Developing a Spending Plan
Psalms 1:1-3
The Way of the Righteous and the End of the Ungodly
1 Blessed is the man
Who walks not in the counsel of the ungodly,
Nor stands in the path of sinners,
Nor sits in the seat of the scornful;
2 But his delight is in the law of the LORD,
And in His law he meditates day and night.
3 He shall be like a tree
Planted by the rivers of water,
That brings forth its fruit in its season,
Whose leaf also shall not wither;
And whatever he does shall prosper.
God’s prosperity is having what you need when you need it. God’s prosperity does not mean you will be wealthy. Some Christians are wealthy and some are not.
Today’s youth have ipods, iphones and xboxes. Debt caused by credit cards, student loans, wage stagnation, rising cost of health care and housing is causing many young people to struggle. Suzie Orman is a well known author that states people need to live below your means. We should save for our future as Social Security is not expected to be solvent. Few people today have discipline. People are spending more than they earn.
How can we plan for the future? Start with a Budget Process and stick with your budget and you will be ahead of most people.
Matthew 6:31-33
Therefore do not worry, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ 32 For after all these things the Gentiles seek. For your heavenly Father knows that you need all these things. 33 But seek first the kingdom of God and His righteousness, and all these things shall be added to you.
God has some responsibility for us. We need to also be responsible. Don’t be lazy. The main purposes of a budget are the following principles:
1. Live within your income
2. Spend your money wisely
3. Reach your financial goals ( make sure you have goals on paper or in a digital file )
4. Have a budget to prepare for financial emergencies
5. Develop wise financial management habits
How to Create a Budget:
A. Figure Your Income – Whenever you have extra income, set that money aside and put it in a savings account.
B. Expenses – Tithe should be listed first as it is a deduction from your income. Tithe is Holy and belongs to God. This demonstrates that we trust God and He will take care of us. If for some reason we give too much, He will return it back to us in some way. God doesn’t need our money. Tithe and offerings are an expression of our gratitude to God.
C. Monthly Expenses – Mortgage, rent, utilities, insurance, food, medical. Clothes are not included in this category. If you are in financial trouble and need clothes, go to a thrift store.
D. Income and Social Security Taxes – Pay all taxes that are due. Don’t get drawn into the falsehood that you should not pay taxes to the government.
Romans 13:7
Render therefore to all their due: taxes to whom taxes are due, customs to whom customs, fear to whom fear, honor to whom honor.
The government has the right to tax people. Al Capone served many years in Alcatraz prison for tax evasion. Take advantage of all the legal tax deductions you are allowed and contribute to 401K plans but never avoid paying taxes.
Matthew 22:21
They said to Him, “Caesar’s.”
And He said to them, “Render therefore to Caesar the things that are Caesar’s, and to God the things that are God’s.”
Enter the amount of taxes that are withheld and put that amount into your budget.
E. Savings – Lack of savings is causing financial ruin for many people. Budget for savings as an expense item. Put $20 into a savings account to get into the habit of saving. How much should a family have in family savings? It is best to keep 3 months of living expenses in a savings account.
Many people get on unemployment and then do not find work. To not go and look for work is being dishonest. During the depression of 1929-1933, unemployment affected 27 % of the workforce. There was no unemployment insurance or social security from 1776 until 1934. President Roosevelt signed into law the federal programs in 1934 that provided social security for the elderly and disabled. In 1935, unemployment insurance began to assist workers that lost their jobs.
F. Vacations – There is no virtue to brag that you have not had a vacation. Save all year long and pay off your vacation and enjoy the time and rest. People need vacations. Jesus took time away from His Healing Ministry and went up to be in prayer to God many times in the New Testament.
G. Clear Your Debts – Invest any income that you can to get free money by using retirement accounts. Some employers offer matches on money that the employee sets aside for retirement. Best retirement account available today is the Roth IRA.
H. Fixed Housing Expenses – Property taxes are a big expense. Spread the expense over an entire year and set aside 1/12 of your total tax bill in a savings account.
I. Auto Loans – Try to pay cash for vehicles. If you are making payments now, keep paying and once your car is paid off, keep making payments into a savings account so you can pay cash for the next vehicle you buy. Maintain your vehicles and drive them as long as possible.
J. Insurance – Carry insurance to prevent getting wiped out financially. Use money wisely. God does not honor presumption. Risk management covers your loss or accident. Cost to settle a lawsuit can wipe you out if you don’t have insurance. Auto liability is required in all states.
If a natural disaster strikes your property and you don’t have home owners insurance, you lose your life savings. Carry medical insurance and life insurance to protect your family should there be a death. You can also carry catastrophe insurance for just a few dollars a month and set a $5,000 deductible. This will protect you from ruin and paying off $5,000 is easier than losing your life savings.
K. Set Up a Will – The Washington Conference of Seventh-day Adventists has a Will and Trust Service. The conference will set up a will for all members for free. Include God’s work in your will. You can chose a percentage to tithe in your will.