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Family Money Management: Getting a Grip on Your Finances

Family Money Management: Getting a Grip on Your Finances. Budgeting is simply a plan to ensure that you know where your money goes each month. Larry Burkett with Kay Moore, Jesus On Money: Charting a New Course (LifeWay: Nashville 2000) pg. 48. God’s Plan for our Lives !.

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Family Money Management: Getting a Grip on Your Finances

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  1. Family Money Management:Getting a Grip on Your Finances Budgeting is simply a plan to ensure that you know where your money goes each month. Larry Burkett with Kay Moore, Jesus On Money: Charting a New Course (LifeWay: Nashville 2000) pg. 48

  2. God’s Plan for our Lives ! • That all should know Him • John 3:16 • A full and abundant life for His disciples • John 10:10b • Lives built on rock, not sand • Matthew 7:24-27 • Lives of service and witness • Matthew 28:19-20

  3. God’s Plan for our Resources ! • Every person to be found a faithful steward, acknowledging God owns it all • Psalm 24:1 / Matthew 25:21 • Every person giving their tithe • Leviticus 27:30 / Malachi 3:10 • Every congregation on mission for God at home and around the world • Acts 1:8

  4. Many have left God’s Plan And have built their lives on the sand

  5. Average credit card interest rate: 14.97% Credit Card Debt: $7,394 1.45 million US bankruptcies in 2009 51% Don’t pay off credit cards monthly Average Savings Rate: 4.09% Non-mortgage debt is now $14,000 + Many Americans now spending 120% of their annual income Debt and Financial Crisis in America Total consumer debt has risen from $1.34 Trillion to $11.4 Trillion since 2002 (nine years) http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php#Debt

  6. Credit Card Rates • Your Credit Card costs vary depending on how you are using them.

  7. Debt and Giving in the Church • The statistics about debt in our churches are no different than for society at large (including pastors and staff) • The average church attender in SBC gives about $1000 per year (total church giving vs. SS attendance) • Only 37 % of regular church goers give to their church • The average church attender gives less that 2.6 % of disposable income to the church • Only 3-5 % of givers actually tithe • Church CP Missions gifts have dropped from 10.1% in 1984 to 6.6% now (probably lower in California) • In the U.S. only 30% of Protestant pastors now tithe

  8. The Consequences For Failed Stewardship FAMILIES • Personal stress and worry • Families in bondage due to consumer debt • Broken marriages and relationships • People missing God’s blessings through faithful stewardship • Inability to do what God wants done with the resources He has given

  9. The Consequences For Failed Stewardship CHURCHES • Churches lacking the resources needed to: • Reach their communities for Christ • Fund their ministries and facilities • Adequately pay their church staff • A broken witness to your community • Insufficient funds to reach North America and the world for Christ

  10. Getting into debt is like sliding down an icy mountain. Getting out of debt is like climbing back up that same mountain

  11. Sixteen out of 38 of Christ’s parables deal with money; more is said in the New Testament about money than heaven and hell combined; five times more is said about money than prayer; and while there are 500 plus verses on both prayer and faith, there are over 2000 versesdealing with money and possessions.” John MacArthur, Jr....

  12. Living within your means provides you with Dignity and Independence

  13. Financial Planning is the allocation of limited resourcesto unlimited alternatives Key Issue

  14. Questions for your Personal Finances Current financial situation Upcoming issues Schooling, children’s education, home purchase, vehicles, etc. Do you tithe

  15. Retirement Questions You Need to Ask When will I retire, day and year? How long will I live? What will I do in retirement? What debt will I carry into retirement? Where will I retire?

  16. If You Don’t Have Enough to Retire on… Die Work longer Retire on less Work in your retirement

  17. APPENDIX 4 (p. 12 in work book) Form for determining Net Worth Date Husband + Wife + Joint=Total Assets: (what God has entrusted you with) Cash on Hand Checking account(s) Savings accounts(s) Credit Union Savings Bonds, stocks, securities Cash value of life insurance policies Cash value of annuities and other retirement plans Real estate (market value) Automobiles (market value)

  18. APPENDIX 4 (cont....) Husband + Wife + Joint = Total Furnishings, equipment, tools Jewelry, collections, heirlooms, clothing Money owed to us Other Assets __________________________ Total Assets $ $ $ $ $ Liabilities: (What you owe) Real Estate Loan Home Equity Loan Vehicle Loan(s) Life Insurance Policy Loans

  19. APPENDIX 4 (cont...) Husband + Wife + Joint = Total 401K or 403B Loans Installment Debt (p. 15) Medical Bills Other Debts __________________________ Total Liabilities $ $ $ $ $ To find net worth: Total Assets (subtract) Total Liabilities __________________________ This is your net worth $ $ $ $ $

  20. 12 Warning Signs of Excessive Debt You are unable to pay each month’s bills on time You routinely receive over-due notices because of late or missing payments You pay the minimum amounts required on your credit card bills You’ve reached your credit limits on your credit card bills You’ve applied for more credit cards to keep up your spending

  21. 12 Warning Signs of Excessive Debt You have used cash advance for one credit card to make payments on others You regularly take cash advances on your credit cards to pay routine living expenses such as food, rent, or utilities You owe more on your car than it is worth as a trade in You postdate checks and cover them on payday or with new borrowings

  22. 12 Warning Signs of Excessive Debt You don’t know the total amount of installment debt you owe You no longer contribute to a savings account You have no savings at all

