Biblical Financial Principles: ..\documents And Settings\jim\my Documents\_rmnilogotype.jpg

BIBLICAL FINANCIAL PRINCIPLES

..\Documents and Settings\Jim\My Doc Jim Sutherland, Ph.D., Director

www.RMNI.org/financial 1

INTRODUCTION

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Are you financially free or in bondage? Do you give generously? Do your assets exceed your liabilities ? Do you have a short-term financial plan ? Do you have a long-term financial plan ? Do you honor God with your giving ? Are you saving regularly? Do you have adequate insurance and a will ?

TOPICS  The

Master or the MasterCard ?  Contentment  The Real Owner?  Family Finances  Giving & Receiving  The Lowdown on Debt  Short-term Planning—The Budget  Long-range Planning--Savings  Fundamentals of Investing ®

THE BIBLE AND MONEY • • • •

51% of African Americans are “personally struggling with finances” (Barna, 2001). Is the Bible able to advise us into the second millennium ? Will we trust the Bible when we disagree with it ? There are many “experts”--who will you believe ?

WHAT IS A CHRISTIANS’ FIRST COMMITMENT ? 

What do we commit to God ?  Matt.

6:33; Mark 12:30; Rom. 12:1-2; Col. 1:16



The Macedonian example (2 Cor. 8:1-5)  Few

resources, first commitment, giving (9:811), grace



Does my spending reflect trust in God ?

FINANCES TEST OUR COMMITMENT to GOD • There are two masters—Luke 16:9-13 • The “Rich Young Ruler” illustrates —Luke 18:18-23 • $ is stronger than blood and friendship—Prov. 19:7 • Money offers pleasure, prestige, power • We can’t love God and the world—1 John 2:15; Demas tried--2 Tim. 4:10 6

FINANCES TEST COMMITMENT • Honestly, do you want to be rich? • If we “go for the gold” & choose money and affluence as Master • Temptation, traps, grief, destruction—1 Tim. 6:9-10 • Dissatisfaction—Ecclesiastes 5:10 • Chokes the Word of God— Matthew 13:22 • Riches take wings—Prov. 23:4-5 7

Where Is Your Treasure? • Are we trying to build heaven on earth? • We cannot manipulate God by giving, or by praise or by claiming something. God is too smart for that. • Beware of greedy teachers who exploit you with false words (2 Pet. 2:3). If some really believed in “seed money,” they would send you the money. 8

Where Is Your Treasure? • The “prosperity gospel” preaches materialism and greed in the name of super-spirituality. • Some teach that Jesus was rich, “justifying” a Rolls Royce. • According to the NT, riches are instead a spiritual liability, making it harder to enter heaven (Matt: 19:2324). Riches tend to choke the Word of God (Matt. 13:22). 9

The Creator and The Creation  Material riches are not to be our goal, but things material are not evil in themselves. The good God created very good things out of matter— stars and people and butterflies and whales (Gen. 1:31).  The focus is to be on the Creator, instead of upon His creation.

 Matthew 6:21 “For where your treasure is, there your heart will be also.” NIV  If God is our treasure, He can entrust to us the good things of His creation, knowing that they will not become idols— i.e. become more important to us than is God.

 Psalm 37:4 “Delight yourself in the LORD and he will give you the desires of your heart.” See also Ps. 16:11; 84:11b; Rom. 8:32. The more we love God, the more He is free to bless us, and I suspect we place less and less intrinsic value upon those gifts. 10

Wealth and Christians  God blessed Abraham, Job, David, Solomon, Hezekiah, etc. with much wealth (Gen. 24:35; Job 1:3; I .

Chron. 29:3-5; 2 Chron. 1:12; 2 Chron. 32:27)

 The fact that stealing remains a sin (Rom. 13:9) implies that private property is approved by God.  The “rich” (us) are not told to divest of wealth, but to be richly generous (1 Tim. 6:18). If you make $10,000/year you are among the upper 9% of the worlds affluent. From the World Christian Encyclopedia, David Barrett, George Kurian, Todd Johnson, Eds. 2001, p. 1:6

Riches are deceitful. It remains harder for the rich to enter heaven—Matt. 19:23.

Real Prosperity:  Prosperity is:  Your name written in heaven, Lk.10:20

 Contentment, with godliness, 1 Tim. 6:6  Without contentment, you’ll never have enough.  God meeting ALL your needs, Phil. 4:19  How much more do you need?

 Proverbs 30:7-9 "Two things I ask of you, O LORD; do not refuse me before I die: 8 Keep falsehood and lies far from me; give me neither poverty nor riches, but give me only my daily bread. 9 Otherwise, I may have too much and disown you and say, 'Who is the LORD?' Or I may become poor and steal, and so dishonor the name of my God. 12

Real Prosperity:  Prosperity is:  Having all the funds you need to accomplish all the work that God has given you to do in life, Eph. 2:10  Preparation and ministry cost money.

