FINANCES

You may wonder why there's a section on finances on a Christian website. Everything we have is a gift from God that we are stewards of, including "our" money.  When we don't use money wisely, we suffer.  We can have stress and also not be able to participate in helping others. So as you read and hopefully learn something below, consider this as a practical guide to the spending and saving part of the money God has entrusted to you. 

Two out of three Americans don't have the cash to cover a $500 unexpected event. Misuse of finances causes unnecessary stress. Debt puts us in bondage. The principles to being in a better financial situation are simple while many times being difficult to implement.  There are those who are in such a difficult place for example with a disability that keeps them from working, that may not be able to substantially improve their situation.

Everything written below assumes two things.

  1. You are physically able to put the suggestions into practice.

  2. You aren't currently on track with your savings to be able to retire by at least age 70.

PRINCIPLE'S

The problem with debt.  Incurred debt outside of a secured loan on a house is a result of overspending income.  At 12% interest, the overspending can only be "enjoyed" for six years, at 15%, only five years.  After that, the interest on that debt is equal to the amount overspent each year.  So spending after those number of years will be FORCED to be less than income because of the payment of interest. Unless one dies well before the average life expectancy, it's virtually impossible to end up ahead, being able to spend more than one's income for an entire life.  Debt is enjoying now at the expense of your future self.  With interest, your future self has to live on less than what is earned.

Make more money.  Whereas a 40 hour work week is the norm, it may require many more hours/week to earn enough to pay for past overspending or at times just to support oneself.  Christians are called to work hard.  God commands us to complete our work within six days, not five.  So if it takes six days of work to get out of debt, then work six days.  Improve your rate of pay through promotions, pay raises for working hard or getting a better paying job.

Spend less money. First it is important to separate what are needs and what are wants. Many people in our country and many more in the world survive on less than what is in the needs category below.  You have a choice to keep overspending on your wants or to have some freedom from financial stress.  Small amounts of spending less adds up to a very large amount of savings over the years.  Several methods of saving are included below.  If you are in debt, you most probably have a habit of outspending your income.  Now is the time to pay up. It's not going to be easy at first.  Once you realize that people including you can have a nice life without going out to eat and watching cable TV, you'll get used to it.  Your family deserves the freedom from stress and your future self deserves a better future than what you're on track for.  Whereas living according to some of these guidelines may seem uncomfortable at first, once you've done it for a while, it will seem natural.

Needs Wants

Enough food to survive

Enough clothing to stay warm and dry.

Enough heat and water to survive

Safe housing

Medical as needed to survive and be healthy

Transportation to commute to work and purchase needs. (Bus?)

Everything else

FOOD:  The difference between a thrifty and expensive monthly grocery bill for a family of 4 is $400/month.  America's spending for groceries.

STOP throwing away food. Buy less and eat it instead of throwing it in the garbage.  Americans throw out 1/4 of their food on the average at a cost of up to $550/year/person.  Since there are a substantial percentage of people who don't waste food, the percentage wasted by the rest is higher than 25%.  We waste less than 1% of our food, all of it being spoiled fruits and vegetables left too long in the refrigerator.

Buy LESS EXPENSIVE food.  Look at the cost per pound of meats, fruits, and vegetables. Buy very few if any prepared foods.  Arrange your shopping around sales.  Buy in quantity real good values if they aren't perishable.

If you don't know how to cook, learn

DINING OUT: This is a want, not a need.  The poorest part of our population spends over $100/month dining out. Pack food and take it with you.  If you are free of debt and saving money each month, a good guideline is to spend at most 2 earned hours of take home income each week.

UTILITY BILLS:  Same as food, quit wasting.  Our winter usage for two people is typically no more than 200 cu ft./month. Average for a family of 2 is 450, more than double that.  Living on less can be done.  Simply not turning up the water any higher than what's needed and not leaving it running will save over 30% in most cases.  Just not being wasteful will save you $40 or more per month on your water and sewer bill. Get a programmable thermostat that turns the heat to 55 at night and when you're away and starts to heat to 68 30-60 minutes before you arrive at home or arise in the morning. 

AUTOMOBILES:  If you are in debt, buy the cheapest car that will run without expensive repairs.  Ones with body damage can be a great value.  If you're free of debt and saving money each month, limit the total car values for the household to 25% of your annual income.

CLOTHING:  Most everything you need can be found at thrift stores and garage sales.

VACATION/RECREATION:  There are nearly free ways to enjoy time off. If you don't have your own, borrow some camping gear and camp out. Pretend you're a tourist in your own city and see the free sights.  Pack a picnic lunch. Play outdoor games.

TV:  Get an antenna and watch free high quality digital TV.  If you have internet, for $100/year, Amazon Prime has thousands of movies.  Get rid of satellite or cable while you're in debt.

TELEPHONES:  Find the lowest possible cost for either cellular or land lines.  Most people don't need both. Skip the data plans while you're in debt.

Summary:  If you overspend in some of the categories above and make changes, the results although they won't seem like much at first, really add up.  If you're an average family of 2, you're wasting $100/month in food, spending $100/month eating out more than what may be prudent for your income, and can save $50 or more monthly in utilities.  Just considering those three categories, you'd save $250/month, in 5 years, no interest earnings, you'd have saved $15,000, 25 years, $75,000.

 

More to come.  Page under construction.

 

 

 

 

 

 

Overspending doesn't last long at all.

Loan/ Credit Card Interest rate         12%

  Annual    Annual
Year Overspending Balance Interest
       
1 $1,000 $1,120 $120
2 $1,000 $2,374 $254
3 $1,000 $3,779 $405
4 $1,000 $5,353 $574
5 $1,000 $7,115 $762
6 $1,000 $9,089 $974
7 ($1,000) $9,060 $971
8 ($1,000) $9,027 $967
9 ($1,000) $8,990 $963
10 ($1,000) $8,949 $959

Loan/ Credit Card Interest rate         15%

  Annual    Annual
Year Overspending Balance Interest
       
1 $1,000 $1,150 $150
2 $1,000 $2,473 $323
3 $1,000 $3,993 $521
4 $1,000 $5,742 $749
5 $1,000 $7,754 $1,011
6 ($1,000) $7,767 $1,013
7 ($1,000) $7,782 $1,015
8 ($1,000) $7,799 $1,017
9 ($1,000) $7,819 $1,020
10 ($1,000) $7,842 $1,023
Savings add up.
SAVING
    Saved in years with no interest
Daily Monthly 1 5 25 50
 $     3  $             100  $          1,200  $          6,000  $        30,000  $        60,000
 $     7  $             200  $          2,400  $        12,000  $        60,000  $      120,000
 $   10  $             300  $          3,600  $        18,000  $        90,000  $      180,000
 $   13  $             400  $          4,800  $        24,000  $      120,000  $      240,000
 $   17  $             500  $          6,000  $        30,000  $      150,000  $      300,000
 $   33  $          1,000  $        12,000  $        60,000  $      300,000  $      600,000