Category Archives: Control Spending

Control Debt, Control Spending, Tools

What Can I Really Afford?

There is a very interesting tool on ManagingGodsMoney.com (no affiliation with GrowGodsMoney.org) in the section about Affordability.  They start with a very good discussion and guidelines around the affordability of a home and then lead into a tool they call the Affordability Calculator. I encourage you to take some time and check it out. You can also browse their other tools.

We have included below an excerpt from their site with just enough of their good material to get you interested… click their link to connect for more detail!

— Check out ManagingGodsMoney.com for more —

To access the Affordability Index Calculator immediately, click here.

afford

Affordable is Subjective

Affordable means different things to different people. Affordable, according to Merriam Webster Dictionary, means being within the financial means of most people. However, the dictionary doesn’t define financial means. I define affordable as spending funds without acquiring or committing to acquiring debt. With debt easily available nowadays, it’s essential we keep this affordable definition in mind. Unless we have a firm grip on affordable, we cannot be effective as God’s stewards.

Affordable Housing

Affordable housing should be viewed separately from affordability of other buys. Your house is likely to be your most expensive lifetime buy, and it’s unlikely you could buy it without debt. Housing affordability became widespread in the 1980s in Europe and North America. Today, it is a major issue. Here is my simple checklist to decide affordable housing. Ensure each of these criteria exists before you conclude you can afford to buy a home. Don’t let government enticements by lowering deposit requirements, cutting interest rates, and so on, sway your decision.

  1. You are debt free.
  2. Working with a monthly budget.
  3. Know your housing needs such as size of housing. For example, will the family size increase shortly?
  4. Have at least 20% down payment for a conventional mortgage and so avoid mortgage insurance (in Canada).
  5. Understand and accept sacrifices needed to pay the full yearly housing costs. What might you have to give up to pay these costs regularly?
  6. Understand current and projected state of the economy and housing market, and feel reasonably comfortable you will be able to fund your total housing expenses for six months, even if you were laid off. This article on speeding up mortgage payments might help you.
  7. Understand the best approach for mortgage life insurance.
  8. For a couple, husband and wife are on the same page.

Affordable housing, therefore, means the ability to buy the house so that the total estimated ongoing costs, including a mortgage, do not compromise current and projected household budgets, plans, and commitments. Essentially, affordable housing means carry a mortgage, but no other debt.

— I am grateful for good sites like ManagingGodsMoney.com —

—-

Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Control Debt, Control Spending, Optimizing Life, Saving

Avoid The Christmas Hangover – Spending, Debt, and Stress

Christmas is a holiday with many competing areas of focus. Some manage to stay focused on the Lord, but there are many distractions. Some focus on family, but one can easily get caught up in a month long stress about the “perfect holiday” and “who is or is not coming” and “do we have the perfect gifts for everyone”, etc. I have seen people who strive to genuinely follow Jesus yield a month of every year to stress associated with the Christmas holiday, and almost none of it is focused on actually celebrating Christ.

Others get lost in debt, convinced by marketing and our culture that to celebrate Christmas requires spending lots of money, often money they don’t have. For the record, even “good sales” cost you money unless you were going to buy that item anyway. It costs even more if you buy other stuff along with the thing that was on sale. That is why the companies selling you things run the sales… to make money, not to save you money! Often this debt creates stress that lasts for months after Christmas is over as the credit card bills roll in.

Rather than waiting for that after Christmas “hangover” to set in along with the credit card bills and extra 5 pounds you put on by eating too much… consider challenging some of the holiday cultural norms.

1- Reduce the number of people for whom you buy gifts.

Buying gifts for everyone you know is not necessary. Instead of buying gifts out of obligation for many with whom you are not close, just make a point to be nice to them all year round. Treat them with kindness and sensitivity and they will know you care for them even if you do not give them a gift. If they only like you when they receive a gift, then they are not really your friend anyway. If you are concerned that they will buy for you and you will not have something for them, just have a real conversation with them about managing your expenses and budget responsibly and encourage them not to give something to you. If they are not close enough to you to have this conversation, then why are you even exchanging gifts with them? In some cases, it may be very important to someone close to you to exchange gifts… go ahead if you want to.