 Having the world--all things are the Christian’s (1 Cor. 3:21-23; Rom. 4:13 —JRW Stott).

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FINANCES TEST COMMITMENT If you go for the crown and the Lord  All your basic needs will be met—Matt. 6:25-34 (sometimes these will be met by others, James 2:14-17).  All other needs will be met—Phil. 4:19, Rom. 8:32  Can you buy a policy that meets ALL your needs?

 We’ll have enough to share  Our lives will find balance between work and rest—Eccles. 4:5-8.

Is my trust in my Master or in my MasterCard®?

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Security • If your security is in wealth, you will never have enough wealth to be fully secure. A man who has given away over 11 million dollars freely admits this, since wealth is quickly lost. • God is enough. When you have Him, you are secure no matter what happens financially. 15

CONTENTMENT  Are you content right now ? 1 Tim. 6:6  Debt often indicates lack of contentment.

 What are the minimums? 1 Tim. 6:8  Will Christians always have them? (2 Cor. 11:27; Matt. 8:20; 2 Pet. 1:3). How was Paul content? Phil. 4:13  What would it take to make you content, if you’re not ?  What is abundant life? (John 10:10)

Life = possessions? Luke 12:15 Life = Christ? Colossians 3:4 Loss = despair? Job 1:20-21; Hab. 3:16

CONTENTMENT

DIS-CONTENTMENT • Advertisements-- $850 @ American in 2000 • Materialism & the shopping mall temple • Giving fights materialism • The prosperity of the wicked—Psalm 73:35,12 • The prosperity of other believers—Acts 20:33 • Is God enough right now? Psalm 73:25 18

WHO IS THE OWNER ? • • •

YOU ? THE BANK ? GOD ? What does God claim? Ps. 24:1; 50:10-12; Haggai 2:8 Where do you go when you need $ ? •

•

How does God meet needs? • •

•

Ask, Seek, Knock—Matt. 7:7-11; Ps. 50:14-15 God “burdens” folks to desire to give—2 Cor. 8:5,16; Jews, 1 Chron. 29:8-14

How can I admit God’s ownership?

FAMILY FINANCES • Should a wife or mother work outside the home? • Adam provided—Gen. 3:17-19 • Male provision for the wife illustrated in • 1 Tim. 5:8; Hos. 2:2-9; Ezek. 16:8-13

• The wife assists her husband—Gen. 2:18, doing him good—Prov. 18:22 • She raises the children and manages the home—1 Tim. 5:14; Titus 2:3-5 • God wants “godly” offspring—Malachi 2:15 • The Prov. 31 lady met family needs and was a businesswoman (vs. 16, 24) • An empty nest may require new challenges for a wife. 20

FAMILY FINANCES If a mother of young children works to increase the standard of living, she may gain little net increase. She may end up with work both at home and the office. Daycare means someone else raises the child and extra sickness (1-2 year-olds, especially). 13 million children are in daycare in the US and 2/3 of mothers with children under 6 are working (Katha Pollitt, “Happy Mother’s Day,” The Nation, 5/28/01) 21

FAMILY FINANCES

• The Institute for Social and Economic Research (British) found that “Married men earn more than single men, but only if their wife stays home—and does all the chores.” • Sociologists Vincent Duindam and Ed Spruijt of Utrecht Univ. found that “the more hours the mother works, the worse the father’s physical and mental health.” “Housewives make their men healthy and wealthy” 6/30/05 www.telegraph.co.uk/health/main.jhtml?xml=health/2005/06/30/hworking30.xml 22

FAMILY FINANCES

• 55% of mothers with children under 1 worked or were looking for work in 2000, down from 66% in 1998. (USA Today, Stephanie Armour, “More moms make kids their career of choice” 3-12-02)

• A separate income may promote an independent spirit in the wife and divorce. 33% of married Christians (and 34% of nonChristians) divorce (Barna 8/6/01). A job may be seen as an “insurance policy” against it. • Sometimes wives and singles must work. • Divorce, death, out-of-wedlock pregnancy and desertion may force a mother to work. 23

GIVING How much? • Should a Christian tithe because mandated in the Old Covenant? (Gal. 3:10; James 2:10; Heb. 8:8-13) • Generosity is commanded of the rich (us) in the NT (1 Tim. 6:18) • The Law of receiving and giving (1 Cor. 16:2; 2 Cor. 9:6; Eccles. 11:1; Prov. 11:24-25). • Attitude is crucial—why do I give? • For love (I Cor. 13:3), cheerfully (2 Cor. 9:7; 8:1) and secretly (Matt. 6:1-4)? • Give to receive ? To buy God off (Amos 2:624 8; 4:1-5, 12) ?

