Slipping Back into Old Financial Habits with Dr. Shane Enete

We work, we earn, we save.

But is that all there is? The Book of Ecclesiastes gives us an entirely new perspective on money that impacts our day-to-day lives. FaithFie's newest study, Wisdom Over Wealth, unpacks life-changing biblical truths about wealth, work, and contentment. This resource will help you grow in how you handle wealth by deepening your trust in God.

Get your copy when you become a FaithFie partner with a gift of $35 a month or $400 a year at faithfi.com. They say that crisis reveals character, and for a brief moment, the pandemic revealed surprising financial resilience. Hi, I'm Rob West. During that season, many Americans experienced a rare financial reset as savings rose and debt declined.

But five years later, much of that progress has unraveled. Dr. Shane Enad joins us to unpack what changed and how believers can respond faithfully in a culture gripped by renewed financial anxiety. Then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is faith and finance, biblical wisdom for your financial journey. Well, my guest today is Dr. Shane Enad, associate professor of finance at Biola University and founder of the Biola Center for Financial Planning. He's a good friend. He's a regular contributor, and I'm delighted he's here today to offer both insight and encouragement. Shane, great to have you back with us.

Thanks so much for having me, Rob. Shane, in the latest issue of our quarterly magazine, Faithful Steward, you've written a compelling piece on the state of America's finances. Interestingly, you opened by noting that the pandemic was, for many households, a time of unexpected financial progress.

Let's start there. What were some of the positive shifts we saw during that season? Sure, so some of the studies that came out kind of looking back and looking at what happened financially during the pandemic showed lots of positive trends. So the Federal Reserve Bank of Boston, they studied credit card spending and credit card balances, and they saw that Americans reduced both dramatically during the pandemic time. In another study by the U.S. Government Accountability Office, they looked at each pandemic stimulus check, and they found that each check, you know, there was three different ones, and for each one, people were reducing their credit card payments, reducing their credit card balances, and for every check that came, the next check had a bigger increase in credit card debt, and so people were using the pandemic to both reduce their credit card balances, reduce their credit card spending, and then we also saw that emergency fund levels, while credit card payments were going down, credit card spending was going down, emergency fund levels were going up, and they were up materially during the time of the pandemic, and a study by the Consumer Financial Protection Bureau saw that emergency fund levels were at peak levels when you study kind of the past two decades. Yeah, so not only were we spending less and had more margin because we were stuck at home and, you know, we were not out spending like we normally would, but also good decision-making in the wake of perhaps some of the uncertainty and even some of the concern. There was a drop in debt, an increase in savings, so that was certainly encouraging, but now, Shane, it seems much of that financial progress is gone.

What are the numbers? Tell us about where things stand today. It's not looking good, so we just reached the one trillion dollar mark in credit card spending and credit card balance, and really you can look at the moment people's behavior switched back to old habits, and it's during the second quarter of 2021, and if you kind of look at the case study of COVID, it's the point when everyone started to get very hopeful and the case is dropped. That's actually coincided with an increase in credit card spending, and so you saw kind of old habits start with credit cards. You saw, you know, now currently we're in a situation where six and ten US adults say that they're uncomfortable with their level of emergency savings, and we also see a situation where we're at historic highs in terms of poor financial well-being, according to the CFPB's 2024 Making Ends Meet survey. So our financial well-being is low, our emergency savings are low, and our credit card debt is high, and we're basically back to where we were before the pandemic. Yeah, that is discouraging. Shane, just about 30 seconds until our break. Talk about this score, this well-being score.

What exactly is that? You know, this score reflects the confidence in a household's ability to pay bills and put food on their table, and so the average has fallen from 55 to 49, so it just has gone quite a bit lower from pre-pandemic levels. Yeah, well that's really discouraging. Well, when we come back, we'll continue to unpack the data, what's going on right now, and we'll apply that to your role as a steward of God's resources and talk about as Christ followers what we can do differently than the world. Shane Enad here today talking about how American consumers appear to have slipped back into old financial habits. We'll have much more with him after this break, and then following this interview, it'll be time for your questions. So go ahead and call right now, 800-525-7000, or you can always email us your question at AskRobAtFaithFi.com.

We'll be right back. What matters most to you when selecting a financial advisor? Someone who shares your biblical values? How about someone who will take the time to explain your financial options clearly? Certified Kingdom Advisors meet high standards of competence, integrity, and biblical training, equipping them to offer financial advice grounded in God's word. No more wondering if your advisor truly understands what's important to you. Find a Certified Kingdom Advisor near you at FaithFi.com.