2- Reduce how much you spend on each person

Contrary to advertising… you do not need to buy a car, a diamond, gold jewelry, expensive electronics, etc. for people just because it is Christmas. If you don’t show them that you love them throughout the year, you will not fool them with an expensive gift in December. For those with whom you want to give or exchange presents, you can set a reasonable budget for each person and then stick to it. This helps you set your overall Christmas budget in a predictable instead of impulsive way.

3- Save up your Christmas budget in advance and avoid credit cards you cannot pay back before you have to pay interest.

Once you decide who you will get gifts for and how much to spend, you have a good estimate for your budget planning. Now divide by 11 and start saving it each month starting in January and continuing through November. Inevitably you will still have surprise expenses in December from the season’s activities, so you don’t plan on taking money for gifts from that month’s budget.

4- You can even consider replacing your current gift exchange traditions with a donation to a charity or family in need… someone you can give to in God’s name with no hope of receiving a gift in return. You will spend less money and honor God more.

If you find yourself condemning me as “Grinch”… I do not mind. You are not alone, but you are in fact also not correct. If Christmas is all about giving and getting gifts as the centerpiece and focus, then it has nothing to do with Jesus Christ and is simply a pagan festival where people want to get a lot of expensive stuff from each other. I wholeheartedly and enthusiastically reject giving (and receiving) gifts on the basis of obligation.

The alternative is to recognize that gifts are intended not as the focus, but as a means of showing those closest to us that we were thinking of them. That does not require spending lots of money, despite what our culture would have us believe. Besides, you can  give gifts to those you love any time during the year… it does not have to be at Christmas.

Many tell us that giving gifts is a tradition originated to honor God’s gift to us in the birth of Jesus Christ or because of the acts of the real man who came to be known as Saint Nicholas. Though many give with this in mind, the fact is that this is not the accurate origin of gift exchange. In fact, gift giving to children in late December did not start with Christian origins, but rather as part of a pagan celebration of the sun god, Saturnalia, in ancient Rome. It is easy to research for yourself… even in Christian history encyclopedias such as by Zondervan.

Let’s explore the gift giving tradition further and test if it is even consistent with celebrating Jesus’ birth according to the principles of the Biblical record of that glorious event. Does this tradition point to or honor God, or is it just a tradition of men and a potential distraction from God?

Mary and Joseph did not get gifts for one another or even for Jesus and they knew who He was and that He would be born soon. The shepherds came to celebrate and honor God. They did what they were commanded by God to do… which did not involve bringing gifts. The wise men did not even come when Jesus was born… contrary to common tradition.  Scripture tells us they came and found Jesus in a house, not a manger. Herod killed all the male children two years and younger… not a week and younger, or even a few months and younger. It was likely they arrived over a year after Jesus was born. When they did come, they brought gifts to honor God. They did not exchange gifts with each other, nor did they expect to receive gifts in return from Joseph and Mary. I should not fail to mention that God came down as Jesus to die for us and while this is a great gift, He expects no gift from us in return.

So if you really want to focus on giving gifts to honor Christian traditions… give in a way that honors God to those who will not be able to give anything in return and convince others to do the same. You will honor God more, find more joy instead of stress, and spend less.

If suggestion number 4 seems overwhelming… start with suggestions number 1-3. The less focus you put on gift exchange, the more focus you will find is available to consider God’s gift to us in the person of Jesus Christ. You will have more time and less stress to enjoy the holidays and hopefully you will not have the Christmas “hangover” in January.

This article was developed and shared in partnership with HearingFromJesus.org.

Remember that all you have belongs to God. Manage your money God’s way and use it for His glory rather than your own. Visit GrowGodsMoney.org .

Control Debt, Control Spending, Generate Income

To Build Wealth, Spend Less than You Earn

Spend less than you earn. I know this sounds very simple and elementary. It is just that. It is nonetheless the first and most fundamental step on your journey to build wealth. You can adjust the relationship by increasing earnings or decreasing spending… or both. But if you deny this fundamental law and spend more than you earn you are accumulating debt rather than wealth, no matter how much money you make.

Learn to be content with what you can afford and what you already have. Do not covet what others have or you will never be satisfied. There is always someone out there with more stuff than you.

  • Prov 13:11 NIV – 11 … whoever gathers money little by little makes it grow.

To those who love money, they will never have enough. Use money  as a tool to serve God and to support yourself and your family, not as a goal in and of itself.

