Grace Evan June 10

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My June 10, 2009 economic presentation to Grace Evan.

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  • The Reality – The SWs - Some Will, Some Won’t, Some Wait
  • God is the author and perfecter. So obviously God plays an important “part.”. The reality is that it is ALL about God. God owns it all. Psalms 24:1 tells us that the “earth is the Lords.” and Haggai 2:8 says that the gold and silver are His and according to Psalms 50:10 every beast of the forest and the cattle on a thousand hills are His. We must recognize that He is the owner of all our possessions. Therefore, every spending decision becomes a spiritual decision. Earlier, we looked at I Chronicles 29:11-12. But just to review, God controls it all – good, bad. It is all under His control. Isaiah 45:7 tells us that God creates well-being and calamity. And we have all heard that God has a plan and a purpose and that all things – ALL THINGS – work together for good for those that love HIM and are called according to His purpose. As a side note, the Apostle Paul wrote in his second letter to the Corinthians that he was “filled with comfort.” and that he was “exceedingly joyful in all his tribulation.” (II Corinthians 7:4) How do you get to the point were you are exceedingly joyful in all your tribulation? The promises of God. So if you need a word of comfort, I would encourage to review God’s promises. [NEXT SLIDE]
  • So now that we have a better understanding of what the Bible says about money. Let’s take a look at the economy.
  • “The wise man saves for the future, but the foolish man spends whatever he gets.” Proverbs 21:20 Proverbs 22:7 Liquidity Goals – builds a tower Diversify – Ecclesiastes 11:2 ? I Chronicles 29:11-12
  • Potential > Reality requires discipline. If no discipline – dream. “Do not be anxious about anything, but in everything, by prayer and petition, with thanksgiving, present your requests to God.” Phil. 4:6 Focus on the next destination. Little victories. Eat an elephant one bite at a time. Involve your spouse.
  • The average American spends $1.10 for every dollar earned. No spending plan = flying by the seat of your pants. Rainy day fund. It is going to rain. There are five steps to developing your spending plan.
  • Record every penny. List Your Monthly Expenses. Fixed Expenses – Housing, Car Payment. Variable Expenses – Food, Utilities. List Your Monthly Income. Compare Your Income Versus Expenses. If you are spending more than you make OR want to accelerate your journey, then you MUST increase your income, reduce your spending or both. With every expense, ask yourself two questions – Do I really need this? Can I do this less expensively? Reducing spending = changing lifestyle. Examples: Cancel cable, sell car with highest loan, eat out less, buy fewer clothes, public school. Your financial situation change periodically. Handouts
  • Coach = advice, encouragement, accountability. Variable expenses (utility, food, clothing, etc.) = monthly average divided by 12. Team = spender vs. saver. One is usually better equipped = details, keeping records, etc. Talk to discuss progress, challenges, and adjustments. Think annually - $6 lunch every day = $1,500 per year. Daily paper ~ $300 per year. Starbucks, etc. Holidays, birthdays are one of the biggest budget busters.
  • Handouts
  • Deut. 1:19-33 – people of Israel refused to enter the land.
  • Psalms 46:10 – “Be ??? [what] – still - and know that I am God…” Are you reactive or proactive? Biblical principles are always right, relevant and don’t change.
  • Grace Evan June 10

    1. 1. The Path to True Riches <ul><li>“ So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches?” </li></ul><ul><li>Luke 16:11 </li></ul>
    2. 2. Our Goals at Centurion <ul><li>Reduce Fear and Establish Confidence About Money </li></ul><ul><li>Provide Instructions </li></ul><ul><li>Provide Tools </li></ul><ul><li>Provide Group & Individualized Help </li></ul>
    3. 3. Tonight’s Focus <ul><li>The Background </li></ul><ul><li>The First Step </li></ul><ul><li>The Traffic Jam </li></ul><ul><li>The Alternate Route </li></ul><ul><li>The Promise </li></ul>
