6 Steps to a Killer Emergency Fund For When “Stuff” Really Hits the Fan

Emergency Fund

Photo by Miran Rijavec

[Excerpts from this post are taken from Larry’s book, Beyond Peace In Christian Finances: Accelerating Past Average With Your Money Plan]

Introduction

In Financial Peace University, Dave Ramsey teaches the basic “three to six month’s worth of expenses in a good money market account.” But the preparation ends there at the Baby Step 3 Emergency Fund. I’m not knocking this advice, because I think it is good advice. My family has a rainy day fund such as this for unexpected financial problems.

What happens, though, if for some reason that stash of cash is inaccessible and it is needed sooner than later? What if there is a run on banks? What if there is a global computer virus that turns digital money in online savings accounts into a big fat zero? Lots of weird stuff can happen, especially in today’s unstable world.

Let me present another potential way to put together a rainy day fund. In my own personal plan, I have several layers of emergency funding. And just like Dave talks about, remember that an emergency fund is more in line with an insurance policy—not a way to do something “big” with money. Yes, piles of money will be lying around not growing as fast as they could be, and that’s okay.

Step 1: Purchase a Quality Safe

Depending on how many items need to be stored and how big the safe needs to be, costs for a good safe range from $200 to $1,000. I realize that may seem like a lot of money, but from personal experience, a safe is well worth the investment. Another personal note on safes: always go a little bigger than you think you need to. I bought my family’s current 1.2 cubic-foot safe around ten years ago. This size has been too small for our needs for the last four to five years. I recently added an extra safe about twice as large as the first, primarily to hold all the various Jones family legal documents. Be sure to buy a safe that is well built and has a high fire rating.

Step 2: Put $3,000-$5,000 in Your Safe

Depending on personal comfort level and “prepper” attitude, I would put anywhere between $3,000 to $5,000 cash in a safe. This is the first level of an emergency fund. And no, just like Dave talks about, this isn’t pizza money for dinner or a, “I need to go buy something on Craigslist right now” fund either. Pull together a decent-sized collection of $5s, $10s, and $20s for this first level of an emergency fund. In this way, if a bank account can’t be accessed in a crisis, there is cash at hand that will carry a family through a minor emergency for at least a few weeks.

Step 3: Place $2,000-$5,000 in a Savings Account at the Same Bank as Your Checking Account

Be sure you have both accounts linked together to move money back and forth as needed. This is your second level of an emergency fund. In this way, when you have a financial problem, you can immediately transfer the money you need from savings to checking to spend it immediately via check or debit card. This third step is most likely adequate for the majority of your “regular” emergencies such as car repairs, smaller home repairs, and minor medical emergencies. The next two steps will be the “icing on the cake” for your major, abnormal life emergencies.

Step 4: Save $10,000-$30,000 in a “Higher Yield” Savings Account

This account will be your largest savings account, closer to your three to six months of expenses. Place this money in a separate bank account that will take a few days to access the money. You don’t want to make it too easy to access. I recently found one of the highest percentage yield online accounts over at MySavingsDirect.com. At the time of this writing, it is 1.00% APR. There are many online banks like this. Check out this link at Nerd Wallet.

Step 5: Set-up Recurring Deposits to Your Savings Accounts to Fight Inflation

This next step is going to seem completely “geeky,” but to fight a yearly inflation rate of anywhere between 3 to 5 percent on your primary emergency fund in step four, I would take the high number of 5 percent and subtract the bank account interest gain of 1 percent, leaving you with 4 percent that you are “losing” out with your financial purchase power in your emergency savings due to inflation. Next, I would set up a small recurring deposit into this account to cover inflation losses. So, if a base emergency savings is $10,000, that amount times 5 percent inflation means a loss of around $500 per year. You are making 1 percent ($100) in interest and will need to cover the remaining $400 lost due to inflation. $400 divided by twelve months equals about $33 that would need to be deposited into the account each month. In this way, the three to six months of cash reserves will not lose its purchasing power in the event of a large emergency. Put this small deposit on autopilot between bank accounts. In the words of the great Ron Popeil, “set it and forget it!”