  • 1 Timothy 6:9-10 – 9 But those who want to get rich fall into temptation and a snare and many foolish and harmful desires which plunge men into ruin and destruction. 10 For the love of money is a root of all [a]sorts of evil, and some by longing for it have wandered away from the faith and pierced themselves with many griefs.
  • Ecclesiastes 5:10 – 10 He who loves money will not be satisfied with money, nor he who loves abundance with its income. This too is [a]vanity.

—-

Remember that all you have belongs to God. Manage your money God’s way and use it for His glory rather than your own. Visit GrowGodsMoney.org .

 

Control Spending

How Can I Break Out Of Paycheck-To-Paycheck Living?

Many who struggle with their finances are living paycheck to paycheck, and can not see a way out to break the cycle and start saving and planning for the future. This cycle can generate strong emotions and a feeling of defeat and hopelessness.  What might surprise many is that people feel this way across many different income levels. Living paycheck to paycheck is not just a function of low income. It is a function of choosing a lifestyle whereby your expenses match or exceed your income. Even many with high incomes still live paycheck to paycheck.

There are many successful strategies to help people break this cycle depending on the financial circumstances and personalities of the people involved. I am not trying to cover all of them, but rather give some basic insight that perhaps can help you in how you approach the situation.

Many want to think… if only I could make more money, then my problems would be over. More money certainly has the potential to help but is not typically the answer. Often people who live paycheck to paycheck do not solve the problem when they increase their income… they just increase their spending.

As an example, consider that many who are considered “low income” in a country like the USA are actually wealthy by global standards. If you have shelter, clothing, and a steady supply of food you are actually doing well by global and historical standards. Many of the other things we think we “need” are really just “wants”. All too often we judge what we “need” based on what we see others around us have rather than true needs.

Step 1: Prayerfully ask God for help. Submit to Jesus Christ and change your behaviors and attitudes to be different from the world and more like His. Ask Him for help specifically with your finances.

Step 2: Clearly separate in your mind true “needs” from “wants”. Need is really limited to such things as basic food, shelter, clothing, and safety. Even much of the more expensive food, shelter, and clothing qualify as “want”. I do not need brand-name clothes or expensive food or an expensive home.

Step 3: Commit to yourself and before God that you believe you can and that you will, take steps to pull yourself out of your financial situation even if it feels difficult and you have to give up things you like and want. If you don’t believe you can or if you are not committed to taking sometimes painful steps, you will fail.

Step 4: Find an accountability partner who you trust to share your finances with, or at least your expenses. It works best if it is someone who will tell you what you need to hear rather than what you might want to hear and also if you find someone who is a good role model. A good role model is someone who is demonstrating the behavior you want to achieve yourself. In this case, find someone who has already gotten out of the paycheck-to-paycheck cycle and is planning successfully for the future.

Step 5: Track your expenses over a few weeks or a month. Really write down everything you spend… as you spend it. You can use your phone’s “notes” app or you can carry a pad and pen. Next to each item consider and write down if it is a “need” or “want”. Be careful in assessing what food and clothes you buy. It is too easy to say “need”, when in fact we may have spent more money than truly needed in order to get a style or amount of food or clothes that we “wanted”.

Step 6: Review with your accountability partner. Discuss your assessment of need and want for key items. Add up the seemingly small expenses in categories rather than ignoring them. For example, if you get a Starbucks coffee each day for a few dollars, that may seem small but actually, over a month it can be significant. Identify some of the wants in your spending that you can change your behavior on and reduce your expenses. Make a plan and write it down.

Step 6: Execute your plan based on the wants you choose to avoid based on prior spending. Take that same amount of money directly into separate savings or checking account… or an envelope in a secure location if you prefer. You have just started saving for the future and are still living on the income you had last month.

Step 7: Repeat, starting back at step 1. Look to increase how much you put aside for the future. You must start with seemingly small, achievable goals as you change your attitude and behavior. As you start to experience success you will likely increase in confidence and motivation and be prepared to take additional steps to improve your situation.

Soon you will be able to start planning for the future… establishing an emergency fund, generating an operating fund (allows you to absorb unexpected timing issues on expenses or income), and then future costs like a car, school, and retirement.  There are also longer-term decisions that may help you improve your situation such as growing your income, but that topic is the subject of other posts.

Are you ready to break the cycle of paycheck-to-paycheck living? What will your first step be?

—-

Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org.

Control Spending, Generate Income, Greed, Stewardship, Taxes, Treasures In Heaven

Does God Require Us to Donate Money to Support Those in Full-Time Service to Him?

