A Biblical Study of Personal Finances Ai Jia

A Biblical Study of Personal Finances Ai Jia 愛家 April 13, 2011 Week #3: Saving and the Spending Record

Review the Spending Record • Did everyone start tracking your spending this week? • Questions about the form? • Where are you keeping your receipts? • Who is responsible for recording spending?

Spending Plan Guidelines • Each category should follow these basic percentages of monthly income: – Giving 10% – Housing 33% – Food 9% – Transportation 15% – Debt 5% (hopefully less!)

Saving • Saving is a crucial part of a successful financial plan!

Types of Saving • Emergency – short term savings in cash. Initially $1000 US or 30, 000 NT. Goal is 6 months of total living expenses in cash or a liquid account

Types of Saving • Replacement – This is the money you save to replace a specific item. Your Spending Plan and Spending Record will have an entry for Savings – Car or Savings – Refrigerator or Savings – Computer.

Types of Saving • Retirement – This is long-term savings for your retirement and should be a very diversified investment.

Types of Saving • Retirement – When you are young, a greater percentage is in higher risk investments (stocks). The older you get, your portfolio should change so that more and more of your investment is in cash and cash equivalents.

Types of Saving • College – If you have children, and once you have saved for yourself, begin building a college fund for each child. But remember, you have other options to pay for college, but you cannot finance or get scholarships to cover emergencies or retirement!

The Enemy of Savings • Debt is the enemy of savings. You cannot save until you are debtfree.

From Financial Planners “If you want to be wealthy, you need a healthy income and you must invest wisely. But neither of these are enough unless you’re saving enough. Financial advisors often say convincing clients to save is their most challenging task …

From Financial Planners “…At the end of every month, even clients with six-figure incomes can find themselves short of cash to invest. So much money can walk out the door without us realizing where it’s going….

From Financial Planners “…Luxuries are fine, but very often we don’t distinguish between which are worthwhile and which are wasteful. Every dollar spent now is a dollar you can’t invest toward longterm goals…

From Financial Planners “…And, with gas prices rising and the economy precarious, there is an added impetus to set aside more cash for a rainy day. ” ~Business Week, July 22, 2008

From the Wise “A bank is a place that will lend you money if you can prove that you don’t need it. ” ~ Bob Hope (American Comedian)

From the Wise “Make all you can, save all you can, give all you can. ” ~ John Wesley (1703 – 1791)

From the Wise Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six (26), result misery ~ Charles Dickens, (British Author, 1812 -2870)

From the Wise “Never spend money before you have it. ” ~ Thomas Jefferson (American President, 1743 -1826)

From the Bible Proverbs 6: 6 -8 Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.

From the Bible Proverbs 21: 20 The wise store up choice food and olive oil, but fools gulp theirs down.

From the Bible The Bible clearly tells us to save for the future.

From the Bible Luke 12: 24 Consider the ravens: They do not sow or reap, they have no storeroom or barn; yet God feeds them. And how much more valuable you are than birds!

From the Bible Matthew 6: 19 Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal.

From the Bible The Bible clearly tells us not to hoard our money.

Three Kinds of People • The Squanderer – this person spends all their money on things that will fade away. • The Hoarder – this person “oversaves”, never spending money or giving it away.

Three Kinds of People • The Saver – This person balances giving, saving, and spending in a responsible financial plan. g n i v i G g n i d n e Sp Squanderer Saver g n i v a S Hoarder

The Spending Record • Keeping track of our expenses is the only way to know if we are following our Spending Plan, if we need to adjust our Spending Plan, and if we are meeting our financial goals.

Keep Track of Your Finances Proverbs 27: 23 Be diligent to know the state of your flocks, and attend to your herds.

Group Discussion • What are barriers in our lives to saving? • Simple ideas to cut costs and save money.

Homework • Discuss the current state of your savings. – Do you have $1000 US/30, 000 NT in an emergency fund? – Is your debt paid off? – Do you have 6 months of living expenses in cash? – Do you need to save to replace anything? – Are you saving for retirement? College? • Keep recording your spending this week!

A Biblical Study of Personal Finances Ai Jia 愛家 April 13, 2011 Week #3: Saving and the Spending Record