Finances Pt. 7: The Efficient Budget Puts People First

Most people who want to save try to save what money is left at the end of the month. The problem is there is rarely anything left. George Clason in his wonderful book, “The Richest Man in Babylon” says, “a part of all you earn is yours to keep.” When I first read that it kind of made me angry. Of course my money is mine to keep! But as I read on I understood what he meant. Just like in the budgets previously mentioned a lot of the money you earn is already designated for other things. However, some of it you keep for yourself. Robert Chilton in “The Wealthy Barber” says, “Pay yourself First.” The guy who wrote “The Automatic Millionaire” says the same thing.

When it comes down to it you won’t be able to ever reach financial security if you don’t save. If you wait till the end of the month to save you will never save. Skim the cream off the top and you will eventually have enough for a very nice stick of butter.

What about all that extra stuff we do to save money. Running the program at the YMCA, volunteering for the symphony, or going to the dollar movie instead of the full price theatre are all obvious ways to save money. Let’s analyze one dollar of money you earn. We’ll look at it two different ways. We will look at it both from the perspective of someone who has debt and spends money like normal people do and then we’ll look at an “Efficient Budget.”

Wow! Living like most people do you are saving a very minimal amount for retirement, spending 20% more on debt and at the end of the month you have a measly 4 cents left on every dollar you earn.


Now let us look at a budget of someone living “The Efficient Life.”





















With your Efficient Life Budget (the budget that puts the highest and best use of your life, i.e. relationships, at the center) you even have a little blow money left at the end of the month!!

Some of you read this and thought to yourself; “Why live on the Efficient Life budget if it comes out that you have eight cents left?” Well first of all eight cents is twice four cents. Even more importantly though is the effect it has on your relationships. The better budget puts relationships first and things second. The budget isn’t putting you into debt. It is relieving stress out of your life and relationships. It gets the financial monkey off your back!

Finances Pt. 6: Focus and Snowball Your Debt Away

Will your finances allow you to impact other people? Can you afford to take extra time off work to work at a habitat blitz? Can you afford to sponsor someone to go on a mission trip to build housing in third world countries? Can you afford to slide a waiter a $20 tip because you know they are struggling financially? If you are like most people…not right now you can’t. Maybe in the future you can. Here is the first thing to do “cut back and sell”. This is about getting out of debt so you can have money to impact others later on.

1. Cut spending
· Cut cable or satellite TV
· Access the internet from work or the library—cut the internet connection
· Cut out eating out—this is a major money drain. Learn to cook and enjoy building family relationships in the kitchen. This includes cutting out trips to Starbucks.
· Cut movie rental or going to the theatre
· Delay major purchases if possible. Do you want a new car or do you need to keep driving your old car?
· Don’t take vacations
· Don’t renew magazine subscriptions (until you are out of debt you can use the library)
· Don’t go nuts at birthdays and Christmas (this is extremely hard to do given what our culture teaches us).
· Keep wearing the clothes you have instead of buying new clothes.
· Cut out the extra features on your phone bill (call waiting, caller ID, etc).
· Cut out the cell phones (One phone and one phone line until you are out of debt).

2. Sell Stuff
· Have a garage sale. Have another garage sale. Then have another garage sale.
· Take books to used book stores and sell them.
· Take old clothes to consignment shops.
· If you have a car with a car payment then sell it and get something to make due with until you can afford something better. If you owe more on the car than it’s worth then sell it for what you can and get a small loan from a credit union or your local bank for the difference (Which is better owing $20,000 on a virtually new car that is only worth $15,000 or selling it for $15,000 buying a used car for $4000 and owing $9000? The answer is the later, because the $4000 car isn’t going to depreciate much more and you just cut your debt by $11,000!!).
· Sell anything you don’t use on a regular basis.

3. Increase your income.
· Get a better job.
· Work a second job.

4. Examine your housing situation
· Are you spending more than 25% of your take home pay on house payments?
· Do you have a two bedroom apartment for yourself?
· Can you live in a smaller apartment or a smaller house?
· Do you have a nicer house than your parents did at their age?
· Do you have a mortgage of fifteen years or less? If you don’t have at least 20% equity in your home you are paying PMI (Private Mortgage Insurance). If you financed close to 100% and have a thirty year note you won’t have 20% equity till you have been paying for 14 years. A fifteen year note gets you 20% equity in under five years and has you nearly paid off in that same 14 years.

