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Sunday, November 8, 2009

Wisdom and Finance

Last Sunday, my sister’s family came to visit from Hickory. We spent the afternoon together, and my nephews and I were finding fun things to do together. My 9-year-old nephew, Nathaniel, came very close to breaking something while they were playing. I told him that he would owe me the money for a new one, but I’d be happy to put him on a payment plan and only charge him moderate interest. This, of course, was a few hours after I preached a sermon about responsible borrowing and using our credit wisely. Even at 9, he knew that something sounded fishy about my proposal, and that it would seem the only one who would benefit from such an arrangement was me.

This morning is the second in our sermon series Enough: Discovering Joy through Simplicity and Generosity. We are looking together at the principles of financial management as outlined in the Bible, and are trying to discover how God would have us best manage our money. Last week, we talked about how our pursuit of the American Dream has led people to spend money they don’t have in order to accumulate stuff they don’t need, resulting in an American Nightmare. Today, we’re talking about “Wisdom and Finance.” May we pray.

A few weeks ago, we looked together at the story of the prodigal son in Luke 15. Let’s review part of that story. There was a man who had two sons. The younger of them said to his father, “Father, give me the share of the property that will belong to me.” So he divided his property between them. A few days later the younger son gathered all he had and traveled to a distant country, and there he squandered his property in dissolute living. When he had spent everything, a severe famine took place throughout that country, and he began to be in need. So he went and hired himself out to one of the citizens of that country, who sent him to his fields to feed the pigs. He would gladly have filled himself with the pods that the pigs were eating; and no one gave him anything (Luke 15:11-16).

From Jesus’ description, we the see that the prodigal son had the habits of squandering and spending. The word prodigal does not mean someone who wanders away or is lost. It literally means “one who wastes money.” A prodigal is one who wastes money, who is a spendthrift. Many of us struggle with that habit as well. We’re not worried about tomorrow. We want it today. The problem with that kind of thinking is that, for most of us, the “famine” eventually comes. It comes when we have spent everything we have and even a little bit of next year’s income. So we use the credit card and we charge it, and we go a little further into debt. Finally, we come to a place where we find ourselves. We have nothing left, not even any credit, and we can’t figure out how we are going to make it.

It seems that the more financially secure we become, the less we worry about spending money here and there. We waste a dollar on this or that, and we forget where it went. Money just seems to flow through our fingers. We’re not as careful with our money as we should be. There are many ways we waste money, but there are two primary money-wasters that many of us struggle with. It is not necessary to eliminate these two things all together, but we should think more carefully about how we spend our money.

The first big money waster is impulse-buying. Just a few weeks ago, I noticed that I was out of milk. OK, I actually had milk, but for the first time, noticed the expiration date was more than a week past. I drove to the Harris Teeter at Cotswold, 5 minutes from my home, and walked into the store. I grabbed a cart on my way in, because who knew if I would pick up a few more things. 30 minutes later, I pushed the cart into the checkout lane, handed over my VIC card, and was proud of myself for the savings of $11.73 that got my total order down under $90. As I unloaded the groceries back in my kitchen, I realized I had probably bought more than I needed. I also realized that I had forgotten to buy milk.

How can we avoid impulse buying? Consider these helpful hints. Never go grocery shopping when you’re hungry. Shop for what you need only. Make a list and stick to it; buy what you need and get out! Wait 24 hours before making an impulse purchase. For instance, did you know that if you walk into a car dealer, statistics indicate that 80 % of people will purchase a car within 48 hours? Whether you need one or not, whether you can afford one or not, 80 % of us will make a purchase. The longer the salesperson can keep you in the dealership has a direct correlation on how quickly you will purchase a car.

The second big money-waster is eating out. This one was shocking to me. The average American eats out 4 times per week. I looked at that and thought, “Only four?” Because of my schedule, and the fact that I meet a lot of you out for lunch or dinner to discuss church business, I probably eat out 10 times a week. If, on average, I am spending $10 a meal, that’s $100 a week - $5200 a year on eating out. That doesn’t even count dates where I have to pay double!