There can be a debate about whether or not the tithe is still required. Separately, one can ask, “If we pay a tithe, do we have to pay it to the church?” There are arguments on both sides. We could have these debates, and if done based on scripture, they could be significant discussions. If done based on our emotions or the tradition of men, they have significantly less value.

Perhaps the more significant question is not “Am I required to tithe to those serving God?”, but rather “Is it pleasing to God?” We can also explore the perspective of one who would be accepting such donations.

I am going to start by focusing on scripture from Paul in 2 Corinthians 11.

2 Corinthians 11:7-9

     7Or did I commit a sin in humbling myself so that you might be exalted, because I preached the gospel of God to you without charge? 8I robbed other churches by taking wages from them to serve you; 9and when I was present with you and was in need, I was not a burden to anyone; for when the brethren came from Macedonia they fully supplied my need, and in everything I kept myself from being a burden to you, and will continue to do so.

I do not claim this is authoritative for every situation, but rather very interesting to note. Paul accepted money when it was offered, but did not require it or pressure people to give to him just because he was preaching the gospel to them.  Those that gave to Paul arguably were not giving to the “church” as we think of it today. That would have been tithing to the Levites at this time. If they had only tithed to the Levites, Paul would not have received financial support. Neither would any of Jesus’ disciples or Jesus Himself in His earthly ministry.

It is probably worth highlighting at this time that Jesus accepted donations from supporters. We know from the biblical record of the money found in the mouth of a fish and the miracles of the loaves and fishes that Jesus could have simply made His own money. He set an example by accepting support from others. That said, I have not found any scripture where He passed around a collection plate during His teaching and asked for money either. He did not appear to make it a focus of His ministry to ask for donations.

 Luke 8:1-3

1Soon afterward, Jesus began going around from one city and village to another, proclaiming and preaching the kingdom of God. The twelve were with Him, 2and also some women who had been healed of evil spirits and sicknesses: Mary who was called Magdalene, from whom seven demons had gone out, 3and Joanna the wife of Chuza, Herod’s steward, and Susanna, and many others who were contributing to their support out of their private means.

If we look back to the Torah (first 5 books of the Bible), we can see how the LORD provided for the Levites. He did not give directly to them an inheritance as He did for other tribes. He instructed others to provide for them.

Numbers 35:1-5

Cities for the Levites

     1Now the LORD spoke to Moses in the plains of Moab by the Jordan opposite Jericho, saying, 2“Command the sons of Israel that they give to the Levites from the inheritance of their possession cities to live in; and you shall give to the Levites pasture lands around the cities. 3“The cities shall be theirs to live in; and their pasture lands shall be for their cattle and for their herds and for all their beasts.

      4“The pasture lands of the cities which you shall give to the Levites shall extend from the wall of the city outward a thousand cubits around. 5“You shall also measure outside the city on the east side two thousand cubits, and on the south side two thousand cubits, and on the west side two thousand cubits, and on the north side two thousand cubits, with the city in the center. This shall become theirs as pasture lands for the cities.

I believe God is pleased when His people choose to support those He calls into full-time ministry. Some of us will serve Him in business roles (e.g. Daniel, Moses, Abraham, Jacob, many of the people were farmers, etc.). However, some will be missionaries and pastors and Biblical teachers and these may need the support of the community of believers as a means for God to provide for them.

I would encourage these individuals to also consider the example of Paul and work in such a way as not to be a burden to others. They can provide sometimes for their own needs or be modest in what they spend. One receiving donations from hard-working people should not be flying in private jets unless they earned that money in another way aside from donations.

Keep in mind that Moses turned away donations that were made when they were in excess of what was required. It was not his goal to get personal wealth from donations from the people.

Exodus 36:3-7

 3They received from Moses every [g]contribution which the sons of Israel had brought to perform [h]the work [i]in the construction of the sanctuary. And they still continued bringing to him [j]voluntary offerings every morning. 4And all the [k]skillful people who were performing all the work of the sanctuary came, each from [l]the work which they were performing, 5and they said to [m]Moses, “The people are bringing much more than enough for the [n] construction work which the LORD commanded us to [o]perform.” 6So Moses issued a command, and circulated a [p]proclamation throughout the camp, saying, “No man or woman is to perform work any longer for the [q]contributions of the sanctuary.” So the people were restrained from bringing any more. 7For the [r]material they had was sufficient and more than enough for all the work, to perform it.