I have this “inflation busting” strategy set up with all our layers of emergency funding. Every month, I add $20 to our cash pile in our home safe (Step 2). I also have a small recurring transfer/deposit that automatically moves from our bank’s checking account over to our savings account (Step 3). All of our emergency money sources now keep pace with inflation.

Step 6: Max Out Your HSA Account

This final step is for those who have high deductible health insurance with an HSA account. Max this account out every year. In the year 2015 (you will need to check these numbers for the current year), a single person can contribute up to $3,350 per year. A family can contribute up to $6,650 per year. These amounts are 100 percent tax deductible (at least for now!) because they are withdrawn in pre-tax dollars. Medical emergencies are the number one reason people end up declaring bankruptcy. I would treat my HSA account as another layer of an emergency fund to protect my family against this bankruptcy statistic. Don’t be tempted after a good health year to cut back the amount deducted from each paycheck toward HSA the following year. Keep on plunking in the maximum amount and treat that HSA account as another layer of emergency funding in the area of health care. At some point it will be needed, so you may as well plan and prepare for a health care emergency.

Conclusion

This six-step approach is a more deliberate, organized plan than just sticking “three to six month’s worth of expense money in a money market account.” A good emergency plan prepares for the worst-case scenario occurring to the banking system. Because this is a debt-laden economy completely run by susceptible computer systems, trouble is inevitable if relying solely on the government and computers to be 100 percent reliable every day. Prepare for the worst and pray for the best!

The information shared in this post can be found Larry’s book in the Amazon Kindle store: Beyond Peace In Christian Finances: Accelerating Past Average With Your Money Plan.

My Monthly Financial Book Review Email List

Photo by David Shankbone

Photo by David Shankbone

I’m in the midst of changing some things up here on my personal website. One of the biggest changes is creating a more useful email list to you, my readers!

Beginning today, I have created a new email list in which you will receive a monthly financial book review from me, Larry. You see, over the last several years, I have been in the process of literally devouring over one hundred personal finance books. I’ve taken copious notes. I’ve highlighted a lot of material. I’ve learned a lot. I’m in the processing of translating this goldmine of information into useful action steps for your personal finances.

Each month, I will email you exclusive book review material that I won’t publish anywhere else. It won’t be on the blog. If you want to glean some “nuggets” from all my personal finance reading, then sign-up in the contact form below. Happy Reading!

 






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Book Review: From Zero to Hero in Your Finances

From Zero to Hero In Your Finances BookBackground

As a stewardship pastor and blogger, I was recently encouraged to check out the book From Zero to Hero in Your Finances by Dr. Richard Knapp.

Christian stewardship isn’t always the easiest topic to tackle, especially in a book format. If approached in the wrong manner, the subject matter can come across as dry and boring, or even worse, as legalistic and condescending. Dr. Knapp did an excellent job with his approach on the topic of stewardship. I found his book to be entertaining, and at the same time quite convicting!

6 Key Aspects Of The Book That Make This Book Worth The Read

There were several aspects of this book that I really enjoyed. Due to these key parts of the book, I know I will find myself coming back to this book for future research and inspiration in the area of stewardship.

Here are the 6 key aspects of the book I enjoyed:

  1. A Quick and Easy Read. As I mentioned above, the topic of stewardship can be potentially stuffy and boring to many, but I enjoyed Dr. Knapp’s approach to this book. Each chapter was concise, had a good flow, and got straight to the point. Nicely done.
  2. The Concept of Well-Digging. The opening chapter talks about this interesting idea of digging wells. I had never consider this approach in this way before, but it does make complete sense to me. I had one of those “I could have had a V8” experience when I read through this particular chapter. Dr. Knapp explains that “ … wells symbolize God’s provision and blessing. Abraham dug many wells, which were later filled with dirt by the Philistines, a type of the enemy.” You can read Genesis 26:18-19, 22 as well as Isaiah 12:2-3 for the Old Testament inspiration for the overall concept. Here’s a very brief synopsis of what Dr. Knapp writes about “well digging”: “When a well has been properly dug, the water flows freely into it. The water from a functional well will always be available, not only to us, but to others around us. The devil, however, will constantly try to throw unbelief into our wells to dry up our faith in that area … Digging a well is an active spiritual process, not a passive mental one.”
  3. Personal Stories from the Author’s Life. Stories are always excellent ways for an author to connect with his audience. Dr. Knapp shared several of his own personal stewardship stories that were interesting and convicting. His stories were a great reminder that I still have much to learn in the area of stewardship.
  4. Stewardship Testimonies from the Lives of Others. Not only did Dr. Knapp share his own stewardship stories, but he also included several stories and testimonies from others. These were very inspiring as well. I’ll probably be “stealing” some of these stories for a few Giving Talks at my church in the near future.
  5. Tons of Scripture to Support Each Chapter. At the end of every chapter, Dr. Knapp listed a lot of Scripture to support the particular concept he was teaching for that chapter. I will definitely be using this part of the book as a resource as I teach on key areas of stewardship.
  6. Written-Out Stewardship Prayers. Most chapters of the book have a written-out stewardship prayer of confession. I’m definitely coming back to these for inspiration for public prayers with our congregation.

