Tag Archives: Money & Stewardship

Financial Lesson #1: Discerning your Needs and Wants

In light of the interest in my previous post about budgets, I figured it would be good to resurrect a serious I started a while back on financial lessons. These aren’t complex or fool proof, but they are some steps on how I think about money. I think these will be my Wednesday posts for a while.Financial Lesson #1: Discerning your Needs and Wants

You must sit down (and if you are married, you both need to sit down) and draw up a list of your basic NEEDS (That you spend money on). To make this easy, do not start with what you see in and around your house, start with what you will be purchasing from this point forward. As an example person myself, here is an example.

Jack and Jill sit down and start their list of NEEDS. Immediately the basics come to mind: Food and Shelter. They break shelter down into clothes and rent (including heat, electricity etc). Now to get the money to purchase food they would need an income, thus their jobs. And to keep their job they each need transportation to work and occasionally work appropriate clothing. Jill thought back to here psychology days and Maslow’s hierarchy of needs and suggested they did have some ‘emotional’ needs that might be hard to countify. In the end they came up with these needs: FOOD, SHELTER, TRANSPORTATION, MISC (Clothing, soap, etc) and EMOTIONAL.

But, that’s not the end of the lesson. Things get a little more complicated at this point. Does “Food” mean eating out three times a week and coffee at Bongo Java every morning? Are those NEEDS? You must discern on your own what part of your “food” is meeting your basic needs and what part is fulfilling your WANTS. The same goes for clothing. You might NEED button down shirts and dressy shoes for on the job, but you don’t NEED name brand clothing to wear out on the town. Getting to work is a Transportation NEED, driving across town to the outlet mall is not. Does that make some sense?

As you think through your needs, be sure to write down the things you’ve discerned are WANTS in another column (eating out, coffee, shopping trips, new sweaters).

Your Assignment for this week: Spend money as you normally have in the past, but be very concious of how much you are spending on Needs and how much on WANTS. Keep track of actual purchases if you’d like. And see if thinking through these lists actually changes what you spend money on through out the week.

The Great House Adventure

Thanks for all the feedback on the last couple house posts everybody! I’m realizing there are quite a few more interested parties then I originally realized. I mentioned earlier that one of the reasons we are excited about doing this, and taking seriously paying off our debt, is that we want to have an opportunity to serve as an example to others of taking debt seriously and paying things off. The ultimate goal for us, is to live on only what we need (more discussion here later) and to continue to even after we’ve paid off all our debt. I’m excited to see the amazing good that can be done with our resources once we are no longer enslaved to our lenders.

This is going to be a relatively short post because I need your opinions mostly. I’ve thought about this before a little, but haven’t come to any serious conclusions. Here’s my question. As a Christian, how should we properly discuss our finances? On one hand I’d love to be totally transparent about it all, because I think our ‘taboo’ nature about finances is what gets many of us in a heap of trouble (and as Aaron said, we want the church to be open about their finances, we should too, we are the church after all). On the other hand, there’s that whole, don’t let your left hand know what your right is doing, etc. Thus the dilemma about how to discuss our finances, paying off debt, giving, setting an example, and still honoring God in it all. So, the question:

What is the appropriate way for me to follow Christ and discuss my finances with the general public (i.e. on this blog)? 

It’s Time To Get Rid of Stuff

Joanna, at Keeping Feet, wrote a great piece called Sick of Stuff, which I thought was worth checking out. Here’s a snippet:

Christian author and theologian Richard Foster puts it this way:

The lust for affluence in contemporary society is psychotic. It is time we awaken to the fact that conformity to a sick society is to be sick.

I stole that quote from my pastor’s sermon a couple weeks ago. The topic is Practicing the Economics of God’s Kingdom, and the second catalyst he talked about to encourage us to change the way we think about money and wealth and stuff, My personal economics will begin to change the more I am sick and tired of the material lifestyle I am living.

I recommend reading the whole thing here.

….Another P.S.

I just added a new type of post to Trying to Follow, called Asides. To see them you have to actually go to the website and browse the posts. They’ll mostly be short thoughts, links, maybe occasional pictures or videos. They won’t show up in your email or rss. The idea is it will allow me to post more often, without bombarding you with more information, and it’s one more reason to check out the website. Enjoy.

