Serving Bread

Finance Friday 20: Not so Biblical of an Economy

Finance Fridays 8: Accountability

Finance Friday 25: Giving out of poverty

Published

on March 7, 2008

Finance Friday 31: How do you give?

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He sat down opposite the treasure, and watched the crowd putting money into the treasury. Many rich people put in large sums. A poor widow came and put in two small copper coins, which are worth a penny. Then he called his disciples and said to them, “Truly I tell you, this poor widow has put in more than all those who are contributing to the treasury. For all of them have contributed out of their abundance; but she out of her poverty has put in everything she had, all she had to live on.”

– Mark 12.31-44

In this passage, Jesus is watching and comparing how various worshipers are contributing to the treasury of the temple. The text tells us that many rich people put in large sums. I imagine that the administrators of the temple appreciated cultivating these large-sum donors. And these large-sum donors may have enjoyed being able to bless the temple out of their wealth.

In contrast to these donors, a poor widow put in “two small copper coins, which are worth a penny.” The money she put is essentially of no value, yet Jesus chooses to honor her above all of the wealthy donors. The difference is that Jesus was judging the motivation of the giving not the amount of it. Jesus was looking at the ways that the giving shed picture on the sacrifice associated with the giving, rather than the bottom-line contributions to the temple.

The widow gave out of her poverty compared to the rest who gave out of their abundance. Jesus honors giving that comes out of poverty over giving that comes out of abundance. There are a few things about this principle that stand out to me:

The poor will shame the rich. This is an example of the upside-down kingdom. This is consistent with the power of the gospel where those who do not have uproot those who do have. It is the shake-up of power-structures, where the least shall be first.
Giving is important and necessary. From the poorest of the poor to the richest of the rich, all are expected to give. Being in ministry among college students, the constant mentality is that student budgets are immunized from having to give toward the works of God.
Giving is not associated with a certain amount. Giving is measured on a heart level not in the amount we give, whether it be a percentage of our income or the absolute amount we actually give.

Though the amount this widow gave to the treasury was insignificant to the treasury, it was significant to her. How we measure our giving is not the impact it will make to advance God’s work, but the impact it will make on our lives.

Throughout the gospels, we see that Jesus has strong words for those who are wealthy. I don’t believe it’s because there is something less spiritual or more sinful in being wealthy, as some of our friends who subscribe to liberation theology may suggest. I think Jesus has strong words to those who are wealthy is because the more money we have, the harder it is to give out of our poverty.

Over the past 10 years, my income has consistently inched upwards. And as my income has inched upwards, so has our expenses. Some of that is just natural cost-of-living increases (inflation) and the expansion of our family, but some of the increase in our expenses is due to us taking advantage of a larger income.

In other words, the more money that is disposable to me, the easier it is for me to give money away from a place of abundance rather than a place of poverty. To give from a place of poverty is to have the heart of this widow who gave all she had to live on. She gave what she may have needed for basic necessities. What she gave, she will miss as she now must trust that God would still provide for her needs.

Practically speaking, these are some ways I have tried to grow my heart to mimic this hero of the faith:

Make giving a priority: Our family revolves around our giving. We make financial decisions regarding other expenses and budget items after we have settled on a giving priority.
We have focused on living a simpler lifestyle: The basic rule of thumb is that every year, your expenses expand. We have tried to operate on a reverse trend where every year, we learn to live with more simplicity. This has been extremely difficult to do. One way we do that is that we have committed to look for ways to increase our giving over the years. When we got married, we began with a 10% tithe and over the years have worked to increase that percentage.
Freedom in giving: Rather than make giving a rule, we have looked for ways we can enjoy this discipline. I like to think of giving as an experience of worship rather than monthly dues.
Pray for a motivated heart: I want my heart to reflect that God’s abundance and mercies are sufficient for me and my family. I want my giving to reflect my heart.

This poor, nameless widow is a hero of the faith. She reflects that her trust is in God rather than the amount of money that is in her name. In this story, Jesus draws a lesson that the Kingdom of God is not built through the abundance of our possessions, but through giving of ourselves to God.