    4. 4. If I Only Had More Money……… <ul><li>I would get some respect! </li></ul><ul><li>I could do what I want to do! </li></ul><ul><li>I could pay my bills! </li></ul><ul><li>I wouldn’t have to work! </li></ul><ul><li>I wouldn’t feel so much pressure! </li></ul>
    5. 5. God’s Part <ul><li>Owner – We must recognize God as the owner of all our possessions. Every spending decision becomes a spiritual decision. </li></ul><ul><li>Sovereign – We must realize that everything is under God’s control – good and bad. Everything is part of His plan. </li></ul>
    6. 6. Our Part <ul><li>Faithful – I Corinthians 4:2 </li></ul><ul><li>All of Our Resources – Hosea 4:6 - Ignorance of or disobedience to Biblical financial principles frequently causes money problems. </li></ul><ul><li>In Little Things – Luke 16:10 – Missionary Hudson Taylor - “Small things are small things, but faithfulness with a small thing is a big thing.” </li></ul><ul><li>With Others Possessions – Luke 16:12 </li></ul><ul><li>Leads to Contentment - Philippians 4:19 and Philippians 4:9 </li></ul>
    7. 7. The Path to True Riches <ul><li>Spend Less Than You Earn </li></ul><ul><li>Avoid the Use of Debt </li></ul><ul><li>Build Liquidity </li></ul><ul><li>Set Goals </li></ul><ul><li>Diversify Your Investments </li></ul><ul><li>Remember — God Owns It All </li></ul>
    8. 8. How To Get There? <ul><li>Limit Your Exposure </li></ul><ul><ul><li>Reduce the Temptations (TV, Web, Catalogues, etc.) </li></ul></ul><ul><ul><li>Cultivate Contentment – (Forget the “Joneses!”) </li></ul></ul><ul><li>Little Victories </li></ul>
    9. 9. Your Path To True Riches Victory 1 : Spending Plan & Save $1,000 For Emergencies Victory 2 : One Month Living Expenses & No Credit Card Debt Victory 3 : Three Months Living Expenses & No Consumer Debt Victory 4 : Saving For Major Purchases, Expenses & Retirement Victory 5 : Buy Affordable Home, Wise Investing Victory 6 : Home Paid Off, Major Expenses Funded Final Victory : True Riches = Generosity
    10. 10. Victory 1 - Develop and Use A Spending Plan & Emergency Savings <ul><li>Start Using a Spending Plan </li></ul><ul><li>Save $1,000 for Emergencies </li></ul>“ The wise man saves for the future, but the foolish man spends whatever he gets.” Proverbs 21:20
    11. 11. Developing Your Spending Plan <ul><li>Record Your Income & Spending for 30 Days. </li></ul><ul><li>Complete the First Draft of Your Spending Plan. </li></ul><ul><li>Adjust Your Spending Plan. </li></ul><ul><li>Develop/Select A System. </li></ul><ul><ul><li>Envelope System </li></ul></ul><ul><ul><li>Pencil & Paper </li></ul></ul><ul><ul><li>Computer Software </li></ul></ul><ul><li>Record & Review. </li></ul>
    12. 12. Suggestions For Your Spending Plan <ul><li>Discontinue Credit Buying. </li></ul><ul><li>Use a Coach. </li></ul><ul><li>Annualize Your Variable Expenses. </li></ul><ul><li>Become a Team. </li></ul><ul><li>Think Annually. </li></ul><ul><li>Be Careful with Holidays. </li></ul><ul><li>Deal with Gambling & Compulsive Spending. </li></ul>
    13. 13. Needs, Wants & Desires <ul><li>Needs </li></ul><ul><li>Necessary purchases to provide basic requirement: food, clothing, housing, and medical coverage. </li></ul><ul><li>Wants </li></ul><ul><li>Choices about the quality of goods: steak vs. hamburger; new vs. used. </li></ul><ul><li>Desires </li></ul><ul><li>Choices made out of surplus funds after all other obligations have been met. </li></ul>
    14. 14. Spending Plan Guidelines <ul><li>Giving ?%-?% </li></ul><ul><li>Housing 25-35% </li></ul><ul><li>Utilities 5-10% </li></ul><ul><li>Food 5-15% </li></ul><ul><li>Car 10-15% </li></ul><ul><li>Clothing 2-7% </li></ul><ul><li>Medical/Health 5-10% </li></ul><ul><li>Recreation 5-10% </li></ul><ul><li>Saving Excess </li></ul>