Flash Back: A Podcast on Simple Living and the Poverty Line

I reposted about this topic in December, but I wanted to highlight the podcast, which I think is worth a listen. A while ago I chatted with my friend Nate about simple living and some discussion we had had on our blogs and others comments. It was quite interesting.

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For the original post, On Simple Living and living “a dollar above” the poverty line

What If? Visions of the Future or Future Fridays

I’m a visionary of sorts. What I mean is that I often think about and dream about what would happen if… the big radical amazing changes we long to take place actually took place. In an effort to encourage my imagination and spread the vision of change to others, I’m gonna start writing once in a while some of these thoughts. Don’t know if I’ll call them by a unique title or not, any ideas?

In reflection on yesterdays post on Jesus’ statements on Wealth
What if Everyone Who Read The Bible Lived Out What Jesus said about Wealth and Possessions.

First of all, I think there would be a lot more people that chose to step out of the rat race, selling their possessions and wandering the land (just like Jesus!). But let’s think on a large scale. I’m not gonna look up specific numbers, but let’s just suppose there are 1 billion people in the world who actually read the Bible. If each of them read Jesus’ words and chose to live their lives accordingly it would mean incredible change in the world. Let’s assume they chose to continue at their jobs, provide the basics for their family and gave the rest to those in need.
There would be no one homeless or without something to eat in the entire United States. If a Bible reader saw a person walking the street with nothing to eat or no were to sleep they would bring them to their house and feed them, clothe them, and provide them with shelter. If they didn’t have room at their home they would do as the Samaritan and provide the finances to feed, clothe and shelter their companion until they are well enough to make it on their own.
Organizations like World Vision and Compassion which sponsor children through out the world would suddenly have more finances available then children and they would have to quadruple their service to every child in the entire world.

We could probably fully fund feeding, vaccinating, providing clean water, educating, and housing ever person on the planet.

Imagine that.

And just in case you thought there wasn’t any validity to this, here’s a stat from Generous Giving:
Generosity Potential (American Churchgoers)

1. If members of historically Christian churches in the United States had raised their giving to the Old Testament’s minimum standard of giving (10 percent of income) in 2000, an additional $139 billion a year would become available.

Finance Brain Storm: Pay Each Others Mortgage

The Conversation about housing got my wheels turning and I started thinking about different ways we might live creatively outside the box of what we are currently used to in our culture. I’m gonna write a few things this week about just ideas I’ve had of ways to live out our convictions creatively. This is the first.

Instead of taking out huge Mortgages and taking years to pay them off and effectively paying three times the cost of our houses, we should pay each others mortgages. I’m not quite sure how this would work as traditionally we all want a house and we want it now, not later. But really think about it.
If you could pay cash for your house today, then over the course of the next 30 years you could take what you would have spent in interest to the bank and give it to some wonderful cause you believe in. As one person or family this doesn’t quite seem possible, but collectively it’s not as difficult.
What if five or ten families got together and decided that each year they would take all the money they could muster and pay off one persons mortgage (assuming they already have one). Over that time the pay-off would speed up exponentially as a persons house is paid off and they no longer have a monthly payment themselves. By the end of the time (maybe ten years max) everyone has a house completely paid off and they are able to do a world of good with the rest of the money.

Or, what if folks lived communally in a house, that was fully paid off. And then they pooled their resources and were able to buy one house a year, which a family would move into and start a communal living opportunity for others to follow a similar pattern.

There are some assumptions I’m making here. You can’t be living paycheck to paycheck, nor can you be living just below your income, you need to make some radical life changes. Of course, those are things you should have done even before you bought a house to begin with.

Here’s a brief (I didn’t have much time) example…

So you’ve got five families, with differing incomes. The goal is for each to buy a $100,000 house. If they all contribute 25% of their income to a pot it would take 11 to accumulate $500,000 (enough for each family to have a house). If they lived on just $16,000 a year they’d have enough in 5 years.
The “5 Year House” column is just showing what cost of a house they could pay off in five years if they were putting 25% of their income to the house.
And the “Years to 100K” column shows how many years it would take each family to actually accumulate $100k if they were doing it themselves (by which time their house cost would be double if they were doing their own mortgage).