If you have a passionate desire to grow deeper in this area of Christian stewardship, then I highly recommend picking up a copy of this book.

What’s The Big Deal About Christian Financial Stewardship Anyway?

Photo by Paval Hadzinski

Photo by Paval Hadzinski

The Light Comes On For Me, Over Time

Stewardship.

Yeah, it’s a weird word. It’s a churchy word, too. Not many people really get it, either.

Twenty years ago, I would associate the word “stewardship” to tithing on Sunday mornings and church building campaigns. That’s what I thought it was all about.

Then, I attended my first Crown Financial Bible Study Class back around 2001-2002, and the light of understanding slowly began to come on as I learned what God’s Word had to say about financial matters. I learned that “my money” was not mine at all. Everything that I possess has been given to me by Almighty God to manage for His kingdom purposes.

This is the core essence of Christian stewardship. As believers, we are called by God to manage the time, money, abilities, and relationships He has given us. We aren’t supposed to squander all these resources on selfish, fleshly desires.

Here’s an excellent synopsis of stewardship taken from Wikipedia:

A biblical world view of stewardship can be consciously defined as: “Utilizing and managing all resources God provides for the glory of God and the betterment of His creation.” The central essence of biblical world view stewardship is managing everything God brings into the believers’ life in a manner that honors God and impacts eternity.

Stewardship begins and ends with the understanding of God’s ownership of all.

After I went through the Crown Financial Bible study, I ran across this blueish-green book in a local book store called Financial Peace by some guy named Dave Ramsey, who I had never heard of before. I’m reading through this book thinking to myself, “this guy makes a lot of sense. Debt is dumb. I need to get my family out of debt with gazelle intensity!” As a result of reading Dave’s book, I started listening to his syndicated radio show and eventually began coordinating Financial Peace University at my church.

All of these baby steps in the area of Christian stewardship eventually led me to take on a secondary role in my church as our Stewardship Pastor. It has certainly been an exciting as well as interesting journey as I have grown in stewardship in my own life and have attempted to teach it to others.

Why Stewardship?

So, why should stewardship be such a big deal in the life of a believer, anyway?

I believe there are several answers to this question.

First, the Bible is filled with financial wisdom and instruction. The estimates on the amount of financial verses in the Bible range from 900 to over 2,000 depending on your criteria. Needless to say, that’s a lot of Bible verses on money!

Second, Jesus Himself spoke a lot about money in the parables He taught the Jewish people. In fact, money was (possibly) His second most discussed topic with the Kingdom of God being the first. There is much theological debate on which parables dealt specifically with the topic of money, but money was a huge issue that Jesus addressed frequently in His ministry here on earth.

Third, money is one of the biggest areas of struggle for most believers. Unfortunately, the majority of Christians have adopted cultural beliefs and practices when it comes to money. Most of us have either forgotten or never been taught Biblical financial principles.

Fourth, stewardship is about more than money. The more I study and practice the principles of Biblical stewardship, the more I understand this important principle. It really encompasses every aspect of your life – your time, natural talents, abilities, money, assets, physical health, and relationships.