I am a sandwich eater. I thought I got smart when I starting buying $5 footlongs at Subway or taking advantage of the daily $2.99 half sub at Harris Teeter. $2.99 for a delicious sandwich – that’s a pretty good deal, right? I thought so too, until I got into my sermon research this week. I Googled how much a typical sandwich costs. Did you know that you can make a peanut butter and jelly sandwich at home for about 29 cents? An egg salad sandwich can be made at home for about 51 cents. A typical cold cut sandwich – complete with mustard, mayo, cheese, lettuce, and tomato – will run you about 98 cents.

Don’t like sandwiches? Harper’s down at South Park has a delicious filet penne – filet mignon in a creamy sauce with roasted vegetables served over Penne pasta – I feel like I’m telling you tonight’s specials – that’s available for $14. If the market cost of the filet mignon is $12.99 a pound and there are two ounces of filet in the meal, that means there’s about $1.65 of meat in the meal, 25 cents of pasta, and we’ll be generous and say a dollar’s worth of vegetables and seasonings. That means, for the meal you’ll pay $14 in the restaurant – plus tip – you can make the same meal at home for $2.85.

Here me carefully; I’m not saying to stop eating out. I’m simply saying that by deliberately reducing the number of times in the average week that we eat out, we can spend significantly less and get a better hold on our finances.

A big part of getting our finances under control has to do with our identity. Over the last few months, as our congregation went through a process of rewriting our mission statement, we were trying to clarify our identity. We were trying to make a statement about who we are and who we are called to be, and then have a filter by which we can make decisions about our future. As a congregation, we will continue to ask if our goals and activities are in line with our mission statement, and we will use that statement as a measuring rod by which those decisions are made.

Likewise, we all have to clarify our relationship with money and possessions. We do not exist simply to consume as much as we can and get as much pleasure as we can while we are here on this earth. We have a higher purpose. We need to know and understand our life purpose—our vision or mission or calling—and then spend our money in ways that are consistent with this purpose or calling.

Our society tells us that our life purpose is to consume—to make as much money as possible and to blow as much money as possible. In the economy, we are consumers – that’s our identity! But, this is not God’s vision for us. The Bible tells us that we were created to care for God’s creation. We were created to love God and to love our neighbors as ourselves. We were created to care for our families and those in need. We were created to glorify God, to seek justice, and to do mercy. Our money and possessions should be devoted to helping us fulfill this calling. We are to use our resources to help care for our families and others—to serve Christ and the world through the church, missions, and everyday opportunities. We have a life purpose that is greater than our own self-interests, and how we spend our God-given resources reflects our understanding and commitment to this life purpose or mission.

Fulfilling these great and lofty goals and purposes doesn’t just happen. It requires planning. Taking the time to set goals related to our lives and our finances is crucial if we are to become wise stewards of our God-given resources. If you look at the insert in your bulletin, you’ll see that we’ve provided you with some resources to do this sort of planning. Each of us should think about our life purpose and goals and then identify two short-term financial goals, two mid-range financial goals, and two long-range financial goals that are aimed at helping us to accomplish our broader life goals. At least one goal in each category should relate specifically to faith.
So the first step is figuring out our life’s mission. We’ve already stated this should have something to do with caring for creating, with loving God and neighbor, to care for our families and those in need, to glorifying God, to seeking justice, and to doing mercy. The second step is setting goals that actually meet these purposes. The third step is putting a plan in place.

I had a friend who made a New Year’s resolution to lose 20 pounds. It was a great goal. When I asked him what his plan was, he said, “to lose twenty pounds.” I worked with a church whose goal was to have an active children’s ministry. That’s a great goal. When I asked what their plan was, they said, “To have an active children’s ministry.” Many times we put our goals together, and then fail to put a plan in place that will actually help us achieve those goals. A failure to plan is a plan to fail.

