Today is the third in a four-part series of messages on Faithful Financial Freedom. At the root of this series is this question: “How do you live on the upside when the economy is on the downside?” We have realized that most people are responding to what’s happening in the economy out of the twin emotions of fear and worry. But as Christians, there’s a better way to respond. Fear and worry are not God’s plan for our lives. There is something better.
You are going to learn a lot in this series, so go ahead and take the sermon notes out of your bulletin and grab a pen or a pencil. Most of us learn best when we take notes, so write down anything of interest we discuss.
The first week’s message was “God’s Perspective.” Building sound financial health first requires us to seek God’s perspective. Last week’s message was “Rebalancing Life Investments.” We were reminded of the formula for doing this, realizing that right priorities + right actions = right results. This requires us to submit to God and do in our lives what God would want us to do.
Once we are ready to commit ourselves to right action, the next step is putting together a plan for how we’re going to practice those actions. And the best day to start is today. May we pray.
Every time I visit the dentist, we have a very similar conversation. First he says, “You drink a lot of coffee, don’t you?” “Yes, I do.” Then he says, “You don’t brush after every meal, do you?” “No, I don’t.” Then he says, “How often do you floss?” Not completely forthcoming, I say, “Probably not as often as I should.” Then I get the lecture about how I need to cut back on my consumption of coffee and other staining beverages, how I need to brush after every meal, and that I need to floss more. I say thank you, get in the car, and stop by Caribou Coffee on the way back to the office.
Now here’s the thing; I already have the right information! But just having the right information doesn’t necessarily lead to the right action. I have to actually start practicing those habits, not just know what they are. Today we are reaping the harvest of seeds we planted yesterday. Think about that for a moment. What does that mean for you personally? The seeds you plant today will determine the harvest you reap tomorrow. Think about that, too.
You choose your spouse or partner. You made a decision in the past, and today you are reaping the blessings or perhaps the curses that have come from that choice. When I got serious about following Jesus, I made a commitment that I would give God the first 10 percent of everything that came into my hands. Even when I was in college and graduate school. God blessed that – a harvest was brought about in my life because of the seeds I had planted.
Although none of us can change the past, there’s good news if you’re feeling lost or trapped: The commitments and actions you make today will become the seeds that create your harvest tomorrow. But you need to put some things into action. It’s critical that we make strategic plans for the future. The way to begin experiencing success is to strategically plan for a purposeful future, and this is certainly true in the area of your finances.
Plan according to God’s will
One of the most important things about planning for tomorrow is realizing we are not in control. If we’re not in control, how do we respond? How do we plan? Turn with me to James 4:13-17: Come now, you who say, “Today or tomorrow we will go to such and such a town and spend a year there, doing business and making money.” Yet you do not even know what tomorrow will bring. What is your life? For you are a mist that appears for a little while and then vanishes. Instead, you ought to say, “If the Lord wishes, we will love and do this or that.” As it is, you boast in your arrogance; all such boasting is evil. Anyone, then, who knows the right thing to do and fails to do it commits sin.
Life is fragile. James says that our life is like a mist that appears and then vanishes in a moment. Have you ever been beside a pond or another calm body of water on a cool morning in fall, and watched the mist come off the surface of the water? That’s how short life is. If we want our lives to count for something, we have a very limited window in which to do it. Tomorrow isn’t a guarantee. That’s why now is the time to do the right thing.
God wants to bless people financially, but it’s always for God’s purpose. We are in trouble when we forget God gives us the ability to make wealth. We must always ask ourselves: Does my financial strategy align with God’s will? Am I using these resources in ways that would please God, and be consistent with what God wants in my life and through my life?
Activate the fundamental life principles of sowing and reaping
A lot of people have plans but fail to act on them. Once we have a plan, we must take action. In every area of life, and especially in the area of finances, we must activate the fundamental life principles of sowing and reaping.
1. You reap what you sow
Plant apple seeds, get apple trees. Plant dandelion seeds, get dandelions. Likewise your attitudes and actions are the seeds that will create your future harvest, so you’d better be sure you’re planting right attitudes and good actions.