5. Focus
· This isn’t going to take forever.
· The more you focus and the deeper you cut the sooner you will be out of debt.

So the first thing extra you can do after the debt snowball is in actuality five things. It can be summed up in one phrase “cut back and sell”. So what you ask is the second thing you can do to get out of debt when you are way, way in over your head? You negotiate. This is tough! If you are so far behind you cannot cover all your minimum payments you have no alternative than to negotiate some of your debt. The collectors have been calling you. Now it is your turn to call them.

First, you have to know what your situation really is. If you have done your budget you know your situation better than they do. Keep it that way. They will try to do your budget for you and show you how to spend your money and pay them first. Don’t do it. All that is under discussion is the amount of your budget that you have allocated to debt reduction. Now don’t think you can skimp out on all your debts by saying, "I only have $100 a month to spend on my debts so won’t you please write it off."

At this point the debt collectors could have a pretty good idea what you make and who you owe. You aren’t going to be pulling the wool over their eyes. You have to be truthful. You have to prioritize your debt. The house payment, the utilities, and the car payment come before the credit cards and the student loans. You don’t stop paying those other loans. You pay what you can and you tell them what you can pay. Then you ask to have your interest frozen or your rate reduced. When they say “no” you ask them this, “Do you have the authority to freeze the interest or reduce the rate?” They will then avoid the question and start asking you other questions. Do not answer. Get their attention. Interrupt them. Then ask them the question again, “Do you have the authority to freeze the interest or reduce the interest rate.” Does the person you are talking to have the authority to lower your minimum payment so that you aren’t piling up more late fees? You have got to keep hammering them until you are sure you are dealing with someone who can do those things. Talking to the first person to answer the phone usually gets you no where.

You may have to hang up. You may need to yell, cry, vent; you may need to scream at the sky…before you call back. It may take days or weeks to get a company to agree to a lower payment. You have got to be persistent. You owe them all the money they say you do. You signed up for all those late fees and interest rates when you got the card. It was and is your fault. That doesn’t mean they aren’t gouging you. You can get some traction with them by your persistence and you showing them you are really trying to get your life back on track.

Now do this for the other five credit cards you have. You will be exhausted. You will learn a lot about these companies through this process. You will learn a lot about yourself through this process. Eventually, through the negotiation and the two extra steps you will start gaining some traction. It may take months, but it will come.

Now is the time to take a look at what you have been saving. Remember that ten percent we have been paying ourselves? The ten percent after the tithe…you have been saving it haven’t you? Well here’s what we are going to do with it. First off we aren’t going to spend all of it. We are just going to spend part of it. Keep $500 to $1000 back for emergencies (not Christmas or birthdays, EMERGENCIES) and use the rest as a negotiation tool.

Imagine that after three months you have $828 saved up. If you keep $500 in your savings account you have $328 to negotiate with. Let’s say you have a credit card you are late on and the balance is $517. You have been calling and calling trying to get them to lower the payment or the rate but they won’t budge. Now you are going to offer them the $328 as payment in full. Maybe they say yes. Maybe they say no. IF they say yes get it in writing! Have them fax it to Kinko’s. Have them pop it in the mail. Don’t send the money till you get it in writing that they are going to take it as payment in full. If they won’t take it as payment in full go on to the next group you owe. Chances are someone will take the $328. Chances are they will give you credit for more than $328. Chances are you will have to get it in writing or they will forget that conversation took place.

So now you have the debt snowball rolling, you are “cutting back and selling,” and you are negotiating with your creditors. You are taking control! Then the washing machine goes out. What do you do? Well remember that $500 you have? You aren’t going to spend $500 on a new washing machine. You are going to have yours repaired. You are going to the scratch and dent and you are buying the cheapest washer that will clean your clothes. OR you are going to use the laundry mat. OR you are going to be doing laundry at a friend’s house and giving them a couple of bucks. Then you are going to go back to what you were doing before. You are tithing, you are paying yourself first, you are prioritizing your spending, you are working your debt snowball, you are cutting back and selling, and you are negotiating.

Remember this whole time you are also communicating with your spouse, kids, etc. about the plan and about what you are doing and why you are doing it. Your are forgiving yourself and those around you for the financial mistakes you have made in the past and the ones you continue to make as you overcome your bad habits. You are celebrating the milestones of paying off each debt and re-creating your life. You are taking control of your life so your relationships can thrive. You are using your money to reinforce the highest and best use of your life. You are on your way to the efficient life!