    15. 15. Hints For The Budget Busters <ul><li>Housing </li></ul><ul><ul><li>Own – Affordable? </li></ul></ul><ul><ul><li>Rent </li></ul></ul><ul><li>Food </li></ul><ul><ul><li>Written List </li></ul></ul><ul><ul><li>Bulk </li></ul></ul><ul><ul><li>Eliminate Paper Products </li></ul></ul><ul><ul><li>Store Brands </li></ul></ul><ul><ul><li>Use Coupons/Look for Specials </li></ul></ul><ul><ul><li>Leave Children at Home </li></ul></ul><ul><li>Car </li></ul><ul><ul><li>New </li></ul></ul><ul><ul><li>“ Previously Owned” </li></ul></ul><ul><li>Insurance </li></ul><ul><li>Entertainment </li></ul><ul><ul><li>“ Staycation” </li></ul></ul><ul><ul><li>Consider Camping </li></ul></ul><ul><ul><li>Family Games </li></ul></ul>
    16. 16. <ul><li>Determine One Month of Expenses by Using the Average From Your Spending Plan </li></ul><ul><li>Eliminate Credit Card Debt </li></ul>Victory 2 – Save One Month Living Expenses & No Credit Card Debt “ The rich rule over the poor, and the borrower is servant to the lender.” Proverbs 22:7
    17. 17. Steps to Becoming Debt Free <ul><li>Perform Plastic Surgery. </li></ul><ul><li>Limit the Cards. </li></ul><ul><li>Determine the Essentials. </li></ul><ul><li>Consider Transferring High-Interest Balances To Low Interest Cards. (Be Careful!) </li></ul><ul><li>Have a Written “Snowball” Plan. </li></ul><ul><li>Save. </li></ul>
    18. 18. The Snowball Strategy <ul><li>List Your Debts In Order With The Smallest Remaining Balance First. </li></ul><ul><li>Continue To Pay The Minimum Payment On All Debt. </li></ul><ul><li>Apply All Excess To Pay Off Your Smallest Debt. </li></ul><ul><li>After You Pay It Off, Celebrate; Then Apply Its Payment Toward The Next Smallest One. </li></ul><ul><li>Continue The Process. </li></ul>
    19. 19. Example of The Snowball Strategy   500.00 Total: 22,200.00 Total:                         175.00       Excess Available             325.00   22,2000.00   Total Debt 4 190.00 10.00% 9,000.00 Car Loan 3 55.00 12.00% 5,000.00 Store Card 1 30.00 9.9% 3,800.00 Credit Card “B” 2 50.00 13.00% 4,400.00 Credit Card “A” Priority Minimum Payment Rate Balance Creditor
    20. 20. The Snowball Strategy <ul><li>List Your Debts In Order With The Smallest Remaining Balance First. </li></ul><ul><li>Continue To Pay The Minimum Payment On All Debt. </li></ul><ul><li>Apply All Excess To Pay Off Your Smallest Debt. (Credit Card “B”) </li></ul><ul><li>After You Pay It Off, Celebrate; Then Apply Its Payment Toward The Next Smallest One. </li></ul><ul><li>Continue The Process. </li></ul> $325 $30 + $175 = $205
    21. 21. The Alternate Route – How to Survive A Financial Meltdown <ul><li>Adjust The Volume. </li></ul><ul><li>Deal With Reality. </li></ul><ul><li>Know Where You Are Going. </li></ul><ul><li>Have A Plan To Get There. </li></ul><ul><li>Think Long-Term. </li></ul>
    22. 22. Step #1 - Adjust The Volume <ul><li>Thermostat or Thermometer? </li></ul><ul><li>Use Ear Plugs. </li></ul><ul><li>Focus on What You Can Control. </li></ul><ul><li>Remember God’s Roles. </li></ul><ul><ul><li>Protector. </li></ul></ul><ul><ul><li>Provider. </li></ul></ul><ul><li>Rely on Sound Principles. </li></ul><ul><ul><li>Principles That Are Right. </li></ul></ul><ul><ul><li>Principles That Are Relevant. </li></ul></ul><ul><ul><li>Principles That Don’t Change. </li></ul></ul>
    23. 23. Step #2 – Accept Reality <ul><li>Take Personal Responsibility. </li></ul><ul><li>Face Your Fears. </li></ul><ul><li>Take A Financial Physical. </li></ul>
    24. 24. Step #3 – Know Where You Are Going <ul><li>The Five Uses of Money. </li></ul><ul><ul><li>Spend </li></ul></ul><ul><ul><li>Give </li></ul></ul><ul><ul><li>Debt </li></ul></ul><ul><ul><li>Taxes </li></ul></ul><ul><ul><li>Save/Invest </li></ul></ul><ul><li>You Can Only Spend Money Once. </li></ul>
    25. 25. Step #4 – Have A Plan To Get There <ul><li>Think About: </li></ul><ul><ul><li>Reducing Debt </li></ul></ul><ul><ul><li>Increasing Savings </li></ul></ul><ul><li>Self-worth has nothing to do with net worth </li></ul>
    26. 26. Step #5 – Invest Wisely with Eternity in Mind <ul><li>Determine Your “Finish Line” </li></ul><ul><li>Generosity is the key to True Riches </li></ul>
    27. 27. The Ultimate Guarantee <ul><li>“ Keep your lives free from the love of money and be content with what you have, because God has said, ‘Never will I leave you; never will I forsake you.’” </li></ul><ul><li>Hebrews 13:5 </li></ul>

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