Archive | Salary and Finance RSS feed for this section

It’s All About Our Choices

27 Jun

As I neared the end of my budgeting exercise, I began to panic. It was clear that I hadn’t been putting enough thought into the practical matters of life (like saving for the day when my ancient truck finally gives up the ghost). But it was also clear that saving for those eventualities left me with far less to spend on the things in life that I enjoyed. How exactly was I supposed to make the most of my free time if I didn’t have a couple hundred dollars to spend on books each month? And what would life be like without Starbucks? It was clear that more than just my budget was going to require a “makeover”.

While I acknowledged my relative wealth with my mouth (and with regular charitable giving), it was clear that the message had yet to reach my heart. I had enough, but I felt like I was impoverished. I had failed to recognize that the wise handling of money (just like everything else in life) is about our choices. Dave may have recommended that I dedicate a certain percentage of my income to retirement… but doing so was a choice that I would have to make. Dave suggested that I consider spending less on food, but the decision was mine. With each dollar I allocated, I was making a choice between living with a sense that money controls me or that I control the money. The former brings a sense of slavery. The latter, an undeniable freedom.

Drawing a deep breath, I looked through my budget again – this time with an eye towards practicality and an intense focus upon the two categories to which my impulse spending was most frequently directed. Truthfully, there was nothing that prevented me from making coffee at home. Doing so would reduce my food expenditures by 50% and I could reduce that spending even more if I really tried. Likewise, I rarely had the time to read all of the books that I purchased. With the skill of a surgeon, I cut my budget to reflect the purchase of a mere two volumes a month. (If I needed more reading material, it was rumored that there was a nifty place in town called a “library” where I could go pick out books and take them home… absolutely free!)

I took Dave’s advice and put together envelopes for both of these impulse categories. With cash in each, I would be able to regulate my spending in ways that were nearly impossible when I used my “charge-it-to-the-credit-card-and-pay-it-off-at-the-end-of-the-month” method. Then, I gave the new method a try at the brand new health food store.

List in hand, budget in mine, I cruised the aisles admiring all of the delightful product offerings. I carefully examined my options for each item on my “needs” list and selected the most financially responsible products. Then, each time I picked up something that wasn’t on my list I asked myself, “Do I want to remove cash from my miscellaneous food envelope to pay for this?” One item after another went back onto the shelf, ear-marked for another day. I left the store having spent a mere pittance compared to the previous month… and each “treat” I purchased tasted twice as sweet!

More importantly, I’d finally gotten around to taking responsibility for the money God had entrusted me with. I was no longer a victim held captive by a low salary, government policies, or societal expectations. Instead, I was a steward who could account for each dollar entrusted to them. I was free.

Advertisements

Paychecks and Planning Part II

20 Jun

My first encounter with the type of planning that goes into an effective budget was through Dave Ramsey. I came across his Financial Peace University in search of some help for a friend who didn’t handle money as well as I did. I was soon to learn that there is a distinct difference between handling money “better” than your friends and handling it “well”.

While Dave is well-known for his emphasis on getting people out of debt, it turns out that he also had quite a bit to say to “victims” like myself – trapped in a cycle of living paycheck to paycheck. His message began with a lesson on the importance of “cash flow planning”. This was, essentially, the same budgeting technique that my mother had attempted (unsuccessfully) to teach me years before. The difference was that I wasn’t to figure out an entire year’s budget all at once.

Instead, Dave’s budget involved monthly planning in which I was to write my income at the top of a page, then progressively deduct my expenses. Once I’d finished listing everything I had to buy like insurance, fuel, food, and clothes, I began allocating the remainder of my paycheck to other categories until the total amount deducted equaled the amount of my paycheck. (Dave calls this a “zero-based budget” and he offers a great budgeting tool online at: http://www.daveramsey.com/tools/budget-lite/ if you’d like to try this for yourself.)

Each category received its own, separate envelope into which I placed cash. In a sense, each envelope was a tiny savings account designed to ensure that I didn’t have any more unplanned “emergencies”. (I will forever recall the blissful feeling I got the first time I was sick and opened my wallet to discover that the “medical” envelope was stuffed with more than enough bills to cover the cost of my medicine. It was as though I’d discovered that people do get sick… and that it was something that could be planned for!)