It doesn’t make any sense to make goals if we don’t put a plan in place. Financially, our goals need to be put into action through a plan. A budget is a spending plan that enables us to accomplish our goals. Some people use an envelope system to help them manage their saving and spending and stay on budget. Others use a variety of different approaches. Many people keep track of their budgets and actual expenses through Microsoft Excel or other financial management software. Many people find it helpful to seek the advice of a financial advisor. I don’t care what plan you use. I’m simply asking you to make a plan. Whatever it is, whatever tools you use, just make a plan. For those who find themselves in the midst of a financial crisis, a financial counselor can help work out terms with creditors and develop a workable financial plan. Whatever approach you choose, the important thing is simply to have a plan.

We need to remember that money is among the things with which we are entrusted by God. God makes us stewards over creation. God makes us stewards to care for each other and for our families. God gives us financial resources and entrusts their usage to us. Any plan we make about what we’re doing with the money that is entrusted to us needs to reflect God’s plan.

Your money is entrusted to you. Right there on the front of the dollar bill, it says, “In God We Trust.” Our trust is in God, and we reminded that everything we have already belongs to God. It’s already God’s money, and you’re called to manage it well. God will hold each of us accountable in the end for what we do with our time, our talents, and our resources. And so we begin to think, How can we help each other have good financial practices? I sat down with a credit union manager to share with me some of the basic things she tells her members about how to be good financial managers. There are four basic things. You know them already, but often we fail to practice them.

She said that in recent years, she sees a lot of people who are living beyond their means and don’t really grasp what is happening. They’re juggling payments, maybe paying bills with one credit card to save cash to pay down another card, maybe making only minimum payments on their cards. Total personal debt was rising—compounded by some pretty significant interest rates. Here were four things she said to do.

First, track your spending. Where is the money going every week? Most of us don’t know how much we’re spending at the grocery store or in restaurants every month.

Second, take a good look at this picture created by your spending habits—and then you must set some financial goals. That is the foundation of every budget and financial plan. Ask yourself what you want to achieve and by when?

Third, pay off your debt. This is the best way to simplify your life. Use your credit wisely and sparingly. If you want something, save up to get it. One of the ways I did this was after my car was paid off, I continued to make car payments to myself in the same amount each month – that is, I put that amount into a separate savings account so that when I am ready to purchase another car, I already have the cash in the bank for it.

Fourth, she listed this is as the number one thing that everyone needs to do: establish savings. Take it directly out of your paycheck. Don’t see it. Have it go into an account.

Here’s the thing – we all know these things. Just like we know to eat right and exercise. The challenge is to make a plan and stick to it. When push comes to shove, most of us don’t make the decision to eat right when we sit down at the table and the food is already prepared. We plan to eat right by planning meals that accomplish this. Likewise, we don’t make wise financial decisions with our paycheck in one hand and the Pottery Barn catalog in the other. We have to make a plan before it’s time to actually spend any money.

The hard part is doing it on a daily basis. We need a reminder. To help you out with that, we’re providing a small gift for each of you today that will help you remember these principles as you make your daily financial decisions. It’s a little window cling that says “Six Financial Principles” on it, and you should have received one from the usher on your way into worship. If you didn’t get one, there are more available on the table in the narthex. If you have yours, take it out now and let’s look at it together, so we can manage our money with wisdom and faith.

Here me carefully. The point of wise financial management according to Biblical principles is not so you will get rich. I am not now and nor I will ever preach the prosperity Gospel, that God desires for everyone to be wealthy. It’s about being responsible with what God has entrusted to us. It’s about using our resources in accordance with our purposes. It’s about not being in bondage to our debt so we are free to do God’s work. It’s about glorifying God in every single aspect of our lives.

1. Pay your tithe and offering first. You have no idea how important this is. In Scripture, we are told to put God first in everything. Put God first in your living and in your giving. Give your tithe and offering from the top of your paycheck, and then live on what remains.