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Finance Friday 24: The bad among us

Published

on February 29, 2008

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A friend recently reminded me of an off-hand comment I made about pay day loan centers. While teaching a personal finance seminar for seniors, I mentioned how these types of businesses will have a special place in hell. I recognize I used some extreme language, but it’s heart-breaking to know how pay day loan centers or check cashing centers usually take advantage of the poor who have little financial education and/or are unable to seek better options in their finances.

The politically correct term for these types of businesses is that they are a part of the “fringe economy.” Here’s a description of the fringe economy (from my friend):

The term “fringe economy” refers to a range of businesses that engage in financially predatory relationships with lowincome or heavily indebted consumers by charging excessive interest rates, superhigh fees, or exorbitant prices for goods or services. Some examples of fringe economy businesses include payday lenders, pawnshops, check-cashers, tax refund lenders, rent-to-own stores, and “buy-here/pay-here” used car lots. The fringe economy also includes credit card companies that charge excessive late payment or over-the-creditlimit penalties; cell phone providers that force less creditworthy customers into expensive prepaid plans; and subprime mortgage lenders that gouge prospective homeowners.

I came across “Pay Day Loans Have Equally Bad Friends” at Bargaineering.com that speaks of others that make up the fringe economy.

Personal finance is an important part of mentoring young students. And especially when I have seen students and theri families suffer from poor financial decisions and who have been a part of the fringe economy, this economy has become more personal than just an evil that I simply think exists among us.

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Finance Friday 27: Tools to help you

Finance Friday 12: The ends do not justify the means

Finance Friday 23: Why I enjoy doing my own taxes

Published

on February 22, 2008

Finance Friday 19: What’s your new year’s resolution?

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A few weeks ago, I mentioned that filing my taxes is helpful in caring for my personal finances. Most people probably hate doing their taxes for many reasons: it’s cumbersome and confusing. Our tax system is very complicated, which is the reason why I enjoy doing them.

When I’m filing my taxes, I am able to have a better sense on how the government views my money and how it wants to tax it. As I’ve filed my own taxes over the past 10 years, I have learned more about the tax system and I can prepare better over the course of the year how I spend my money and how to take advantage of the various tax breaks available to us as a family.

I recognize that we can familiarize ourselves with the tax system without having to do our own taxes, and if that works for you, that’s fantastic. I personally have learned more by doing my own taxes (and these days, with electronic filing capabilities, it’s not too difficult to file your own taxes).

Some tips to do your own taxes:

Spend a day to collect all necessary paperwork. I have a big folder where I put all of the necessary forms to file my own taxes. This includes W2s, 1099’s, 1098’s, etc…
Purchase one of the eFile programs such as Taxcut or TurboTax.
Set aside an entire day to fill out the program. If you feel stuck, search on the internet for a particular term and how it may apply to your situation.
After you are done going through the program, do not file your taxes with the IRS. Wait a couple of weeks before you file to allow you time to remember if you forgot anything during the filing process. This was important for me last year when I realized I had missed a couple of deductions that eventually saved me a couple hundred dollars in paying taxes.

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You know you’re an American when…

Finance Friday 18: Your car is not an investment

Proposition 89

Finance Friday 22: The Fiscal Month

Published

on February 7, 2008

Finance Friday 30: Revisiting a budget

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You may have heard of a fiscal year. Organizations run their budgets on an annual basis where they balance their accounting at the end of the fiscal year and start over when the new year begins. It’s wise for families or individuals to also integrate a fiscal year in their accounting, where once a year you can reset your budget, assess your expenses, and make financial commitments for the next 12 months.

In addition to operating with a fiscal year (I’ve mentioned in a previous post that my family’s fiscal year runs from September 1 to August 31), we also operate with a fiscal month. Basically, at the end of every month, I balance my checking account in a way where we end the month with $0. If we end up with a little extra money at the end of the month, that money either goes into some sort of savings or toward debt. If we end up a little under at the end of the month, then I look to cover that shortfall through our savings.

What I like about having a fiscal month is that it gives me a better sense of how to manage my money and be a steward of the money we have. We can make changes along the way and be on top of our finances.

