Tag Archives: Finances

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 New Testament

23 May

Last week in “Stewardship, Tithing, and the Old Testament”, we looked at the two ways in which Israelites were commanded to offer their tithes: in produce or in cash. And we examined the purpose of that tithe, both in recognizing God’s ownership and our stewardship and in aiding in the support of those called to serve God to the exclusion of other employment. This week, we’ll take a closer look at giving in the New Testament and begin to consider the implications that Scripture’s teachings have for the way we use our paychecks.

While many Christians argue that the tithe is a concept exclusive to ancient Israel, the Apostle Paul had plenty to say about the importance of giving – especially to those who performed God’s work. (If you recall, the original purpose of the tithe was to support the Levites who labored in the temple.) Indeed, “Who at any time serves as a soldier at his own expense? Who plants a vineyard and does not eat the fruit of it? Or who tends a flock and does not use the milk of the flock?” (1 Corinthians 9:7) In 1 Corinthians 9:13-14, the Apostle asks, “Do you not know that those who perform sacred services eat the food of the temple, and those who attend regularly to the altar have their share from the altar? So also the Lord directed those who proclaim the gospel to get their living from the gospel.” (NASB)

Church leaders, apostles, and missionaries often devoted (and continue to devote) countless hours to managing church affairs, mediating conflicts, and counseling, teaching, and supporting the members of local congregations as well as to spreading the Gospel message. These labors are extraordinarily time-consuming, requiring well-developed problem solving and management skills as well as a willingness to be on call 24/7. Such roles are highly demanding and frequently result in a great deal of stress (physically, emotionally, and financially) for both the workers and their families. Those who fill these roles full-time often forgo the higher paying employment that the common market offers to those who possess such skill sets. Full-time service to Christ’s Body, far from being an easy way to earn a living is, instead, an act of sacrificial giving… and this act of giving can only be supported through an act of giving on the part of those who do engage in outside employment.

The tithe supports those who faithfully fill the roles of pastor, teacher, and missionary. It enables them to meet their financial obligations and tend to the physical needs of their families while at the same time shepherding Christ’s flock. And it is for this reason that those of us who seek to be good stewards of the paycheck with which God has entrusted us, must faithfully give.

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.

Our Effort or God’s Gift: Where Does Money Come From?

2 May

My dad is a hard worker. He always has been and I expect that he always will be. He grew up with a traditional Protestant work ethic that demanded a day’s work for a day’s pay. And he firmly believes that good, honest work (even if it doesn’t pay much) is never beneath the dignity of a real man.

I watched him live out his beliefs on a daily basis, but at no time were they quite as impactful as that winter. Due to cutbacks, his good government job had come to an abrupt and unanticipated end. Unemployed and with mouths to feed, he did the only thing his sense of duty would allow: he took a minimum wage job. It wasn’t long before he was able to add a couple more and I watched as he faithfully showed up on time for each. He wasn’t getting much sleep, but he was supporting his family.

What stood out the most to me that winter, however, was that I never once heard Dad complain either about the odd hours he was working or about the low pay he received. To be honest, I can’t say as much for most of the folks I know. I, myself, have been known to complain about the disparity between the amount of work I put in and the amount that I get paid. Yet this highlights an important point: long hours and hard work don’t yield the same results for everyone.

A close examination of income disparity reveals a startling fact that there is very little connection between the amount of work (either hours in a shift or actual physical effort) a person performs and the number of zeroes on their paycheck. Nor is there a universal connection between the type of work we do and the income we receive. (If you don’t believe me, take a look at the difference between what your family doctor makes and what a missionary doctor gets paid.) Work, it seems, doesn’t create or, for that matter, guarantee cash flow. (If you still doubt me, just ask any stay-at-home mom!)

But if money isn’t the result of our efforts and education, where exactly does it come from? While an economist would argue that it originates with banks, the Bible would tell us that it’s a gift from God. Ecclesiastes 5:19 states that, “for every man to whom God has given riches and wealth, He has also empowered him to eat from them and to receive his reward and rejoice in his labor; this is the gift of God.” Moses explained Israel’s trials saying that they had been for an express purpose: “Otherwise, you may say in your heart, ‘My power and the strength of my hand made me this wealth.’ But you shall remember the LORD your God, for it is He who is giving you power to make wealth, that He may confirm His covenant which He swore to your fathers, as it is this day.” (Deuteronomy 8:17–18) And the Apostle James reminds believers, “Every good thing given and every perfect gift is from above, coming down from the Father of lights, with whom there is no variation or shifting shadow.” (James 1:17)

So what exactly does this mean for those who are busting their tails working odd shifts at odd hours for low pay just like my dad did that difficult winter? It means that they’re in the same boat as those with high wages and cushy 9-5 jobs. Who employs us, the hours we work, and the wage we are paid are, to a large degree, irrelevant. We are all recipients of God’s gift… and each of us, regardless of the magnitude of that blessing, is responsible for using it well.

