Sunday, December 11, 2005

Financial Resolutions for the New Year

Some people are really good at making New Year’s resolutions but not necessarily in keeping them. While this may be natural a New Year is a great time to make some resolutions to make positive changes. One of things families can often do better is to become good stewards of their finances.

This is something that nearly every family as well as single adult can work on as there is a daily and constant struggle literally between good and evil. On one side we have pull of a culture that tells us we need things we really don’t and on the other side, Godly wisdom which is available and can enable us to live a life that is focused on contentment when it comes to more things. Being content is difficult when we are constantly being told that things bring happiness, that debt is expected and that a little bit of money will solve all of our problems.While some people have found great help in the advice given by licensed, certified financial planners, there is some simple, common sense financial guidance that may help to give you a new perspective in the New Year.

For example, most people think immediately of "spending" when it comes to financial matters but actually, "spending" is just one part. There are actually five componets to a financial plan or budget. They include: Earning, Spending, Saving, Giving and Debt.

This article is too brief to fully develop all five of these components. If you are inclined, all of these components are fully explained and planned in the “Good $ense” seminars held regularly at the church where I serve on Pastoral Staff as well as at other churches that have a stewardship or financial ministry.

Here are some really good tips on just two of the five components: Spending and Debt.

We’ll start with Spending.

There are four myths that most of us have bought into regarding spending. They are: that things will bring happiness; that your possessions define who you are; that you deserve to have what others have; and finally, that spending is a competition. While these myths are truly pervasive in this culture, they stand in direct opposition to what God has said regarding the way we are to relate to the things of this earth.

The New Testament teaches that we are to seek first the Kingdom of God and His righteousness (Matt. 6:33). Further it teaches that we are to store up our treasures in heaven rather than consume things for our own benefit (Matt 6:19).

The more secular wisdom of practicing moderation or what the Bible calls contentment is also a good way of looking at spending. All too often we allow money and what it can buy to become an idol in our life and we need to eventually say, “Enough is enough”.

Studies have shown that often families get into trouble when they start believing that they need to have it all. Mom’s go back to work because they think they need to earn more income so that the family can have more; while all the time what the family really needed was more of mom. Dad works more and more hours to earn more and more money to buy more and more things; while the family really just needs more time to be a family.

The second financial component that we can mention is Debt.

American consumer debt has a stranglehold on too many families and it will destroy your family if you don’t get it under control. While there are many advisors that recommend debt consolidation and second mortgages as a way of decreasing your monthly payments I have an easier solution.

  1. Arrange all of your debt by amount owed and make a resolution to get all consumer debt (with the likely exception of your home mortgage) paid off. This may be a two or three year project for many families but it can be done.
  2. Start with the smallest amount owing and find an extra hundred dollars somewhere to aggressively pay off that debt.
  3. Make a firm resolution to not get into any more debt. Throw away all but one of the credit cards and don’t use that one either.
  4. When that first amount is paid off take all of the money you were paying on that closed account and throw it on the next smallest debt and so on.

The above approach is called “snow-balling” and it works. Most families can be completely out of debt in a two or three year period but it only works when they become more responsible spenders and prudent consumers.

Take the time today to talk in your family about the ways that you spend money as well as the balance that you could have between spending and time spent as a family. There are people available to help you with your financial plan and you can likely find them at your local church.

The Good $ense Ministry is a national ministry found in many churches in the United States and Canada.

A Good $ense ministry benefits a congregation in a variety of ways:

  • Helps individuals remove money as a barrier to full devotion to Christ
  • Supports the pastor in training and maintaining the core value of good stewardship
  • Leads individuals to the God-honoring management of money and the resultant peace, joy, contentment and freedom in their hearts
  • Frees individuals from the bondage of debt Restores relationships torn by conflict over money
  • Helps the church realize its redemptive potential, as its congregation becomes free to give and serve

Click on the Link above for more information

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