Do not let your own selfishness or greed stop you from making provision for those whom He calls to His service. Give joyfully. Give generously. However, I also encourage you to give wisely. Do not assume your job is to simply write a big check to the local church. That is not a very active way to steward what He has provided you. Remember, it all belongs to Him… He has just entrusted some of His things to us to manage and enjoy.

—-

Remember that all you have belongs to God. Manage your money in God’s way and use it for His glory rather than your own. Visit GrowGodsMoney.org .

Control Debt, Control Spending, Generate Income, Greed, Investing, Optimizing Life, Treasures In Heaven

Contentment Is Essential for Financial Success

Financial success is not to be measured against an absolute standard of money earned or by comparison of net worth to others. There is always someone with more money. Financial success is achieved by matching our resources to our needs and desires while we humbly live for God and serve others. Finding contentment rather than coveting what others have is essential for finding this success. Then we are free to find our joy through relationship with Jesus Christ, who promises never to desert us.

Ecclesiastes 3:12 I know that there is nothing better for them than to rejoice and to do good in one’s lifetime;

Hebrews 13:5 Make sure that your character is free from the love of money, being content with what you have; for He Himself has said, “I WILL NEVER DESERT YOU, NOR WILL I EVER FORSAKE YOU,”

The United States of America is a wealthy nation. By global standards even many considered to have low income in the USA are relatively wealthy. Despite this relative wealth, most consider themselves to be living day-to-day or month-to-month. They genuinely feel that they are barely getting by. There is insufficient planning for the future, insufficient savings and little investment. There is much coveting and little contentment.

We could double the money everyone is earning, and I dare say the broad results would be largely unchanged. Many people would have more stuff they want (and do not need) but would be no better prepared for the future and still be unsatisfied because they don’t know how to be content.

For those who cannot find contentment with what they have, they may never have enough. There is always the potential to have more. The ability or willingness to be content provides a foundation for satisfaction in achieving personal success.

Of course, contentment should not be confused as an endorsement to be lazy. Instead, in proper context, contentment provides important balance in managing your work hours required to generate income, controlling spending and debt, in how you select your investing strategies… and opens wide the door toward giving to others and serving God.

—-

Remember that all you have belongs to God. Manage your money God’s way. Visit

Control Debt, Control Spending, Generate Income, Optimizing Life

Increase The Money in Your Pocket Now

I know people are in a range of different places with regards to their finances. Those that have a solid foundation already are optimizing spending and debt management and looking for investment opportunities to grow their finances.

However, many simply feel like they are running as fast as they can to just stay in place… never making progress toward their goals. Long term job selection and career or skill development seem far off objectives.  They want to know how to get more money now.

There are at least two very effective ways to get more money in your pocket quickly.

For those of you who have jobs that are commission or “tip” based or those who have the opportunity to work overtime, simply working hard and working longer hours can be effective short term to generate more income. Of course, that effort may not be sustainable long term without detriment to your personal or family life. It ultimately only bears meaningful results if you take that money and pay down debt or create savings or investment funds. If you work harder and then just buy more stuff you “want” but do not “need”, then it has not accomplished anything substantial.

The second approach is undeniably effective, if done in meaningful way. Reduce your spending! You not only keep the money you have earned, but do not forget that you have already paid taxes on this money. A dollar saved is worth more than a dollar earned. It really is yours to save and invest… so long as you do not spend it. To be most effective, start by challenging everything you are spending money on, starting with larger expenses first. Differentiate true “need” from “want”. Aggressively reduce spending on “wants”. Yes, it will feel uncomfortable and force you to change your behavior. But it absolutely generates cash in your pocket at the end of the month.

Want to see how much impact you can have on your finances? Just commit to yourself to test for a month saying “no” to any discretionary spending. In other words, really distinguishing “want” from “need”. Take the extra money you save at the end of the month and put it aside to pay down debt, start an emergency fund, or start preparing for investing. See how quickly you can use this simple approach to get your finances under control. If you are not confident you can commit to this challenge for “no” discretionary spending, then simply set up an assigned dollar value to spend toward your “wants” for the month and track even your small expenses to avoid exceeding that target. Try reducing that target next month. See how much you are actually spending on “wants” and “convenience” vs. “needs”.