Finances Pt. 5: Teachable Moments and Temptation

Getting on a budget and being financially responsible creates “teachable moments” where you can share with your children. It provides a point to start communication. Remember our foundational principles are integrated. If you have had problems communicating with your spouse or “significant other” getting the finances on track gives you something to talk about. It could be there needs to be forgiveness from one party or the other (or even more likely both). It gives work a little bit of new meaning because you can more clearly see how your paycheck is benefiting you and your family. There is cause to celebrate because you are literally re-creating how your family does business. You also have to enforce the boundaries between you and your family vs how society wants you to spend money.

Now look. The debt snowball will help a lot of people. There are some people that are in so deep they need more. Not more as in something else besides the debts snowball, but the debt snowball AND something else. I’ve got two something else’s for you. The first is hard and the second is harder.

1 Timothy 6:6-10 6 Of course, there is great gain in godliness combined with contentment; 7 for we brought nothing into the world, so that we can take nothing out of it; 8 but if we have food and clothing, we will be content with these. 9 But those who want to be rich fall into temptation and are trapped by many senseless and harmful desires that plunge people into ruin and destruction. 10 For the love of money is a root of all kinds of evil, and in their eagerness to be rich some have wandered away from the faith and pierced themselves with many pains.

Yes, I’m going to ask you to be content with less than you currently have. If you have fallen “into temptation and are trapped by many senseless and harmful desires” then that probably means you have too much stuff! So sell it! But…first a bit more about why we need to cut back.

Saving money is like the opposite of losing weight. To lose weight you have to burn more calories than you consume. To save money you have to consume fewer dollars than you bring in. The bottom line is that simple. The question is HOW? Standing in stark contrast to our culture and spending less than you make is not easy to do. Every time you drive down the road and see a billboard, turn on the TV or radio and hear a commercial, or open a magazine or newspaper you will see an advertisement that is trying to separate you from your money.

Advertisements generally show bright sunshiny happy sexy people using the product and living carefree lives. Do you think for a second that if you use that product or service your life will really change? For some reason we have bought into this marketing scheme for years and I’m sure we will continue to do so. So how do we continue to live in this culture and not be “of” this culture?

The answer is easy…with great difficulty. My wife and I are trying to live in the culture, but not of it. We have two decent cars, both purchased used, and both paid for. A 1999 Ford Tarus and a 1993 Mercury Grand Marquis grace the street in front of our house. That’s right we live in a “blue collar” neighborhood where many homes don’t have garages or even driveways.

Our house is a nice little home. It’s probably the nicest house on the street. We have a front loading washer and dryer, a nicer kitchen than I’ve seen in homes costing over $200,000. We have nice storm doors and a two hundred square foot deck that over looks Lenoir City, The Tennessee River, Tellico Lake, Ft. Loudon Dam, and Ft Loudon Lake. Our bedroom furniture is beautiful Quartersawn oak built by the Amish Borkholder Furniture company. We have good sized closets, two sofa’s and it’s all paid for. It’s nothing flashy, but I’m proud of it. I’m thirty-six years old and I live in a paid for house. It’s only 837 square feet. Some people who know us and know how much we make think we are nuts.

There is a temptation to buy a bigger house. We can definitely afford a payment. We have adjusted our savings again and now we are saving 10% towards retirement, $1000 a month in an emergency fund, and between $400 to $800 a month into a sinking fund for vacations, a new computer, a digital camera, a new chair, and a bigger house. We could drop some of that savings for now and easily enough get a bigger house in a much nicer neighborhood. We could have a garage or even just a driveway for crying out loud. We could have a house with two bathrooms and three bedrooms.

The temptation is incredible some days. There are days when I am searching for properties for other people and I see homes we could be living in. I see homes we could afford. I see homes where we can raise our children (we currently have one on the way). Those days the drive back home is even longer than normal. I want to stop about four or five exits sooner and pull into a nice little convenient neighborhood that could be the place where we live.

That temptation is there on a lot of different levels. We don’t have cable TV or a satellite dish. It’s not that I think TV is evil or we don’t watch much. My wife works for HGTV! We want to watch HGTV and The Food Network, and DIY. However, we already watch “The West Wing,” “Alias,” “Extreme Home Makeover,” “The Apprentice,” and way to many others. Add to that the fact that cable TV or a satellite dishes come with monthly fees. We would love a subscription if we didn’t have to pay $40-60 a month.