  23. Steps to Financial Freedom 1. Establish Godly Goals (pg. 14) 2. Estimate Your Income 3. Determine Your Expenses for Last Year 4. Make A Plan for Spending 5. Keep Simple, Accurate Records

  24. Average Lifestyle 2 + % = Kingdom work 20% = Taxes Citizenship 78% = Self & Family Distributions

  25. Step # 1: IN THE STARTING BLOCKS GOALS Goal Ranges 1. Within a Year 2. Up to 5 Years 3. 20 Years or more

  26. 4 REASONS TO SET GOALS 1.Provide direction and purpose 2. Help to crystallize your thinking 3. Provide personal motivation 4. Help state God’s Will

  27. Goals for Next Year 1. Eliminate Consumer debt 2. Begin savings-emergency fund 3. Increase giving 4. Begin volunteer mission work 5. Plan for college

  28. Proverbs 13:22 A good man leaves an inheritance for his children's children, but a sinner's wealth is stored up for the righteous.

  29. When Determining Your Goals: Reach as far into the future as you dare Be as specific as you can Be realistic-goals will change Give Priority to the goals that contribute to growth in Christian lifestyle They should usually benefit the whole family Write your goals down in priority with time lines

  30. Why Are We in Debt? We have to have it now! We have to have the best! It has to be new! It has to be the latest in kind! After all, we have to keep up with the Jones! p.s... The Jones’ are going into bankruptcy1 Harold Nichel, Ph.D..., Financially Free: God’s Plan and How to Achieve It (Santa Paula: Focus For Living, 1995) p.11.

  31. The wheel was invented so we could move faster,Credit was invented so we would have to.

  32. Why Get Rid of Debt? A 30 year mortgage will cost the homeowner 3 times the original purchase price It takes 11 years to pay off $2,000 at 18.5% interest Interest money is forever lost. It is wasted money. It is poorStewardship. 1 Corinthians 4:2 Now it is required that those who have been given a trust must prove faithful. Harold Nichel, Ph.D...., Financially Free: God’s Plan and How to Achieve It (Santa Paula: Focus For Living, 1995)p; 15-16

  33. Possible Sources of Income Within Your Grasp Sell your new car and buy a pre-owned car with cash. Use the monthly payment to pay off debt Sell your second car, motor home, boat, etc. and use the money/payments to pay off debt Raise the deductible on your auto insurance premiums

  34. Have a garage sale and “lose” the excess “stuff” Cash in warranties and service contracts Go to the library instead of buying books Cut trips to the vending machines at work Have a baby sitting exchange with other parents Give up cable television if you don’t need it for regular reception Get rid of high interest credit cards Drink water instead of ordering coffee, tea, or soft drinks when dining out

  35. Turn the thermostat up in the summer and down in the winter Do your own maintenance when possible Bring your lunch to work instead of buying it Buy clothes at consignment shops Watch for sales Consider Want versus Need Cancel newspaper and magazine subscriptions Tighten up miscellaneous spending What have I missed?

  36. When buying clothes: Cash only Family counsel before payday-prioritize need Shop sales, mail order catalogs, discount houses, consignment shops, etc. Educate family on care of clothing Larry Burkett with Kay Moore, Jesus On Money: Charting a New Course (LifeWay: Nashville 2000) pg. 68-69

  37. When it comes to entertainment: Wait for movies to be released on video Use two-for-one coupons when renting Buy entertainment books Prepare meals at home Play family games Plan vacations in “off season” Larry Burkett with Kay Moore, Jesus On Money: Charting a New Course (LifeWay: Nashville 2000) pg. 72-73

  38. “Nuts and Bolts” of Budgeting If you can’t get your budget in line by your self, call a counselor at: LifeWay Resources (800) 458-2772 Christian Credit Counseling Service (800) 342-7686 for business help

  39. Christian Money ManagementEnd of part 1

  40. Reduce Installment Debt (pg. 15)

  41. If you want to feel rich, just count all of the things you have that Money can’t buy.

  42. Goals for Next Five Years (p. 14) 1. Pay cash for automobiles 2. Begin investments 3. Continue plans for college

  43. Paying Cash for Autos Assume monthly payment of $275 per month on current automobile. Value of Auto $ 7,000.00 Annual Cash Accumulations First Year $ 3,300.00 Second Year $ 3,300.00 Third Year $ 3,300.00 Cash & Trade-in $16,900.00 Benefit: $1,200 to $1,800 save per year plus interest earned on savings

  44. Long Range Goals-20 or more years (p. 14) 1. Pay off house mortgage 2. Continue investments 3. Early retirement 4. Extended mission projects

  45. Estimate Income

  46. Determining Your Income

  47. Increase Income or Cut Expenses? Cost for Spouse’s Employment based on Annual Salary of $7,800 Income tax withholding $ 546.00 Social Security taxes 492.00 Other withholdings 51.00 Transportation 720.00 Church gifts (wkly and mission) 936.00 Extra clothes, cleaning, etc.. 520.00 Additional cost of food & household ops. 2,400.00 “I deserve it because I’m working”/gifts 780.00 Additional taxes due to higher tax bracket 1,374.00 Total Cost to be Employed $7,819.00

  48. Determine Expenses for Last Year

  49. How to Increase Income Specializing Hobby or Interest Upgrade Skills

  50. KINDS OF EXPENSES Fixed Expenses Monthly Other than Monthly Flexible Expenses

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