God, Our Job, and Our Wallet

25 Apr

I’m pleased to state that my initial response to my need for speed (or at least for a vehicle that didn’t guzzle gas) was the correct one. I took my bank statement to God and presented it to Him complete with a detailed account of the current fuel prices, available work hours, and the cost of health insurance. I pointed out that He had led me to believe that I was to live debt free and asked that He provide for my need. Since I was already putting the matter before Him, I thought I’d also tag on a few extra requests. “And if you wouldn’t mind, Lord, would you please make my new vehicle a little white pickup truck with four wheel drive and air conditioning.”

Two days later, there it was, sitting beside the road: a little white pickup truck with four wheel drive and air conditioning. Price tag? $2,200. Since I had cash on hand, I was able to talk the owner down to $2,000 and used the remaining $200 to purchase a truck box and a new radio for the cab. I knew that God wasn’t just meeting my need; He was making a point. He didn’t need my salary in order to provide for me.

Jesus commanded His disciples, “do not be worried about your life, as to what you will eat or what you will drink; nor for your body, as to what you will put on.” Then He asks, “Is not life more than food, and the body more than clothing? Look at the birds of the air, that they do not sow, nor reap nor gather into barns, and yet your heavenly Father feeds them. Are you not worth much more than they? And who of you by being worried can add a single hour to his life? And why are you worried about clothing? Observe how the lilies of the field grow; they do not toil nor do they spin, yet I say to you that not even Solomon in all his glory clothed himself like one of these. But if God so clothes the grass of the field, which is alive today and tomorrow is thrown into the furnace, will He not much more clothe you? You of little faith! Do not worry then, saying, ‘What will we eat?’ or ‘What will we drink?’ or ‘What will we wear for clothing?’ For the Gentiles eagerly seek all these things; for your heavenly Father knows that you need all these things. But seek first His kingdom and His righteousness, and all these things will be added to you.” (Matthew 6:25-33 NASB)

The truth is that it can be difficult to see life from this perspective. After all, our jobs give us a place to work, work produces money, and money produces… well, stuff. Or does it? Is it possible that God really does provide for our needs not just through our paychecks, but also independent of them? Over the next few weeks, we’ll be taking a look at what the Bible has to say about our income – where our financial resources come from, how we should use them, and why the money we get from our jobs should not be the driving force behind what we do or how well we do it. In the meantime, feel free to share your own stories about God’s provision in the comment box below!

Contender to the Throne

18 Apr

My first car was a 1972 Lincoln Mark IV. While it’s been years since I last sat on its slightly worn emerald green leather seats, I still remember it with fondness. Like Gaston in Disney’s “Beauty and the Beast”, it was “roughly the size of a barge” and, due to its pale yellow exterior, was affectionately dubbed “The Banana Boat.” Built like a tank, I could have been in a head on collision with a freight train and expected to have (at very least) come out as a reasonably intact corpse.

The one real detracting feature was the gas mileage. My beautiful green machine got a whopping 8 miles to the gallon. The expense was offset by the fact that my dad was able to fix nearly everything that went wrong with the vehicle (with the noted exception of the headlights which, for some reason we were never able to identify, would blink on and off whenever my mother or I drove the car, but behaved quite normally whenever Dad was behind the wheel). It was a teenager’s paradise… until gas prices began to rise.

I laugh today when I consider the major panic which overtook me when the sign at the pump first informed me that my fuel would run $1.769 a gallon. I nearly hyperventilated as I calculated the cost of filling the tank in proportion to the salary I was making. The numbers were not positive. In fact, when all was said and done, I was working simply for the privilege of paying for my health insurance… and being able to drive myself to and from the job which covered that expense. Something needed to happen and it needed to happen fast.

I went home and checked my bank account. The sum total of my savings amounted to $2,200. It wasn’t much. Years earlier, I had been convicted that God wanted me to live debt free (a conviction which I still hold quite deeply). Keeping my promise to ensure that I owed, “nothing to anyone except to love one another” (Romans 13:8) was going to require some financial wrangling. And I wasn’t sure if God would replicate His loaves and fishes miracle with my nickels and dimes.

To be honest, my experience wasn’t a unique one. Most of us have encountered some type of financial need at some point in our life. At times like these, when the money is short and the need is great, it can be tempting to shift our focus away from the Provider and onto the provision. The funding we lack takes center stage while the Giver of all good things slips to the sidelines.

Perhaps it is for this reason that Jesus warned his disciples, “No one can serve two masters; for either he will hate the one and love the other, or he will be devoted to one and despise the other. You cannot serve God and wealth.” (Matthew 6:24 NASB) And few things bring this caution to the forefront quite as vividly as the recognition that money (or at least a little bit of it) still plays a vital role in the life of the Believer.

While we may not bow before mounds of gold coins on a regular basis (or at all), we can be certain that our earthly boss is far from being the only “contender for the throne” to be found in the workplace. During times of perceived famine, our salary can also put up a good fight. (To be continued…)

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