematical algorithm that helps companies and individuals determine the credit worthiness of another individual. Your credit score affects your ability to take out personal loans and also (in some cases) affects your insurance premiums. TheChristianDollar.com believes that an individual’s credit score is not important for those looking to live debt free.

So remember that all of this has to do with the perception of a group of people. It’s not about mathematics as much as it is about how the United States is viewed. But that doesn’t lessen the importance of this news.

How You Might Be Affected

As you can see, the United States is being judged by the S&P because of lack of confidence investors have in the ability of the United States to reduce its debt. This can have an affect on a few things in your life:

• Your interest rates might go up. That’s right, anything that is an adjustable rate (such as some mortgages and credit cards) might climb its way up.
• Uncertainty will cause you to make rash decisions. If you’re afraid the United States is going to continue growing its debt and be irresponsible, you might be tempted to pull out of the stock market.

John

John officially launched TheChristianDollar.com on January 1st, 2010 with the intention to provide an excellent financial resource for biblically-minded individuals and families. Influenced heavily by Dave Ramsey, John started researching how he might better handle his money and help others in the process. John enjoys reading, writing, playing with gadgets, and spending time with his wife Courtney.

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A statement released yesterday from The White House reveals that Democrats and Republicans have reached an agreement on exactly how to extend the tax cuts. While both sides agreed that tax cuts for the middle class were necessary to maintain economic stability, differing opinions on cutting tax for the wealthiest Americans surfaced.

Two Sides Compromise

Obama is of the persuasion that government should only extend tax cuts for the middle class. The GOP argues that tax cuts should be maintained for not only for the middle class, but for the wealthiest Americans as well. Obama explains his position below:

Now, there’s no doubt that the differences between the parties are real and they are profound.  Ever since I started running for this office I’ve said that we should only extend the tax cuts for the middle class.  These are the Americans who’ve taken the biggest hit not only from this recession but from nearly a decade of costs that have gone up while their paychecks have not.  It would be a grave injustice to let taxes increase for these Americans right now.  And it would deal a serious blow to our economic recovery.

Now, Republicans have a different view.  They believe that we should also make permanent the tax cuts for the wealthiest 2 percent of Americans.  I completely disagree with this.  A permanent extension of these tax cuts would cost us $700 billion at a time when we need to start focusing on bringing down our deficit.  And economists from all across the political spectrum agree that giving tax cuts to millionaires and billionaires does very little to actually grow our economy.

The Republicans are convinced that tax cuts should be equal in proportion across the board. Their argument is that the wealthy should not be punished for accruing cash and assets through hard work. While I agree with this, Obama does make a strong counterargument that extending tax cuts to the wealthy does not help with the federal deficit:

. . . I’m not about to add $700 billion to our deficit by allowing a permanent extension of the tax cuts for the wealthiest Americans.

Obama did, however, allow a temporary extension of the tax cuts for the wealthy in exchange for the ability to extend unemployment insurance and allow for tax cuts for small businesses:

And I won’t allow any extension of these tax cuts for the wealthy, even a temporary one, without also extending unemployment insurance for Americans who’ve lost their jobs or additional tax cuts for working families and small businesses — because if Republicans truly believe we shouldn’t raise taxes on anyone while our economy is still recovering from the recession, then surely we shouldn’t cut taxes for wealthy people while letting them rise on parents and students and small businesses.

Americans Need To Sacrifice Lavish Lifestyles

We’re at a time in our history where ideals can clash with reality. Ideally, we all would like to maintain the lifestyle we’ve all grown accustomed to: tax cuts, unemployment benefits, and general government assistance. But I’m afraid that none of these things can remain active in the long term. The fact of the matter is that our nation is in increasing debt. We owe, we owe, we owe.

While we have a good deal of control who we put in Washington, we have greater control of ourselves. It’s time that we stop expecting tax cuts, government assistance, and our President to save the day. It’s time we take control over our own lives and live responsibly.

Whether we like it or not, America will have to make many sacrifices to get governmental spending under control. We soon won’t be able to afford to pay for those who aren’t working. We soon won’t be able to carry the burdens of those who have even legitimately lost their jobs and need assistance. This is why I’ve dedicated myself to learning to be self-sufficent to the greatest extent possible. I’m refusing to believe that I can be successful in only one endeavor. Multiple streams of income are becoming more and more important.