There are a lot of things to do that cost money that we have found ways of doing for free, or less expensively. We go to matinees instead of full priced movies. We volunteer for the Knoxville Symphony and get free tickets to performances. We volunteer to usher when we want to see a play. We even run “Freedom Friday” (a parent’s night out program) at the YMCA so we can get a free membership (plus we think the YMCA is a valuable organization that provides great services to families and we want to be a part of that).

Now keep in mind we don’t HAVE to cut corners like that. My wife and I make nearly $70,000 a year. At that level of income we could afford movies, cable, the YMCA, and symphony tickets. Why don’t we just pay the price? We live the way we do because taking financial stress away from our relationship makes our marriage better. We live the way we do because one day we will move into a bigger house and we won’t be financially stretched when we do. We want to know that when our child is born we won’t be burdened by hospital bills. If the transmission in my car goes out it won’t be a major setback to us.

Our relationship is relieved of financial stress because we live a lifestyle we can easily afford. We could afford a much nicer lifestyle. We could even stretch our finances and live a much, much nicer lifestyle. Think about the stress that would put on our relationship though. There would be stress when those hospital bills come in. The transmission really is acting up, what would happen when it finally goes out and we don’t have an emergency fund? I really feel for those who don’t understand how financial security can bless a relationship. Do we have temptation to spend more…you bet we do, but we know the benefits of having “stores of choice food and oil.”

Think about the business world for an example. Airlines are stretched to the brink of bankruptcy after losses brought about by the 9/11 terrorist attacks and now the high cost of fuel. Northwest and Delta are bleeding money. They are cutting flights, employees, and selling off any non-essential business units they can just for the operating cash. Southwest Airlines stands in stark contrast. Several years ago they stored up “food and oil.” That is they purchased what at that time were very expensive fuel futures. They paid a set price in the past for fuel in the future.

Several years ago people may have said they were nuts buying fuel in the future at prices much higher than it was selling for at that time. Southwest had two things going for it. It is a wise company that had an eye on the future. It also had something else. It had enough financial clout to make it happen. The truth is other companies may have known they needed to buy fuel futures, but very few of them were in the financial shape to do it.

Southwest Airlines is a company that is great at relationships. It has great relationships with its employees, unions, suppliers, and customers. One of the factors that allows those relationships to flourish is its financial position. Southwest is in a position to pay its bills on time and protect its own future. Each airlines financial stance affects not only the business itself, but also the banks that lend them money, the suppliers that supply the company, the employees that work for the company, and so on. Everyone’s financial position in that whole business food chain has impact on the others.

Think for a second about the ability to impact others individually. Start with your family. Can you afford to put a roof over your family’s heads? That may sound simplistic, but we do have homeless people in the world. Can you feed your family well? There are children right here in the United States that go to bed hungry day after day. Can you cloth your family? Can you afford to send your kids to college? Can you afford a car to get you to and from a better paying job?

Think outside your immediate family (wife and kids). If something were to happen to one of your siblings would anyone in your family be able to afford to take their children in? Will you be able to afford to take care of your parents as they get older? Could you be generous to a distant relative who needs a new start without hope of ever being repaid? Will your finances allow you to have "teachable moments" with those around you?

Finances Pt 4: Moving The Needle

In the business world there is a saying I've heard many times. When a company is starting a new sales promotion they often ask if the new discounts or the new sales training or the new program will "move the needle?" That is, will it make things better? Well, how we move our financial needle is to get on a budget.

So what does a budget look like? It can look like all sorts of different things. Some people get paid by the hour and get 40 hours a week. Some regularly get overtime and some get no work when it rains. Some of us are on salary regardless of how much we work and some of us only get paid our commission if we sell something. Budgets will look different for different people.

We can give you a starting point though. I’ll also give you another good reason to do a budget if you’ve got creditors calling. Those collection agents can be unnerving. They can wind you up. You get tense talking to them or avoiding them. You want to do anything you can to shut them up. So some people, LOTS of people actually, will send in a payment on a late credit card BEFORE they pay their electric bill. YIKES!!

The starting point is to pay for the basics first. First and foremost is YOU Incorporated. I’m a big, big fan of paying yourself first. You put aside 10% for the church (5% local/5% to your choice charity) and the second 10% you put aside for you, your family, and your future. Call it an emergency fund, savings, a rainy day account, whatever you will, but put it aside. We’ll be using it now and then along the way, but for now it is yours! However much or little you make save the second 10%!

