In everything in life we must account for the unexpected. I would call it foolish to not do this. Most times when we have an emergency it is a major life changing event. However, when we have not set ourselves up for success financially to get through these types of events not only do we have a major LIFE crisis, but we also have a MONEY crisis.
This adds tons of unnecessary stress that could have been avoided. The reason why I seem to be harping on the need of an Emergency Fund a lot is for a couple reasons:
1.) It is the 1st step the I advise people to do. So if you wanted to ask me what your first step to financial freedom is I would advise to save up $1,000 (basic) emergency fund or $500 if your income is under $20,000.
2.) The other reason is because I see scripture advising us in this direction. Proverbs 21:20 "In the house of the wise are stores of choice food and oil, but a foolish man devours all he has."
It is literally foolish to devour all you have. So if you are living paycheck to paycheck and all your money comes in, then all your money goes out, scripture calls this foolish. This is why my first step is to break the chain and develop an emergency fund.
Showing posts with label Scripture. Show all posts
Showing posts with label Scripture. Show all posts
Monday, September 24, 2007
Tuesday, September 11, 2007
Cash Can Cause...
CONFLICT
I was in wal-mart the other day and saw a kid melt down because he wanted to get something but his mom would not let him. At first I thought how embarrassing that looks and then how thankful I was that I never did that as a kid (...right).
I realized that this was a conflict that was caused by money. It causes conflicts across the board: teenagers and parents, married couples, little kids in toy stores...it is messing stuff up all over the place.
CONFUSION
Money also causes confusion. I think that 2 groups that have a major role in people's confusion is the local church and the educational system.
It is strange that a senior can graduate from high school and can dissect a frog, knows the Pythagorean theorem, and can tell you the symbol for Sodium but cannot balance a checkbook or recognize a good interest rate.
It is so funny that major outlets of teaching will ignore the most practical thing people need to know. And when I mean ignore it, I mean never bring it up period. Then when someone is faced with financial decisions they are hit flat in the face without any experience. Maybe that is the reason why more people will declare bankruptcy than graduate from college this year. It is because we’re confused.
Money is dangerous stuff, you better know how to handle it. Jesus talks a lot about money, but most of the time he is warning us from it. Put yourself in a position to win with money. It really does matter. Are you controlling your money or is your money controlling you?
I was in wal-mart the other day and saw a kid melt down because he wanted to get something but his mom would not let him. At first I thought how embarrassing that looks and then how thankful I was that I never did that as a kid (...right).
I realized that this was a conflict that was caused by money. It causes conflicts across the board: teenagers and parents, married couples, little kids in toy stores...it is messing stuff up all over the place.
CONFUSION
Money also causes confusion. I think that 2 groups that have a major role in people's confusion is the local church and the educational system.
It is strange that a senior can graduate from high school and can dissect a frog, knows the Pythagorean theorem, and can tell you the symbol for Sodium but cannot balance a checkbook or recognize a good interest rate.
It is so funny that major outlets of teaching will ignore the most practical thing people need to know. And when I mean ignore it, I mean never bring it up period. Then when someone is faced with financial decisions they are hit flat in the face without any experience. Maybe that is the reason why more people will declare bankruptcy than graduate from college this year. It is because we’re confused.
Money is dangerous stuff, you better know how to handle it. Jesus talks a lot about money, but most of the time he is warning us from it. Put yourself in a position to win with money. It really does matter. Are you controlling your money or is your money controlling you?
Friday, August 3, 2007
Gut Check Time
Recently I have been thinking about my principles on personal finances because I am preparing to teach a two week Financial Class on October 21 and 28. (Click contact me if you want more information on this) These are 3 questions that I had to ask myself, that I encourage you to ask yourself to examine your financial health.
1.) Is there anything in my finances that if made public would discredit me?
If your financial records suddenly became public, is there anything you are doing that would make you embarrassed? You know what that is and chances are you need to cut it out of your life. This rings true especially if you are a Christ Follower. It may be your $400+ monthly eating out expense when you say you have a heart for the poor. Money is an indicator of our heart, the tough thing is that it is so easy to keep it private. I encourage you that if there is something in your financial life that if brought to light would be a negative representation of you, to cut it out.
However, this is just a symptom of a bigger issue. If you are not content in every situation in life you will always have these type issues being brought up. Cutting out something of your life is behavior modification and will probably be brought up again. Praying and working on being content because God has given you so much already is the solution. That is not an overnight thing, that takes perseverance and time.
2.) What am I doing right now that will make me be where I want to be financially a year from now?
I know a lot of us say, "we are going to save money when this changes" or perhaps we say, "once that thing goes away I will spend less." Whatever reason (cough, excuse) we might be telling ourselves, the better question is what am I actually doing? Am I making steps to be where I want to be?