2. Create a budget and track your expenses. Creating a budget is simply developing a plan in which you tell your money you want it to do. Money is actually very obedient; it does what you tell it to. Tracking your expenses with a budget is like on the scales, it may be uncomfortable or tell you a truth you may not want to know, but it allows you to see how you are doing and motivates you to be more careful with your expenditures. We have included a suggested budget outline on the insert in your bulletin to help you put a workable budget together.

3. Simplify your lifestyle, that is, live below your means. OK, this is where the rubber hits the road. What good is a plan if you don’t stick to it? Because this discipline is critical to the success of any financial plan, next Sunday’s sermon will be devoted to this topic.

4. Establish an emergency fund. An emergency fund is an account separate from checking or long-term savings or any investment funds that is set aside specifically for emergencies. In The Total Money Makeover, Dave Ramsey recommends beginning with $1000 and building that to 3 months worth of income. When you have this amount, you won’t need to use credit cards anymore “for emergencies.”

5. Pay off your credit cards, use debit cards for purchases, and use your credit wisely. As you are building your emergency fund, begin to pay off your credit card debt and start using debit cards or cash for purchases. I don’t know about you, but if I have real cash money, I think long and hard about pulling it out of my wallet and handing it over to someone. Some experts suggest start by paying down the credit card that has the highest interest rate. Others suggest paying down the card with the lowest balance, celebrating that early victory, and applying your payments from the first card to second, and so on, creating a snowball effect to pay off the cards as soon as possible. Now, here’s the painful part. Cut up the cards when they’re paid off. Cut them up so you’re not trapped or leveraged by your present-day pleasure, as the prodigal son was. If you must use a credit card, such as when you’re traveling or making purchases online, pay off the full amount monthly. If you’re unable to do this, it’s better to cut up the cards and stop using them altogether. Seriously. We can go to my office right after worship and you can use my scissors, if you want to. If your credit card causes you to sin, cut it up. Better to enter the mall without money than the poor house with all your worldly treasures!

6. Practice long-term savings and investing habits. Saving money is the number-one money management principle everyone should practice. Now, hear me carefully. We do not save merely for the sake of saving. We do not stockpile money simply for the sake of stockpiling money. There is a word for that: hoarding. The Bible is very clear that hoarding is a sin. It is described as the practice of fools and those who fail to understand the purpose of life. Saving, on the other hand, is meant to be purposeful. It is one of the tools at our disposal to free us to accomplish our true purposes in life. And when it comes to saving, there are three types we should have – emergency, savings for wants and goals, and retirement savings.

And friends, this is nothing new. John Wesley, the founder of Methodism, preached a sermon entitled “The Use of Money.” In it, he invited the Methodists to practice financial principles that would align their lives with the will of God. The first was to earn all you can. Through diligent, honest, hard work, earn all you can. The second was to save all you can. Live simply, don’t waste, and save your money. The third principle was the sticking point, perhaps the same sticking point when Jesus told the rich young ruler how to inherit eternal life. The third principle was to give all you can. After you have earned all you can and saved all you can, give freely and abundantly. Give to those in need, give to God’s mission and ministry in the world. Give generously, for God is generous, and God’s grace is abundant.

Everything we have is a blessing from God. Whether we have been blessed with resources that are great or small in the eyes of the world, we are called to be good, wise, and faithful managers of what is entrusted to us. By the grace of God, we can each develop a financial plan that will truly be an extension of the greatest command, to love God, and to love our neighbor.

God, you know what we don’t even know. We don’t know where every dime went, but somehow you know what we did with all that we had, last year and the year before that. You don’t forbid us from having joy in our possessions. In fact, you delight in our joy. But what you know is that just acquiring more and more stuff isn’t where we find joy. Lord, forgive us for being wasteful, for being prodigals. Forgive us for leveraging our future in order to have pleasure in the present. And help us be good managers of the talents that you’ve given to us. Help us to be generous and willing to share, kingdom-minded and focused on accomplishing your purposes for our lives. In Jesus’ name, Amen.

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