Now here some people are going to ask if all this tithing and saving another ten percent is before or after taxes. I’m going to side with the talk show host again here and say, “Yes.” I don’t care if it is before or after taxes. So few people actually tithe and so few people actually save that if you do it before tax or after tax you are doing more than most. By the way do you know what the word tithe means? The literal meaning is a “tenth”. The word tithe is actually older than the word tenth. In fact it was the word tenth. It became so “branded” by the church as to be what your were supposed to give to them the word “tenth” had to be created so people would know you were talking about that bit after the “ninth” instead of what you gave to the church.

So you’ve done away with 20% of your income. You already owe lots of people money. You haven’t bought groceries or paid the light bill. You’ve got to be wondering what in the heck I’m thinking. Well, we are prioritizing your spending. First pay God, then pay the family, then pay the bills. Which bills get paid first? Let’s start with the basics. How much do you need for groceries? Then let’s look at the rent or house payment. How much is your electric bill and other utilities ? How much do you really need for clothing, hair care, medical expenses, etc.? What about insurance? Cover the essentials. The debts are not the essentials unless you owe Guido and Uncle Vinny.

Especially, if you are on commission or are paid hourly and don’t know how many hours you will regularly have prioritizing your bill paying is an absolute necessity. It’s much better to have someone calling about a Master Card balance than to be foreclosed on. It’s much better to have someone pestering you about your Visa card payment than to not have groceries on the table. When those people are calling and getting you all upset and emotional your reaction is to pay them something, anything to get them to shut up. Your budget steadies you, guides you to keep going the right direction when the storm is blowing you off course.

Now let’s look at what’s left of your income. Where is it…there’s not much left is there? You’ve given to satisfy your soul. You’ve saved to prepare yourself and your family for the future. You have paid for the necessities of life. Now you’ve got to work on the debts.

What you are going to do to pay off your debts is called a debt snowball. It is a proven way to work through your debts in a way that allows you to see that you are making progress and it reinforces your decision to get out of debt. It’s important that you see progress. If you don’t see signs of progress it is easy to get discouraged. If you get discouraged it is going to be more likely that you aren’t going to stick to your budget. If you don’t stick to your budget you are going to pay out your hard earned money in ways that don’t benefit you the most.

When you make a snow ball and you roll it down a hill what happens? The ball get’s bigger and bigger and gains momentum. Soon the ball is huge and you are at the bottom of the hill. That’s what we want to do with your debt. Start small and finish big. List your debts in order of size from the smallest debt to the largest debt. You might have credit card debt…if you are normal you might have several credit cards with balances. List them smallest balance to largest. You might have a student loan. It could be you borrowed some money from a family member. You may have a home equity line of credit. List them all.

I sat down with one lady who was afraid she was going to be foreclosed on asked her how much debt she had. In the beginning she told me she only had two debts outstanding other than her house she hadn’t paid on in nine months. As we started listing the debts the list grew and grew. Before we were done she had NINE debts she owed…plus the house she hadn’t paid on in nine months. This is not a time to fool yourself! List them all. Small debts, large debts, official debts with lots of interest and small debts with no interest at all. You borrowed all the money and now it is time to pay the piper!

So you’ve got your debts listed smallest to largest. Now look at the minimum payments on each. That’s what you are going to pay on each one of them…except for the smallest. Whatever extra you can scrape together you are going to pay towards the smallest debt. The next month you are going to do the same thing. Pay minimums on all the debts…except for the smallest. Whatever extra you can scrape together you are going to pay towards the smallest debt. The next month you are going to do the same thing. Pay minimums on all the debts…except for the smallest. Whatever extra you can scrape together you are going to pay towards the smallest debt.

Soon the smallest debt will be paid off. Then you will have freed up the minimum payment that you were making on the smallest debt. Add that to the next smallest debt plus whatever else you can scrape together and apply it towards your next smallest debt. What are you going to do next month? You are going to pay minimums on all the debts…except for the smallest. Whatever extra you can scrape together you are going to pay towards the smallest debt.

I hope you are getting the idea. Let’s make a pretty chart for the book so you can see how that might look. Notice we haven’t listed the debts in order of interest rate. We have not listed them in order of minimum payment. We simply listed them smallest to largest.

Now let's see what happens...