Yes… buying that morning coffee from the coffee shop instead of brewing at home counts as “want” and the added cost does matter over time.

—-

Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Control Debt, Control Spending, Generate Income

Build Your Income Before You Build a Bigger House

Build your income before you build a bigger house. This sounds obvious, but so many today start by getting deep in debt in order to have a bigger house “now” rather than waiting until they can wisely afford it. Then they say “It is ok, because everyone else is doing it. It is normal.” or “A mortgage is good debt, an investment.”

The advice comes from God in Proverbs 24:27.

  27Prepare your work outside
And make it ready for yourself in the field;
Afterwards, then, build your house.

God is not telling us to go to work while we have no shelter to protect our family. God is telling us to build our income stream through diligence before we focus on more spending and get deep in debt. That way we know what we can wisely afford while stewarding what He provides.

The truth is that you pay a lot of interest on what you may consider “good debt”. The truth is that many people you look to as “normal” are poorly prepared for the future and living beyond their means thanks to high debt load they assume they can pay back later. They are not ready for retirement. They are not even ready for small emergencies like appliances needing replacement or car repairs. They are really living month-to-month despite income that would be considered in the top 10% of the world.

Do not look to the people around you to determine what your standards should be. They may be drowning in debt and high spending. They may simply have a greater ability to generate high income.  Whatever the reason, don’t look to other people as your example but rather look to God and build your own plan based on lifetime objectives, not month-to-month spending. Be content with what you can wisely afford. As you build your income, establish savings, and establish a credible financial plan for your future you will be better prepared to make wise decisions around if/when you can afford to buy more expensive house, car, boat, etc.

—-

Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Control Debt, Control Spending

Spend Like You Did Not Get a Raise; Budget Like There Is No Inflation

I am sure many of you can identify with the following example from my own life. I lived for many years without a mobile phone. I did not “need” it. I was used to living without it. Once I got one though, I found I got so accustomed to the convenience that it would be hard to give it up. I found a similar experience with the speed of my home internet. Dial-up and then DSL speed were fine, in fact wonderful breakthroughs in technology for their time, until I got used to something faster and then I could not go back. The bottom line… it is easier to avoid increasing our spending then it is to reduce our spending once we get used to having what it buys.  So, if you want to control spending, a good way to start is to avoid increasing your “standard of living” when you get more income. This could be income due to a raise, or income due to reduced tax burden. Either way, you have more money and you do not have to spend it frivolously.

No matter how rough you think you have it right now, most of you reading this on the internet have enough to get by with what are truly essentials of food, clothing, and shelter. We are not talking about fine dining, name brand clothing, and mansions… just the basics. Most people throughout the world would be glad to have what we in the USA refer to as a “poverty” standard of living. We have developed high expectations and a sense of judging our happiness and success by comparing the things we have to what others have. This is not God’s standard, but rather one based on coveting what others have instead of appreciating what God has already provided for us.

Too often people get excited to spend every increase in income they receive immediately for short term gratification to have fancier clothes, nicer house, more expensive food. Thus, even as they increase their income, they still remain in debt and lack any substantial savings. They just increase spending to match increases in income, or worse… with anticipation of continual rise in income they start getting deeper in debt, sure that they can pay it off sometime in the future.

If want to improve your financial situation over the long term, try this instead. Next time you get extra income from overtime, annual bonus, or a raise… pretend you didn’t. Keep your spending flat. Instead, put the increase to paying down debt or to savings, which will lead eventually to having money to invest when you are ready. If this is too hard to set aside the full amount of the raise for this purpose, then dedicate as much of the increase as you can. Maybe you can at least put aside 50% dedicated to paying down debt or saving. Maybe 75%.

One of the most effective ways to do this with today’s technology is to automate part of your paycheck routinely going to a separate account from the one you use for monthly spending. Then the extra amount never even shows up in your checking account for example. You keep spending like you did not get a raise, and all of a sudden you start paying down debt and creating a long-term stream of savings which will lead to money to invest.

Pray for God to help you be content with what you have rather than chasing what others have and trying to “keep up with the Jones'”. Identify a clear goal that the money is going toward such as working out of debt or building an emergency fund or starting an investment fund. Share your goals with a family member or trusted friend and celebrate milestones as you make progress!