GIVING How much? • Christians are to give an unspecified percentage of our increase to God, but we give proportionately to our receiving. • 1 Cor. 16:2 2 On the first day of every week, each one of you should set aside a sum of money in keeping with his income, saving it up, so that when I come no collections will have to be made).

• We receive proportionately to our giving. Giving 7%, for example, is not a sin. The Spirit will lead you. • However, a tithe is the least that God has asked His people to give (Larry Burkett). A tithe was given before the Law (Gen. 14:18-20); and was commanded in the Mosaic law (Lev. 27:30). 25

GIVING How much? • Generosity is commanded of the rich in the NT (1 Tim. 6:18) • The Law of receiving and giving governs our giving (1 Cor. 16:2; 2 Cor. 9:6; Eccles. 11:1; Prov. 11:24-25). • Attitude is crucial—why do I give? • For love (I Cor. 13:3), cheerfully (2 Cor. 9:7; 8:1) and secretly (Matt. 6:1-4) ? • Do I give to receive ? To buy God off (Amos 2:6-8; 4:1-5, 12) ? 26

GIVING • Can we first give to God ? (Rom. 11:35-36) • What part does God request ? (Prov. 3:9) • How much should Christians give ? • Should we tithe ? Only 3% of born-again Christians tithed in 2002—down from 8% in 2001 (Barna 5/19/03). In 2001 16% gave nothing to the church (Barna 5-21-01). Globally Christians give 2% of personal income to Christian causes, while in the US it is about 2-3%. (Barrett & Johnson, Int’l Bulletin of Missionary Research, 1/03, p. 25) • A tithe was given before the Law (Gen. 14:18-20); and was commanded in the Mosaic law (Lev. 27:30). 27

GIVING  Don’t give due to being pressured (2 Cor. 9:7) via phone, mail, or solicitations from friends. Ask for time to pray for guidance. Many ministries use the most effective marketing techniques to generate income. Because someone found you does not mean that you are to give. Some have very high overhead (fireman’s charity concert).  A need does not necessarily mean that you should meet it, just as a ministry opportunity does not necessarily mean that you should engage it. We are to walk by the Spirit, and keep seeking God’s wisdom (Gal. 5:25; Prov. 3:5-6). 28

GIVING  Should all giving go to the church? Is the staff adequately paid? (1 Cor. 9:714, 1 Tim. 5:17-18, Gal. 6:6) Are the truly needy supported— believers and unbelievers? (Jas. 2:15-17; Gal. 6:10) Are missions advanced? (Matt. 28-1920; 3 John 1:5-8) Is the property maintained? (Haggai 1:79) 29

GIVING

• Guidelines for giving outside the church • Whose kingdom is glorified? (1 Cor. 10:31) • What percentage is spent on administration? • Check www.give.org for organizations giving 60% + to programs and www.charitynavigator.org for evaluations of charities. See www.wallwatchers.org • Form 990 can be obtained from Guidestar for many not-for-profits at www.guidestar.org • Follow the burdens (work) God gives specifically to you (Eph. 2:10). Only God can 30 meet all needs.

6 LEVELS OF GIVING 1. Giving little or nothing. Among Babybusters (18-35), only half gave anything to the church in 2002.1 2. Inadequate giving. Giving less than 10%. 3. Obedient giving. Giving a tithe. 4. Giving beyond obedience--beyond the tithe. 5. Giving generously, being “willing to share” (2 Cor. 9:6). 6. Surpassing generosity. Giving out of God’s bounty, becoming a conduit of His blessing (2 Cor. 9:8,10-11). 1 George Barna, “Americans Were More Generous in 2001 Than in 2000,” 4/9/02, accessed at www.barna.org on 2/7/03 31

BIBLICAL FINANCIAL PRINCIPLES

..\Documents and Settings\Jim\My Doc Jim Sutherland, Ph.D., Director

www.RMNI.org/financial 32

Jim’s Badboy 13 Omens n

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If you missed a paycheck, you’d qualify for federal disaster aid. You hit-up your friends for a loan until payday, or you’ve gotten a check-advance loan. Your first strategy to meet an unexpected bill for $1000 is the Lotto 5. You owe more than you own. If you died, your family would need help. 33

Jim’s Badboy 13 n

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You skimp on groceries and work clothes. You have no plan to (1 save for your children’s education (2 pay off your home (3 have enough for retirement. Because of debt, your paycheck is already spent. But you might be able to rent a movie. You try to stay one-jump ahead of disaster by rolling over credit card 34

Jim’s Badboy 13 1.

2.

3.

4. 5.