This sense of satisfaction, however, lay months into my future. As I looked over the figures for my previous three months spending, I began to panic. After allocating most of my paycheck to necessities either immediate or anticipated, I had very little left. Moreover, my records made it clear that my belief that I wasn’t an impulse buyer was not supported by the facts. No, I didn’t grab candy bars at check registers or make instantaneous decisions to purchase “discount” goods at the local retailers, but I did have two particularly weak categories: food and books. And these two categories consumed such large quantities of my income that it was no wonder I found myself scrambling for cash each time I had to make an automotive repair. I had a problem and something needed to be done… immediately. (To be continued…)

Paychecks and Planning Part I

13 Jun

I wasn’t very old when my mother began teaching me the art of budgeting and, thanks to her training, it wasn’t long before I was allocating dollars like I knew what I was doing. (“Like” being the operative word.) Each year, I sat down with a list of the previous year’s expenses and made a curiously inaccurate guess as to what I might spend in the coming year. I divided that figure by twelve and voila, I had a budget! (In retrospect, I think I may have taken away very little of what my mother was attempting to teach… but then numbers never really were my thing.)

I quickly grew quite skilled at this practice which I rather dubiously labeled: “financial planning.” I was great at categorizing expenditures and moderately efficient when it came to recording receipts. In theory, each pay check was parceled out with portions allocated to gas and groceries, medical expenses and movie tickets. There were pigeon holes for nearly everything and I was quite adept at creating new ones whenever the need arose.

Reality, however, was a little different. I lived within my means, but I had a bad habit of “fudging” on my budget. I was paid hourly and that meant that the amount of my paycheck was inconsistent from one pay period to the next. My spending mirrored that inconsistency.

To be honest, aside from a few monthly bills for necessities like insurance, I couldn’t tell anyone where the rest of my money was going. I kept a running tally of how much I made vs. how much I’d spent and made purchasing decisions based upon that figure. If there wasn’t enough money, I didn’t spend. If there was, I spent without discretion. The result was that, despite my not-so-carefully planned budget, I usually felt a bit tense when it came to my finances. There was always one more unexpected automotive repair to be made or another doctor’s visit to cover. I was staying out of debt, but I also seemed to be teetering precariously close to the edge of a personal fiscal cliff.

The solution to my problem seemed like a no-brainer: I simply needed to find better employment. A more demanding job at higher pay would resolve the ongoing “crisis” of paycheck to paycheck living. So I began my search.

It wasn’t long before I’d found what I was looking for and not much longer than that before I discovered that I still wasn’t making “enough”. Clearly, the obvious solution to my problem had not been the correct one. It was time to pull out the big guns and place the blame where it belonged: on the government, on society, on the fact that I was a woman, on the price of gasoline… on just about anyone or anything except myself. I had become a victim.

The truth is that I’ve always been more of a visionary than a planner. I think in broad swaths of color, not in the intimate details of individual threads. Yet it’s those details that make the difference between financial chaos and effective money management. My income was sufficient to meet my needs at each of my places of employment. I just wasn’t handling it efficiently. In order to do so, I had to acquaint myself with an ancient art with which I claimed only marginal familiarity: planning. And learning the art would prove to be a challenge. (To be continued…)

Debt and the Bible

6 Jun

Last week in “The Dangers of Debt”, I shared a bit about my first and last experience with owing money. While the gut-wrenching feeling I experienced during this time played a big role in my decision to can credit (even when it was extended to me by loving parents), it was the Bible that ultimately pointed me in the direction of debt-free living.

While the Bible doesn’t say that owing money is a sin, it does clearly indicate that the wise man does his best to avoid it. Proverbs 22:7 declares that, “The rich rules over the poor, and the borrower becomes the lender’s slave.” Proverbs 26:6 warns, “Do not be among those who give pledges, among those who become guarantors for debts.” And in Romans 13:7-8, the Apostle Paul admonishes believers to, “Render to all what is due them: tax to whom tax is due; custom to whom custom; fear to whom fear; honor to whom honor. Owe nothing to anyone except to love one another; for he who loves his neighbor has fulfilled the law.” Clearly, debt isn’t something to be entered into lightly or, if it can be avoided, at all.

Of course, keeping my promise to remain debt-free hasn’t always been easy. (Following God’s Word rarely is.) Over the years, I watched as my friends moved into nice homes, bought brand new cars, and started families of their own. While they weren’t necessarily living “high on the hog”, their lifestyles left plenty of room for new clothes, new toys, and new adventures. Meanwhile, I was living with my parents, driving a twenty-year old vehicle, and stashing every penny of my meager pay into savings in an attempt to form an emergency fund.