My Take

Here’s my own personal take on this area of stewardship. If God’s Word is filled with financial wisdom and Jesus’ own ministry focused a lot of time teaching on money management, then there are certainly good reasons for this instruction. This is an area that the Lord knows we all struggle and need to work on in our life on a continual basis. It’s not a “one and done” kind of deal, either. Stewardship is a life long pursuit.

Every day, we have to surrender our selfish, greedy financial plans and desires over to our Lord and Savior. Our primary concern should be using the resources God has entrusted to our management to advance His Kingdom here on earth and in heaven.

Questions: Do you think stewardship should be a big deal in the life of a believer? Why or why not? Is stewardship a big deal in your own life and the life of your family?

Do You Have A Messed Up Life? How To Influence People’s Lives By Sharing Yours

Photo by Alan Levine

Photo by Alan Levine

I Was One Messed Up Trumpet Player

In the late 1980s, I was an undergraduate trumpet student at a prestigious music conservatory. My trumpet teacher at this school is a well-known principal trumpet of a major symphony orchestra. He is a very natural, incredible musician. In his trumpet career, he has never really encountered any personal playing problems.

I, however, have always struggled with a couple of different playing technique-related issues. My teacher at the music conservatory had no idea how to help me. At the time, he just didn’t have enough teaching experience to help me correct my trumpet playing problems. We struggled through two semesters in my sophomore year and nothing was helping. As a matter of fact, I was actually getting worse with each passing lesson.

After two difficult years in music school, I ended up dropping out defeated and discouraged. I ended up moving back home with my parents, applied at a local university, and changed my major to electrical engineering. I was done with music, altogether.

But then, I connected with a couple of different trumpet teachers who understood my playing problems and were able to help me tremendously. Because of their own personal playing problems, they brought a wealth of experience and knowledge into my trumpet lessons. As a result, I was able to move forward and be successful in my music career. To this day, I owe them a debt of gratitude and appreciation for their help in getting me back on track as a musician. I seriously doubt I would have enjoyed the life of an electrical engineer!

The more problems you have experienced and the more mistakes you have learned from actually makes you WAY MORE qualified to help others.

Experience Is Pure Gold

Interestingly enough, those of us in our 40s who have experienced some pretty horrific failures have the tendency to think we may have disqualified ourselves from being able to help others. We have this messed up view that we have to be “perfect” in order to dispense advice to others.

Believe it or not, the opposite is true.

The lessons learned from your own personal experience make you uniquely qualified to share and help others going through similar circumstances.

Sharing Is Caring

When you care, you share.

And, if you’re over 40, then chances are you have built up a wealth of valuable knowledge and experience.

By this stage in life, you have probably had several failures and a few successes. You generally have a firmer grasp on life than those who are younger than you. For the most part, you have entered life’s “sweet spot.” You have learned from your mistakes and are typically making better choices in your mid-life journey.

There are many younger people in the generations directly behind you who could learn a lot from your experience.

Why not grab some of the younger people in your sphere of influence, especially the ones who are really struggling right now, and take them out to lunch. Listen to their stories and share yours.

Maybe, just maybe, you can help someone in a generation behind you that nobody else can reach.

Question: What life experiences do you carry around inside of you that could possibly benefit others?






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How To Enjoy Life And Make A Greater Contribution In The Lives Of Others

Photo by John Catbagan

Photo by John Catbagan

The Starfish Story

This story has been around for some time. Perhaps you’ve heard it before? In any case, I believe this story sets up this post well.

Strolling along the edge of the sea, a man catches sight of a young woman who appears to be engaged in a ritual dance. She stoops down, then straightens to her full height, casting her arm out in an arc. Drawing closer, he sees that the beach around her is littered with starfish, and she is throwing them one by one into the sea. He lightly mocks her: “There are stranded starfish as far as the eye can see, for miles up the beach. What difference can saving a few of them possibly make?” Smiling, she bends down and once more tosses a starfish out over the water, saying serenely, “It certainly makes a difference to this one.”

The Impact Of A Book

Have you ever read a book, seen a TV interview, or perhaps watched an online video that causes you to have one of those “AHA” moments? You know, when a light bulb goes off in your mind and you feel like a major shift in your thinking has taken place?

This happened for me about 7-8 months ago, when I watched a Youtube video of an orchestra conductor named Ben Zander and then read his book “The Art of Possibility.” You can read my book review on “The Art of Possibility” here.