Dollars stick to you like Superglue when you have the chance to give. You argue almost every week about money. You’ll really be content when you get the new …. Bankruptcy is looking good. You’re trying to get rich quick. ®

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DEBT  The Problem:  “33% of born again adults say it is impossible for them to get ahead in life because of the financial debt they have incurred.” Barna.com BarnaPageStats.htm accessed 8/20/98  “For at least a half century, household debt has been rising faster than income, as everhigher levels of discretionary income have increased the proportion of income spent on assets partially financed with debt.” Alan Greenspan (Oct. 2004) www.federalreserve.gov/boarddocs/speeches/2004/20041019/default.htm

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DEBT  The Problem:  “Throughout the 1960s, '70s, '80s, and '90s, households showed a surplus of varying degrees. It wasn't until 1999 — for the first time in about 50 years — that U.S. households started spending more than they took in. What started as a small deficit of about $50 billion among households quickly spiked to a deficit of more than $350 billion in the second quarter of [2004].” U.S. Consumer Credit Card Debt May Crash Economy, 12/31/04 By Susan C. Walker ww.foxnews.com/story/0,2933,143037,00.html 37

DEBT  The Problem:  On average, we carry eight cards per person and have a balance of $8,400 in credit card debt. Twenty percent of our cards are maxed out, reports CardWeb.com, which tracks the lending industry's machinations. And just 40% of Americans pay off their accounts in full at the end of the month. The average line of credit is around $3,500. (A decade ago it was just $1,800.) The average household pays their lender $1,000 a year in finance charges. “Our Credit Crunch” Dayana Yochim www.fool.com/ccc/secrets/secrets01.htm accessed 8/20/05

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DEBT  The Problem:  Home equity loans are more popular than ever as people borrow against their home to feed their spending binge. Today, average homeowners owe nearly 50% of their home's value. Twenty years ago that figure stood at 30%. Can't you just picture the modern-day needlepoint plaque? "Home, Sweet Credit Line." “Our Credit Crunch” Dayana Yochim http://www.fool.com/ccc/secrets/secrets01.htm accessed 8/20/05

 The US government owes over 8.2 trillion dollars in 2/06. (www.brillig.com/debt_clock accessed 2/10/06)

 What is your debt/income ratio—more than 10% (non-household debt to monthly income)? 39

DEBT IS DISCOURAGED  The Bible discourages debt (Rom. 13:8; Prov. 22:7; Dt. 28:44), but it isn’t sin (Matt. 5:42; Dt. 23:20)  Bankruptcy should be avoided and all debts satisfied (Ps. 37:21).  Debt is usually poor stewardship  Paying only the balance due (2%) on $2,000 at 18% would take 30 years and cost $8,000 in interest (Cardweb). A mortgage may triple the face amount borrowed  Average debt for 4-year private schools: $17,500 (1998-Nellie Mae)

 Debt may be lack of self-control--Gal. 5:23. 40

Debt and Dissatisfaction • Our consumer debt (debt other than for our home, but including home equity debt), is generally an excellent indicator of our level of discontent. – We step outside the circle of God’s provision, to get more, by borrowing. – Lack of contentment is a spiritual issue.

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How Can I Get Out of Debt? ■

■

You must be serious about it. As Larry Burkett said, getting into debt is fun, but getting out of debt isn’t. It will likely take years. If you are spending much more than your income, you must go on a survival lifestyle. ◆

■

Before every purchase you need to ask yourself, “Do I need to purchase this in order to survive?”

You’ll need to determine if cutting back will enable you to get out of debt, or if you’ll need to increase income to meet your commitments.

Getting Out of Debt ■

■ ■

If you have cable, or a cell phone, cut them off. Buy out your contract if necessary. Stop eating out. Tell your family that you won’t be able to give gifts as you would like to do, until you’re back on your feet. But don’t stop giving to God. That would be a bad solution. Determine ALL your debts and pay off the highest interest rate debt first. When that is paid off, use the same payment, plus what you don’t have to pay on the first debt, to tackle the second debt, etc.

Start Budgeting You must go on a strict budget. ■ See the “How to Budget” and “Philosophy of Budgeting” paper at www.RMNI.org/financial ■ You may need to go to Consumer Credit Counseling Service to negotiate lower interest rates and penalties. ■ In over 20 years of personal financial counseling have I seen a completely hopeless situation, and none that would justify bankruptcy. ■

Her Money—His Money You are one in God’s sight (Matt. 19:5). Don’t let money divide you. The husband is the head of the wife (Eph. 5:23). With separate money, the wife can develop an independent spirit and ditch the husband. Have complete financial openness between you. Each should know the total assets of the union. You should have joint ownership of those assets. Both names should be on the deeds and financial accounts. 45

Exceptions: If the man directs the inheritance from his family, the wife, in fairness, should be able to direct the assets of her family, under the final authority of the husband. If one of the partners has an addiction, then it is not prudent to hold all assets jointly. Additions include drugs, gambling and shopping. 46

Avoid Separate Bank Accounts But have one person balance the books and reconcile the statements. This person should be the one with the greater aptitude, discipline and interest in financial matters.

A husband is wise to obtain the counsel of the wife in financial matters. She does not want your half of the boat to sink. Many husbands regret not listening to that counsel. One husband told me that he’d now be in “Fat City” if he’d have listened to his wife when she suggested buying specific pieces of property many years ago.

