Honoring God With Our Money: Rules of Investing

If you have created a budget and are following it, eventually you will wind up with more in savings than you need for an emergency fund.  At that point, you should think and pray about investing your excess money to meet future needs.  The following rules of investing are adapted from Larry Burkett’s book, Family Budgets That Work.

investor

Rules of Investing:

  1.  Never invest money you cannot afford to lose.  All investments have an element of risk and the possibility exist that you might lose all or a portion of the money you have invested.  One only has to look at the variability in the stock market to see that this is true.
  2. Never get involved with things you don’t understand.  Don’t try to buy individual stocks unless you know the company well and have confidence that it is well-run.
  3. Demand sufficient information to thoroughly evaluate the opportunity.  Take the time to thoroughly research possible investments.
  4. Seek good, non-involved Christian counsel.  There are many knowledgeable Christian financial counselors who will discuss your needs and goals and help you to make wise investment decisions.
    • Proverbs 19:20  Listen to advice and accept discipline, and at the end you will be counted among the wise.
  5.  Set a minimum time to pray and seek God’s direction.  Don’t let anyone rush you into an investment decision.  If the opportunity is only available for a limited time, it is probably an opportunity you should forgo.
  6.   Once you have God’s direction, write out an investment plan.  A written plan will help you keep your goals in mind and help you make investment decisions that are consistent with your goals.
    • Proverbs 20:5 The purposes of a person’s heart are deep waters, but one who has insight draws them out.
  7. Avoid ‘get rich’ schemes.  Plan for slow, steady growth.  If it sounds too good to be true, then it almost always is.
    • Proverbs 21:5 The plans of the diligent lead to profit as surely as haste leads to poverty.
    • Proverbs 28:20 – 22  A faithful person will be richly blessed, but one eager to get rich will not go unpunished.   To show partiality is not good—yet a person will do wrong for a piece of bread. The stingy are eager to get rich and are unaware that poverty awaits them.

Honoring God With Our Money: Savings Plan

Most financial experts recommend that everyone should make a regular habit of saving 5% of their income.   A goal for savings should be to accumulate enough savings to cover 3 -6 months of living expenses as a cushion for periods of unemployment due to layoffs and extended illness.

For those who are struggling financially and are unable to meet current expenses, savings is not an option at present.  Everyone else should make a goal to save at least a small amount out of each paycheck and to increase that amount as circumstances allow. 

Getting into the savings habit can be difficult, so I offer the following steps to assist in getting started on a regular, steady savings plan.

Tips for Developing a Savings Plan

1)     Acknowledge that God’s word tells us that it is wise to save in the good times for lean times.

Proverbs 6:6-8  Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.

Proverbs 21:20  The wise store up choice food and olive oil, but fools gulp theirs down.

Story of Joseph in Egypt:  Genesis 41: 29 – 36

Seven years of great abundance are coming throughout the land of Egypt,  but seven years of famine will follow them. Then all the abundance in Egypt will be forgotten, and the famine will ravage the land. The abundance in the land will not be remembered, because the famine that follows it will be so severe.  The reason the dream was given to Pharaoh in two forms is that the matter has been firmly decided by God, and God will do it soon.
And now let Pharaoh look for a discerning and wise man and put him in charge of the land of Egypt. Let Pharaoh appoint commissioners over the land to take a fifth of the harvest of Egypt during the seven years of abundance. They should collect all the food of these good years that are coming and store up the grain under the authority of Pharaoh, to be kept in the cities for food. This food should be held in reserve for the country, to be used during the seven years of famine that will come upon Egypt, so that the country may not be ruined by the famine.”

2)      Develop a system for putting money directly into savings.

a.  Use a company payroll automatic savings deposit, if possible. This puts the money directly into savings before you receive it.

b.  Set up an automatic bank transfer from your checking account to your savings account.

c.  Write your savings account a check just as if it were a creditor.

3)      When an existing debt is paid off, allocate any extra money toward the next largest debt. When all consumer debt is paid off, then reallocate that money to savings.

4)     Set goals for which you are saving, such as a new couch or a vacation.  Having a goal for savings will keep you focused and less likely to fritter money away on things that are not truly needed.  This money should be in addition to your long-term savings for ’emergencies.’

5)     Use the money savings tips provided in an early blog to reduce expenses and have more money to put into savings.

Honoring God With Our Money: Maintaining Good Credit

This week lesson in our series on honoring God with our money covers way to deal with debt and to build credit.  Today we will look at ways to maintain good credit and improve poor credit.

A good credit score is important to maintaining a good reputation.

Proverbs 22:1 A good name is more desirable than great riches; to be esteemed is better than silver or gold.

It is easier to maintain good credit than it is to rebuild a poor credit rating.  A  credit score of about 680 or higher is generally considered to be good or excellent.  If your credit score is not good, you should take steps beginning today to rebuild your credit.

credit scores

A good credit score:

1)      Improves your chances of being approved for a loan.

2)      Allows you to get better interest rates on loans and credit cards

3)      Lowers your car insurance premiums.

4)      Helps you to rent an apartment.

To maintain a good credit score or improve your credit score,

1)      Always pay bills on time.