In several chapters of his book, Ben discusses some of his challenges of being a conductor of a volunteer orchestra. As I continued to read through the book, I kept having these “Aha” moments of realization and learning.

For a large portion of his life, Ben Zander struggled with the drive to be to be successful as well as a fear of failure. He claims that this struggle caused both himself and those around him considerable suffering. The greater his success as an orchestra conductor, the worse this tension became in his life.

The tipping point for Ben came when his second wife walked away from their marriage. He began re-thinking how he was “doing life.”

He came away with the realization that he was living a life of selfishness. He was more inward focused on his own success. When being inward focused, he had more of an attitude that there was always another orchestra – aside from the one he was currently conducting – that he suspected would bring him more success, and so he was never fully present when he was on the conductor’s podium.

When he began playing the game of contribution, on the other hand, he found there was no better orchestra than the one I was conducting, no better person to be with than the one he was with; in fact, there was no “better.” In the game of contribution you wake up each day and bask in the notion that you can be a contribution to the lives of others.

A Shift Takes Place In My Thinking

This personally hit home with me about my own relationships within my family, as well as the volunteer orchestra I direct each week. I started asking myself questions about whether I was more interested in achieving success in my family or ministry, or am I truly more interested in living a life of contribution. This subtle but important shift in my mindset has (I believe) created a more enjoyable experience for those that I love and lead.

For example with the orchestra at church, in the past, I would get frustrated or upset with various problems such as excessive absenteeism for orchestra rehearsals on Wednesday nights as well as worship services on Sundays. My mindset before was too focused on having a successful orchestra and the roadblocks (in my mind) that my volunteer members were causing me to be a successful director.

Once I made this shift in my thinking, though, I started focusing on the orchestra members who decided to be present for a particular Wednesday rehearsal or Sunday worship service. I began realizing I could and should be a contribution in their lives spiritually, musically, and personally.

And you know what has happened? I’m enjoying my life and ministry a whole lot more by living a life focused on contribution rather than success versus failure. And, I hope those around me are enjoying life at a deeper level as well.

The Generous Life

Playing the game of contribution should really be of no surprise to those of us who are believers in Christ. The Bible has much to say about living a life of generosity versus selfishness.

In Proverbs 11:24-25 (MSG) we read these words:

The world of the generous gets larger and larger;
the world of the stingy gets smaller and smaller.

The one who blesses others is abundantly blessed;
those who help others are helped.

Throw yourself into life as someone who makes a difference, accepting that you may not understand how or why. Just like our starfish story at the beginning, don’t get overwhelmed and give up because you can’t help everyone. Focus on being a contribution to the few that you can be.

Questions: Are you living a tension-filled life based on a drive for success and a fear of failure? Is your life enjoyable or full misery? Do you need to consider a shift in mindset from success versus failure over to contribution?






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Does The Bible Really Contain A Secret Money Code?

Photo by Susan Kambalu

Photo by Susan Kambalu

Sean Hyman And The Biblical Money Code

His advertisements are everywhere!

Over the last few months, it seems like anytime I have my local talk radio station on, Fox News, or simply browsing the web, I keep running into advertisements for Sean Hyman’s Biblical Money Code.

A few weeks ago, I was curious enough to just go ahead and purchase the lowest subscription possible to check out what all the hype is on this Biblical Money Code book is all about.

Buying The Biblical Money Code book is really more of an opportunity for you to end up on an email subscription to the Ultimate Wealth Report plus NewsMax.com. Of course, this is the new normal in today’s digital marketing age, so now I am blessed with at least two to three extra emails cluttering up my inbox each day!

But, you do also receive several ebooks and other pieces of financial information for your purchase. It’s not a complete “bait and switch.”

Who Is Sean Hyman?