Although it may be hard, this can apply also to inflation. If you can, try to keep your spending budget steady, even if prices are rising. It means you will have to cut back on what you are buying in order to “absorb” inflation. In some cases, you may have to pivot to lower cost options or brands for some items. In other cases, you can buy some things less frequently or in lower volume. If you can hold your spending budget flat in the face of inflation, then you protect any money you have budgeted for savings, paying down debt, or creating an investing fund. Short term pain helps create long term gain.

As always, seek wisdom and encouragement from God along the way and from any trusted mentor you may have. Just make sure you pick a mentor that models the behaviors and outcome you want to achieve. Not every friend is a good financial mentor.

—-

Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Control Debt, Control Spending, Diversification, Ethics, False Teaching, Generate Income, Greed, Guiding Framework, Parables, Plan Carefully and Seek Wise Advice, Saving, Speculative Investment, Stewardship, Treasures In Heaven

How Is Financial Planning Like the Super Bowl?

The Super Bowl is considered by many to be one of the most important sporting events in the world each year. Many from around the world tune in to watch it even if “their team” did not make it to the final game. Much time and preparation is spent certainly by the teams in preparing for the game, but even by many spectators and fans around the world as they prepare parties and tailgating and other such events to watch the game.

Many people spend more time preparing for, watching, and then talking about the Super Bowl then they actually spend preparing their personal financial strategies. One could spend a little time reflecting on which will ultimately be more important for each of us… but we quickly conclude that perhaps we should spend a little more time planning our finances, even if we have to wait until the big game is over and behind us.

Financial planning may not sound like much fun, so let’s try to make it a bit more interesting. In some ways it is like preparing for the Super Bowl.  Without good planning and execution, you will never win. “Luck” or “winging it” is just not good enough to carry you to victory. Proper preparation for a Super Bowl victory begins before the season every starts.

Start with the end in mind. Teams don’t just show up in training camp with the intent to “play football”… if they do, they do not win very much. They must define success and goals along the way to evaluate their performance in moving toward that success. Winning teams come into the season planning to play for the Super Bowl rings! They don’t just plan to play catch and throw and suddenly find themselves in the Super Bowl. There is short term sacrifice for long term success.

Similarly, for our financial planning you must define what success looks like for you. Define your personal goals and steward progress toward them. Think big! Do not limit yourself to simply having money for earthly things, but also to store up treasure in heaven. How you view your success will strongly influence how you play the game!

Define your goals… define success.

  • Matthew 6:20-21 – 20“But store up for yourselves treasures in heaven, where neither moth nor rust destroys, and where thieves do not break in or steal; 21for where your treasure is, there your heart will be also.
  • 2 Corinthians 9:7 –  7Each one must do just as he has purposed in his heart, not grudgingly or under compulsion, for God loves a cheerful giver.
  • Proverbs 22:9 –   9He who is generous will be blessed, For he gives some of his food to the poor.

Steward your progress toward those goals and make adjustments when called for. If something is not working as you expected, do not be afraid to consider making “in game” adjustments to your game plan.

  • In Matthew 25:14-30, Jesus teaches us through the parable of the talents that a good steward periodically checks on the effectiveness of his efforts and makes adjustments according to their performance.

With every game there are rules. If you do not know the rules and play by them, you will likely not do well on the field. Penalties for failing to follow the rules can ruin your game. In finances, as with most of life’s challenges, God has laid out the rules for us in the Bible. Know what God says about how we should treat others and how we should conduct our earthly affairs. It is also true that man has added some rules, called laws, as well. We should heed both sets of rules.

  • Proverbs 22:1 – 1A good name is to be more desired than great wealth, Favor is better than silver and gold.
  • Proverbs 22:5 – 5Thorns and snares are in the way of the perverse; He who guards himself will be far from them.
  • Ecclesiastes 12:13-14 – 13The conclusion, when all has been heard, is: fear God and keep His commandments, because this applies to every person. 14For God will bring every act to judgment, everything which is hidden, whether it is good or evil.

Plan carefully and seek wise counsel. Do you ever see a winning Super Bowl coach who did not have a staff of assistant coaches… advisors? The head coach makes the final decisions, but the good ones listen to the advice of others and weigh carefully in their decisions the counsel of others.  Surround yourself with bad counselors and you will fail.

  • Proverbs 22:3 – 3The prudent sees the evil and hides himself, But the naive go on, and are punished for it.
  • Proverbs 15:22 – 22Without consultation, plans are frustrated, But with many counselors they succeed.
  • Proverbs 14:15 –   15The naive believes everything, But the sensible man considers his steps.