Of course these are simple numbers not taking into account other housing costs, inflation, etc, but hopefully you get the idea (or maybe your totally lost).

Any math geeks out there want to help me make more sense of something like this?

Okay, But What If Debt Really Is Bad?

We’ve had a fabulous discussion over at the Home Sweet Mortgage post, and I’d love to continue it. The thing is, the direction I would really like to take it is into the area of creatively brain storming how a Christians might live and function if they decided Debt really was completely unacceptable.

I’m not saying it is (Mindy and I have chosen to take loans out for her to finish school), but I’m contemplating what things might look like if we firmly believed that it was. You see, I think too often we are quick to interpret and justify away some of scripture because we can’t figure out how it would “work” in our world today. I think that’s why a lot of people don’t believe in non-violence (a topic for another post). I think this is also why most people give the “buying is better then renting” statement and then give the short financial advice to back it up.

Again, I’m not saying buying is bad, I’m just saying maybe we can think of ways to think of all of it in a completely new way. Jac, mentioned people in the church giving others loans. That’s a neat idea that is outside the box of what we ever consider. I want to brainstorm ideas like that.

So, the floor is open. The one rule is that what ever idea you present, it has to be given with the assumption that Debt is unacceptable and not an option.

How do we live? were do we live? College? Cars? the floor is yours…

Home Sweet Mortgage: Isn’t Debt Bad?

At the place we’ve been hanging out on Sunday’s here in Nashville, a number of people have purchased homes in the last 1 1/2 that we’ve been there. It’s not a large community so it was a significant percent of the people that were making this major life decision/change/move. I posted on the online forum and tried to strike up some conversation about it, but was met mostly with perplexed looks. Basically, I wanted to know how as people of faith, they processed through choosing to purchase a home. I was hoping for a whole sermon series on it, but there wasn’t one.

It’s my understanding that if you believe in something as truth, then it should affect every facet of your life. This isn’t exclusive to religion or faith, our faith in gravity applies as much to standing in a bathroom as looking over a cliff’s edge. A couple verses in the Bible run through my mind specific to this idea of thinking about everything we do as it relates to our beliefs and faith:
“we take captive every thought to make it obedient to Christ.”
“And whatever you do, whether in word or deed, do it all in the name of the Lord Jesus, giving thanks to God the Father through him.”

I would venture to say most major religions, and most people of faith, understand it’s impact on everything they do. That being said, I honestly wanted to know the thought process folks had gone through in deciding to purchase a home. It wasn’t that I disagreed with their choice, I just wanted to know more, and I finally realized, there wasn’t more.
Buying a house is just something you do. Just like millions of other little things every day that are just a part of our society, part of the “American Way of Life.” And boy is it dangerous.

The Old Testament book of Proverbs is chock-full of maxim’s about the dangers of debt, “The debtor is slave to the lender.” And yet we take out student loans (even I am guilty) and home mortgages without thinking twice about it. Most folks eventually pay off their student loans, but I’m not sure I know a soul who actually owns their house. We refinance, we upgrade, we take out second mortgages to our hearts content, and I don’t think most Christians have even given a thought to how their faith should affect that part of their life.

Mindy and I are about to have our first child. She’s about to finish school and we’ll pay off all our loans in a couple years. I can see the benefits of owning rather then renting, but I also see some of the negatives. I see the trap of wealth and greed, of always wanting more and going into debt to get it. Everyone around us seems to be buying houses, you would almost think it’s a necessary part of following in the faith.

Houses make me think. Does isolating ourselves in single family home make it difficult to carry out Christ radical call to love our neighbors and live in community with other believers? Does living in perpetual debt keep us from being the generous, sharing, and financially open church Christ calls us to be? Does the “American Dream” really look like what Christ aspires for us to obtain, or are we terribly off-track?

Random Scraps: It’s not about the Money

Note: Okay, so I’m going through my old drafts of posts I started but never finished. I feel like I’m so removed from when I first wrote them that it wouldn’t make sense to complete them, but they are interesting enough that they might create some conversation, so I’m putting them up.

