Tag Archives: Giving

Managing Your Money Rule #4: How To Develop A Giving Plan

Welcome back to our Managing Your Money series. Today is on Rule #4: Develop a Giving Plan.

“One life to give; one life to live.” That’s the life-motto of pastor I heard speak years ago who was imprisoned in the middle east and tortured for his faith. Just this morning I read where Jesus said “Any of you who does not give up everything he has cannot be my disciple.”

Those are hard words to hear, especially in the land of materialism. Yet I believe true financial freedom isn’t endless wealth, but rather, freedom from the control of money and posessions. It’s more about your heart than your bank account.

Giving is powerful regardless of your faith. but since my relationship with God is at the core of who I am, it just makes sense for me to start this post with His words on giving.

Proverbs 11:25: “A generous person will prosper; whoever refreshes others will be refreshed.”

Proverbs 28:27: “Those who give to the poor will lack nothing…”

Malachi 3:10: “Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it.”

Luke 6:38: “Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you.”

2 Corinthians 9:7: Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.

How To Put Giving Into Practice

Here’s how Beth & I budget for giving.

1. Make giving a line item at the top of your budget. Allocate money for giving before anything else.

2. Start with giving 10% of your gross income. I know when you’re in debt that the last thing you have is “extra” money. But you have to have faith! There is a spiritual principle at work here. Read Luke 6:38 again: “with the measure you use, it will be measured to you.” If you wait to start giving until you have enough, you will never have enough. If you seriously can’t give 10%, at least start somewhere. Maybe it’s just 1% and you commit to grow this by a percentage point each month.

3.  Once you are out of debt, increase your percentage each month and see where it goes!

Giving Destroys Materialism

One life to live; one life to give. Jesus said to “store up for yourselves treasures in heaven…for where your treasure is, there your heart will be also.”

God isn’t against wealth or nice things. But we have to be very careful because “stuff” can quickly grow roots into our hearts. Every time you give something away, it is declaring that you trust God to be your provider and your source of joy and comfort, not your stuff.

Giving is very powerful. There’s a reason it’s a “rule” when it comes to managing your money. Either you will learn to manage money by giving it away, or you will learn that your money is managing you. There are no other alternatives.

Committed to your success,

-Wesley 

Comments: People have more questions about giving, as well as incredible testimonies, than most other topics. Please share!

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How To Develop A Savings Plan in 3 Easy Steps: Step 2

Savings.”

So boring right?

That word is not nearly as fun to say as spending. Yet true wealth does not come from spending, but from saving and investing.

Today, we’re back on the savings wagon, and the next stop on our “How to Develop a Savings Plan” journey is Step #2.

Step Two: Determine the Amount & Frequency of Your Savings

Once you have set your short term and long term goals (see Step One), you have to determine how much you will save and how often you will save.

1. Determine the Amount:

Researchers at USC have found that how you think determines how you save.

They found that abstract thinkers, who focus on the “why,” are more successful at saving when they have a savings goal with a specific amount (such as $200,000 for a house). The house then becomes the answer when the abstract thinker asks “why am I saving this money?” and it motivates them to save.

Concrete thinkers tend to get overwhelmed when setting a goal of a specific dollar amount. They focus on the “how” and get discouraged when they don’t know all the details of how they are going to save up for a specific amount. Concrete thinkers do better with simply saving as much as possible, rather than a specific dollar amount.

My suggestion would be for abstract thinkers to pick a dollar amount to save towards, and for abstract thinkers to pick a specific percentage of their income to save each month.

However, you have to do what works for you. For example, I’m an abstract thinker, yet Beth and I found that what works best for us is to save a specific percentage each month. I am still motivated to do so because I have a clear picture of why we are saving.

If you’ve never really saved before, or your monthly budget is very tight, we suggest starting out by saving 10% of every dollar that comes in. We’ll explain where to save it in our next post (Part Three).

2. Determine the Frequency:

How often you save will obviously have an impact on how much you will save. Our thought on this is that you should start saving a percentage of every dollar that comes in…immediately.

You have probably heard the phrase “pay yourself first.” Because of my Christian faith, I believe in paying yourself second, as giving back needs to be first. Even when we had over $100,000 of personal debt, we continued to tithe first on our gross income. We never once missed a payment on anything.

So when we receive income, giving is first, then we move a specific percentage into various savings accounts set-up for short term and long term savings goals. Then with the leftover we set our monthly budget allowances.

If you put your expenses first, then there’s never anything left for giving or saving.

Take Action (15 minutes):

It’s time to take action. Discuss the following with your spouse:
• Are you an Abstract thinker (“why?”) or a Concrete thinker (“how?)”?
• Should you set savings goals using a percentage of your income or a set dollar amount?
• Discuss when you will start saving. Immediately? After the debt is gone?

Stay tuned for step three. The easiest way to do this is to sign up for our newsletter. We send out one newsletter each week with links to that week’s posts.

Committed to your success,

-Wesley

Question: What are your thoughts on paying yourself first?

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The Seven Rules of Managing Your Money

The #1 key to growing wealth is understanding how to manage your money. In the outstanding book, Secrets of the Millionaire Mind, T. Harv Eker states that “the single biggest difference between financial success and financial failure is how well you manage your money. It’s simple: to master money, you must manage money.”

So how well do you manage money? Do you feel lost when thinking about your spending plan, your debt, and your investments? Do you ever catch yourself thinking “where did all my money go?” If so, you need to become a student of money management.

Don’t get overwhelmed, the rules of money management are simple. The problem we have is not in understanding the rules but in following them. We simply aren’t doing the things we know we need to do.

The Seven Rules of Managing Your Money

1. Take a Financial Snapshot: The first step in managing your money is to get an accurate picture of where you are financially. You may not like what you see but this is the first step to change.

2. Develop a Spending Plan: Give a task to every incoming dollar, such as buy food, pay the electric bill, or get rid of debt. Money gets lost when it doesn’t know where to go.

3. Develop a Savings Plan: Here’s where most people fall short. To grow wealth, saving is not optional.

4. Develop a Giving Plan: Want to read a crazy promise found in scripture? Read Malachi 3:10. It’s the ONLY time in scripture where God tells us to test him.

5. Develop an Investment Plan: To quote Eker again, “Rich people have their money work hard for them. Poor people work hard for their money.”

6. Track your Spending Weekly: Wealth is like a road trip, and tracking your spending is the same as keeping the car between the lines. Constantly checking and adjusting.

7. Review your Plans Monthly: This is like checking the map on a long trip, making sure you’re still on the right track.

I’m assuming if you’re reading this that you’re in a place where you are ready to take action and get control of your finances. Today is simply an overview of the seven rules of managing your money, however, stay with us for the next two weeks as we go into detail about each rule and how to take immediate action on each one.

Committed to your success,

-Wesley 

Comments? We love hearing from our readers. Let us know which of the steps you’re working on!

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