Sean Hyman is a former pastor who has allegedly moved from making $15,000 a year to now giving away up to $50,000 a year. He didn’t make this kind of money in church work, however! Here’s a portion of Sean’s bio regarding his financial work:

Sean Hyman has become a trusted correspondent on CNBC, Fox Business and Bloomberg due to his extensive background in the financial markets, having spent more than 20 years in the investing trenches. Over that time, he’s been a stockbroker at Charles Schwab, a trading course instructor for foreign exchange market maker Forex Capital Markets (FXCM), a financial writer for numerous outlets, and a key speaker at conferences both nationally and internationally. Over the course of his career Hyman has also held five financial licenses …

… Sean Hyman became the editor of the Ultimate Wealth Report newsletter because he loves teaching and helping others to have a better life than what they’d had before. His goal with the Ultimate Wealth Report is “to shepherd readers in the right direction so their wealth doesn’t get eaten away by inflation, but rather benefits from the rise of inflation.”

A Fast Overview Of The Six Keys

The primary ebook focused on the Biblical Money Code that you receive as part of your subscription is called The Six Keys To Financial Success. Like many ebooks you receive online, it’s a brief 47 pages and a quick read.

In the ebook’s introduction, Sean makes the case that in order for God to bless us financially, we need to follow all the financial wisdom in Scripture. In order to unlock the full potential of the Biblical Money Code in our lives, we must be fully obedient to all God’s wisdom, not just part. That won’t work.

Sean states that most people only follow some or part of the Biblical financial wisdom found in Scripture. Perhaps, they may tithe on a regular basis, but the rest of their financial life is a complete mess. Or, maybe they live a debt free lifestyle, but don’t tithe.

Sean drives home the point that a believer living in full obedience to each financial principle unlocks the full and complete blessing of God in the area of personal finances.

Here are the six Biblical financial principles that Sean focuses on:

  • Principle #1: Pray for God’s Favor and Blessing In Your Work.
  • Principle #2: Tithes and Offerings: 10% Plus Some, Not Just 10%.
  • Principle #3: Save Money and Reduce Your Debts
  • Principle #4: Invest for Your Future
  • Principle #5: Philanthropy
  • Principle #6: Being the Lender and Not the Borrower

My Take On The The Six Keys To Financial Success

I am of the personal opinion based on my own research PLUS personal experience that there is a “Biblical Money Code.” Is it some kind of big secret or something? No, of course not. But, the Bible does give us A LOT of common sense wisdom when it comes to handling money.

I do believe that God blesses complete obedience to His Word and His will. I also believe in the power of the Law of the Harvest. When you do the right things in the right order and in the right way, you will reap a bountiful harvest.

This is so very true in this area of personal finances. If you follow Biblical financial wisdom in every area (giving, saving, spending, debt, and investing), then God will bless you. You will reap what you have sown.

BUT, I would be hard pressed to say that this will happen every time for every person in every situation, though.

God is God, and He does not always conform to the box that we place Him in. He may allow negative financial circumstances into our lives, even if we may be following this “Biblical Money Code.”

Why would God allow this to happen, though, if we’re playing by these Biblical money rules?

It’s always difficult to pinpoint a definitive answer. We may never know this side of heaven. Perhaps God is teaching us an important spiritual lesson. Maybe He wants us to learn to rely on Him, rather than money. Or, maybe, He wants us to learn a lesson in controlling our emotions and growing in the virtue of patience.

I believe the key is remaining open to growth in your life when your expectations aren’t met, even when you are doing all the right things. But, don’t give up, though. Keep on doing all the right things in spite of the circumstances. There will be a tremendous payoff, eventually. Remain obedient, teachable, and press through to the end!

Questions: Do you believe in a Biblical Money Code? Why or why not? Have you experienced the Law of the Harvest in your personal finances from following these principles?






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Who Else Wants To Raise Children, Successfully?

Photo by Jose Roco

Photo by Jose Roco

My Daughter’s Essay Was An Important Reminder

“Well, Daddy, I wrote about you.”

My oldest daughter and I were having a quick phone conversation right after school about how her day went. I asked her my usual questions, “How was your day? Anything special happen at school?”

She probably told me that not much exciting happened. Then, I probably asked her a few more questions about some specific subjects. These questions led us into a conversation about an essay she had to write in one of her classes. The assignment was to write about a person you know who has set goals and accomplished them.

She chose to write about me!

Actually, I was somewhat taken back when she said this. A tear showed up in the corner of one eye. We’ve never had any kind of “official” conversation about goals or goal-setting that I can recall. I’ve never shared with her any of my life goals.