I won’t pretend that I wasn’t teased for my failure to “grow up” or that I wasn’t just a touch jealous that my life hadn’t “taken off” the same way that my friends’ had. I was working hard to obey God’s Word and give debt a wide berth, yet it seemed like it was my friends who were on top. At least, that was how it appeared until the recession hit.

It didn’t take long to realize that my “grown up” friends had been living beyond their means. Their “adult” lifestyle had been a façade financed by mortgages, credit cards, and government loans. I watched as they fought to keep their homes, their vehicles, and their dignity. Some of them even slipped into poverty, unable to support their own children. And for the first time, I was truly grateful for the commitment I’d made.

I’ll be the first to admit that living debt-free isn’t easy. It requires commitment – a willingness to stick to your guns when others tell you you’re foolish. It requires sacrifice – a readiness to put off the childish attitude that we want what we want when we want it. And it requires planning – a subject we’ll address in greater depth next week. Debt-free living isn’t for the weak, it’s for the strong, the diligent, and the self-controlled. And the freedom it gives is worth every ounce of effort it takes.

The Dangers of Debt

30 May

Last week, we talked about the purpose of the tithe both in the New Testament and in the modern church, but good stewardship isn’t just about dumping a few dollars into an offering plate as a token gesture. It’s about handling the entirety of God’s gift to us well – our whole paycheck, not just 10%. If we’re to manage God’s gift to us well, we need to start by choosing not to throw bits of it needlessly away. And in few places are paychecks as quickly wasted as in the payment of debt.

My first and last encounter with this particular form of monetary carelessness came during my transition from Jr. High to High School. I had developed an avid interest in astronomy and the local Sam’s Club was carrying a beautiful Bushnell, 4.5” reflecting telescope. At nearly 3’ in length, it was a monster and I couldn’t prevent myself from drooling over it.

Up until this point, I had been making due with a pair of 10×50 binoculars. They were strong enough to show the phases of Venus, the thin rings of Saturn, and Jupiter’s moons. I could make out binary star systems easily enough or see the vague, gaseous outline of the Orion Nebula, but I longed for so much more. What I really wanted (and wanted now) were the views I got through the telescopes of my big-league astronomy club buddies. I wanted to hold the heavens in the palm of my hand and I knew that this telescope would allow me to do just that.

Seeing the magnitude of my desire, my parents offered me a deal. They would buy me the telescope. It would be both my birthday present and my Christmas present and I would be obligated to repay half of it. I quickly determined that $250 dollars was not an insurmountable debt (at least not in comparison to the treasures it would unlock) and agreed to the arrangement.

Of course, in my eagerness to possess this wondrous new toy, I hadn’t really taken the time to consider just how long it would take me to pay it off… or to create a plan for doing so. Looking back, it should have been obvious that on an income of $2-$5 a week, freedom was not going to come any time soon.

At this point, it’s important to note that this lack of planning was not due to any failure on my parents’ part. They had taken the time to teach me about money and, in reality, I should have known better than to blindly indulge the seemingly irrepressible desire to own a telescope.

Over the next few years, I spent my time struggling with a stomach-turning sickness whose onset always seemed to coincide with my use of the instrument. My payments had not been regular (there were other things I also “needed” to own) and, though my parents were not charging interest, they weren’t making any indications that their loan was about to be forgiven. Tired of dealing with the sense of captivity which accompanied my debt, I set up a plan to pay off the telescope. In a matter of months I was free and made a vow that I would never go into debt again.

While I’d like to say that I was a great innovator, my debt-free philosophy was hardly something new. In fact, the writers of the Bible had quite a bit to say about the dangers of owing money. We’ll take a look at their words of wisdom next week, but for now, feel free to share your own journey into or out of debt in the comment box below!

Stewardship, Tithing, and the Old Testament

16 May

Last week in “An Introduction to Stewardship”, we discussed the idea that good stewardship isn’t about how much you have, but about how you handle what you have. This week, we’ll be taking a look at this concept on a more practical level – beginning with the tithe, a 10% contribution of all that we make.

It isn’t a surprise that Scripture has a lot to say about the importance of this type of giving. Each time we offer a portion of our goods or finances to God, we acknowledge the truth that all we have comes from Him. He is the Master and we are the stewards of His wealth.

Originally, in Israel’s agrarian society (one sustained largely by subsistence farming) the tithe was to be given in the form of produce. It was, after all, grain and olives, fruit and spices which were the reward for a man’s labor. Leviticus 27:30 declares, “All the tithe of the land, of the seed of the land or of the fruit of the tree, is the LORD’S; it is holy to the LORD.” (NASB) And in Deuteronomy 14:22, the Israelites were commanded, “You shall surely tithe all the produce from what you sow, which comes out of the field every year.”