One of my goals has always been making my money work for me so I wouldn't HAVE to (I would still WANT to because I love working at what I am passionate about; I would just do it for free now). I want my "alternative income stream" to be larger than my expenses. What I qualify as alternative income is anything that I don't go to a job for. This could be interest earned, dividends, rental income, or any type of income stream that doesn't require me to "go into work for." This is a lot longer than a goal than one that can be achieved a year from now. But I honestly have to ask myself, if this is a goal then what steps am I or have I taken towards it.
3.) Am I increasing in generosity?
It doesn't matter if you follow Christ or not, you have to be increasingly generous. I believe that it is truth that the love of money is a slippery slope that can ruin a persons life. In fact, it is cool that I am writing about this today because I just read 1 Timothy 6 this morning. (Fresh Bread)
1 Timothy 6:9 "People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction."
I believe that God created our hearts and through his divine word he is warning us about money. It is a blessing to have money and in that same chapter (1 Tim 6:17) scripture says that God richly provides us with everything for our enjoyment. Now, right before that is says do not put your hope in wealth but hope in God and they go together. What I am saying is, it is okay to enjoy blessings from God (after tithing, basic needs, and generosity of course) as long as you put your hope in God and not in wealth. I am not using that scripture as justification for being greedy so please don't hear me wrong.
But to get back on track, generosity is key to keeping our hearts in check so that we won't fall into ruin and destruction like 1 Timothy 6:9 talks about.
Those are 3 questions that you can ask yourself that will help examine if you are on track to being financially healthy.
1.) Is there anything in my finances that if made public would discredit me?
If your financial records suddenly became public, is there anything you are doing that would make you embarrassed? You know what that is and chances are you need to cut it out of your life. This rings true especially if you are a Christ Follower. It may be your $400+ monthly eating out expense when you say you have a heart for the poor. Money is an indicator of our heart, the tough thing is that it is so easy to keep it private. I encourage you that if there is something in your financial life that if brought to light would be a negative representation of you, to cut it out.
However, this is just a symptom of a bigger issue. If you are not content in every situation in life you will always have these type issues being brought up. Cutting out something of your life is behavior modification and will probably be brought up again. Praying and working on being content because God has given you so much already is the solution. That is not an overnight thing, that takes perseverance and time.
2.) What am I doing right now that will make me be where I want to be financially a year from now?
I know a lot of us say, "we are going to save money when this changes" or perhaps we say, "once that thing goes away I will spend less." Whatever reason (cough, excuse) we might be telling ourselves, the better question is what am I actually doing? Am I making steps to be where I want to be?
One of my goals has always been making my money work for me so I wouldn't HAVE to (I would still WANT to because I love working at what I am passionate about; I would just do it for free now). I want my "alternative income stream" to be larger than my expenses. What I qualify as alternative income is anything that I don't go to a job for. This could be interest earned, dividends, rental income, or any type of income stream that doesn't require me to "go into work for." This is a lot longer than a goal than one that can be achieved a year from now. But I honestly have to ask myself, if this is a goal then what steps am I or have I taken towards it.
3.) Am I increasing in generosity?
It doesn't matter if you follow Christ or not, you have to be increasingly generous. I believe that it is truth that the love of money is a slippery slope that can ruin a persons life. In fact, it is cool that I am writing about this today because I just read 1 Timothy 6 this morning. (Fresh Bread)
1 Timothy 6:9 "People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction."
I believe that God created our hearts and through his divine word he is warning us about money. It is a blessing to have money and in that same chapter (1 Tim 6:17) scripture says that God richly provides us with everything for our enjoyment. Now, right before that is says do not put your hope in wealth but hope in God and they go together. What I am saying is, it is okay to enjoy blessings from God (after tithing, basic needs, and generosity of course) as long as you put your hope in God and not in wealth. I am not using that scripture as justification for being greedy so please don't hear me wrong.
But to get back on track, generosity is key to keeping our hearts in check so that we won't fall into ruin and destruction like 1 Timothy 6:9 talks about.
Those are 3 questions that you can ask yourself that will help examine if you are on track to being financially healthy.
Monday, July 30, 2007
Common Budget Planning Traps to Avoid
In order to ensure success in your cash flow plan I wanted to talk about 4 common traps or mistakes that people fall into which ultimately causes them to "get out of the game" with their finances.
I have been harping on "having a plan" for the past few weeks and those of you that have started making a plan I want to encourage you. Every month you are going to get better at planning. The first month is the hardest, I cannot urge you enough to continue this every month because it is so easy to give up.
Everybody that makes a Cash Flow Plan is not always successful to start. Some do have a natural gift at thinking through each detail and following their plan, but I would say most do not. 4 Common reasons why your Cash Flow Plan may not work:
1) Leaving Things Out
Each month is different. December is going to be much different than June. December has Christmas; June probably has a vacation. March might have a birthday; August your kids need new clothes for school. My point is actually think through your month. Plan it carefully. You have a specific number of money coming in, you have to tell it what to do. That includes mid and long term savings that you set aside each month such as: car, retirement, kids college, etc.