Take a look at month four and five. On month five the last payment was made to the parents for the $150 loan. That loan is gone. You have a victory. You have now gone from eight debts to seven! Moreover you relationship with your parents is probably improved because you have paid them back. Now look at month number five. All that was added to the payment on the gas card was the minimum payment to the parents. Paying off the parents allows you to make a larger payment to the next debt. Let’s take a look and see where our balances are now on our smaller loans.


If you notice our minimum payment on our loan to our parents was $10. Our minimum payment to the Gas card is $20. So from now on the minimum we will be paying on our Gas card will be….$30. We roll the minimum from the previous debt into the minimum of the next debt. Then we will add anything else we can scrape together. Notice in some months we were able to pay more than other months. That’s just reality. Month 2 our imaginary couple was able to pay $60! Month 3 was tighter and they were only able to pay $40. Don’t worry about it!

You now have a plan. You have a budget. You have priorities and you are on your way to building a secure financial base for your relationships. How will the kids react when they realize the credit card companies aren’t calling anymore? How will your neighbors react when the debt collection agencies quit calling them? How will your wife or husband react? Even if you aren’t behind there is going to be reason to rejoice...and you will have moved the needle.

Finances Pt 3: R We Counter Cultural?

So if our first priority is in giving the first ten percent what is the second priority?

“If anyone does not provide for his relatives, and especially for his immediate family, he has denied the faith and is worse than an unbeliever.”--1 Timothy 5:8
“The good leave an inheritance to their children's children, but the sinner's wealth is laid up for the righteous.”-- Proverbs 13:22

“The rich rule over the poor and the borrower is slave of the lender.”-- Proverbs 22:7

Well I guess that spells it out! If you don’t provide for your family then you are worse than an unbeliever. Furthermore you need to provide for your grandchildren. Furthermore if you think you can get there by borrowing you are going to make a slave out of yourself.

So what does it mean to provide for your family, your grandchildren, or to be a slave? In my opinion it means different things for different people. For an entrepreneur it might mean leaving a business for future generations to grow. For a teacher it may mean making sure your kids and grandkids get an education that will lead them to nice careers. For some it could mean teaching their progeny about stocks and bonds. For some it could simply be putting what food on the table you can and keeping alive a hope that tomorrow can be better.

Providing for our Children’s children is a truly Christian outlook towards money and a largely foreign concept for most of us. I don’t remember hearing the verse about leaving your grandchildren an inheritance until the last couple of years. I grew up in church and went to seminary AND didn’t hear or read (or at least it didn’t register) that verse till I was in my mid-thirties? Why?!!

In my opinion the church as a whole has let us down on the financial front. As Christians we should teach each other sound financial concepts, live those concepts, and reap the rewards of those concepts. What I mean by that last comment is not that we should all be rich nor did I mean to espouse some sort of prosperity theology where God’s favored have more money. What I meant was that sound finances give us a foundation for better relationships.

Do you think the divorce rate among Christians would be the same as the divorce rate among non-Christians if more of us lived in financial security? Do you think individual churches might have more financial resources to carry out mission work? Could we fund Christian schools to take, not our children out of public schools, but disadvantaged children out of public schools who need extra time and attention? What kind of impact could we make on the church’s relationship with the world if we had our financial act together?

“The good leave an inheritance to their children's children.” The contrast of that concept with our culture is stark to say the least. Leviticus and 1 Chronicles say that we are “sojourners” in the land. This place doesn’t belong to us. Neither the earth, nor the culture do we own. We are to be in a word from the hippy days of the 1960’s “counter cultural.” Well isn’t living a financially responsible life counter cultural? …now back to our story. It doesn’t say provide for yourself, or provide for your family. It says leave an inheritance for your grandchildren. The thing is those verses don’t necessarily give us the details on how to do it. There are fortunately other verses that do speak to the subject.

“For which of you, desiring to build a tower, doesn't first sit down and count the cost, to see if he has enough to complete it?—Luke 14:28

“In the house of the wise are stores of choice food and oil, but a foolish man devours all he has.”—Proverbs 21:20

These two verses tell us we have to; first, see if we have enough money to spend for what we want to buy, and second, to live on less than we make. What does counting the cost mean? It means a budget you dummy. Oh gee that’s no fun is it?

“For my yoke is easy and my burden is light."—Matthew 11:30

It’s actually not that bad. A budget is a yoke that guides us. It will help us pay off our debts and save for the future. It is a tool not a master. If we use a tool like this we will truly be counter cultural in this materialistic society we live in.