Some tips to establish and maintain a fiscal month:

Balance your accounts every month and then initiate accounting exercises after you balance your account.
The reason I do this at the end of the month is because we get paid once a month. If you get paid every week or twice a month, you may want to have a fiscal week or fiscal bi-week.
Make sure you know how you want to spend any extra money and/or how you would handle if you ended in the red at the end of the fiscal season.

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Finance Friday 29: The envelope system

Finance Friday 21: Allowances

Published

on January 25, 2008

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When I was young, my parents gave me a weekly allowance I could spend as I wished. There were no conditions attached to the allowance—it wasn’t attached to grades, to chores or even behavior. It was simply money given to me on a weekly basis, allowing me to either spend it immediately or save it for a larger purchase. (I usually saved my allowance for months on end to purchase a computer game)

When I began working and earning my own money, I stopped getting allowances. I had little expenses, which allowed me to spend earned income on pleasures. The foundation of financial independence was:Â spend what I earn. I did not budget, save or consider any expenses.

A few years ago, I reintroduced the concept of an allowance into my budget. Our family tries to live by a strict budget and the allowance has been an important “line-item” in our budget. Rhoda and I each receive an allowance in cash at the beginning of the month. That money can be used for any purpose without the need to account for it. That money is used to eat-out, purchase books, or entertainment. We can save it to increase our purchasing power in future months, or we can spend it all in one day. But once that money is gone, it’s gone. Neither one of us is allowed an increase or an advance on such discretionary spending.

An allowance gives us the freedom to do whatever we want with a limited amount of money. It is both freeing and restricting in a healthy way. For the past seven years, our income has increased, our expenses have increased, but we have been faithful to keep our allowance at the same amount which is $60 for each of us. Sixty dollars may be too little or too much for you, and you may need to figure out how to adjust it to suit your lifestyle. (I know of a couple who live with a $20/month limit)

Whenever I am counseling people in areas of stewardship, I usually begin with having them develop an amount for an allowance. It matters less to me what the amount is (I once had someone set her limit at $500/month) than that they are abiding by the limits of an allowance. Over time, I will work with them to limit or cut their allowance spending.

Give yourself a monthly allowance, but the key is that you have to abide by your limit. Blowing off an allowance will render this system useless.

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Finance Friday 27: Tools to help you

Finance Friday 24: The bad among us

Finance Friday 20: Not so Biblical of an Economy

Published

on January 18, 2008

Finance Friday 24: The bad among us

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Pundits tell us that our economy is weak. One headline in my Yahoo News Reader said that the economy needs “rescuing.” Two of the three branches of government are focusing their energy to care for our economy, the Federal Reserve is urging for a federal response to our economic downturn, and every presidential candidate is going back to the adage that worked so well for Bill Clinton, “It’s the economy, stupid!”

The big proposal on the table is a tax refund to middle-class Americans. Here’s what they are talking about in Washington:

Aides to lawmakers involved in the talks said the White House is pressing for tax rebates of $800 for individuals and $1,600 for married couples. Lawmakers were likely to settle on a $500 rebate for individuals, said an aide involved in the talks, with details for couples and people with children still being negotiated.

Fed Chairman Fred Bernanke “endorsed the idea of putting money into the hands of those who would spend it quickly and boost the flagging economy.”

Our economic model depends strongly on consumerism. For example, the lackluster holiday season that just passed has many politicians and economists worried that our economy is in trouble. What does it mean for us that we live within an economic model that encourages or even thrives on buying more things? This model is in contrast to the Bible’s teachings. The Bible is clear on how we should relate with “stuff.” It doesn’t teach accumulation but radical generosity and faithful stewardship. (See Luke 12)

Crisis moments often teach us about ourselves and our values. As we feel an economic downturn that could very well turn into a recession, we will see (if not already apparent) our values exposed. However we may feel about our economic model, it’s important to remember that this is far from what the Bible would preach. I don’t pretend to know how God would intend for us to relate economically, but it’s far from American capitalism.

Having said that, we should remember that there will be plenty of resources and wisdom on what should be done to help our economy and how we should steward our finances. Anything that is not shaped by what Scripture teaches falls short to be our needed solution.

