Posted by: skokiecentralchurch | October 31, 2010

2010.10.31 Enough: Discovering Joy Through Simplicity and Generosity – Sermon 3: “Wisdom and Finance”

Central United Methodist Church

Enough: Discovering Joy

Through Simplicity and Generosity

Sermon 3: “Wisdom and Finance”

Pastor David L. Haley

October 31st, 2010

“There was once a man who had two sons. The younger said to his father, ‘Father, I want right now what’s coming to me.’ So the father divided the property between them. It wasn’t long before the younger son packed his bags and left for a distant country. There, undisciplined and dissipated, he wasted everything he had. After he had gone through all his money, there was a bad famine all through that country and he began to hurt. He signed on with a citizen there who assigned him to his fields to slop the pigs. He was so hungry he would have eaten the corncobs in the pig slop, but no one would give him any. (Luke 15:11-16, The Message)

       Today, we come to the third sermon in our series, Enough: Discovering Joy Through Simplicity and Generosity.” 

In the first week, we looked at the background of the financial mess we are in, as a country and as families and individuals.  Last week, we looked at some of the ways we most commonly get into financial trouble. Today, we consider both biblical wisdom and basic money management principles, toward two ends: (1) if we are in financial trouble, to get out; and (2) if we’re not in financial trouble, to make the most of what resources we do have.

Considering how most of us go through money, it might be appropriate to begin by asking just how much of the prodigal son we have in us?

The prodigal son, you may remember, was the younger son in that story told by Jesus in Luke, chapter 15, about a man who had two sons. One day that younger son came to his father and said, “Father, I want what’s coming to me.” So the father gave his younger son his part of the inheritance. It wasn’t long before the younger son packed his bags and left for a distant country, where he wasted everything he had. After he had gone through all his money, there was a bad famine all through that country and he began to hurt.  (Luke 15:11-16, The Message)

For sure, it’s a story about the love of God: how God takes us back even when we’ve wandered from the fold and squandered everything we have. This is the aspect of the story we typically focus on, but there’s another important element.

The prodigal son wanted his inheritance, and he wanted it now. His inheritance was likely a piece of property which would have supplied him an income for the rest of his life. I can imagine the Father saying, “But son, when it’s gone, it’s gone. What will you live on then?”  But the prodigal didn’t care. All he wanted was fast cash. He wasn’t interested in tomorrow. He was living in the now.

We can relate, can’t we? As we saw last week, right now the national savings rate in America is a -2.5 %, meaning that most of us are not only not saving, we’re spending more than we’re earning. In which case, we’re likely also not planning for emergencies, kids going to college, or retirement.  Do you know that 50 percent of all Americans have less than $25,000 set aside for their retirement?1

The problem with this kind of thinking is that, in one way or another, the famine eventually comes. It comes when we’ve spent everything we have and part of next year’s, and there’s nothing left over. But then the car breaks down, or the refrigerator goes out, or medical needs arise, and we have no money to pay for it. So we use the credit card and charge it, going further into debt. Finally, we have nothing left, not even credit, and we don’t know how we’ll make it.  I shudder to think how many people live this way day to day.

On the other hand, we may not find ourselves broke. We’re not abusing our credit cards; no creditors are calling. But the truth is, we may still be wasteful and extravagant, throwing money away through such things as impulse buying or frequently eating out. In fact, sometimes it seems like the more money we make, the more we waste. Such that by the end of the year, we’re asking, “Where did it all go”?

 

From Jesus’ description, the prodigal son had the habits of squandering and spending. The word prodigal does not mean someone who wanders away or is lost. The word prodigal literally means “one who wastes money.” Even though we’re financially OK, many of us may still be prodigals.

Because, really, how we spend our money is secondary to a much bigger and more important question: What Is Our Life Purpose? Why do we exist? Do we exist simply to consume as much as we can with as much pleasure as we can, as in the saying, “He who dies with the most toys wins.” Or do we have a higher life purpose: a mission, a vision, mission, a calling?

Remember God’s call to Abraham? In Genesis, chapter 12, God says, “Abraham, I’ve chosen you, and I’m going to bless you. I’m going to make your name great. And I’m going to increase your descendants so that they will be a great nation. I will bless you so that you might be a blessing to all the nations of the earth” (verses 1-3).

Like Abraham, we are blessed to be a blessing to others. We are created to care for our families and those in need. We are created to love God and to love our neighbors as ourselves. We are created to glorify God, to seek justice, and to do mercy. We are created to care for God’s creation. To be a Christian is to follow Jesus and seek to do his will in our lives. It is to say, “Here I am, all of me! I’m yours. Put me to work, help me to serve, use me to accomplish your work.”