Just click Find a Professional. We are grateful for support from Timothy Plan. Since 1994, Timothy Plan has shared good news with investors and advisors by offering faith honoring mutual funds and exchange-traded funds. More information is at TimothyPlan.com. The investment objectives, risks, charges, and expenses are contained in the prospectus and summary prospectus available at TimothyPlan.com. Mutual funds distributed by Timothy Partners Limited and ETFs distributed by Foresight Funds Services LLC. Investing involves risks, including possible loss of principal. We saw some incredible progress during the COVID pandemic with regard to financial habits.

Unfortunately, a lot of that is gone. Shane Enad here today. This is Faith in Finance.

So glad to have you along with us. Dr. Shane Enad is Associate Professor of Finance at Biola University and founder of the Biola Center for Financial Planning. He's our resident researcher, if you will. And today, looking at, unfortunately, some discouraging data. Shane, for those just joining us, give us a quick snapshot of where we were during the pandemic and where we now find ourselves today. You know, before, or at least during the pandemic, there was a bit of a boost financially. People felt better about their finances. They paid down their credit card debt. They had an increase in emergency savings.

And so there was some good momentum. But then once the pandemic really started to release and people started to feel better, then things got a little bit dicey and things continued to kind of fall from where they were. And we're to a place now where six and 10 adults feel uneasy about their level of emergency fund. And, you know, before the pandemic, it was 37%. So we've gone from, you know, 37% to 60%. And so we're kind of moving towards a place of less financial margin.

Yeah, there's no question about that. And as you mentioned before the break, we now have eclipsed 1 trillion owed on credit cards. To take that a step further, more than one in three Americans now carry more credit card debt than they have set aside in emergency savings. What does that tell us about their financial stability and priorities, Shane? So it just means, you know, that they're spending more than they're earning, that they've kind of locked themselves into a lifestyle that is not sustainable. And without margin, there's just going to be a cycle of debt and they're going to be put into a place where they can't make progress. And in fact, they're mortgaging their future for a present lifestyle that's not sustainable. And it's going to make things hard in the future for them. Yeah.

It's going to make things hard because everything is tight right now. But if we have an unexpected disruption or a loss of income, we're in a really precarious situation. I know in the data, it says that, you know, Americans literally can't afford to lose income for even a month. That's a pretty widespread condition right now, isn't it?

Yeah. The studies show that 42% say they couldn't absorb a month of lost income. And that's up from 37% just a few years ago.

So things are getting to a place where there's no margin. And, you know, one in four Americans have no emergency funds. And what happens when you have no kind of emergency fund, when you can't absorb a lost income, then you get into debt. And debt is a type of slavery that we're meant to avoid. We're meant to kind of show the world that we're free.

Yes, that's exactly right. We talk about those principles found in God's word that really should govern how we handle our finances. They're simple, not easy, but simple. Spend less than you earn, avoid the use of debt, set long-term goals because the longer term your perspective, the better your decision today, have some margin and give generously. So we certainly need to be doing those. But Shane, it really starts with, and I appreciate this so much about your teaching, a proper understanding of our role as a steward of God's resources. You mentioned that when Christians face financial uncertainty, our first response should be to look to Jesus.

How does that perspective shape the way we think about money and actually handle our finances day to day? You know, if Jesus isn't present, and if we don't take his word seriously, then we see this fear, this anxiety around providing for ourselves, and it's real, and we will take on full financial responsibility. And that's a burden that we were never meant to bear fully. And instead, we should take very seriously how Christ talked about the Father. He said, we have a good Father. And he also said, we have, you know, our Father is like a good shepherd. And in both cases, they provide, you know, they provide for their children, they provide for their flock.

And I think with that perspective, with that foundation, then we cannot have to bear full financial responsibility. And we can lean in on Jesus's promises. And that actually equips us to then become a better steward to make behaviors become less consumptive, become less debt prone, because we'll start to engage all of the resources from the Father and the Holy Spirit. Yeah, I love what you've taught us in the past, Shane, about really making budgeting a worshipful experience. And that's a foreign concept for a lot of people.

They hear the word budget, and they think, Oh, boy, I don't want to go there. But you talk about it in a completely different way where it actually can be a way to worship, to celebrate God's provision. How should we look differently at this idea of spending within God's provision?

So there's an attitude about receiving. And so if we think of ourselves as steward, then we can see the moment that God's providing our daily bread, the moment that God is providing our utilities, our gasoline for transportation, our shelter. As we track and as we budget, that's the moment we get to be grateful. That's the moment we get to declare God's goodness. And we get to see evidence that God is providing, even when things don't seem like they're going to be good going forward. There is a moment where we get to just say, here is where God has provided my clothing. Everything that I'm budgeting, everything that I'm tracking is God's provision. And He's promised to keep taking care of us. And it may not be the same way that we're hoping, but it is a way that's good.