2)      If you missed a payment, get current and stay current.

3)      Never take on more debt than you can repay on your current income.

4)      Keep credit card charges to 30 – 40% or less of your credit limit.

5)      Don’t close old accounts as they contribute to a longer credit history.

6)      Review your credit report annually to check for errors, identity theft, and issues that are pulling your credit score down.  Checking your credit report and/or score does not hurt your score.

7)      Minimize the number of credit cards you have.  Opening new accounts lowers your score.

8)      Have different types of credit, such as a mortgage or lease, education loan, car loan, and credit cards.

9)      If you have never had credit, you will have no credit history.  This can make it difficult to be approved for a mortgage or lease.

10)   When shopping for a new car, do so in a short period of time, so it is viewed as a single inquiry rather than multiple.  Multiple inquiries in a short time period will lower your score.

You are entitled to a free copy of your credit report each year from each of the three major credit reporting agencies:  Experian, Equifax, and Transunion.  To request your free credit report, go to

www.annualcreditreport.com

Honoring God With Our Money: Dealing With Debt

This week lesson in our series on honoring God with our money covers way to deal with debt and to build credit.  Today we will look at steps to pay off debts and ensure that debt does not entrap.

Steps to Dealing with Debt

1)      Determine in your heart to repay all your debts, as the Lord enables you.

Psalm 37:21 The wicked borrow and do not repay, but the righteous give generously.

2)      Establish a payment schedule that includes all creditors.

    • Make a list of all debts from smallest to largest and/or according to interest rate.
    • Determine to first pay off either (1) the smallest debt or (2) the debt with the highest rate of interest.
    • Make minimum payments on all debts but the one to be paid off first.
    • Allocate as much money as possible each month to paying off the debt being retired first.
    • When one debt is paid off, concentrate efforts on the next debt to be paid off.

3)      Contact creditors and asks for a lower interest rate.  Many lenders will lower the interest rate to avoid default.

4)      Contact all creditors, honestly relate your problems, and arrange an equitable repayment plan.

5)      Buy on a cash basis, and sacrifice your wants and desires until you are current.  Allow God to meet your needs without taking on more debt.

Psalm 37:7  Be still before the Lord and wait patiently for him

6)      Do not cosign for another person unless you are able and willing to pay off the debt if he/she cannot do so.

Proverbs 22:26-27  Do not be one who shakes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you.

7)      Do not count on future raises to pay for today’s expenses.

James 4:13-15   Now listen, you who say, “Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.” Why, you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes.  Instead, you ought to say, “If it is the Lord’s will, we will live and do this or that.”

If you are dealing with overwhelming debt, you may need to seek assistance from a debt counselor.  Also seek help from the One who supplies all of our needs.  God wants to help you and is waiting for you to bring your burdens to Him.  Psalm 55:22, “Cast your cares on the Lord and he will sustain you; he will never let the righteous be shaken.”

Please feel free your tips for dealing with debt.

Honoring God With Our Money: Practical Money-Management Tips (Part 3)

This week’s lesson on honoring God with money focused on practical money-management tips.  These ideas have been culled from books, magazine articles, and internet sites, including Crown Financial Ministries and Christian Financial Concepts.

Today’s tips focus on ways to save on vacations and recreation, gift-giving, as well as general savings tips.

StaycationSaving on Vacations and Recreation:

  1. Take a stay-cation.  Take days trips to sites of interest in your general locale, go on picnics, visit museums, etc.
  2. Consider a camping vacation to avoid motel and food expenses. Christian friends can pool the expenses of camping items.
  3. Use Netflix or Redbox instead of going to the movies.  Also, saves on popcorn and soda.
  4. Have family games nights.
  5. To reduce expenses and increase fellowship, consider taking vacation trips with two or more families
  6. If flying, use the least expensive coach fare (i.e., late night or early morning usually saves 10 percent to 20 percent).
  7. Check out books and movies from the library.

Ways to Save on Gift-Giving:

  1. Shop ahead for birthdays and anniversaries.  Look for sales.
  2. Make gifts.  Learn new skills, such as sewing and knitting.
  3. If your family is large, draw names.  Or only buy Christmas gifts for young children and immediate family members.
  4. Help children earn money to shop for gifts.
  5. Consider sending cards rather than gifts.

 Saving money

General:

  1. Look for things you need on Craigslist.
  2. Take unwanted items to consignment stores.
  3. Have ‘planned’ leftovers for lunches and dinners on busy nights.
  4. Use your curtains and/or blinds to hold in heat in the winter and keep out heat in the summer.
  5. Wash clothes in cool or cold water.  Washing in cold water rather than hot water saves 60 cents per load.
  6. Don’t buy bottled water or $3 cups of coffee.
  7. Hang clothes out to dry.
  8. Cut out or reduce cable expenses. 
  9. Reduce cell phone expenses. Consider eliminating your land line.
  10. Down pay for music downloads—burn CDs at the library
  11. Eliminate magazine subscriptions and look for articles online.
  12. Dishwashers save more water than hand washing dishes.
  13. Take reusable bags when you go shopping.
  14. Reduce, reuse, and recycle.
  15. Frame your own photos and art work to hang on the wall.
  16. When ordering online, look for free shipping.
  17. Don’t spend change. Put it in a jar and cash it in at the end of the year.
  18. Put half of birthday money/gifts in savings.