2) Over Complicating Your Plan
You do not NEED to put down $17.22 for toilet paper in a certain month. This is not only tedious and annoying, it is also unnecessary. As an example of what I do is actually lump in my toiletries and groceries together (I usually get them from the same store anyway).
3) Not Actually Doing It
Tell your money where to go instead of wondering where it went. Imagine if a coach did not have a plan for his team; there is a pretty good chance he would not be very successful (and probably fired).
4) Not Actually Living By It.
If that same coach made a plan, but then didn't care if his players actually did what he planned out, they would still not be very successful in this scenario either.
Cash Flow Planning helps avoid living on a crisis by crisis management system. It should not be a surprise when Christmas presents come up or when you need to buy clothes for the kids. These are not what I consider "emergencies." If you want to review my thoughts on emergencies (see Click Here and read the importance of an emergency fund.
Proverbs 21:5 - "The plans of the diligent lead to profit as surely as haste leads to poverty."
Wednesday, July 11, 2007
Proverbs 12
This is extremely fresh bread so I am excited to share it. It is more like old bread that now has become fresh again. But that doesn't really happen. It's more like in the past I LOVED Wendy's Spicy Chicken Sandwiches, but over the past year or two I kind of forgot that I liked them. Recently I had one and now I can't stop trying to figure out ways to go to Wendy's to have another. Okay that's what this is like.
Proverbs 12:1 - "Whoever loves discipline loves knowledge, but he who hates correction is stupid."
I really love it when a passage of scripture sounds like my friend Adam wrote it. Adam is full of wisdom and full of bluntness, like this passage. To think that every time I am corrected I immediately get defensive and try to avoid it. This is a necessary step for knowledge.
Proverbs 12:11 - "He who works his land will have abundant food, but he who chases fantasies lacks judgment."
Work is supposed to be hard. I know a lot of people (including myself) think we deserve to have any job of our choosing, but that is not the way it works. We are supposed to work from the sweat of our brow, that is the broken world that we live in. I am not saying don't go after the career you want, but I am saying don't chase fantasies. If you have to work a job to pay bills while doing something you are passionate about on the side, do it. But scripture is clear that if you chase fantasies without working the land you are lacking judgment.
Proverbs 12:24 - "Diligent hands will rule, but laziness ends in slave labor."
I love it when scripture cross references with other scripture. At first glance this passage kind of doesn't make any sense. Why would laziness end in slave labor? Glad I asked. This passage works well in light of Proverbs 22:7 "The rich rule over the poor, and the borrower is servant to the lender." Another translation says "the borrower is slave to the lender." When you establish a lender/borrower relationship you are actually establishing a slave/master relationship. The sad thing is I know too many people whose master is Visa or American Express. I don't think that the people who named "MasterCard" were too far off.
So if debt leads to slavery and laziness leads to slavery then we can conclude that laziness and debt are connected. If you find yourself in a mound of credit card debt (like I was), you have to evaluate if laziness was a contributing factor why you got into debt, or why you are not out.
Proverbs 12:1 - "Whoever loves discipline loves knowledge, but he who hates correction is stupid."
I really love it when a passage of scripture sounds like my friend Adam wrote it. Adam is full of wisdom and full of bluntness, like this passage. To think that every time I am corrected I immediately get defensive and try to avoid it. This is a necessary step for knowledge.
Proverbs 12:11 - "He who works his land will have abundant food, but he who chases fantasies lacks judgment."
Work is supposed to be hard. I know a lot of people (including myself) think we deserve to have any job of our choosing, but that is not the way it works. We are supposed to work from the sweat of our brow, that is the broken world that we live in. I am not saying don't go after the career you want, but I am saying don't chase fantasies. If you have to work a job to pay bills while doing something you are passionate about on the side, do it. But scripture is clear that if you chase fantasies without working the land you are lacking judgment.
Proverbs 12:24 - "Diligent hands will rule, but laziness ends in slave labor."
I love it when scripture cross references with other scripture. At first glance this passage kind of doesn't make any sense. Why would laziness end in slave labor? Glad I asked. This passage works well in light of Proverbs 22:7 "The rich rule over the poor, and the borrower is servant to the lender." Another translation says "the borrower is slave to the lender." When you establish a lender/borrower relationship you are actually establishing a slave/master relationship. The sad thing is I know too many people whose master is Visa or American Express. I don't think that the people who named "MasterCard" were too far off.
So if debt leads to slavery and laziness leads to slavery then we can conclude that laziness and debt are connected. If you find yourself in a mound of credit card debt (like I was), you have to evaluate if laziness was a contributing factor why you got into debt, or why you are not out.
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