Read More Details

For more information on the details of the extension of the tax cuts and other deals that were made, please read my friend Peter’s article at BibleMoneyMatters.com: Deal Reached Between President Obama And GOP On Extension Of Bush Tax Cuts.

What are your thoughts on the tax cuts or the ever increasing federal debt? Leave us a comment below!

John

John officially launched TheChristianDollar.com on January 1st, 2010 with the intention to provide an excellent financial resource for biblically-minded individuals and families. Influenced heavily by Dave Ramsey, John started researching how he might better handle his money and help others in the process. John enjoys reading, writing, playing with gadgets, and spending time with his wife Courtney.

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Do you think you’ll get Social Security within your lifetime? According to an article on The Washington Post, Social Security benefits will remain flat for the 2nd straight year. 54 million retirees will not receive cost-of-living increases in 2011 in their monthly checks.

For three and a half decades payments automatically adjusted according to the nation’s inflation rate. We’re now starting to see a wavering of the system that was designed to ensure the prosperity of those in their latter years.

Social Security, in my opinion, is starting to seem more and more like Social Insecurity. As a young person, how does this wavering in our government’s ability to fund their promises make me feel about my Social Security payments? Not so good.

A Better Way

I truly don’t believe I’ll ever see Social Security benefits in my lifetime. Instead, I’m choosing to depend on my own financial investments to carry me through retirement. I believe there is a better way to retire than solely depending on the government for a mere $1,200/month (the average payment retirees receive from Social Security).

So what can you do instead? Saving for retirement isn’t enough. Here are a few preliminary tasks (in no particular order) before building up your retirement.

1. Get out of debt. As you eliminate your debt, you’ll be able to free up your cash flow and ensure you have enough money to invest into retirement. This is a crucial step to take. If you want to learn more about how you can get out of debt, read through Dave Ramsey’s 7 Baby Steps.
2. Build an emergency fund. We’re just finishing up our fully funded emergency fund, and it feels spectacularly awesome. The last thing you want to do is pull money out of a Roth IRA or 401(k) because you had an emergency. Finish your emergency fund before you even begin to think about investing.
3. Create a sustainable budget. This one should be obvious. It goes without saying that everyone needs a budget that is built to last. The budget is one of the key components of any financial plan. When you stick to a budget you learn discipline, living below your means, and how to ultimately win with money.

Go forth and invest!

After you’ve completed these tasks, it’s time to start your journey to retirement funding. I recommend funding any matching 401(k) or similar fund up to your company’s match. After that, throw as much money into your Roth IRA as possible (for 2010: if you’re under 50 years of age, that’s $5,000 or up to your taxable compensation) using mutual funds. Then, go back to your matching fund and contribute until you’ve spent 15% of your income on retirement contributions.

Are You Depending On The Government?

I’m really not one to depend on the government for my financial security (that’s between me and God). I ask you this question: are you depending on the government? In what ways do you expect the government to take care of you? Or better yet, in what ways SHOULD the government help its citizens? I’d love to hear from you in the comments below!

John

John officially launched TheChristianDollar.com on January 1st, 2010 with the intention to provide an excellent financial resource for biblically-minded individuals and families. Influenced heavily by Dave Ramsey, John started researching how he might better handle his money and help others in the process. John enjoys reading, writing, playing with gadgets, and spending time with his wife Courtney.

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Rick Dancer has been in the television news industry for over 23 years, and I remember watching him on our local news station. I’ve always respected this man, and have enjoyed his YouTube channel where he frequently discusses life and faith. Here’s one of his videos which he cleverly entitled “God’s Wastefulness.”

Rick makes some great points here. God abundantly creates and allows us to do the same. The beauty of this world is truly remarkable, and Rick insightfully points that out in this video.

Check out his website when you get a chance. For you bloggers out there, you can learn a lot about marketing and social media from his endeavors online.

John

John officially launched TheChristianDollar.com on January 1st, 2010 with the intention to provide an excellent financial resource for biblically-minded individuals and families. Influenced heavily by Dave Ramsey, John started researching how he might better handle his money and help others in the process. John enjoys reading, writing, playing with gadgets, and spending time with his wife Courtney.

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A few days ago you may recall I interviewed Samer Forzley of eBillme.com. Today, the eBillme blog interviewed me asking about The Christian Dollar and personal finance. Check it out!

John

John officially launched TheChristianDollar.com on January 1st, 2010 with the intention to provide an excellent financial resource for biblically-minded individuals and families. Influenced heavily by Dave Ramsey, John started researching how he might better handle his money and help others in the process. John enjoys reading, writing, playing with gadgets, and spending time with his wife Courtney.