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Pre-nuptial Agreements If you cannot trust you prospective mate with your money, you shouldn’t marry that person. Faithfulness in money is a small thing (Luke 16:1011). Being bound for life to someone is a heavy matter.

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What Are Your Savings Goals? • Save money/pursue investments:

– 8% of those having non-retirement income make this their main goal (not all goal responses are noted)

• Home purchase or renovation: 8% • Be debt-free: 4% • Emergency fund: 2% – But 100% have emergencies. • No goals: 6% Is this you?

• 67% of workers aged 35-44 and 74% of workers aged 45-54 saved something for retirement in 2004. Of those 55+, only 69% saved something. – But 100% of old folks will need something. 49 Source: Retirement Confidence Survey® 2004

Social Security Is Not Enough • Currently, if you were born in 1960 or later, you will not be eligible for full Social Security benefits until you’re 67. • As of 2000, if you are a man and live to 65, you will live another 16.3 years—to 81.3. That’s a lot of Christmases. • Women at 65 live an average of 19.2 more years— until they are 84.2—almost 3 years longer than men. Will you be able to take care of both of you, and will your wife be provided for when you’re gone? • The average Social Security payment is $10,500/year ( 50 http://moneycentral.msn.com/content/Retirementandwills/Playingcatchup/P34625.asp 7/24/04)

One dollar can be spent today or sometime in the future • 23% of all workers are very willing to cut back on current spending to save for retirement • 38% are somewhat willing • 19% are not too willing • 15% are not at all willing • Are you among the 34% unwilling to curtail spending for retirement? Source: Retirement Confidence Survey® 2004 (not all responses were given)

• “Earlier this year [2005], Fidelity [Investments] said that, based on the current rate of savings, the average American household will live on 59 percent of pre-retirement income once they stop working.” “A third of U.S. workers retire late, lack savings,” Wed Aug 24, 2005, Reuters 51

Reasons not to save: • Present pleasure – “He who loves pleasure will become poor, whoever loves wine and oil will never be rich.” Prov. 21:17

• Misunderstanding – “I’m not supposed to worry about tomorrow.” But “The prudent see danger and take refuge, but the simple keep going and suffer for it.” (Prov. 27:12).

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Reasons not to save: • “I have too much debt to be able to save.” – Go on a survival budget. Spend only what you must to survive and pay down debt. – Pay off your smallest debt first and work up.

• Laziness – I’ll start when things aren’t as tight. 53

Reasons to do nothing: • I can’t budget. – You can budget. Only my wife likes to budget. The alternative is to spend without a plan. Only the very wealthy can afford that.

• I can’t save. – Unless you are devoured by debt, you can save, if you want something in the future badly enough.

• I’m beyond hope. – I’ve never seen anyone in about 20 years of financial counseling who was beyond hope, or who had to file bankruptcy.

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Saving •We are far more concerned about having good credit—the privilege to accumulate more debt--than about saving. •In June 2005, the US consumer savings rate was 0%. http://money.cnn.com/2005/08/02/news/economy/savings/ Accessed 8/27/05 •Even “breaking even” is foolish (Prov. 21:20). Why? 1 http://www.bea.doc.gov/bea/newsrel/pi1201.htm, Department of Commerce, accessed 2/5/02

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Saving • The Spirit can put to death the desires of the flesh (Rom. 8:13). Irresponsible spending is a “spiritual” problem. • We save against future “evils” (Prov. 22:3, 27:12) such as breakdowns and disability. • An emergency fund of at least 3-6 months income is prudent. 56

Saving • Know why you are saving. • You need an emergency fund to cover potential major expenses. They should be expected. • • • • •

Appliance or major system failure in the home. Medical, dental and other un-reimbursed expenses. Cash for national emergencies Large auto costs/replacement costs Track how much in savings is for a particular purpose

• Other savings goals: • Inheritance for children/grandchildren (Prov. 13:22) • Retirement and old age care—The average SS payment is about $10,500/year

http://moneycentral.msn.com/content/Retirementandwills/Playingcatchup/P34625.asp 7/24/04

• Kingdom funding 57

Saving • To make it harder to “raid” your savings, make it harder to access. • Automatically debit your checking account to savings at a bank account hard to access. • Automatically debit your checking account to invest in the stock of a solid company through a dividend reinvestment plan (DRIP). Such stock purchases may cost little or nothing. Visit www.DirectInvesting.com for details on how to establish this account. 58

Saving • Establish a “ladder” of savings. • Begin with a passbook savings account. • When you have sufficient funds, transfer it to an out-of-town money market account with low fees (such as Vanguard Prime Money Market Fund). • From there move into higher-paying investments— bonds, CD’s if interest rates are high, mutual funds and stocks, or into tangible investments such as land.