I have been a goal-setter pretty much my entire life, though. Somehow, my daughter picked this up from me without words. Over the last 13 years, she’s been observing my actions.

She then went on to tell me my list of goals that I had accomplished from her viewpoint as my daughter. I was totally blown away.

At the same time, I was also reminded that what we do in front of our children has a bigger impact than we truly realize.

Actions Speak Louder

We’ve probably heard this statement a million times, “actions speak louder than words” or “more is caught than taught.” I am still amazed, though, at the number of parents who don’t seem to understand that what they do in front of their kids each day makes a HUGE impression on them, way more than words do.

Your words either support your actions, or they contradict them. Unfortunately, I suspect that many parents have words and actions that are complete polar opposites.

Children are a lot smarter than we give them credit. They listen to what we say, but more importantly, they watch everything we do.

Get Into Alignment

If you struggle in this area of right words but wrong actions in front of your children, then there is no better time to change this aspect of your parenting than today.

The best time to make any kind of parenting change is now; not tomorrow, or when the sun, moon, and stars line up.

Start with a change in just one area. Begin by making just one single positive action in front of your children. Then when that takes hold as a habit over a few weeks, then add another positive action and follow the pattern.

Small changes over time have a greater success rate than trying to change everything about your parenting all at once.

Be sure your actions support the words you speak to your kids. Actions really do speak louder than words.

Questions: Do you struggle in this area of alignment between your words and actions with your children? If so, what small change could you begin with today that would make a huge impact on their development over time?






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Do Rich People Stuff And File Your Taxes As Late As Possible

Photo by Ken Teegardin

Photo by Ken Teegardin

Tax Season Is Upon Us

It’s tax season. Yippie!

(That was a touch sarcasm if you didn’t catch the tone of my writing voice.)

I recently finished doing all my family’s tax forms. I don’t really enjoy doing my taxes, but who does? This is mainly because I’m either really close to receiving a small refund or owing a ton of money. You see, I have the awesome privilege and responsibility of paying quarterly estimated taxes due to my status as an ordained minister.

My income taxes are not deducted from my paycheck each month, and I like it this way.

(And now, I probably just painted a bullseye on myself for an IRS audit.)

What this means for me, though, is that I need to plan, budget and save accordingly, so that I can pay my federal and state quarterly estimated taxes on April 15, June 15, September 15, and January 15.

In paying my income taxes this way, I experience the financial “pain” of my taxes. Most people don’t experience this same pain due to tax withholding from each paycheck. Believe me, it’s a totally different experience. The government knows and understands this, too. They don’t want the majority of the population to feel this kind of tax pain.

For 2013, I messed up my tax calculations for a couple of different reasons. Now, I owe a substantial amount to Uncle Sam next week.

While I’m not thrilled with the thought of having to pay a substantial amount of money in addition to what I’ve already paid, I am okay with it.

And why in the world would I be okay with owing the government a bunch of money? Because I have a different tax season financial mindset than your average American.

Two Different Tax Season Mindsets

Poor and lower middle class families typically file early in the tax season.

Why do they file early? I believe this is due to the fact that poorer people tend to view tax season as an opportunity to “make money.” They have structured their withholding as such that they have been enrolled in a one-year forced money-saving program.

The funny thing, though, is that they have essentially loaned their money interest-free to the government for a whole year. They lost the opportunity of using that money for an entire year.

The poor usually have regular income from only one or two jobs. Their tax forms are relatively clean and simple. They can fill out the forms quickly and begin the process of getting their money back.

The sad reality is that the majority of Americans who receive refunds have no real strategic plan for this money once they get it back from the government. They tend to go spend it on stuff that they probably don’t even need, and then the cycle begins anew for another year.

On the other hand, wealthier individuals and families typically file as close to April 15 as possible.

So, why would rich people choose to file so close to the deadline? Probably due to the fact that they feel the pain more of paying taxes. Their tax forms are more complicated. They have a variety of income streams. They have investments. They own a small business. They have more of a producer mindset rather than a consumer one. They understand the value of every dollar they earn.

Rich people definitely experience the pain of paying taxes at a deeper level than poorer people.