And so budgeting is that moment we get to just open a conversation with the Lord and see how He's providing and also bring our concerns and our cares to Him and have Him fill us up with His love and His peace. Shane, what is the next step? If somebody is listening today saying, Yes, that's what I want. That's what I want for my life. I just don't know where I go from here. How would you direct them in terms of getting started and building out that plan in that way?

So don't be alone. I think one of the things you want to do is open a line of communication with the Lord through a budgeting app, you know, like the Fify app. And once you start tracking, you want to shine a light bright on your financial behavior and just keep track of what you're doing.

Don't try and change it, but just keep track. And, you know, Ephesians says, what you shine a light bright on becomes a light. And so as you shine a light bright, your spending will become a light. And then you get to bring before the Lord and He can start to move you and shape you.

And that really is a great first step because just tracking is a very simple activity. You'll start acting like a steward. And really you're going to start to behave more like Christ, which will be counter-cultural because you won't be caught up in materialism. You won't be caught up in a debt lifestyle because you're going to be wanting to show off, you know, living within your means and show off kind of what it looks like to be free from debts and to be living in a way that's blessing others. And generosity requires a budget because you have to live within your means to have extra to share with others. I love that.

Let's finish with that idea. You know, our friend Ron Blue said, money is a tool, a test and a testimony. And you were hitting on that testimony aspect. How can Christians who live out biblical stewardship serve as that shining city on a hill and reflect God's kingdom to the world around them? You know, one of the characteristics of the Holy Spirit we forget about is self-control. And I think when believers are financially responsible, they're modeling a beautiful trait of the Holy Spirit, which is that they are able to show off a type of self-control, a lack of, you know, living beyond their means. They're just acting in a way that's admirable. And they're also taking God's stuff and they're spending it and saving it and giving it responsibly and sustainably. And I think that's going to be a light to the world so that they can see something that's good that they would want to chase after as well. That's incredible.

We're going to have to leave it there. Shane, thanks for stopping by, my friend. Yeah, thanks for having me.

That was Shane Enad. He's the Associate Professor of Finance at Biola University and founder of the Biola Center for Financial Planning. The article we've been discussing is featured in the latest edition of Faithful Steward, our quarterly magazine. If you'd like to receive each issue, just become a Faithfi partner at faithfi.com. Up next, your calls and questions at 800-525-7000. This is Faith and Finance, biblical wisdom for your financial decisions.

We'll be right back. We're grateful for support from Movement Mortgage, who provides residential home loans in all 50 states. Guided by a mission to love and value people and a goal to redefine the mortgage process, Movement seeks to help others achieve their financial goals.

You can find out more at movement.com slash faith. Movement Mortgage LLC supports equal housing opportunity. NMLS number 39179.

For licensing information, please visit nmlsconsumeraccess.org. Faith and Finance is grateful for support from Sound Mind Investing. For more than 30 years, they've offered financial wisdom for living well. SMI provides step-by-step guidance for do-it-yourself investors, from those just getting started to those getting ready for retirement.

More information, including a short video webinar on profit and peace of mind, no matter what's happening in the market, is available at soundmindinvesting.org. Great to have you with us today on Faith and Finance. I'm Rob West. We've got some lines open today. We're ready for you at 800-525-7000. If you have a financial question today, go ahead and call right now. Again, 800-525-7000. Let's see, we'll head to Plymouth, New Hampshire, and welcome Barbara. Go right ahead.

Hey, Rob. Question. My senior mother, she's in her 90s, but she's in good health, thankfully. She is going to be selling her house. She's owned it for over 30 years. It looks like she may be going over the 250,000 exemption for gains. And my question is, if she goes over it, say by 20,000, what happens there? How does that work out? And the other question is, how soon after the sale does she have to deal with this? Got it.

It's a great question, Barbara. So first of all, your mother would report the sale of her home if she sold it this year on her 2025 federal tax return if she has taxable capital gains. So that is profit exceeding the exclusion, which you just referred to. So that would be the filing deadline, which would be April 15th, 2026 for 2025.

And that would be, you know, when she would need to do that. If she, you know, receives a form 1099 S, she would have to report the sale even if the gain is fully excluded, but it would be on her 2025 return. Now, if she goes above the 250,000 of gains on a primary residence where she's lived there two out of the last five years, and she's single, not married filing jointly, then it would be added to her taxable income, which, you know, if that threshold for a single filer goes above 48,000, and that's not only your adjusted gross income, but your gain is included in that number, which is where most people fall. If it's between 48,300 and 533,000, then whatever that gain is that goes above the $250,000 threshold would be taxed at a 15% long-term capital gain. Okay. It's 15%. Anything above.

