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Personal Finances Lunch & Learn. Sojourn Campus Church April 30, 2011. Outline. Beyond Dollars & Cents (God’s Values) [Keith] Six Things Your Really Need to Know: Debt: Get out and Stay Out [Mike Wang] Home buying and selling – a word to the wise [Keith]
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Personal FinancesLunch & Learn Sojourn Campus Church April 30, 2011
Outline • Beyond Dollars & Cents (God’s Values) [Keith] • Six Things Your Really Need to Know: • Debt: Get out and Stay Out [Mike Wang] • Home buying and selling – a word to the wise [Keith] • Budgeting: Where’s my money going? [Kathy Witte] • Giving: What’s your Plan? [Keith] • Retirement: American Dream?? [Keith] • Personal Experiences: Best and Worst [Mike, Kevin] • Discussion, Sharing, Questions [All]
What is My Purpose? “Let not the wise man boast of his wisdom…let not the rich man boast in his riches, but let him who boasts, boast in this, that he understands and knows me, that I am the Lord who exercises kindness, justice, and righteousness in the earth….” Jeremiah 9:23-24
Keeping Up withthe Jones’? • What single factor creates a desire for more? • Seeing others who have more. • Example: Parade of Homes • US Advertising Goal: Create new desires for things we don’t have. • You’ll be cool, life will be better, you deserve it
Illusions “Our…society encourages competition…rather than contentment. Someone who isn’t climbing the social ladder is regarded as a fool and a failure. We’re taught to climb to the top of the heap. What we’re not taught is that the heap is a garbage heap.”Peter Kreeft, Back to the Virtue. “One of the most astounding things about the affluent minority is that we honestly think we have barely enough to survive in modest comfort.” Ronald Sider, Rich Christians in an Age of Hunger “There is great gain in godliness through contentment… if we have food and clothing we will be content with that. People who want to get rich fall into a trap that plunge men into ruin and destruction.” Apostle Paul I Timothy 6:6-9
What would Jesus Do…. Really! • Had no possessions except clothes on his back • People’s response to Jesus in Scripture: • Zacchaeus: gave away ½ his wealth, paid back 4x • Disciples: left careers (fishing, tax collectors, etc) • Early Church: shared everything, sold land, gave to poor • God’s expectations: • Bless and receive children (Math 19:14) • Take care of orphans & widows (James 1:27) • Feed, clothe, care for poor (Math 25) • Don’t lay up treasures on earth (Math 6:19)
Our Response… • Surrender completely everything we are and everything we have to God • Graduated Tithe: • 10% base, then increase as God provides • Above threshold give 100%. • Avoid luxuries (I want) • Focus on true needs (food, clothing, shelter, medicine) • Purpose to live by God’s standards • i.e. serving poor, orphans, children, abused “What does the Lord require of you? To act justly, to love mercy, and to walk humbly with your God.” Micah 6:8
Homes, Mortgages:A Word to the Wise • When is it wise to purchase a house: • You have a stable jobwith regular income • Your PITI is not greater than 28% of net income • You understand all other costs: utilities, garbage, maintenance, etc. • You will be able to handle unexpected costs such as new roof, new furnace, new appliances, etc. • You plan on staying in the home for a long time (maintenance, realtor fees, etc.) • If any of above are iffy, don’t buy. Housing market may stay down or decline for a long time.
Tips in purchasing • How much house can you afford? • Save for a down payment. 20% no PMI. Or 80-10-10 • Closing costs ($3000 for $200K home with 10% down) • Get a fixed rate mortgage. No balloons or surprises. Interest rates will only go up. • Get pre-approved for a loan prior to looking • Pick neighborhood / city where you want to live. • Consider neighborhood, street traffic, schools, work, church • Consider ease of re-sell: BRs, fit in neighborhood, etc. • Wait until your other loans are paid off. Do not add debt to debt. • Have home inspected for structural integrity. Title history search. Anything that looks too good to be true, probably is. • Buy simply, within your means, preferably on one income if married.
Budgeting: Where’s all my money going? No Shame! No Pain?
Steps to Creating A Budget • Record all of your sources of income. • Create a list of monthly expenses. • Break expenses into two categories:Fixed and Variable. • Total your monthly income and expenses. • Make adjustments to expenses. • Review your budget monthly.
Discuss at Your Table • One Challenge You’re Facing in Your Financial Journey • Or Question that You Have for the Group • 10 Minutes
Giving: What’s Your Plan? • Strategic Areas for Giving: • Church, Missions • Poverty • Family Needs (Trafficking, Teens, Pregnancy Crisis Center, Prison Ministry, etc.) • Major Sectors for Giving: • Local, National, Global • Reached, Unreached Nations • Specific Ministries • Known, Accountable, Strategic vs Tactical • Percent of Income vs. Salary, Time
Note to Self: • 2/3 of World is “reached” • 80% of missionaries • 99% of funds • 1/3 of World is “unreached” • 20% of Missionaries • 1% of Funds
Savings: Who? Me?Some Goals • Short Term: • Car Repair, Ins Premiums, Car Savings • Giving • Medium Term: • College Savings • Home Down Payment Savings • Giving • Long Term: • Retirement (more on this later) • Giving
Investment Options SAFETEY RA T E OF RETURN • Banks (S&L, Std& On-Line Banking) • Money Market Accounts • Certificate of Deposits • Bonds (T Bills …. Junk) • Index Mutual Funds (SP500, Wilshire 5000, International, Small Cap, Industry, etc.) • Managed Mutual Funds, ETF’s • Stocks (Income, Growth, Lg Cap, Sm Cap) • Commodities (Metals, Fuels, Food, etc.)
Practical Tips • Short Term in Secure, Liquid Investments: • Bank, MM, CD’s • Avoid Life Insurance Annuities for Savings • Balance, Diversity, Diversity • Reduces Risk, Evens out Cycles, Long Term • Do not Focus on USA. Look at Country’s Debt, Long Term Growth Potential • Stocks, ETF’s, Mutual Funds: Buy Low, Sell High • Resist high value stars (peaking out) • Wait for downturns, corrections (on sale) • Convert to Cash 5 years prior to need
Retirement: What’s Wrong with the American Dream The dream: Travel, indulge, eat, drink, be merry…you’ve deserved it. Sit back, relax, and enjoy your final days. The reality: Boredom, laziness, apathy, sickness, stress, divorce, death “…researchers concluded that employees who retired at age 55 had almost double the mortality risk of those who continued working into their 60s…” British Medical Journal, May 2005
Jesus said to them, "MyFatheris always at his work to this very day, and I, too, am working.” John 5:17 What does God Say? For me to live is Christ and to die is gain.” Phl 1:21 Whatever your hand finds to do, do it with all your might. Ecc 9:10 On the seventh day God had finished the work he had been doing; so on the seventh day he rested from all his work. Gen 2:2
Take Home Points • Re-Commit Your Finances to the Lord. Commit to live a simple, giving lifestyle • If in debt, make getting out #1 priority • Make a budget and stick to it Join a small group, class, or other get a mentor. Don’t do it alone!
Personal Experiences • Best and Worst Financial Decisions • How We Saved $200 per Month • Medical Costs – How we survived • Other Comments, Stories, Questions….
Resources • Crown Financial Ministries (Crown.org) • Quicken – managing money, budgeting • Mint.com • Living More with Less (Doris Longacre) • Rich Christians in an Age of Hunger (Ronald Sider) • 365 Ways to Live Cheap (Trent Hamm)* • TheSimpleDollar.com*
Discussion Time: Other Comments, Stories, Questions….
