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YAM – Money Management

YAM – Money Management. Planning for a Lifetime. Introduction (What you will learn). The importance of saving money. Lifetime costs by category + Grand Total. A word on financial-based divorce. Some final words. The importance of saving money (The FUTURRRE!).

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YAM – Money Management

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  1. YAM – Money Management Planning for a Lifetime How to biblically manage finances.

  2. Introduction(What you will learn) • The importance of saving money. • Lifetime costs by category + Grand Total. • A word on financial-based divorce. • Some final words. How to biblically manage finances.

  3. The importance of saving money(The FUTURRRE!) • What are some things we need to save up money for? • A short list of the big ticket items: Marriage, children, house, cars, emergencies, school, retirement, inheritance, funeral. • A short list of smaller ticket items: Refrigerator, stove, furnace, A/C, washer, dryer, furniture, roof repair, computers/tech. gadgets, remodeling. How to biblically manage finances.

  4. Now for some Scripture(Hope you brought your Bible) • We are to plan for the future. Examples: • Genesis 41:33-40, 41:47-49, 41:53-57 • Proverbs 13:16 • Luke 14:28-30 • 1 Corinthians 16:1-3 • Matthew 25:1-13 How to biblically manage finances.

  5. Break it down!(Costs by category) • How much does it cost to…get married? • Time for a game! (Note to self: Traditional). • The ring can be from $100 to $3,500 (rule of thumb: One month’s income). Average $800. • Wedding and reception: Average cost in the U.S. is $20,398. Average range is $15,299 to $25,498. • The honeymoon is another $3,000 to $10,000. Average $3,400. • Total: $24,598. Roughly $25,000. How to biblically manage finances.

  6. Break it down!(Costs by category) • How much does it cost to…have a baby? • About $5,000 if well insured. Check your insurance policy. • If not insured, $2,000 per ultrasound (3 per pregnancy), 12 prenatal visits at $150 each, $5,000 OB fee (whatever that is), and $8,000 to $15,000 for delivery in the hospital + stay. Roughly $22,000. • Extra cost if problems develop. • Let’s say $10,000 to be on the safe side. How to biblically manage finances.

  7. Break it down!(Costs by category) • How much does it cost to…raise one child? • The first year is supposedly the most expensive. • But, on average, per year (until college age): • Housing - $4,400 Healthcare - $730 • Food - $2,000 Transportation - $1,700 • Clothing - $550 Education - $1,300 • Misc. - $1,200 • Average total per year: $11,880 • Total cost for 18 years: $213,840 How to biblically manage finances.

  8. Break it down!(Costs by category) • How much does it cost to…get a house? • Decent houses range from $80,000 to $200,000 with the nicer ones kicking in around the $130,000 range. • Rule of thumb is: Minimum 20% down – the more, the better. But reserve some money for emergencies. • Property taxes, community fees, insurance, etc. = More per month. • A bit of history: 40 years old + lawyer. How to biblically manage finances.

  9. Break it down!(Costs by category) • How much does it cost to…own a car? • Average cost of a used car with low miles is $7,000 to $11,000. • Assume insurance at $200 per month, total repairs and maintenance at $6,000, gas every week at $25. • Roughly $16,700 to $20,700. How to biblically manage finances.

  10. Break it down!(Costs by category) • How much does it cost for…emergencies? • $1,000. • Break an arm? $1,000. • Car trouble? $1,000. • Leaky roof? $1,000. • You get the picture. Always have $1,000 on hand for real emergencies. How to biblically manage finances.

  11. Break it down!(Costs by category) • How much does it cost to…retire? • Social Security? Yeah, right. • Assume retirement at 65 and death at 85. You need 20 years worth of income. • Assume $16,000 per year in expenditures. • Roughly $320,000. How to biblically manage finances.

  12. Break it down!(Costs by category) • How much does it cost to…die? • Brace yourself… • Last two years of life via Govt. programs: $28,616 • Family out-of-pocket medical: $5,700 • Funeral and burial: $8,000 • $42,000. You pick up $13,700 of that. How to biblically manage finances.

  13. The Grand Total(Welcome to America!) • Over your lifetime: • Marriage: $25,000 • Baby: $10,000 • Raising one child: $213,000 • House: $120,000 • 6 cars: $108,000 • 30 emergencies: $30,000 • Retirement: $320,000 • Death: $13,700 • Grand Total: $839,700 or $1,627.32 per month or $10.17 an hour @ 40 hour work weeks, avg. How to biblically manage finances.

  14. A word on divorce(An ugly, ugly word) • Mark 10:1-12 • Yet, today, 50% of all marriages end in divorce. • AND there is no statistical difference between Christians and non-Christians! • Half is due to lack of communication. • Half is due to financial troubles. • Resolve now to never utter the word divorce and to work through your problems. The moment the word escapes your mouth, it becomes an option in any conversation. How to biblically manage finances.

  15. Oops. Got carried away.(More immediate future) • So let me answer the most immediate question that should be on your mind: “How much do I need to save to completely avoid finance-based divorce from the get-go?” • Quick quiz: Who here requires financial stability to be satisfied, happy, safe? How to biblically manage finances.

  16. More immediate future (The formula) • Cost of marriage in the first five years: • Marriage - $25,000 • Baby - $5,000 • Child - $11,880 * 3 = $35,640 • New House - $56,000 (Down payment + monthly) • Total: $121,640 • Average: $14,328 per year after $50,000 up front. • $50,000 + 1 year buffer = $64,328 liquid assets. • $80,000 desirable in total combined assets up front. • Compare: $45,000 total up front living with in-laws. How to biblically manage finances.

  17. Some final words(Ending on a positive note) • The big numbers are just that - big numbers. Start small. • Financial management is hard for some people. Everyone needs help but we are all afraid to ask. • But this is why we need to support each other. We do this by encouraging one another to come out of our financial shells and be accountable to each other and to God. • One last note (if there is time) – Combine arranged marriage with dating-based marriage. How to biblically manage finances.

  18. YAM – Money Management End of Lesson How to biblically manage finances.

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