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They say that cash is king. Now, a new $100 bill that is going to be released early next year might just be the most advanced piece of currency ever released by the U.S. Department of the Treasury.

Counterfeiting must be combated by new forms of currency every few years. If the general public is going to trust in this most important form of currency (cash), we must update it with new security features in order to protect against those who see to undermine the system.

The new $100 bill doesn’t in the least replace older $100 bills, but instead helps to protect the trust we have in our currency. I believe the new look has a “modern” flavor that will lead people to value the currency more, and help Americans to save – not lavishly spend – their cash.

Two new advanced security features of the new $100 bill:

1. The Blue 3-D Security Ribbon: This contains images of bells and 100s that move and transform as you move the bill back and forth.
2. The Bell in the Inkwell: The bell changes color from copper to green when the note is tilted.

I am convinced that these features will be difficult for criminals to duplicate. Developing the technology to make this enhanced bill took the dedication of many people, as mentioned in the official press release:

“For 145 years, the men and women of the United States Secret Service have worked diligently to protect the integrity of U.S. currency from counterfeiters,” said Director Mark Sullivan. “During that time, our agency has evolved to keep pace with the advanced methodologies employed by the criminals we pursue. What has remained constant in combating counterfeiting, however, is the effectiveness of consumer education initiatives that urge merchants and customers to examine the security features on the notes they receive.”

No doubt, it is up to every American to be able to recognize the new $100 bill in order that counterfeiting decreases and trust reigns. Money is a means of trust between two parties, and we must protect that trust to secure the economy.

To learn more, visit NewMoney.Gov to explore the story behind the new $100 bill and other advanced security features. Spread the word!

John

John officially launched TheChristianDollar.com on January 1st, 2010 with the intention to provide an excellent financial resource for biblically-minded individuals and families. Influenced heavily by Dave Ramsey, John started researching how he might better handle his money and help others in the process. John enjoys reading, writing, playing with gadgets, and spending time with his wife Courtney.

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I’m curious what your thoughts are on Obama’s speech. What do you think of health care reform? Is it needed? What specifically should America do?

Briefly, my thoughts are that there is a lot left unsaid. I am concerned that the government is getting involved to a point that is unhealthy. Requiring that Americans have health insurance is not the government’s obligation or right. That is our responsibility. However, like I said before, there is a lot that I don’t know yet about the reform.

Your thoughts?

John

John officially launched TheChristianDollar.com on January 1st, 2010 with the intention to provide an excellent financial resource for biblically-minded individuals and families. Influenced heavily by Dave Ramsey, John started researching how he might better handle his money and help others in the process. John enjoys reading, writing, playing with gadgets, and spending time with his wife Courtney.

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I have to share this video with all of you. The recent recession has a lot of people wondering: “What in the world happened?” I found this 60 Minutes episode of great help. Watch it below. Let me know what you think in the comments!

Watch CBS News Videos Online

John

John officially launched TheChristianDollar.com on January 1st, 2010 with the intention to provide an excellent financial resource for biblically-minded individuals and families. Influenced heavily by Dave Ramsey, John started researching how he might better handle his money and help others in the process. John enjoys reading, writing, playing with gadgets, and spending time with his wife Courtney.

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The earthquake in Haiti was one of several disasters in recent days that impacted many lives. If you are currently in a position to donate, please do! Consider donating to Haiti or another American Red Cross cause.

John

John officially launched TheChristianDollar.com on January 1st, 2010 with the intention to provide an excellent financial resource for biblically-minded individuals and families. Influenced heavily by Dave Ramsey, John started researching how he might better handle his money and help others in the process. John enjoys reading, writing, playing with gadgets, and spending time with his wife Courtney.

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If you didn’t get a chance to watch Obama at the White House Health Care Summit today, you may want to check out some of the key quotes from the event if you’re pressed for time. If not, watch the video below!

The meeting was very polarized and heated. It did seem that Democrats and Republicans were trying to bridge the gap, but much more work is required.

As always, let me know your thoughts! Let’s talk about it!

John

John officially launched TheChristianDollar.com on January 1st, 2010 with the intention to provide an excellent financial resource for biblically-minded individuals and families. Influenced heavily by Dave Ramsey, John started researching how he might better handle his money and help others in the process. John enjoys reading, writing, playing with gadgets, and spending time with his wife Courtney.

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