Finances Pt 2: The Freedom To Give

But is giving to others our first priority? Where do we start? What is most important? I want to provide a useful framework for thinking about finances. I want to give you options about how to plan your finances. I want to give you tools that will put your finances right where they ought to be…in the background. Relationships are what is really important not money. However, can we really give our best to relationships if we have underlying concerns about a secure financial future?

Where do we start? How about with the first ten percent? “Hey,” you say, “I’m in debt up to my eyeballs. Is giving ten percent to a church really the smartest thing I should do.” My answer is…well I don’t know, but it’s a place to start. If you are under the pretense that your faith is the most important thing in your life starting with the 10% only makes sense. I believe I heard it from talk show host Dave Ramsey that “if you can’t live on 90% then you can’t live on 100%!” If you aren’t being responsible enough to kick out 10% of your spending you are doing something wrong (or maybe you don’t have any income at all—in which case 10% of nothing is well…nothing).

Let me share with you something about giving that ten percent that most pastors won’t like and a lot of people won’t agree with. The 10% goes to the church right? Does it have to be the local church? The church isn’t just the building down the road where your name is on the role. The Church is the worldwide family of God. Now I do think we need to support the local church, but can’t we support other things we feel strongly about as well?

I’ve got a friend who is a Catholic priest and he encourages the members of his congregation to give 10%. 5% to his local parish and the other 5% to charity (I think he mainly means Catholic Charities, but I’m stretching his advice to cover a lot of other things here). Let me give you an example. My wife is from Romania.

On a trip back to visit her family we went to the small village that her father was from. On our way to her grandmother’s house and the local church, which was just next door, we passed people on foot, horse drawn buggies, and a few really, really old Romanian cars. The church was literally falling apart. It was made at least in part with mud bricks…which were disintegrating. The floor was horribly uneven. The back part of the church which wasn’t used anymore had a hole in the roof you could throw a basketball through.

Luckily, the congregation was well on the way to building a new facility. They had been working on it for several years and the walls and roof were in place. The inside of the structure still had a lot of work to be done. There’s one note of explanation I should give you here. Europeans quite often don’t finance homes or buildings. They build with what money they have and then wait till they have more. It can take a decade to build a home. The upside is that when it is built, they are not straddled with mortgage payments for the next 20 years.

So this church was being built and one of the local Baptist Association officials had come over to America several times to raise funds. Several churches had made pledges…and never delivered! Don’t ya want to just find the people who go to a church like that and smack ‘em?! Telling these Romanians from a little village where a lot of them don’t have cars, paved roads, or even plumbing that they will help them build a church…and then not sending the dough!!

Soooo…my wife and I took our 5% and sent them the money for about a year. We had some money saved up when we were there on our first trip. We gave it to this aforementioned Baptist official (who happens to be Marta’s uncle) and he just about stroked out. Over the course of the year they were pretty much able to finish the church and when they did they sent us a picture of the inside of the church with a packed house.

Sometimes, giving to your local church doesn’t inspire a person like giving to something else. Paying for the lights and new carpet and the pastor’s salary isn’t sexy. Giving that five percent to the church in Romania actually kind of kept us on track for giving the other five percent to our local church. I really think it’s important to support your local church. Any organization we can be part of has dues. A bicycle club, Civitan, Optimist Club, Toastmasters; they all have dues to be paid. A church is pretty much the only thing going that you can be a part of week after week and never fork over a dime. Unfortunately, the reality is most people don’t.

At most churches the bulk of the giving is done by the older members. Why? Their houses are paid for, their kids are out of school, and their retirement fund is full so now they are supporting your cheap ass. Why don’t you start giving so those old folks can go on a vacation or something?

(The front of the old church is the only part remaining at this point. The rear of the church was torn down as a house was being built behind it. The new church will stand many years of the harsh Romanian winters while keeping the members warm!)

Finances Pt 1: Do Finances Impact Relationships?

Chapter Two:
We’ve all been told forever that financial problems are the number one reason of divorce. In this politically correct day and age we say “the number one cause of relational discord.” Some people don’t ever get married so it can’t be the number one cause of divorce for them. Regardless if someone is married, has a “civil union,” or is just dating, financial problems can cast a cloud of unnecessary stress on a relationship…or can it?