And, I wonder what would happen if poorer families had to pay their taxes like wealthier families? My guess is that we would probably experience a tax revolution in this country!

Here are some thoughts on how we can all shift our financial mindsets during tax season.

5 Ways To Shift Our Tax Season Mindsets

  1. Consider tax strategy in your overall budget process. I know when I plan my monthly budget, I want the largest amount of monthly net income in order to leverage what I need leveraged in my family finances, such as debt reduction, savings, and investing.
  2. Give the government exactly what it deserves. No more and no less. Yes, we should pay our taxes. As Christians, we need to be obedient to the laws of the land. But, handing additional money over to the government for them to use interest free for a whole year is not wise stewardship.
  3. Structure tax withholding and payments for equilibrium. You don’t want to owe, but you also don’t want to receive a massive refund, either. Consider meeting with a tax advisor or financial planner to achieve this tax equilibrium.
  4. Start some type of small side business and see your taxes and tax forms become more complicated. If your business is even moderately successful, you will need to pay estimated quarterly taxes. You will now experience the pain associated with paying taxes at a new level.
  5. Create a wise financial plan for any refund money that you may receive. You might consider using the money for debt reduction, savings, or investing. Otherwise, that money is going to somehow wander into Wal-Mart and be gone forever!

Questions: What is your tax season financial mindset? Do you think more like the poor or the rich? Do you file your taxes early or as late as possible? Why or why not?






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Is God Your First Or Last Thought When It Comes To Money?

Photo by rhoadeecha

Photo by rhoadeecha

Shocked, But Not Really

I was recently teaching a Bible Study class regarding fundamental Christian stewardship principles. In the class was a really sweet, older lady who was telling the class about some mistakes she had made with her finances.

The mistakes she made were pretty serious, but her mistakes didn’t surprise me too much. What I did find surprising, though, was her statement that she had never even considered praying to the Lord about her financial decision-making. This was made even more surprising to me because she said that she had been walking with the Lord for 60 years!

As a stewardship pastor, I took this woman’s comments as a scathing indictment against those of us in leadership within the universal church. We as church leaders have done a very poor job in educating believers on a whole life, Biblical stewardship outlook.

God should be at the center of every part of our lives. He really should be the very FIRST thought in every aspect of our lives, including our personal finances.

So, How Should We Pray About Money?

When we pray about money, should we be selfish and ask for a million dollars in the bank and zero financial worries? No, of course not. These are not the kind of prayers I’m talking about.

I do believe, though, that there are specific ways we can pray about the money and resources He has entrusted us to manage:

  • Pray for wisdom. James 1:5 tells us, If any of you lacks wisdom, you should ask God, who gives generously to all without finding fault, and it will be given to you. If you’re struggling in some of your financial decision-making, then God wants you to talk about it with Him. Don’t just rush in and make a hasty decision when it comes to your finances. Press pause, pray, read His Word, and reflect on God’s wisdom when it comes to His money.
  • Pray for His will to be accomplished. James 4:13-15 states, Now listen, you who say, “Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.” Why, you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes. Instead, you ought to say, “If it is the Lord’s will, we will live and do this or that.” It’s too easy for us to assume things will happen for us tomorrow because we desire them to take place. In these verses, James reminds us that this life holds no guarantees. We should pray an attitude of “ … if it is the Lord’s will, then He will accomplish whatever He desires to do through us.”
  • Pray for provision. Matthew 6:11 says, Give us this day our daily bread. In the Lord’s Prayer (or model prayer), Jesus gives us the example of praying for our daily needs. In order for us to survive as human beings, there are basic needs that we all must have: food, water, clothing, and shelter. A few verses later, in Matthew 6:32-33 we read, For the pagans run after all these things (basic needs), and your heavenly Father knows that you need them. But seek first his kingdom and his righteousness, and all these things will be given to you as well. God loves us and cares about our needs. If we will simply place Him and His Kingdom as our number one priority, He will take care of our daily needs.

Questions: So, is God your first or last thought when it comes to money? Are you praying for wisdom and guidance in your financial management? Are you praying for His will to be accomplished in your finances? Are you praying for His provision when you have needs? If not, why not?