Category Archives for "money"

Renewed Through Financial Housekeeping

The thing I have discovered about working with personal finance is that the good news is that it is not rocket science. Personal finance is about 80 percent behavior. It is only about 20 percent head knowledge.

Dave Ramsey

In this year of renew, I am focused on doing some financial housekeeping. Leanne and I do not have any consumer debt, but we do owe on our house. For the longest time, I have been the one who has handled the finances. I love numbers which has helped in this regard. Having said this, Leanne and I both agreed it was time for Leanne to get up to speed on our finances.

We are crossing into new territory in our lives as we prepare to launch our youngest out of college (we only have to pay for two more semesters). We moved this summer into a smaller home with a smaller mortgage. At the end of the year, I will be turning 50. I believe I still have very productive years ahead of me, but I also recognize I may want to direct my working attention elsewhere at some point with a possible early “retirement” from Siemens. This is the time to start making plans and to consider what steps we may need to take financially to ensure we are ready for these changes.

Over the last year or two, we have simply allowed our finances to coast. Thankfully, we had set many things in place to prevent us from calamity, but we also realized it was time to be more intentional. To help us in our focus, we decided to sign up for Financial Peace University at our church. We have been Dave Ramsey followers for a while, but this course is taking us from doing “Dave-ish” (this is when you only partially follow Dave’s teaching) to jumping on board more fully. After three weeks in the class, we can already see a big difference. We are working together on our budget. We are firming up our fully funded emergency fund. And we are making plans to firm up our savings (both retirement and non-retirement) while aggressively paying off our mortgage.

Regardless of your financial situation, it is always a good time to do financial housekeeping. If you are married, this is a great way to get on the same page and to solidify your relationship. If you are single, you may want to seek out some accountability and assistance to get you focused and moving in the right direction.

Here are Dave Ramsey’s Baby Steps for Achieving Financial Peace:

  1. Save $1,000 in a beginner emergency fund.
  2. Pay off all debt (except the house) using the debt snowball.
  3. Put 3-6 months of expenses in savings. This is your fully funded emergency fund.
  4. Invest 15% of your household income into Roth IRAs and pre-tax retirement plans.
  5. Save for your children’s college education using tax-favored plans.
  6. Pay off the house early.
  7. Build wealth and give.

Ramsey’s plan makes sense when you look at it. He encourages his followers to take it one step at a time allowing yourself to see progress and to gain momentum. Because of our station in life, I can see us making it to Baby Step 6 and 7 fairly quickly. For others, it may take a little more time.

For Leanne and me, our next steps include connecting with a financial advisor to help us plan and prepare for Baby Step 7, retirement, and beyond. We are also in the process of making sure Leanne is in the know on everything related to our finances – account numbers, account values, account contacts, etc. I am excited for this financial housekeeping we are doing, and I’m excited to see the progress we are making.

I want to be a good steward of the resources God has given us, and financial housekeeping is part of the stewardship process. Dave Ramsey isn’t the only solid biblical-based financial expert out there, but I have seen how his program and system works. Don’t let your finances operate on coast mode; get the help you need and intentionally move forward.

What is the next financial housekeeping step you need to take? What’s holding you back?

As each one has received a gift, minister it to one another, as good stewards of the manifold grace of God.

I Peter 4:10 (NKJV)

Here are some resources to help you out in this area:

I Didn’t Win The Powerball Lottery

 

I DIDN'T WIN THE POWERBALL LOTTERY

Yesterday, I walked into a local convenience store at lunch time after a quick-lunch time geocaching run.  I couldn’t believe how many cars were in the parking lot.  As I entered the store there was a line of people wrapped around the store.  I followed the line and saw that it led to a lottery machine in the middle of the store.  I was clueless.  I had no idea that everyone was in line for a huge Powerball jackpot.

It kind of cracks me up.  People stand in line for their entire lunch hour just to plunk money into a machine at $2 per ticket for an unlikely chance to win a $579 million dollar lottery jackpot.  What are the odds of winning this jackpot?  Some reports indicate that the odds of winning are 1 in 175 million.  The news today is reporting that there were 2 winning tickets (one in Arizona and one in Missouri).

I didn’t win.

I didn’t purchase a ticket though either.  They say you have to play to win.  But I think I may have already won.  In Proverbs, Solomon talks about ways to become wealthy:

Dishonest money dwindles away, but whoever gathers money little by little makes it grow.  Proverbs 13:11

I’m not sure that the whole lottery system is dishonest, but it’s not a smart way to gather money.  People think they can get rich quick by spending their paychecks on $2 lottery tickets or by putting their money in a slot machine or on a blackjack table.  Sure, it’s possible that someone could win and alter their financial existence forever, but is it likely?  Of course not!

As Christians, we are called to be good stewards of our resources.  While I’m not wasting my money on $2 dollar lottery tickets, I’m sure there are purchasing decisions that I have made that don’t offer the best return on investment.  Over the years, I’m learning more about good stewardship, and it’s an ongoing lesson.  Here are a couple of thoughts to get the conversation started:

  1. Don’t go into debt.  This is a challenging one for Americans.  We have built a culture of consumerism where consumer debt is the norm.  We want the latest thing now, so we go into debt instead of saving up to make the purchase.
  2. Get out of debt quickly.  So most of us missed step one.  There’s still hope.  Get out of debt as fast as you can.  This means cutting up credit cards.  This means sacrifice.  But it can be done!
  3. Have a plan.  This is an area that has taken our family a while to develop.  Sitting down once a month to plan your spending is key.  Your plan shouldn’t involve spending more than your income (makes sense).  Review your plan regularly throughout the month to make sure you are on track.
  4. Save your money.  Since when did we have to spend it all.  Just like the verse above states, wealth happens when you gather your money little by little.  Do you have a retirement fund?  Do you have a college fund?  Do you have an emergency fund?  These are great places to start.
  5. Give your money away.  When you get out of debt and start saving money, you suddenly have money that can make a real difference in the world.  I would say that this includes tithing to your local church (which should start from the beginning).
  6. Remember who owns the money.  If you are a Christian, you should realize that it’s not your money anyway.  Every good and perfect gift comes from God.  When we remember this fact, it will help us to make better decisions about how we spend the money we’ve been given.

Did you play the Powerball?  How are you being a good steward?  What other advice do you have for the Stretched Community on practicing good stewardship?