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Finance Friday 28: Peace comes from God

Finance Friday 19: What’s your new year’s resolution?

Published

on January 11, 2008

27 not so foolish Americans

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So this is the time of year that people are inspired to make resolutions as well as break them. What are your new year’s resolutions when it comes to your finances?

I find it helpful to spend half a day, once a year to

Review our financial situation
Thank God for the ways he continues (sometimes surprisingly) to provide for our needs
Confess the ways that we have been unfaithful or poor stewards of our resources
Make corrections to our budget
Develop our generosity plan

Our family’s “fiscal year” actually ends in August. So in August, my wife and I review how we are spending our money, figure out how to make appropriate cuts, and believe God in faith for our provisions. We adjust our spending, our tithing and develop a financial plan for the year. But this time of year provides a helpful “mid-year” check-in. Having done that recently, there are a few things I noticed that I plan to correct:

I record too many things as “Miscellaneous” in my budgeting software. I commit to be a lot more diligent to record everything I spend. The better data I have, the better decisions I can make about our finances.
In the next month, we anticipate to have a little bit more disposable income due to paying off a couple of debts. We are going to make sure to save that money. We will pretend that those debts are still in play and so every month, we will put that amount of money away in a savings account.
Next month, we expect our second child. This means that we have to anticipate that some of our costs will increase (usually in diapers in the first few months and perhaps in formula, depending how the feeding plan goes). We hope that our 2 1/2 year old daughter would be completely potty trained, which would then keep the diaper cost the same, but we will inevitably be absorbing new expenses with a new child.
My taxes will continue to be more complicated and I continue to remain committed to do them myself (I will explain this reasoning in another post). Because of that, I will go through all of my records and prepare them for filing my taxes next month (for the past three years, I have been doing them over the Presidents’ Day Weekend in February).

Spend some time in the next month to get acquainted or re-acquainted with your financial situation. Spend the time in prayer, seeking God’s wisdom and stretch yourself in faith to live as one who trusts God —not money—for your provisions.

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Finance Friday 10: Choices

Published

on October 26, 2007

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One of my privileges is that of choice. When you think of nearly half the world living on less than $2 a day, you realize they have very few choices on how to spend or steward their money. At $2 a day, the money will be spent for the very bare essentials—food, water and shelter.

Though at many times I may feel that I could use a little more income in my life, I am not in the same financial camp as half of the world. As my income has grown so have my choices. Stewardship focuses us to make choices. How will we choose to spend the money that we have?

In the area of our finances, it seems that there are some black and white principles, but when it comes to application, it tends to be in gray. I’m not sure whether I am making the best choices, and even if I am, those choices may not necessarily work for other individuals and families.

Good stewardship is knowing the principles and making the best decisions that reflect our convictions and principles. The reason so many Americans are in debt reflects that we don’t know how to make good choices. The credit industry has expanded our access to things that our income cannot afford. And through that, we have lost the ability to make choices.

Instead of saving for something, we get it when we want. Our choices have been reduced to the color of the product rather than whether that product is even necessary.

Rhoda and I live on a budget and a monthly allowance. That allowance allows us to spend our money however we would like but we are limited by what is given in allowance. One month, I may use that money toward buying a CD while another month, I may put some of that money toward buying a book. In other words, because there are limited funds, when I buy a CD I am choosing against buying the book.

Some tips to make better choices:

Allowance. Live on an allowance and operate within the bounds and limits of that money. Our allowance is (and has been since we got married 6 years ago) $60 a month each, but that may be too little or too much for your particular case. But whatever you set for yourself, stick to it.
Purchase on credit when you have the money. This may seem a no-brainer, but few of us actually do this. I think credit cards are a great convenience. However, my discipline is to make sure that whatever I buy on credit, I can back up with money in my checking account.
Pray. Pray before you make purchases. Ask God to help you make better choices along the way.
Accountability. I think I’ve mentioned this point in previous posts and I will probably mention it in future ones. We need accountability in making better choices. Find someone who can speak truth into your life regarding your choices.

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