Barbara Glanz is a motivational speaker who conducts work-
shops for large companies. Once she was speaking at an event for the employees of a grocery store chain. She talked to them about how they saw their life purpose, suggesting their work was more than stocking shelves or ringing up customers’ purchases or delivering supplies. She told them that every person they met was an opportunity to bless someone, to live out a higher calling or mission. The employees were inspired by her words, including one nineteen-year-old grocery bagger named Johnny.

Johnny, who has Down’s syndrome, took her words to heart. He went home and tried to think of ways he could be a blessing to others. Finally, he came up with a plan. Each night he would search the Internet for a positive saying that would encourage people. Then he would print out 300 copies and carefully cut the sayings into individual strips. The next day, he would put one of the sayings in the grocery bag of each of his customers while saying, “I put a saying in your bag. I hope it helps you have a good day. Thanks for coming here.”

A month later, the manager noticed that Johnny’s line was longer than the others. Even when he announced that there was no waiting in lines 2 and 3, no one budged. People wanted Johnny to be their bag boy. He touched them and filled them with hope. Johnny got it. He was pursuing a mission bigger than his personal satisfaction.2

What about each of us? Are we pursuing a mission bigger than our personal satisfaction? Can we articulate this mission and its relationship to our faith? Does the way we spend our time and money reflect that mission?

Once we have a sense of our LIFE PURPOSE, the next step is to set LIFE GOALS. What do I hope to accomplish in the next year? In the next five years? For the rest of my life? After this, we can set some FINANCIAL GOALS that will help us to accomplish these objectives.  Once we have set financial goals, we need to develop a FINANCIAL PLAN to achieve them. The saying is true: A failure to plan is a plan to fail. Without both goals and a plan to reach those goals, we revert to being prodigals. A plan gives us concrete steps that we can take to accomplish our goals. (See sheet)

A plan could be as simple as devising an envelope system for saving and spending.  Or it might be setting up separate bank accounts for funding various goals, such as family needs, missions and charitable giving, and retirement savings. Many people find it helpful to seek the advice of a financial advisor, someone who counsels people in good financial practices. For those who find themselves in the midst of a financial crisis, a financial counselor can also help to work out terms with creditors and develop a workable financial plan. Whatever approach you choose, the important thing is simply to have a plan.

While there are countless books written by financial experts on the subject of financial planning, here are some of the most basic financial planning concepts condensed into six principles:

First, pay your tithe and offering first. In other words, put God first in your living and your giving. Make it your number one priority to honor God with what you have. Give your tithe and offering from the “top” of your paycheck, and then live on what remains.  You and I both know from experience, if we don’t do this, it’s guaranteed there won’t be anything let over, and God will get a tip and not a tithe.

 

Second, create a budget and track expenses. Creating a budget is simply developing a plan in which you tell your money what you want it to do. Tracking your expenses with a budget is like getting on the scales: It allows you to see how you are doing and motivates you to be more careful with your expenditures.3

 

Third, simplify your lifestyle. Simplifying your lifestyle is essentially learning to live below your means. Because this discipline is so critical to the success of our financial plans, next week’s entire sermon will be devoted to it.

 

Fourth, establish an emergency fund. An emergency fund is an account separate from checking or long-term savings that is set aside specifically for emergencies. Then, when an emergency arises – such as an unexpected car repair, medical need, or home repair – you will not have to pull out a credit card but can tap into your emergency fund. Some recommend beginning with $1,000 and building that to three months’ worth of income. When you have this amount, you won’t need to use your credit cards anymore.

Fifth, pay off your credit cards, use cash/debit cards for purchases, and use credit wisely. As you are building your emergency fund, begin to payoff your credit card debt and start using cash or debit cards for purchases. Whenever you need or want something, use only the money you have on hand or in the bank. If an item costs more money than you have available, save up for the purchase.4

Most counselors recommend paying off credit cards as quickly as possible. Some suggest starting with the credit card that has the highest interest rate. Others suggest you pay down the smallest debt first, experience that victory, and begin applying payments from the first card to the second, and so on, creating a snowball effect to payoff the cards as soon as possible. They speak of the importance of freeing yourself from credit cards by having what they call “plastic surgery” – cutting up your cards as you pay them down so that your future is not leveraged.5

Of course, there are times when you need to use a credit card, such as when traveling or making purchases online. They urge, however, that you pay off the debt monthly. If you are unable to do this, then it really is better for you to cut up your cards and stop using them altogether.