Yeah. If she tipped, if it's under 48,350, her combined income or taxable income, so her adjusted gross income minus standard or itemized deductions, but with the gain included, if it's above 48,000, then she's in that 15% bracket. If she goes over 533,000, it's going to be up at 20%. Well, as far as I know, she hasn't filed an income tax because she's on Social Security, and she gets a little bit of a pension from my dad, his local union. She's been getting that for about 10 years, but that's been under like $700 a month. So she hasn't even been filing an income tax. Okay.

Yeah. But this would be the year where she would need to look at that because, again, you know, it's based on her taxable income. And so, you know, that would be really important if she knows she has a gain beyond the exclusion. You know, the pension and Social Security income are included in that, you know, taxable income, but the extent just depends on specific rules around that. So this would probably be a good year for her to get a CPA or accountant to help.

Okay. And last question, she's been offered different ways to receive the money for the house, either a direct deposit, a check, and it was something else. Does it really matter how she receives the money from the sale? No, it really doesn't.

I mean, typically, it would happen electronically through the closing agent, you know, it would normally go to an escrow account, whoever that closing agent is, and then they would either cut a check or do an electronic transfer. It really doesn't matter in what manner she receives it. Okay. Should she at least throw some of this money into, you know, a high yield savings or, you know, something like that? She's 91.

Oh, yeah. I mean, I think once she has the proceeds, then she needs to take a step back and just say, you know, what are my values and my priorities? What is my financial position? I mean, I think from a financial standpoint, you know, making sure she has, you know, at least six, you know, in this season of life, maybe as much as 12 months in reserves, and that I would put in a high yield FDIC insured savings account. Beyond that, if you know, if she ends up with more than that, I think then that's an opportunity to say, okay, should we bring an advisor into the mix that could help her manage this, minimizing risk, giving her a given her age, but also, you know, outpacing inflation and trying to, to grow it while protecting it at the same time.

I mean, all those things could be in play. But yes, immediately getting it earning interest in an FDIC insured account would be the first order of business as far as I'm concerned. Okay, and at least 12 months in reserve should be going into that high yield savings?

I mean, I think somewhere between six and 12 months is probably, you know, the right range and the ultimate amount is really dependent upon just her comfort level, what's going to give her peace of mind, what other potential, you know, financial needs she's going to have now or in the future, you know, a lot of that will play into how much she ultimately wants to have liquid. Okay, her last concern is, evidently, they used to go to when my dad was alive, they used to go to an H&R block to do their taxes. And they they said, you two are on Social Security, we don't even need to see you guys anymore, because you know, you don't even earn enough.

My dad has been gone for like 12 years. And like I said, she's been on her Social Security. And that small pension from my dad. She didn't think she had to file any tax, any income tax. So she hasn't filed any. So I mean, could this bite her?

No, no, not. I mean, the only question would just be whether or not she did, in fact, have enough income that she needed to file. You know, as long as you don't know anything, there's not a requirement to file. If she falls under that threshold. I think the question is just, you know, when you look at income beyond Social Security, if she gets above those thresholds, certain percentages of her Social Security can be taxable. But, you know, if she had very little in the way of income, it may be absolutely true that that was not necessary. So the only way to know for sure would be just to, you know, connect with the CPA, perhaps at the same time that you're dealing with the calculation on the capital gains, you know, perhaps just do a quick review of the income she received in the prior years. And they could probably quickly say, nope, that was absolutely right, not needed.

Or yeah, we need to go back and file some of those returns just to get into compliance. Okay. All right, Rob. Thanks a lot. Appreciate your time.

Absolutely. Thanks for your call. We appreciate it, Barbara. Folks, we so appreciate you being along with us each day. And we look forward to taking your questions and hearing your stories and being invited into your stewardship journey. It's our privilege to come alongside you. I couldn't do this without an amazing team behind me each day, certainly contributing to today's broadcast. Mr. Devon Patrick, our producer, handling our phone calls today. Pat Montague, we're so thankful for Pat and also Mr. Jim Henry on research. Plus the entire cast and crew here at Faith By. It's an amazing group of men and women committed to equipping you as wise stewards of God's resources. If you want to check out our work, you can learn more at faithby.com, where you can give and download the app and check out some great content as well. Have a wonderful weekend and we'll see you next week. Bye-bye. Faith and Finance is provided by Faith By and listeners like you.