Will your family be taking a ‘stay-cation’ this year?  What fun activities do you have planned?

What other tips do you have for saving money?

Honoring God With Our Money: Practical Money-Management Tips (Part 2)

This week’s lesson on honoring God with money focused on practical money-management tips.  These ideas have been culled from books, magazine articles, and internet sites, including Crown Financial Ministries and Christian Financial Concepts.

Today’s tips focus on ways to save on clothing and medical expenses for your family.

Saving on Clothing:

1)      If you can sew, consider making clothes.
2)      Make a written list of clothing needs and purchase during the “off” season when possible.
3)      Select outfits that can be mixed and used in multiple combinations rather than as a single set.
4)      Frequent the discount outlets that carry unmarked name-brand goods.
5)      Shop at authentic factory outlet stores for close-out values of top quality.
6)      Select clothing made of home washable fabrics.
7)      Use coin-operated dry cleaning machines instead of commercial cleaners.
8)      Practice early repair for damaged clothing.
9)      Learn to utilize all clothing fully (especially children’s wear).
10)   Check out Goodwill and the Salvation Army for clothing.
11)   Have clothes swapping parties.  Works for kids’ clothes and grown up clothes.

 Saving on clothes

Reducing Medical Expenses:

1)      Prevention is cheaper than treatment.
2)      Teach children to eat the right foods and clean their teeth properly. Good diet, rest, and exercise will most likely result in better health.
3)      Ask doctors and dentists in advance about costs.
4)      Shop for prescriptions and use generic drugs when possible.
5) Be sure to use doctors and labs that are in your insurance network.

Coupons for medical services

Honoring God With Our Money: Practical Money-Management Tips (Part 1)

This week’s lesson on honoring God with money focused on practical money-management tips.  These ideas have been culled from books, magazine articles, and internet sites, including Crown Financial Ministries and Christian Financial Concepts.

One of the most important tools in managing one’s money is to track monthly expenses.  In the past this was generally accomplished by either keeping a small notebook handy to write all expenses in, recording expenses on an Excel spreadsheet, or using the ‘envelope’ system.  The envelope system involves dividing one’s paycheck into envelopes, each for a designated purpose; when the envelope is empty no more money can be spent on the category of expenses until the following month.

In today’s digital world, tracking expenses can be accomplished more easily by downloading an app onto one’s phone, ipad, Kindle or other electronic device.  Since we tend to have our devices with us at all times, it is a handy, easy way to track expenses. Regardless of the method you use to track expenses, it is very important to consistently track expenses for at least several months so you can identify where your money is being spent.

Grocery sticker shock
Grocery bill sticker shock

Today I am providing lists of ways to save money on groceries and on eating out.  In other posts this week, I will provide lists of other ways to save money.  I hope that you will find at least a few new ideas for saving money in each post.  Please feel free to add your own money-saving tips in the comments.

Ways to Save on Groceries:

1)      Always use a written list and stick to it.  Plan meals for the week before shopping.
2)      Avoid taking your children grocery shopping.
3)      Never shop for groceries while hungry.
4)      Shop advertised specials, especially for nonperishables.
5)      Shop in bulk, if it makes sense for your family.
6)      Use a calculator, if possible, to total purchases.
7)      Reduce or eliminate paper products.
8)      Avoid processed and sugar-coated cereals. These are expensive and most of them have little nutritional value.
9)      Avoid prepared foods, such as frozen dinners, pot pies, cakes. You are paying for expensive labor that you can provide.
10)   Determine good meat cuts that are available from roasts or shoulders, and have the butcher cut these for you.
11)   Try store brand canned products. These are normally cheaper and the same products as name brands with a different label.
12)   Use manufacturer’s coupons and rebates only if you were going to buy the item anyway and it is cheaper than another brand would be without the coupon.
13)   Do not buy from convenience stores except in case of emergency.
14)   Avoid buying non-grocery items in a grocery supermarket except when on sale. These are normally “high mark-up” items.
15)   For baby foods, use normal foods processed in a blender.
16)   Check every item as it is being “rung up” at the store and again when you get home.
17)   Consider canning fresh vegetables whenever possible. Make bulk purchases with other families at farmers’ markets and such. (NOTE: Secure canning supplies during off seasons.)

Eating Out:

1)      Make eating out a special occasion.
2)      Know where kids eat free and take advantage when eating out.
3)      Order lunch size meals OR order dinner size meals and take leftovers home.
4)      Groupon or other restaurant special coupon deals–only buy if you eat at that restaurant.
5)      Avoid buying desserts at restaurants.
6)      Skip the ice cream shop and buy ice cream in the grocery store.
7)      Rather than eating out, throw a potluck party with family or friends.
8)      Make coffee at home; invest in inexpensive pot for the office.
9)      Bring your own snacks to work; take snacks in the car when running errands.
10)   Pack lunches for work.

What are your best tips for saving money on groceries and dining out?