 

Sixth, practice longterm savings and investing habits. Saving money is the number one money management principle everyone should practice.

There are three types of savings we should have: 1) emergency savings, which we have discussed; 2) savings for wants and goals; and 3) retirement savings. The first two categories keep us from being a slave to the credit card company. Saving for wants and goals is setting aside money in advance for things we know we will need or want – such as televisions, cars, and even college – rather than buying them on credit. For larger savings goals and needs, consider routinely deducting a percentage from your paycheck and depositing it in a savings account or investment option. Set up a direct deposit so that the money is automatically deducted from your paycheck and deposited into the account. Do not have a debit card on your savings account, and do not link your savings account to your checking account so that it is easy to transfer money from your savings to your checking.

The third type of savings is for retirement. We are living
longer today than ever before. Many of us will live into our 90s and may even pass 100. When pensions are going the way of the Dodo, and the future of Social Security is uncertain, it is important that we make it a priority to set aside funds for our retirement, and the earlier the better. Don’t we wish someone had told us this when we were young!

Combined, these six principles create a simple plan to help us all become better money managers.6 Many of us may already know these principles in theory. We may be like dieters who know that in order to lose weight we must eat right and exercise, yet still we fail to do so.

So let me be one more voice crying in the wilderness, that with a little practical help and encouragement, we might all re-evaluate our relationship with money and possessions, in order to all become better stewards of the gifts God has given us.

Remember, the prodigal son was welcomed home and loved by his father; but he had to make a new start. Every now and then, so do we. May this be it.  Amen.

* * * * * * * * * * * * * * * * * * * * * * * *

This series, “Enough: Discovering Joy Through Simplicity and Generosity,” was developed by the Rev. Adam Hamilton and the staff of United Methodist Church of the Resurrection in Leawood, Kansas, and then made available to the larger church through Cokesbury. As such, these sermons are my versions of Adam Hamilton’s original sermons, for my congregation.

1“Have Less Than $25K in Savings? Get in Line,” by Jeanne Sahadi, April 11, 2007, from CNNMoney.com;

http://money.cnn.com/2007/04/10/pf/retirement/ebri_survey_2007/index.htm

2See story at www.barbaraglanz.com.

3Resources for Developing a Budget

http://www.crown.org/Tools/Calculators/Budgeting_SpendingPlan.asp

This is a fun and helpful budgeting calculator that automatically generates a suggested budget based upon the user’s inputs and Crown’s recommended expenditures.

4Getting Out of Debt: Dave Ramsey’s Financial Peace University offers a great deal of online information including his approach to reducing debt found at this site: http://www.daveramsey.com/

 

5Credit Card Pay-Off Strategy. Use this technique to payoff multiple credit card balances. This method is simple and effective.

Review your credit card situation:

Which cards have the highest balances?

Which cards have the highest interest rates?

1.     Start with the card that has the lowest balance. Determine the amount you can pay each month over the minimum payment in order to completely eliminate this debt. Be aggressive, pay it off, and celebrate when it is paid.

Pay off the card according to your plan.

 

2.     Next, move to the card with the next lowest balance. Apply the same amount you paid on the first card payment plus the minimum required and eliminate that credit card debt.

Pay off the card according to your plan.

3.     Continue to payoff each credit card in this way, one at a time, until they are all paid off. By using the determined amount plus the minimum you can become debt free. Each credit card that is paid and cut up is a step closer to financial peace.

Note:  If two cards have the same balance, pay off the card with the highest interest rate first.

 

6Financial Management Tips

                1.     Develop a spending plan.

                2.     Reduce your spending.

3.     Pay down your debt. Make it your goal to eliminate consumer debt. Use a timeline of months, years.

                4.     Stop using credit cards; if you must use credit, use only one card.

                5.     Payoff credit card balances each month.

                6.     Find ways to earn more money.

                7.     Communicate clearly with your creditors.

                8.     Find a financial coach to help you do a financial assessment, spending

plan, and develop your financial goals. Consider and compare 
certified credit counselor agencies (www.usdoj.gov/ust, www.aic 
cca.org, or http://www.welcometousa.gov/Money _finance/Personal_finance.htm)  

                9.     If you apply for a debt consolidation loan (second mortgage), make

sure your new monthly payment is much lower and that you can make such payments.

10.    Borrowing from a friend or family member should be the last resort.

Do not ask someone to co-sign on a loan.

11.    Check your credit report each year for errors, at www.annualcreditreport.com.

12.    Establish an emergency fund.

13.    Protect your family with insurance: Term Life, Health Care, Disability, Auto, and Homeowners.

14.    Buy your home.

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