Financial clarification #1: It’s not about the money
I felt like it is important for me to address two points that were brought up by readers as to what they understood me to be advocating for: the pursuit of not having money and Poverty as righteousness.
I realize that I might come across as advocating for these two things because what I AM advocating for is so radically different then what are culture presents to us. In a culture that is so focused on the accumulation of wealth a statement like “give freely” comes across as odd and as an extreme. In a culture that says your lifestyle should be grand regardless of income level a statement about living on what you need rather then what you want seems rather backwards.
I know we are trying to talk about finances here, but do me a favor for a moment and forget money exist at all. No such thing as money. My points are still the same. Going to a college like Wheaton makes it difficult for you to question that type of lifestyle since you and so many other “Christians” at the college are living it. Hoarding your possessions is not what Christ calls us to, rather to give freely.

On Clothes.
I never felt too poor to afford something, but I knew somethings where just too expensive. Let’s use the example of clothes. You might find this funny, but in middle school and half of high school I was all about name brands. I wanted the nike swoosh on my shoes and my t-shirt. Here’s how my mom handled clothes. We would look in the closet at the beginning of the school year and decided if and how many jeans, shirts, and shorts I needed. Then she would allot me some money for each item (it was about $15 for jeans, $5 for a shirt, and $10 for shorts). If I wanted something that cost more then that I had to dig out my allowance, babysitting and lawn mowing money and pay for the additional cost.

Jesus does say the Poor are blessed with the Kingdom, that’s at least worth pondering.

There was some interesting thoughts and issues brought up in the comments on two previous post: Your Problem with Giving is Probably you, and A Major Flaw of Wheaton College.

I felt these two thoughts where important to address in our Finance lessons so here is…
Financial Lesson #3: Money is simply a mean’s of trade

One thing my parent’s did a good job instilling in me just by example, was that money wasn’t really a big deal. My dad has switched jobs a lot, and my mom has worked varying amounts (sometimes full-time other times half-time) throughout my life. Never did I feel like there was a correlation between their work and how much money they working making and how well off we were. I never felt poor, I never felt rich. You see, money wasn’t that important, what dictated our lifestyle was our values. My first real job was at Pizza Hut. Before that I had picked up bunches of odd jobs through my dad (he owned a temporary employment service), and I enjoyed that cause they were simple jobs and they usually paid well. But the summer after my sophomore year my dad told me I had to go out and get a job myself. Why? It wasn’t to make more money, it was to learn to go out on my own, it was about values. Money isn’t that important, what should dictate our lives is our values. If God had “blessed” my parent’s as billionaires my dad would have still made me go out and find a job on my own.

I don’t know if that helps to give a little perspective of where I think some of my mindset comes from. The two comments I want to address are: “a person’s goal becomes to not have money” and “poverty is righteousness”
I am NOT advocating for either of these. I think the reason both of these commenters have come to these interpretations of what I have been saying is because money was misinterpreted as being a high priority. Here’s what I mean.
When I talk about Wheaton College and how expensive everything is I don’t mean to focus on the money. I mean to say we are like the Rich Man with the beggar Lazarus outside our gate. It is not about the money it is about our value that God does not call us to store up wealth, he calls us to care for the needs of others.

I would be silly to advocate for “poverty is righteousness.”

1 iPod = 900 Children Fed for one Day

Click for the complete image

I think I’ve talked about opportunity cost before, but it bears repeating. It basically means: “the cost of something in terms of an opportunity forgone”* which is exactly what this ad above is about. Now for my confession, for all my talk about giving and sacrifice I currently own an ipod. It doesn’t matter that I got it for free off one of those sites, the opportunity cost of it is still the same, because I could easily sell it. We’ve had an ipod for a year, and it’s not an evil gadget. What I found recently though, is that when I really check myself, there is a lot I can and should do without. I’m going to sell my ipod. You see when I really weigh the benefits of having an ipod, they still don’t outweigh the opportunity cost of selling it. We are still considering getting a different mp3 player as we’ve found having one has been extremely useful and enjoyable, but it’s definitly a choice to think through.

This is somewhat of a follow-up to the baseball card post. If you found there there are ‘valuable’ items laying around your home that you truly aren’t making much use of, consider selling them and donating the money. Feed someone by cleaning the dust collectors out of your closet.

(ht. to Some Random Dude for the image and idea)