To win at any level, you should carefully evaluate your gear… your tools. In football, you need the right shoes, gloves, helmet, pads, ball, etc. In financial planning, the tools you use (or don’t) are also important. They can be of great help or set you up to underperform your abilities. We recommend you visit our Resources section of our website to find some organizations we recommend that provide helpful tools to assist you in “elevating your game”… to be more effective and successful in planning and managing your finances.

It is important to focus on fundamentals to excel. No team will win the Super Bowl on trick plays and misdirection if they do not also have strong foundation in executing the fundamentals well.

Super Bowl Champions do not start with trick plays and 80 yard touchdown plays as their foundational strategy and neither should you in your financial planning.  Avoid greed… assuming you can win with a few big plays… a few high risk investments that are “sure to pay out”. You may want to put a few in as diversification, but don’t put yourself in a position to win or lose solely on “making the big play” over and over again. To those who love money, they will never have enough. Money is a tool to serve God and to support yourself and your family. The draw to “get rich quick” brings much risk.

  • 1 Timothy 6:10 –  10For the love of money is a root of all sorts of evil, and some by longing for it have wandered away from the faith and pierced themselves with many griefs.
  • Ecclesiastes 5:10 – 10He who loves money will not be satisfied with money, nor he who loves abundance with its income. This too is vanity.

Let’s talk more about your Offense (e.g. earning money) . Offense wins games. Your offensive stars:

  •  Hard work and a great attitude are a formidable pair. Develop a skill and work hard to generate income.
    • Colossians 3:23 – 23Whatever you do, do your work heartily, as for the Lord rather than for men,
    • Proverbs 6:9-11 – 9How long will you lie down, O sluggard? When will you arise from your sleep? 10“A little sleep, a little slumber, A little folding of the hands to rest”— 11Your poverty will come in like a vagabond And your need like an armed man.
  • Invest your financial resources for growth. Don’t stuff your mattress with cash in hopes of avoiding risk.
    • Matthew 25:14-30 – Jesus teaches us through the parable of the talents. Click the link to read the scripture.
    • Ecclesiastes 11:1 –   1Cast your bread on the surface of the waters, for you will find it after many days.
  • Diversify investments to manage risks.
    • Ecclesiastes 11:2 – 2Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.

Finally… Defense wins championships! No one can win unless they can stop the other team from scoring. Similarly, no one can earn enough money to win the game if they spend like drunken sailors. Just consider government spending, which almost always outpaces essentially unlimited income from taxes – it is never enough to satisfy those in government. Defense requires discipline.

  • Control spending.  Set a budget that matches your income and stick to it in order to control spending. This budget should include short term “monthly expenses” but also saving ahead for long term expenses like a house, university education, future medical expenses, retirement, and contingency funds for the unknown.
  • Control debt. Carefully consider any debt before committing.
    • Proverbs 22:7 – 7The rich rules over the poor, And the borrower becomes the lender’s slave.
    • Romans 13:8 –  8Owe nothing to anyone except to love one another; for he who loves his neighbor has fulfilled the law.
  • Save money. Save for known expenses and for unknown. Save for today, and save to have money to invest tomorrow.
    • Proverbs 6:6-8 –  6Go to the ant, O sluggard, Observe her ways and be wise, 7Which, having no chief, Officer or ruler, 8Prepares her food in the summer And gathers her provision in the harvest.

Perhaps with a little less fanfare, do not forget Special Teams. They may not affect every down, but they can make the difference in a win or a loss. Prepare for long term expenses such as buying a car, paying off a house, paying for college education, preparing for retirement. To be successful, you must prepare for these things in advance… you can not wait until the special teams is on the field to start planning !

One last piece of advice for your game plan in financial planning… even with the best game plan, you can’t win if you don’t start playing the game! Don’t wait for the “perfect” time to get started.

Ecclesiastes 11:4 – 4He who watches the wind will not sow and he who looks at the clouds will not reap.

(If you are too worried about the clouds and winds to start preparing the fields and planting the crops… waiting for perfect conditions… you will not have a harvest. The perfect time never comes. Look only for a good or appropriate time to get started.)

Hope you enjoyed reading as much as I enjoyed writing it. If you prefer a “non-football” version, please review our Guiding Framework.

—-

Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .