Family 101 (Part 4)
Money Matters
There was once a rich man who had a manager. He got reports that the manager had been taking advantage of his position by running up huge personal expenses.
—Luke 16:1 Message
Running a family is like managing a business. You are managing your own company!
Companies fold from poor management. If you knew that your job depended upon management’s making of good decisions, would you appreciate them overspending and endangering your job?
Your family can fold from poor money management. Get serious about how well you are managing your family’s finances, and God will prosper you.
Ten Principles of Good Money Management
1. The tithe is the Lord’s (Lev. 27:30). Put God first. Return His tenth on the first day of the week (1 Cor. 16: 1) to His house. He will bless you in unexplainable ways and protect your source of income.
2. Pay yourself second. Putting 10 percent into an emergency fund of three months salary is your first management goal. Chinese save up to 31–57 percent of their income, while Americans save -2 percent!
3. Calculate your worth. How much are you worth? What cash do you have in forgotten funds, cash-value insurance, paid-for items, property, etc.? You may already be able to raise your emergency fund just by items you already have.
4. Clean out the clutter. If you are a pack rat, it is costing you money to store and maintain items you will never use. Sell it all or give it away, and put any revenue in your emergency fund.
5. Maintain and repair your possessions. Keep your house, tools, and equipment in A-1 condition. Possessions that deteriorate cost thousands to replace. Keep your home where it could be put on the market tomorrow. Organize tools, closets, and shelves so that you can find things and not be forced to buy more of the same.
6. Restore your credit. Bring your credit score up to 690–720. Pay all unpaid bills and claims against you by calling the creditors and arranging payment terms. Offer to give back items!
7. Have insurance. Have at least minimal health, auto, home, and life insurance.
8. Get training. More training in practical skills makes you more valuable (computer, mechanical, bookkeeping, lawn care, antiques, etc.).
9. Reduce or eliminate unnecessary expenses. Look at where your money goes each month. Make a 10 percent cut in each category, or remove a category altogether. Refuse to live on anything over 80 percent of your income.
10. Remove debt. Get aggressive about systematic debt removal.
Marriage and Money
1. Two are better than one. Both opinions count equally in purchases and management decisions. Agree on spending and debt. Stay together in success or difficulty. Use your talents to make up for your partner’s weaknesses.
2. