The New Managing God s Money The Basics

Transcription

1 New Expanded Third Edition Become A Better Manager Of God s Resources The New Managing God s Money The Basics Michel A. Bell Campbellville, Ontario, Canada

2 The New Managing God s Money The Basics Copyright 2007, Michel A. Bell The author is responsible for the design, content, and editorial accuracy of this work. All rights reserved. No part of this publication may be reproduced in any form or by any means electronic, mechanical, photocopy, recording, or any other except for brief quotations in printed reviews, without prior written permission of the author. All Scripture quotations, unless otherwise specified, are taken from The New American Standard Bible (NASB) Copyright 1960, 1977, 1995 by the Lockman Foundation. Used by permission. Other Books by Michel A. Bell Managing God s Money: 7 Branches Workbook (2006) Managing God s Time: Improving Personal Effectiveness (2004) Managing God s Money: The Basics (2001) Managing God s Money: The Basics WORKBOOK (2001) For more information or To order copies, please contact: Scripture quotations with reference NRSV refer to the New Revised Standard Version Bible (Copyright 1989 by the Division of Christian Education of the National Council of the Churches of Christ in the United States of America). Scripture quotations with reference NIV are taken from the New International Version Bible (Copyright 1973, 1984 by International Bible Society. Used by permission of Zondervan Bible Publishing House). Scripture quotations with reference RSV refers to the Holy Bible: The Revised Standard Version, (Copyright 1946, 1952, 1959, 1973 by the Division of Christian Education of the National Council of the Churches of Christ in the United States of America. All rights reserved). Library and Archives Canada Cataloguing in Publication Bell, Michel A. The New Managing God s Money-The Basics: Become a Good Manager of God s Resources / Michel A. Bell. 3rd ed. ISBN Christians Finance, Personal. 2. Finance, Personal Biblical teaching. I. Title. info@managingodsmoney.com, or PO Box 296, Campbellville, Ontario L0P 1B0 Managing God s Money is a Christ-centred teaching organization helping folks to manage God s money, time, talents, and other belongings, for His glory and to further His Kingdom. BR115.E3B C st Printing February nd Printing, November rd Printing May 2007

3 Essential Concepts The Money Triangle (3M s of Money) Merchant Designs, produces, markets goods and services and often uses coercive, seductive approaches to get Me To buy what I don t need and can t afford because I couldn t resist the Merchant s bait Money The bridge the Merchant accepts to part with his goods and services. GAS Principle: Three Key Truths in the Bible about money: Key Truth #1: God Owns Everything (Psalm 24:1-2, Colossians 1:16) Key Truth #2: Accept What You Have (1 Timothy 6:7-8, Hebrews 13:5) Key Truth #3: Seek First His Kingdom And Submit Your Requests To Him (Matthew 6:33, Proverbs 19:21) PEACE Budgetary Control: A closed looped planning and doing procedure that allows you to reach goals methodically: Plan for a specific period to do precise goals. Estimate and record the expenses needed to do those goals. Act on the plan and record results as you do those goals. Compare results with plan and with estimated expenses needed to do the goals. EXECUTE needed changes to do the goals.

4 PLANE Spending Analysis: Five questions to answer before you commit to a major expense: P Did I Plan and include this expense in my budget? L Will the expense raise my Loans? A Are there realistic Alternatives to fulfill the identified need? N Is the expense Necessary to fulfill the identified need? E Is this the most Effective use of funds compared with my life, budget and other goals? A goal is the destination where God wants you to be, or what God wants you to do. A plan is the journey how to get there, or how to do a job, your road map. An estimate is the likely cost of the plan: the cost of the steps in the plan. A budget is the record of the results of the plan and estimate, your money map. Contents Introduction List of Tables and Figures Section I: Money and Three Key Truths Money and Three Key Truths Money Defined Money and Happiness The Money Triangle: 3Ms of Money Know Your ABCs Three Key Truths from the Bible about Money...36 #1: God Owns Everything #2: Accept What You Have #3: Seek First His Kingdom and Submit Your Requests to Him Summary Think About This Chapter Notes Why Don t We Manage Money Well? Faith Planned Obsolescence Greed Slow Burn Principle Summary Think About This Chapter Notes Contents 7

5 3. Quick Start Action Plan Learning Your ABCs. 57 Stop Striving for More and Accept What You Have.. 58 Own Your Present Circumstance Start Playing Offense with Merchants Today.. 64 Five Practical Steps to Start Today Summary Think About This Chapter Notes Three Essential Financial Planning Steps st Step: Settle Your Eternal Worth nd Step: Find out Your Material Worth Debt Ratios rd Step: Find Out Your Life Goal Life Goals Material Goals Setting and Checking Goals Summary Think about This Chapter Notes Debt Cost, Effects and the Way Out Credit Cards The Borrower is Servant of the Lender Borrowing Assumptions Praying for a Financial Miracle Financial Cost of Borrowing Emotional Cost of Borrowing Interest Income Good News Getting Out of Debt The Case of the Vanishing Dollar Summary Think About This Chapter Notes Money Value and Investing Inflation Time Value of Money Cash Flows Investing Players Procedures Principles Tax Shield Summary Think About This Chapter Notes Section II: PEACE Budgetary Control Overview PEACE Budgetary Control Plan Estimate Act Compare Execute Summary Think About This Chapter Notes Budget Preparation The Plan Budgeting The New Managing God s Money The Basics Contents 9

6 Why Prepare a Budget Specific Budget Goals When to Prepare a Budget and How Far Ahead Essential Information to Prepare a Budget Budget Principles Budget Period Budget Categories Budget Spending Limit Budget Tools Other Budget Information Accountability Quick Start Budget Kit Summary Think About This Chapter Notes Calculating Amount Available to Spend PEACE Budgetary Computation Forms (PBCFs) PEACE Budgetary Computation Income Form (PBCIF). 182 Salary and Other Income Giving Tithing Keeping Taxes Savings Capital Fund Summary Think About This Chapter Notes Allocating Amount Available to Spend and Recording Spending Contingency Finishing the Budget Recording Your Spending: The PEACE Budget Worksheet (PBW) Recording Progress toward Reaching Goals Implementing Three Spending Aids Comparing What You Did With What You Planned to Do When How Who Executing Changes to Remain on Course to Reach Your Plan Budget Truisms Summary Think About This Chapter Notes Three Spending Aids Factors to Consider Before Spending Applying Three Key Truths Truth #1: God Owns Everything Truth #2: Accept What You Have Truth #3: Seek First His Kingdom and Submit Your Requests to Him PLANE Spending Analysis The Affordability Index Plan Loans Alternative Necessary Effective The Affordability Index and the Vase The Affordability Index and Buying a Car The New Managing God s Money The Basics Contents 11

7 Summary Think About This Chapter Notes Family Finances God s Goals for Marriage Man s Role in the Marriage Dispute Resolution Procedure Special Marriage Matters Family Council What and Why Leadership How it Might Work Single Parents Children Allowances Guidelines to Teach Them Good Habits Accountability Summary Think About This Chapter Notes Section III: Selected Spending Decisions Insurance Insurance Questions Why Life Insurance Who Should Take Out Life Insurance Who Should Not Take Out Life Insurance How Much Life Insurance Do You Need Different Life Insurance Types Mortgage Life Insurance Mortgage Loan Insurance Homeowner s Insurance Disability Insurance Equipment and Appliances Insurance Insurance Deductible Summary Think about this Chapter Notes Buying a Home and Choosing a Mortgage. 275 What Buying Your Home Entails Renting a Home Issues to Consider for Rent or Buy Decision Buying the Home No Down Payment and Low Down Payment. 283 Interest Only Mortgages Composition of a Mortgage Mortgage Refinancing Selling the Home Summary Think About This Chapter Notes Leasing Compared with Buying an Automobile 293 Sale and Leaseback Service (or Operating) Lease Financial Leases Leasing an Automobile Summary Think About This Chapter Notes Section IV: Looking Beyond the Sunset The New Managing God s Money The Basics Contents 13

8 16. Retirement Planning Retirement Isn t Biblical Succession Planning Saving for Retirement Pension Plans Questions to Answer to Calculate Your Retirement Budget Gap Registered Retirement Savings Plan (RRSP) Summary Think About This Chapter Notes Estate Planning Why You Should Prepare a Will Who Should Prepare a Will and What It Should Contain Who Should Benefit from Your Will If You Don t Have a Will How to Prepare a Will Selecting an Executor Powers of Attorney Summary Think About This Chapter Notes Choosing a Financial Adviser What Can a Financial Advisor Do For You? What Type of Financial Advice You Can Expect to Get Conflict of Interest Who Is a Financial Advisor Choosing the Financial Advisor For Whom Does She Work Summary Think About This Chapter Notes Writing Your Personal Financial Plan Where Am I Spiritually Where Am I Materially What Goals Should I Work On Key Inputs and Outputs Financial Plan Schedules Sensitivity Analysis How Do I Stay On Track Summary Think About This Chapter Notes A Forever to Remember A Brief Recap Financial Health-Check Questionnaire Money Savings Ideas to Go A Memorable Encounter Think About This Chapter Notes Appendices Money Management Journey Overview Personal Spending Analysis Form Goal Statement Form Goal Tracking Form Debt Repayment Plan PEACE Budget Computation Forms (PBCF) The New Managing God s Money The Basics Contents 15

9 6.1 PEACE Budget Computation Income Form (PBCIF) PEACE Budget Computation Expenses Form (PBCEF) PEACE Budget Worksheets House Purchase Guide Glossary About The Author Index Introduction In 1995, shortly after returning home to Montreal from living in Japan, still a relatively young Christian, I started to learn about church folks personal debt. The high and growing level disturbed me. Five years later while working at a challenging and demanding job, by God s grace, I published my first book, Managing God s Money-The Basics. Three more books, over 50 TV appearances, and more than 50 seminars later, I am writing this introduction for the third edition of Managing God s Money-The Basics, with the same concern. Much changed since the first edition, chiefly my knowledge and me. Though I saw several negatives, the positives I experienced since 2000 outweigh them. The most significant positive change came in Then, I believed I would work another 10 years as an executive in industry, but God had other plans. He led me out of Alcan Inc. where I worked in a job I would have paid to do that s correct, I loved working at Alcan to His full-time unpaid Managing God s Money ministry. As His Word promises, He put everything in place for me to do this ministry, which I am doing today. I continue to see great joy in many families who embrace God s ownership and their stewardship of everything; the resulting freedom from financial stress that follows is infectious and lasting. Since 2000, I saw a few churches and Christian ministries turn to God to provide funding for their work, rather than follow the slick, seductive, or other marketing path. They got more than they needed! As well, I saw families in need call out to God and He fulfilled their needs. What a blessing to see God supply needs in His time, in His way, and not always with money! Still, today, more church folks accept as normal and unavoidable the pervasive personal debt among Christians. Tithing seems more entrenched as many appear unwillingly to 16 The New Managing God s Money The Basics Introduction 17

10 learn Bible teachings that show clearly early believers never practised or taught tithing. Rather, they "presented" 100% to God (Acts 2; 2 Corinthians 8). Perhaps the greatest negative change, and most disturbing, is the pressure and manipulation some churches and Christian ministries exert to raise funds. They exploit the tithing attitude of giving to get; they exploit the sick, promising healing; and they exploit the ignorant. Growing numbers of churches and ministries encourage credit card giving while appealing to selfishness and greed. Sadly, many believers respond and give, hoping to get healing, get money or other emotional and, or material benefit. They forget they have direct access to Jesus and His love, mercy and grace, and so do not need to give to get Jesus healing, love, and everything they need. Today, I am even more convinced than when I wrote the first edition that our Sunday Schools, churches and Christian schools need to teach biblical attitudes to money. Even more important, I realize one main reason for the lack of knowledge of good attitudes to money among Christian families is husbands and wives, especially dads, do not accept their God ordained roles. Dads do not accept primary responsibility to teach their families to love the Lord their God with all their hearts, minds and souls, and to model and practice biblical truths. As Mother Teresa said in her book, A Simple Path: When you know how much God is in love with you then you can only live your life radiating that love. I always say that starts at home: family first, and then your own town or city. It is easy to love people who are far away but it is not so easy to love those who live next to us. 1 In this third edition, I continue custom-fitting to household finances, good business practices and solid bible teachings. Though I rewrote many and added four chapters, the basic message of God s ownership of everything remains. Topics added include: 1. Money and happiness (chapter 1) 2. Quick Start Action Plan Learning your ABCs (new chapter 3) 3. Debt: its costs, effects and the way out (new chapter 5) 4. Investing (chapter 6) 5. Quick start budget kit (chapter 8) 6. Family Finances (new chapter 12) 7. Retirement planning (chapter 18) 8. Writing a financial plan (new chapter 19) 9. Annual financial check-up (chapter 20) 10. Sixty five money saving ideas (chapter 20) Except for investing, this edition deals with the basics. I included the investment section as a reference guide to fill a need I saw. Many folks asked for help to oversee their pensions, education savings plans, and other investments. They do not want to be experts, just to know enough to ask right questions. Folks complained about their investments performance and about their investment advisors ; they don t realize that these days, they can t tell what a financial professional does from his title. Some folks lost pensions by reacting to reports about over hyped companies like Enron, WorldCom, Nortel, and Yahoo!. Sadly, with some awareness, these folks could have seen these companies earnings forecasts (and so stock prices) were not sustainable. Then again, I decided to go a bit deeper than the basics in the investing chapter when I saw Statistic Canada s research showing that in 2005, 89% of Canadian families held financial assets (stocks, bonds, mutual funds, and income trusts). I pray this section will help you place God s funds where He directs. My goal in this edition is to present again, Three Key Biblical Truths as the foundation to develop right attitudes toward money so your giving, spending, and saving will honour God. I do not claim the skills and tools I offer will allow you 18 The New Managing God s Money The Basics Introduction 19

11 to become rich in material terms; I do not have the ability to do this. Contrary to prosperity teachings, the Bible does not promise material riches for our efforts. I disagree with Christians who say if we are good stewards of God s property, He will bless us always with wealth; He might! His will for each of us is different. The Bible shows examples of people blessed with material wealth and some blessed with spiritual wealth only. Read about the lives of David and Job. In 1 and 2 Samuel, and in the book of Job, both in the Old Testament of the Bible, we see two individuals who had hearts for God and who sought always to do His will. He blessed them with wealth. But it was different with the twelve apostles whom Jesus chose; He did not bless them with material stuff. Their blessing, spiritual wealth, came from walking with Jesus Christ. The richness that results from seeking first His Kingdom and His righteousness, and honouring our Lord with our finances is not necessarily material. There may be other blessings, such as grandchildren! God asks us to come in a relationship with Him, and then He asks us to come and be His disciple. After, He tells us to go make disciples. Meanwhile, He tells us the world will persecute us, but He will be with us. To do His will, He gives us everything we need. And those to whom He gives much, He expects much. To be sure, He will not give you more than you can manage. So, be content with what you have and do your best with it. In Matthew 19:24, referring to the wealthy unbeliever whose heart condition was to get more wealth for his own purposes, Jesus said it is easier for a camel to go through the eye of a needle than a rich man to enter the kingdom of God. Jesus wants our hearts, all, not just parts. He has promised to provide for our needs, do you believe He will? That s a key question you need to answer as you go through this book. To be sure, you might have committed your life to Christ, but when the car breaks down at 7:00 PM on Sunday, and you have to go to work at 7:00 AM on Monday, do you believe He will supply your needs in time? I address similar issues you face daily giving, spending, saving, investing I suggest some helpful tools, and point you to the Author and Creator of everything, Jesus Christ, who has all the answers; even when we don t know the questions! Reading this book won t change you; that will happen when God convicts you of truth and reveals needed changes. So, stay close to Him, listen for His call, and do as He asks. Then you will become a better manager of His possessions and experience His richest blessings. I pray you will get to know in a special way, the God of peace, love, joy, hope, long suffering, who loves you so much He died for you! I give Him all the glory! Throughout, I used feminine and masculine references interchangeably. 1. Mother Teresa, A Simple Faith (New York: Random House, Inc., 1995) p The New Managing God s Money The Basics Introduction 21