I set out to see if there was any real research behind this generally held assumption. I scoured the internet exhaustively and after fifteen minutes or so found a true academic study that examined the problem. “Financial Problems as Predictors of Divorce: A Social Exchange Perspective” is the title of the study. It was written by Jan Anderson of California State University. Wow. It had been so long since I had read a truly academic paper I was bored before the fourth page and I was actually interested in her topic! The way academics write is great for sleeping material.

There were sections on the theoretical framework, on what “social exchange” means, variable creation, and stuff even more exciting than that. Oh it makes my heart go pitter pat even just thinking of it. All the analysis, the academic rigor the, the, the…the results were not what I thought

Ms. Anderson actually found that there is no really great correlation between finances and divorce. “…financial problems explained less than 5% of the variability in divorce.” Who would have thunk? She goes on to say “Over 80% of the point-biserial and phi correlation coefficients were less than .10.” That is to say…actually I don’t know what that means, but it wasn’t looking good for our little bit of conventional wisdom.

Then the honesty. Academic researchers quite often obfuscate their research with arcane terminology. However, sometimes they also admit to the limits of their research. Just before the end of the paper Ms. Anderson comes clean as she writes, that, “a major limitation of this study was too few financial questions.” Then she goes further to say that a better study would incorporate more “traditional” financial problems such as “credit use, debt, bankruptcy, etc.”. Well duh!!

So her research proved that financial problems apart from “credit use, debt, and bankruptcy, etc” do not lead to relational problems! Wow! What other kinds of financial problems are people having…too much money? So my search to disprove conventional wisdom came to an end. Jan Andersen’s research aside I think we have to conclude that financial stress can eat away at a relationship.

It really doesn’t matter what time of day it is financial stress is still there. It doesn’t matter if you are standing, sitting, or lying down financial stress is still there. If you are at work, at home, in the car, or in the gym…financial stress is still there. It puts people on edge. It affects sleep, moods, and in general the emotional reserves of everyone in the household. The bottom line is that regardless of whether it is the number one cause of relational discord or the number four cause, it is a cause of relational problems.

In my opinion it is also a deeply spiritual problem. When my wife and I were members of First Baptist Church in Chattanooga, TN one of the things the pastor used to say is that the church budget was the most important theological statement put out by the church. Wow! Of course that was just his opinion. I am a Baptist and he’s not the Pope so anyone can have a contrary opinion. The point is this, finances have important spiritual ramifications.

Can you love God with all your heart, soul, and might if you are worried about the car being repossessed? Can you feel close to God when you have to worry about how to make the next house payment? I have a friend who has been through a tough patch right now financially. He says it has actually has helped him spiritually. He knows now that there are more important things in life than money. He says he and his wife have had to rely on God and each other to make it through emotionally and spiritually. It’s not really the finances that are eating up the marriage, “it’s the little things.” I wanted to smack him upside the head! If his finances were in order the “little things” would be just that: “little things!” Has financial hardship been good for him spiritually? I don’t really see how.

There is a strain on his marriage. There is a weight on his shoulders that he feels everyday. He does bring it to God in prayer, but the collection agencies have not stopped calling. What if his prayer is never answered and he never gets a better job? What if he lives the rest of his life not even from paycheck to paycheck, but in debt that he can’t pay back? Isn’t it a possibility this financial strain could turn him a bit more cynical? Could the unanswered prayer be a sign to him that God is not there for him?

The self righteous out there are thinking, “oh, if he was a REAL Christian then no amount of stress and strain would shake his faith in our Lord…” To which I answer, “Who talks like that? If you do then please shut your self-righteous pie hole and go back to “la la land.” I’m talking about real people with real problems, and it can affect their relationship with God. Money has spiritual implications.

Money and spirituality are NOT linked in the sense that those with a greater amount of faith have a greater amount of money. That’s just silly prosperity theology preached by televangelists and hacks. They are related partially in the sense that how we make and spend out money is a reflection of our values. Financial advisors will tell you over and over that people spend what they make. They see couples making $25,000 a year who have two kids and have a tough time. No money ever saved. They also see a childless couple making $120,000 a year have a tough time. No money ever saved.

Have you ever had enough money left over to help someone out? I’m not necessarily talking about the guy on the street who is asking for help. What about a relative, friend, or stranger you have heard that is having a tough time? We’ve all been warned about lending to relatives and friends, but I’m not talking about a loan. I’m talking about having money left over to GIVE to someone in need. Have you ever had a passion to give to an organization that helps others? Having your finances in order will allow that to happen.