• Try to save at least 10% of your gross income. You only think you are saving if it is not there at the end of the month. 59

Saving • Social Security is solvent only until 20411. Expenses will exceed income by 2017. Today 3.3 workers contribute per 1 retiree—it will be 2.2 by 2030.

•

http://www.ssa.gov/pressoffice/pr/trustee05-pr.htm, accessed 4/15/05

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• The earlier you save and invest the better. If you start investing $2,000 annually at 8% in an IRA at 25, you will have $606,487 at 65. If you delay until 35, you’ll have only $266,427, a loss of $340,0601. 1 Dean O. Webb, “Don’t delay, start saving today,” Christian Financial Concepts, Money Matters, 10/99, p. 3

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Retirement 

 

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The only mention of retirement is at Numbers 8:25-26a, where priests were to retire at age 50, probably due to physical depletion (see Eccles. 12). If you live to 65, you’ll probably live to 831. First, be “rich toward God” (Lk. 12:21), unlike the rich fool who tried to construct heaven on earth. Ask God what standard of retirement living He wants you to have, then plan toward it. 1 www.cdc.gov/nchs/fastats/lifeexpec.htm, accessed 4/17/02

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PLANNING WITH YOUR SURPLUS •

• • • •

God’s plans never fail (Is. 14:27; Ps. 33:11), so we need to try to understand God’s will (Eph. 5:17; Jer. 9:23-24). Planning is “spiritual” (Prov. 12:5; 16:3) Get good counsel (Prov. 12:15; 13:10) God can will in our will (Phil. 2:12-13) “What has God given you faith to believe Him for ?” Bill Gothard •

Try constructing a financial timeline, using 70 years.

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TWO APPROACHES TO SPENDING • From a false assumption • of what “ought” to be able to spend. • “I owe it to myself!” “I deserve to be able to ….”—a deductive approach • From actual income/provision • From within the circle of God’s provision —an inductive approach 64

Income usually isn’t the major issue in budgeting • Here is a list of the nations with the highest percentage of consumers who have no spare cash: 1—America (22%) 1—Portugal (22%) 3—Canada (19%) 4 —United Kingdom (17%) 5—France (16%) 6—Netherlands (15%) ACNielson Online Consumer Confidence Survey—Global Survey, 1/11/2005

• But godliness with contentment is great gain--1 Timothy 6:6 65

HOW TO BUDGET-7 STEPS 1. Pray for wisdom (James 1:5) and for selfcontrol (Galatians 5:23). Habitual overspending is a spiritual issue. 2. BEFORE spending, plan MONTHLY expenses and LONG TERM GOALS (greater than 1 year, requiring savings). 3. Record DAILY expenses in a ledger or software program—keep a running total in each expense category (using the ledger or on the outside of a cash envelope).

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BUDGETING STEPS 4. At month’s end, TOTAL expenses in each category and compare with target figures, and adjust for next month, if needed. 5. Compare ALL expenses and with ALL income. 6. Move any surplus to savings, earmarking it for a particular need. 7. Deduct any shortfall from your next pay before spending it. 67

Go to www.crown.org/Tools/budgetguide.asp to find percentages for each category for your income. Budget busters:

Print this form at www.rmni.org/financial/income_and_expense.pdf

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Typical Budget Problems -1 Spending over 40% of net spendable income (gross income, less taxes and giving) for housing & utilities Long distance/cell phone bills too high Tip: use www.OneSuite.com Food category out-of-control, including eating out Tip: shop from menus “Over-recreating,” including cable, trips and fitness clubs Tip: spend from envelope Paying too much for auto insurance & having inadequate life insurance 69

Typical Budget Problems -2 High debt load and failure to even list and total all debt Tip: debt list at www.rmni.org/financial/debt_list.pdf

Little or no savings—failure to plan for future needs and goals “Miscellaneous” spending out-of-control Unable to pay for private schooling Putting too much or too little into retirement investments 70

Typical Budget Problems -3 • Little giving to Christian causes & too much giving to relatives • Inadequate or inordinate tax deductions • High cost of health insurance—consider a good Christian health cooperative: see www.samaritanministries.org

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Budget Balancing How do Americans try to balance their budgets? • Cutting down on take-away meals— 66% • Saving on gas and electricity—61% • Cutting back on out-of-home entertainment—60% • Spend less on new clothes—54% • Not driving as much—47% • Switching to less expensive grocery brands—42% ACNielson Online Consumer Confidence Survey—Global Survey, 11/2005

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BUDGETING TIPS At year’s end, total all expenses for each category and divide by the number of months included, to refine your budget figures. You will probably have to adjust your budget each month if your income varies (using a computer spread-sheet helps). See: www.rmni.org/financial/budgetsheet.asp

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More BUDGETING TIPS • Expect UNEXPECTED expenses. Satan will try to discourage you. This is the reason for an emergency fund. The budget may take at least 6 months to begin to work smoothly. • If you use software (Quicken™, Money Matters™, or MS Money™), use both a checking account (checks & debit cards) AND a “cash” account, then combine them when running reports. You may also need a credit card account (if you pay them off each month), and again, combine accounts for a report. Using software makes tax season fairly simple.

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FINANCIAL STATEMENT As of_________________ (Courtesy of Christian Financial Concepts, Inc.) Visit the Financial Ministry section of www.RMNI.org ASSETS Liquid Assets[1] ___________________ $____________ ___________________ ____________ ___________________ ____________ ___________________ ____________ ___________________ ____________ ___________________ ____________ Total liquid assets $____________ Invested Assets[3] ___________________ $____________ ___________________ ____________ ___________________ ____________ ___________________ ____________ ___________________ ____________ ___________________ ____________ Total invested $____________ Use Assets[4] ___________________ $____________ ___________________ ____________ ___________________ ____________ ___________________ ____________ ___________________ ____________ ___________________ ____________ Total use assets $____________ TOTAL ASSETS $____________

LIABILITIES[2] ___________________ ___________________ ___________________ ___________________ ___________________ ___________________ TOTAL LIABILITIES

$___________ ___________ ___________ ___________ ___________ ___________ $___________

NET WORTH $__________ (Total Assets less Total Liabilities)

TOTAL LIABILITIES AND NET WORTH

$___________

[1] Cash, Savings Accounts, Checking Accounts [2] Outstanding Real Estate Loans, Credit Cards, Auto Loans, Personal Loans [3] IRAs, TSAs, 401ks, Investment, Real Estate, CDs, Antiques presented at fair market value. [4] Residence, Autos, Personal belongings presented at fair market value.

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www.Crown.org To find out how to join a 10-week small group Crown Ministries financial accountability group, call 800-722-1976. – For the Chattanooga, Tenn. Area, the contact person is Jennifer Helton, CPA, 423-580-0105 [email protected] 76

Are You Ready to Invest? • Is consumer debt (non-mortgage) paid? We should not tell creditors to wait for their money (Prov. 3:27-28). • How is your emergency fund? • Are you adequately insured (auto, home, health, life)? • Can you invest without debt? • Do you know your investment goals? • What is your toleration for risk and your freedom to risk?

Pre-investment Principles • The best investment is in God’s Kingdom. The return is guaranteed and nothing can diminish the principal (Luke 12:33). – Do I believe that God will reward the generous, or am I building my own heaven on earth?

• By application, the parable of the talents indicates that we should try for the best return on investments, consistent with biblical ethics (Matt. 25:14-28).

Solomon’s Principles • Solomon, of incredible wealth, counseled to be vigilant with the wealth we have (Prov. 27:23-27). – Investing requires ongoing scrutiny. – Money takes wings (Prov. 23:5).

• Don’t try to “get rich quick” (Prov. 23-4-5). In fact, don’t try to get rich (1 Tim. 6:9). This is an American heresy.

Solomon’s Principles • Spread risk (Eccles. 11:2, 6). – Buy mutual funds. – Diversify—among size of companies, between stocks (equities) and bonds (debt), or among geo-economic spheres or kinds of economies, etc.

• Gain understanding, even if costly (Prov. 4:7). Libraries of investment information are on the Internet. Investment books, magazines and newsletters abound.

Investment Strategies • Own your home debt-free—a retirement foundation. – Mortgage calculators, etc. are at www.mortgage-calc.com

• Invest while young, so you can tolerate greater risk. – With age, risk should decrease. – Bonds generally become a larger part of the portfolio with age.

Sources of Understanding • Invest in areas you understand (Larry Burkett). Gain information. • Crown Ministry www.Crown.org Christian financial resources • The Motley Fool has online courses & glossary www.Fool.com • http://MoneyCentral.msn.com Very current information

Selecting Mutual Funds • Sound Mind Investing Newsletter: www.SoundMindInvesting.com – Currently about $8 per month for web

• www.Morningstar.com Great rating system, current articles and a free “university.” • Use Morningstar ratings—5 stars is best, (top 10% of sector). Your library may have a subscription.

Some Mutual Fund Types • Index funds match indexes—such as the S&P 500 (500 biggest companies1), and the Russell 2000 (small companies). • Large capitalization funds invest in companies of about 10 billion in market value, mid-cap in companies of 1-10 billion1 and small-cap in smaller companies. 1 www.fool.com/school/Glossary

Some Mutual Fund Types • Risk increases as company size decreases. Having some stock in each (large, mid, small cap) category is good diversification. • Generally there are “value” funds/stocks, good for current price, and “growth” funds, with potential for company earnings1. “Blend” funds combine both. Growth funds have greater risk. 1 www.fool.com/school/Glossary

Buying Stocks • “Sector” funds invest in specific areas, such as technology, real estate, energy, pharmaceuticals, etc. Risk increases as the breadth of investment decreases. • “No-load” funds do not charge a commission, but do have administrative expenses, and are preferable to “loaded” funds.

Buying Stocks • You can purchase stocks through discount brokers, such as Sharebuilder, Ameritrade or Datek, or through brokers offering investment advice. – www.sharebuilder.com – www.Ameritrade.com

Retirement Plans • Company 401-K’s and 403-B’s (for non-profits) offer tax-free accumulation of any earnings and shelter current income. • Particularly good are employermatched funds. • Beware of over-concentration in an employer’s stock.

Retirement Resources • www.quicken.com/retirement/planner • Vanguard Group—IRA’s, etc. http://flagship2.vanguard.com/ • CNN/Money http://money.cnn.com/ Do a site search on “retirement.” • Social Security www.ssa.gov • 401k plans www.psca.org

Estate Planning Resources • Legal information www.nolo.com • National Network of Estate Planning Attorneys www.netplanning.com • www.elderweb.com Elderly issues • Deloitte & Touche Financial planners www.deloitte.com

What if your personal income rises? ¤ Will you spend it upon yourself and your

family? Are you a bucket or a funnel (L. Burkett). Will you give at least a tithe of your income to the work of God? Or will more money lead you away from God (Matt. 11:14)? ¤ Will you be more generous and better steward of your life and gifts, or simply enjoy personal financial freedom with a focus upon this life?

African American Personal Finances ¤ As of February 2006, African

Americans had an annual buying power of 762 billion dollars (expected to rise to 981 billion by 2010). “The US African

American Market” MarketResearch.com http://www.allheadlinenews.com/articles/7002523834 accessed 1/8/07

¤ Black household contributions were

1.9% of expenditures in 20031. Telephone services were 2% and insurance was 2.5%. 1 Target Market News

What if income increases to your church? ¤ Will the church spend it upon its

own people, upon African Americans, and ignore the global Kingdom of God? ¤ Do we care about the 37,000 people who God didn’t wake up this morning, who never even had a chance to hear of Jesus Christ?

OK, What Is Left to Do?

¤ The number of unevangelized people by

mid-2007 is 1,850,402,000, which is 28% of the global population. As of mid-2007, there are 4,420,319,000 non-Christians on the planet. Of these, Muslims total 1,359,745,000, Hindus total 888,300,000 and Buddhists total 382,482,000. Muslims and Hindus both have a higher growth rate than the general Christian population, due to higher birth rates. ¤

David Barrett and Todd Johnson “Missiometrics 2007…” International Bulletin of Missionary Research, Jan. 2007, p. 32. 1 From “Annual Statistical Table on Global Mission: 2002,” International Bulletin of Missionary Research, Jan. 2002, p. 23

Priorities ¤ Ghana sends 500 missionaries per year.

Her population is 22.1 million and her Gross National Income is 10 billion. African Americans spent 10.7 billion on household furnishings and equipment in 2004. Nigeria sends 2500 missionaries per year and has a Gross National Income of 74.2 billion dollars. African Americans spent this much on vehicles, insurance, clothing and gifts in 2004. Sources: The World Bank: ¤ ¤

http://devdata.worldbank.org/external/CPProfile.asp?PTYPE=CP&CCODE=GHA http://devdata.worldbank.org/external/CPProfile.asp?PTYPE=CP&CCODE=NGA ; the World Christian Database and Target Market News http://targetmarketnews.com/BuyingPower05.htm  

A Traditional Black Church and Global Missions ¤ One traditional church in Chattanooga

with a budget of $120,000 spent .4 % on evangelistic home missions (to blacks). ¤ This church spent NOTHING on global missions. More was spent on the annual men’s breakfast and on the copy machine than on missions. ¤ What percentage of your church budget goes to cross-cultural/global ministry?

Perspective: ¤ “The tragedy is that after we are born again, we

can build upon the Rock things that are going to be consumed, so that after we have stood before the Lord Jesus Christ as Judge we have little left. This is a danger not only to businessmen but to missionaries and ministers, not only to individuals but to congregations and organizations. By God’s grace, let us not be infiltrated by the values of affluence and personal peace. Let us use the treasures God has given us in such a way that when we come to that day we will have treasures laid up in Heaven and people eagerly waiting for us.” ¤

Francis Schaeffer, No Little People, ISBN: 0891073345, 3:191.

Will Generations of African American Christians be Lost to Stuff ?

¤ Since the early 1980s, Black income has

been rising. African Americans finally have an opportunity to achieve the American Dream, to have “a piece of the rock.” ❍ ❍

❍

If we focus upon accumulating stuff, that will never satisfy. “Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income. This too is meaningless.” Ecclesiastes 5:10 NIV All Christians should seek first the Kingdom, not prosperity. Where our treasure is, there is our heart (Matt. 6:21).