Answer this for me – do seeds work best in the ground or on the shelf? The Bible says that the seeds that are left on the shelf dry up and die. We keep planting the right seeds – we keep planting right attitudes and right actions so those good things will grow and so that we’ll have a harvest in the future. The Bible puts it this way: “The one who sows sparingly will also reap sparingly, and the one who sows bountifully will also reap bountifully” (2 Corinthians 9:6). If you want a tiny harvest, put a tiny amount of seeds in the ground. If you want a big harvest, put a lot of seeds in the ground.
Not only will you determine the size of the harvest at the time of planting; you will also reap more than you sow. In telling the parable of the sower, Jesus said some seeds “fell on good soil and brought forth grain, some a hundredfold, some sixty, some thirty” (Matthew 13:8).
2. The harvest comes in a later season than the sowing
A farmer plants seeds and harvests crops immediately, right? Of course not. We wait between planting and harvesting. The same is true in the area of finances. It takes time to save and to invest and to watch money grow. The problem is that we don’t like to wait. We want it now, which leads to debt, and when we’re in debt, our creditors are the ones harvesting instead of us. When we do it God’s way, the harvest comes in at a later season than the sowing.
3. You are responsible for the work of sowing; God is responsible for the harvest
As we are faithful to do the hard work of planting, God will be faithful in the harvest. Much of the hard work of planting comes in creating a sound strategy for your financial future based on biblical principles. In other words, it is creating a financial plan. When you make a commitment to create a financial plan based on God’s principles and then follow through on it, God will bless it. God will bring in the harvest.
God gives us grace and wisdom, and gives us the tools we need to manage our finances according to God’s principles. We then have some work to do, and God blesses that work. But we can’t begin the work until we have a plan. Procrastination is the great robber of life. Don’t put it off! Don’t be a slave to debt anymore! Don’t let creditors get rich at your expense! Make a commitment to create a financial plan and follow it through, and God will bring the harvest!
Steps in Creating a Financial Plan
But how do you create a financial plan? If you’re going somewhere, it’s always a good idea to have a plan. Today’s the day to start. Today is the day to put principle into action so you can experience true faithful financial freedom.
1. Financial Analysis
The first step in creating a financial plan is to sit down and do a financial analysis. The Bible says we must be sure to know the condition of our herds and crops, in other words, it helps you to see exactly where you are.
First, list on paper all of your debt. Include everything . Most people underestimate their debt by about 2/3 – if you think you have $9,000 in consumer debt, you may actually have $27,000. Add it all up, but don’t pass out when you see the figure because we have a big God! God is bigger than our debt or our stupidity! Don’t get overwhelmed; you do know how you eat an elephant, right? One bite at a time.
Next, list on paper all of your assets. Assets include things such as bank accounts, investments, possessions, and insurance. This will give you the total value of your money and property—your revenue and resources.
Then, subtract the debts from the assets to determine your net worth. This will give you a picture of where you are financially and help you to pinpoint areas where adjustments need to be made.
2. Look at your giving
Jesus said, “Where your treasure is, there your heart will be also” (Matthew 6:21). I think there are two treasured commodities in our society: money and time. How you spend money and how you spend time will show the things that are most important to you. So in your financial plan, it’s important to prayerfully identify the gap between what you are currently giving and what you believe God wants to give through you. Then you must determine how you can close that gap. The goal is to give God 10% of everything that comes into our hands, demonstrating that our trust is not in our own means. Our trust is not in our own success. Our trust is in the Lord.
Last week we looked at a basic budget outline for figuring out how to give. We committed to following the 10-10-80 formula. 10% is invested in our future. 80% goes to cover our living expenses. But the first 10% is the tithe – it’s the part we give to God, it represents our Biblical giving.
Some Christians ask if giving to organizations like the United Way or police boosters or other non-profits is counted in Biblical giving. No, and here’s why. Biblical giving has some key components and characteristics. First, it must honor God by making God more visible. Others see it and think or say what Jesus observed in Matthew 5:16: “They may see your good deeds and praise your Father in heaven.” Biblical giving won’t honor you; it will honor God. Second, it will be a blessing to other people. Third, we trust God with it, meaning we release the strings, the hold, and the control we might want to exercise over it. Charitable giving is not a bad thing, either, I only suggest that you should consider it an offering above the 10% of your income that you consider Biblical giving.
3. Begin an aggressive program of debt reduction
Step three is an aggressive debt reduction program built on an intentional plan. Remember, last week we performed plastic surgery; we made a commitment to stop using credit cards to pay for everything. If you’re going to reduce your debt, this is critical. It’s hard to get yourself out of debt if you continue to get yourself into debt.
And, I said something about finding extra money to pay down debt with – where does that come from? Well, remember our budget formula – the 10-10-80 formula. The first 10 percent is what? Giving to God. The second 10 percent is what? Investing in our future. And the remaining 80%? That’s to cover our living expenses. And it’s the remaining 80% that provides the place where we can find the extra money to pay down debt.
Now, it’s about to get personal, because this is about our lifestyle and our toys. Take a good look at things that are not actual necessities. Paying $150 a month for cable is a luxury. You really can live without it. Not only will your finances improve, your relationships will improve as you spend less time watching TV. Or, you could get rid of your landline telephone – there’s another $50 a month to use toward debt reduction.
Think of the places you blow money without even thinking about it. A pound of makes approximately 32 eight ounce cups of coffee depending on if you make it weak or strong. If you spend $10 for a pound of coffee and make it at home, you save about $30 over buying 32 tall coffees at Starbucks!
I think another place many of us blow money is in eating out. I admit, I’m a bad one on this. But, let’s just say you eat out only at lunch – well, that’s $10 a day, 5 days a week, 52 weeks a year – that’s $2600 a year just on lunch. Do you think you could reduce that amount by planning ahead and bringing your lunch from home? There’s another $200 a month for debt. I’m not saying never eat out, but most of us could save a lot of money by cooking at home. When you do eat out, be smart. Right now Ashley and I don’t eat anywhere unless we have a buy-one-get-one-free coupon.
With those simple things – cable getting rid of the landline, making coffee at home, brownbagging your lunch – we’ve already found potentially $430 a month. Go out to dinner one time less each week – there’s another $160 a month. We’ve already found $590 a month without huge lifestyle changes – that’s $7000 less debt you can be experiencing in just one year. Do you think that would help you begin to experience financial freedom?
Start with the smaller debts. Some people want to start with the debt with the highest interest rate, but I have found starting with the smallest debt is effective for a couple reasons. First, it’s manageable. Second, you’ll be able to pay it off quicker, which yields a sense of accomplishment. Then, you can roll that amount you were using to reduce that smaller debt into reducing the next largest debt, and you continue that momentum until you are debt-free.
Or, remember that list of assets you put together? Was there anything on that list you rarely use that you could sell and use the money toward debt reduction? Since you cut the cable, maybe you could sell a few of those TVs. If you’re really serious about this, take stock of the house you’re living in. Is it really more house than you need and can perhaps afford? Can you function with a car that’s cheaper than the one you drive? If we’re honest, most of us have more than we need, and many of us are in debt to pay for those luxury items and toys.
Let me explain how interest works in favor of your creditor if you are in debt, and how it works in your favor when you’re out of debt.
On a whim, a family of four takes a trip to Disney World followed by a three-day cruise. They hadn’t saved, and they put the entire cost of the trip on their credit card – all $5,560. Their credit card has an interest rate of 18% - that’s a guaranteed rate of return of 18% for the credit card company. So they pay $1000 a year in interest on the amount that has a minimum payment of $80 a month, and most people pay only the minimum, so even at the end of forty years, that family still owes the original amount. They took a trip to Disney World forty years ago and are still paying for it. Meanwhile, the credit card company charged 18% interest and made $40,000 off that family over 40 years.
$80 a month – that’s the credit card payment, right? Let’s say they skipped the trip to Disney World and invested $80 a month in a fund that gave them an annual rate of return of 12%, which over the long-term of forty years is an honest return. Because of the magic of compound interest, at the end of forty years, that family would have roughly $952,000 from the same $80 a month that had been going to a credit card company. Do you see why debt is not our friend?
Depending on how much debt you have, your plan will vary in length, but that plan creates something very important – light at the end of the tunnel. Put your plan down on paper. Getting rid of debt is liberating. I looked at some of my records; this time last year, I was carrying $5,500 in credit card debt and I realized I was still paying for drinks and movies I enjoyed ten years ago in college, and I thought, “What a waste.” So I began an aggressive plan of debt reduction and eliminated my credit card debt. Do you know what it’s like to not have that debt hanging over my head? I started saving for Ashley’s engagement ring and paid cash for it. In the last year I knocked down credit card debt and saved for something very special.
I still have other debts I want gone. So this week I put a plan on paper. If I stick to it, I will pay off a significant chunk of debt over the next 18 months, and beginning July of 2012, I will have an extra $638 a month that is currently going toward debt suddenly available for other things. Do you know how good that feels? Do you see why I want all of you to experience financial freedom?
4. Create an emergency fund
Your credit card is not your emergency fund – again, do you really want to pay 18% interest on an emergency? Things are going to come up that you haven’t planned for and have no control over. Having an emergency fund keeps you from getting caught back in the debt cycle. Most financial advisors recommend that you start by saving $1000 in your emergency fund, and from there, continue saving until you have set aside three months’ worth of income.
5. Write a will
The death rate among humans remains very close to 100%. At some point in our lives – probably very close to the end – most of us are going to die. Most people either do not have a will, or the will they have is invalid. Perhaps the witnesses are deceased or state laws have changed, making the document invalid. Everyone needs a will. There are websites and software programs out there to help you get started, but you should always have a will examined by an attorney who is familiar with the laws of the state in which you reside who can ensure that the document is provable in court.
I need some help from someone in the congregation on this one. Does anyone have a dollar bill I can use? We can do better than a single, does anyone have a twenty? Actually, does anyone have a hundred-dollar bill on them?
This bill represents your entire estate. If you don’t have a valid will, if you were to die today, the state would divide your assets among your surviving heirs as they see fit, after extracting court costs, state inheritance taxes, and federal inheritance taxes. We’re going to call those taxes your “contribution to society,” leaving about half your estate in tact.
One way or another, up to half of everything you have will be your contribution to society. If you don’t designate how it will be spent, the government will decide for you through estate taxes. Or, you can decide by designating the causes that will benefit from your estate.
And here’s what I suggest – if this church is important to you, consider making an estate gift to St. Paul. Again, I’m not a professional financial advisor – you’d need to meet with one to see what option is best for your situation, but my hope would be that every member of this church would continue tithing even after you have entered the Church Triumphant by designating at least 10% of your estate to St. Paul, and some of you may find it beneficial to even leave 50% or more of your estate to the church.
There are a lot of ways you can do this, too. You can give toward one of our endowed funds. We currently have three endowed funds set up – missions endowment, building endowment, and general endowment. These funds are invested in a way so that they continue to grow, and the church benefits from the income these funds produce without touching principal, except in cases of extreme emergency. But, you can also give a gift to the church generally and not specifically to one of our endowed funds. You can choose whether to designate this gift or give it with no strings, for its use to be decided by church leadership. If you’re wondering where to designate a gift, talk to me; I currently have about $500,000 in potential projects sitting in files in my office that we could start tomorrow if we had the funds available.
Let me be clear here. My goal is not to find ways to get more money for the church. My goal is to help you experience financial freedom. But I’m also aware that as you experience financial freedom that is based on God’s directives, generosity is necessarily going to be one of the byproducts. And it only stands to good reason that your church will benefit from the generosity you’re able to express when you experience true financial freedom.
Friends, God calls us to exceed the limits of our comfort zone and to grow in our giving. This requires living by the Spirit, which is doing the right thing rather than the self-satisfying or easy thing. My hope is that every one of us will put together a plan that brings us closer to God’s intent for our lives, including God’s intent for our finances. We are living today in the harvest of seeds we planted yesterday. But tomorrow’s harvest is determined by the seeds we plant today.
Close your eyes and put your hands on your lap, palm side up. We all reap what we sow. Are you satisfied with the fruit in your life? If not, ask God to help you plant some better seeds. Where in your financial life do you still need to do some work? In your giving? In your debt? In your saving? In your long-term planning? Wherever you are and whatever the issue, make a commitment that you’re going to start working on it today. Plant the seeds today that will produce the harvest you want tomorrow. Ask God to bless your commitment, to give you the grace to meet it, and the perseverance to keep working on it.
God, we thank you that fear and worry are not your plan for our lives. We thank you for the great mystical work you do between planting and harvesting, how you multiply and provide more than we could ever imagine. You make good on every one of your promises, so help us always to trust you. Help us to be faithful in planting good seeds, and we thank you in advance for the harvest that is yet to come. Amen.