Since produce isn’t always readily transportable, Deuteronomy 14:24 gave an alternate method of tithing: cash. “If the distance is so great for you that you are not able to bring the tithe, since the place where the LORD your God chooses to set His name is too far away from you when the LORD your God blesses you, then you shall exchange it for money, and bind the money in your hand and go to the place which the LORD your God chooses.”

As the society evolved, other opportunities for employment began to open up. The reward for labor began to include coins as well as produce and the use of cash for the tithe became increasingly more common. In fact, the presence of money changers in the temple may be an indicator that cash was a primary, rather than secondary form of giving during the time of Christ.

That said, it is interesting to note that when the Scripture speaks of the tithe, only produce and money are mentioned as forms of giving. Both are forms of increase (Deuteronomy 26:12), an addition to the wealth that a man already possess. This is important to recognize, because it is not uncommon to hear ministers speak today of the importance of giving a tithe of our time or skills.

While giving of our hours and skilled labor is important (though I rarely find church members who truly give 10% of their time or 16.8 hours a week in service to the Body of Christ), this form of giving is not included in God’s original command concerning the tithe. Why not? Quite simply because it failed to accomplish one of the key purposes for that specific gift: the physical support of those who performed God’s work to the exclusion of other employment.

Numbers 18:23-24 explains the purpose of the tithe: “Only the Levites shall perform the service of the tent of meeting, and they shall bear their iniquity; it shall be a perpetual statute throughout your generations, and among the sons of Israel they shall have no inheritance. For the tithe of the sons of Israel, which they offer as an offering to the LORD, I have given to the Levites for an inheritance; therefore I have said concerning them, ‘They shall have no inheritance among the sons of Israel.’ ” (NASB)

While the word “tithe” isn’t mentioned in the New Testament (leading many Christians to argue that such giving is no longer necessary), the Apostle Paul does take care to point out that the Church has a responsibility to ensure that those who do God’s work receive a living in return for their labor. We’ll take a closer look at the New Testament perspective on tithing next week, meanwhile, feel free to share your own thoughts and comments in the box below.

An Introduction to Stewardship

9 May

Last week in “Our Effort or God’s Gift” we explored the idea that our income is not the result of our hard work or superior education. Rather, our paychecks are a gift from God. And they are a gift which we are expected to handle wisely. Indeed, Jesus declared that, “From everyone who has been given much, much will be required; and to whom they entrusted much, of him they will ask all the more.” (Luke 12:48) This week, we’ll be exploring this concept of stewardship with a bit more depth, beginning with the parable of the talents.

In Matthew 25:14-30, Jesus tells His disciples a story about a wealthy businessman who, before leaving on a long journey, decided to commit portions of his fortune to his servants. To one, he gave five talents of gold, to another two, and to another one. It is interesting that Jesus doesn’t distinguish between the servants. He doesn’t tell us what roles they held within the household or how hard they labored on their master’s behalf. In fact, the only distinction between them is the amount of money that the master left in their care.

Upon his return, the master found that the first servant doubled the value of his investment. The second servant, likewise, made a return on the rich man’s money. The third, however, took the path of extreme caution. Opting for a “low-risk investment”, he buried the gold and returned it to his master exactly what had been given. (Though, perhaps, a bit dustier than it had been initially.)

Jesus goes on to explain the master’s pleasure with both men who, despite the disparity in what he had given them, gave him a good return on his investment. The third man, however, didn’t fare quite so well. He had done as little as possible with the resources entrusted to his care and reaped the “reward” due a lazy steward.

The passage ends on a theme quite similar to that of Luke 12:48: “For to everyone who has, more shall be given, and he will have an abundance; but from the one who does not have, even what he does have shall be taken away.” (Matthew 25:29) The moral? God’s gift to us doesn’t just consist of a paycheck, but of His trust that we will handle that paycheck well.[1]

Indeed, with money, just as with everything else, we are merely stewards – those who handle wealth on behalf of another. And God is clear that, “As each one has received a special gift, employ it in serving one another as good stewards of the manifold grace of God.” (1 Peter 4:10)

Next week, we’ll dig a bit deeper into the concept of stewardship. Meanwhile, feel free to share your own thoughts and ideas in the comment box below!


[1] We have chosen to focus on the monetary aspect of this passage, but it is important to note that the concept of stewardship extends to every area of our lives: our time, our skills, and our physical resources.

%d bloggers like this: