INTRODUCTION TO FAMILY FINANCE

1. INTRODUCTION TO FAMILY FINANCE

2. For the average individual up to 80% of the waking day is spent dreaming about, thinking about and in the pursuit of money.

3. Many of Christ’s parables are about attitude toward money. Henrik Ibsen says: “Money may bring you food, but not appetite; medicine, but not health; acquaintances, but not friends; servants, but not loyalty; joy, but not peace and happiness.”

4. Proverbs 23:4,5 4Do not weary yourself to gain wealth, Cease from your consideration of it. 5When you set your eyes on it, it is gone. For wealth certainly makes itself wings Like an eagle that flies toward the heavens. New American Standard Bible

5. Financial difficulties are major contributing factors in separations and divorces. Love of money splits many families! Homes are affected by the priorities we set for the use of money. Much marriage tension, misunderstanding, anger and broken homes could be prevented by following the practical principles for money management contained in Gods word.

6. The following money management quiz is designed to help you evaluate your personal finances. It serves only as an indicator of where you may have some problems or potential problems. You are the best judge of your own situation.

7. Do you have a budget? A) yes 10 points B) no 0 points

8. Based on four weeks pay per month, how much of your take-home pay goes toward rent/mortgage and utilities? A) Under 30% 10 points B) 35% 5 points C) 40% or more 0 points

9. Total the monthly amount due on all credit cards, charge accounts, loans (including auto, personal, second mortgage, etc.). What percent of your monthly (4 week) take-home pay does this represent? A) 15% or less 10 points B) 20% 5 points C) 40% or more 0 points

10. Do you have an individual retirement plan? A) yes 10 points B) no 0 points

11. How many credit cards and / or charge accounts do you have? A) 5 or less 10 points B) six to eight 5 points C) nine or more 0 points

12. 6. Which answer best typifies your credit and/or charge accounts? A) Paid in full every month 10 points B) Pay more than minimum due monthly 5 points C) Pay the minimum each month 0 points

13. Do you pay your bills on time? A) Always 10 points B) Usually 5 points C) Seldom 0 points

14. How much of your monthly (4 week) take-home pay do you save? A) Less than 10% or none 0 points B) 10% 5 points C) More than 10% 10 points

15. 9. How much cash do you have on hand in savings and other liquid assets? A) one week’s pay or none 0 points B) one month’s pay 5 points C) Two month’s pay or more 10 points

16. Do you need a second job or use your savings to pay monthly bills or expenses? A) Never 10 points B) Occasionally 5 points C) Often 0 points

17. Totals: 75 – 100 points Top money manager. 50 – 74 points OK, but be careful. Under 50 points Beware, you may have some problems!

18. Why Have a Budget? “For which one of you, when he wants to build a tower, does not first sit down and calculate the cost to see if he has enough to complete it? (New American Standard Bible)

19. Budgeting helps you get a handle on the urge to splurge! It helps you control your spending.

20. Reasons For a Family Budget: • Gives direction to family goals. • Places controls on spending. • Provides needed discipline. • Puts system into giving to God. • Provides for the unexpected. • Unites the family in planning and decision making. • Assists you in managing what God gives you.

21. Money is either a useful servant or a terrible master. The key to financial success is to tell your money where to go, not try to figure out where it went. A realistic budget will help you to do just that.

22. Steps in Developing a Family Budget: • Estimate your income. • Estimate your expenses over the past year. • Discuss your objectives and set goals. Write them down. Remember goals should be “SMART.” 4. Mark goals as short term, medium term and long term.

23. Determine how much you will spend on what. Ensure that your income is more than your expenses. • Expenditures should be divided into Fixed and flexible.

24. Fixed Expenditures: • Tithe • Offering • Taxes • Savings and Investments • Insurance (accident, property, health) • Rent/house payment • Instalment payments • Auto Depreciation • Other

25. Food Household operation Clothing Cleaning Transportation Utilities Telephone Education Marriage enrichment Medical/health Recreation/entertainment Personal allowances Vacation Charity Grooming Other Flexible Expenditures:

26. Getting Out of Debt

27. “Many, very many, have not so educated themselves that they can keep their expenditures within the limit of their income. They do not learn to adapt themselves to circumstances, and they borrow and borrow again and again and become overwhelmed in debt, and consequently they become discouraged and disheartened.” • Adventist Home, p 374

28. Debt exists when: • Money, goods or services are owed to other people with payments past due. • The total of unsecured liabilities exceeds total assets. Larry Burkett defines debt as: "the inability to repay an agreed-upon obligation."

29. Why People Get into Debt? • It is relatively easy to use credit cards, charge accounts and instalment buying. • Lack of contentment with what we have.

30. --it is said that we receive over 30,000 messages daily, trying to persuade us to buy things we do not need, with money we do not have, to keep ahead of people we do not know!

31. Why People Get into Debt? Cont’d • Failure to plan for emergencies • Budgeting more than net take-home pay. • Failure to put God first.

32. Remember: Credit does not raise your standard of living. It lowers it. The truth is, you must sooner or later live on less in order to come up with the extra money needed to pay back money you borrowed. When you cannot afford to pay cash now, consider whether or not you can afford to pay cash, plus interest, later.

33. Signs of financial stress: • Often late in paying bills • Frequent calls from creditors. • Buying sprees. • Emotional strain. • Physical fatigue • Daily mental fatigue. Crying moods. Depression. • Nagging and complaining • Strained relationships

34. Note: • Romans 13:8(NIV)— “Let no debt remain outstanding except the continuing debt to love one another.” • Adventist Home, p.392, 393— “When one becomes involved in debt, he is in one of Satan’s nets, which he sets for souls…Deny yourself a thousand things rather than run in debt.”

35. Adventist Home p. 393— “This has been the curse of your life, getting into debt. Avoid it as you would the smallpox.”

36. What Can Be Done • Be faithful in your tithes and offering • Destroy extra credit cards and stop instalment buying • Purchase depreciating items with cash • Declare a moratorium on additional debts • Set a monthly debt reduction goal • Practice economy measures

37. Economy Measures • Develop a budget and stick to it • Do not confuse price with quality • Take extra time to consider large purchases • Avoid or delay purchasing on credit • Avoid unnecessary travel • Practice preventive medicine • Develop sales resistance • Put most of your economy efforts into saving on big items. • Avoid impulse buying

38. Church Finance There are three basic principles which are involved in financial freedom: • God owns • God provides • God must be first

39. God Owns Psalm 24:1 (NIV) The earth is the Lord’s, and everything in it, the world, and all who live in it Psalm 50:10-12 10 for every animal of the forest is mine, and the cattle on a thousand hills. 11 I know every bird in the mountains, and the creatures of the field are mine. 12 If I were hungry I would not tell you, for the world is mine, and all that is in it.

40. Education p. 137 “That which lies at the foundation of business integrity and of true success is the recognition of God’s ownership. The creator of all things, He is the original proprietor. We are His stewards.”

41. God Provides Proverbs 10:22 (NIV) The blessing of the Lord brings wealth, and he adds no trouble to it. Phil. 4:19 (NASB) And my God will supply all your needs according to His riches in glory in Christ Jesus.

42. God Must Be First Ex. 20:3 (NIV) You shall have no other gods before me. 

43. Mal 3:8-10 (NIV) • 8 “Will a man rob God? Yet you rob me. “But you ask, ‘How do we rob you?’ “In tithes and offerings. 9 You are under a curse—the whole nation of you—because you are robbing me. 10 Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it.

44. What is the Tithe? • Tithe means one tenth • It is holy—Lev. 27:30 • A tithe of everything from the land, whether grain from the soil or fruit from the trees, belongs to the Lord; it is holy to the Lord.

45. What is the Offering • The offering is your gift of gratitude to God for his blessings on your life. • 2 Cor. 9:7 Each man should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.

46. Counsels on Stewardship p.80,81 This matter of giving is not left to impulse. God has given us definite instruction in regard to it. He has specified tithes and offerings as the measure of our obligation. And He desires us to give regularly and systematically…Let each regularly examine his income, which is all a blessing from God, and set apart the tithe as a separate fund, to be sacredly the Lord’s. This fund should not in any case be devoted to any other use; it is to be devoted solely to support the ministry of the gospel. After the tithe is set apart, let gifts and offerings be apportioned, “as God hath prospered” you.

47. Counsels on Stewardship p.80,81 This matter of giving is not left to impulse. God has given us definite instruction in regard to it. He has specified tithes and offerings as the measure of our obligation. And He desires us to give regularly and systematically…Let each regularly examine his income, which is all a blessing from God, and set apart the tithe as a separate fund, to be sacredly the Lord’s. This fund should not in any case be devoted to any other use; it is to be devoted solely to support the ministry of the gospel. After the tithe is set apart, let gifts and offerings be apportioned, “as God hath prospered” you.

48. What Happens to the Money You Give to the Church?

49. The Tithe This fund is not retained by the local congregation It is generally used by the conference in the following proportion: • Workers’ salary and allowances (about 38%) • Administrative and General—this includes evangelism, moving, office equipment etc. (about 14%) • Departmental expenses (about 1%) • Tithe to higher organization (26%) • Sustentation—retirement expenses (7%) • Subsidies—schools, insurance, education assistance etc. (14%)

50. The Offerings: All offerings (Sabbath school investment, 13th Sabbath, week of sacrifice, etc.) with the exception of ingathering and special projects are divided in a ratio of 60:20:20 60% for local church operations 20% for Missions 20% for conference development (this is further divided into two equal parts with half going to the conference and half staying in the island)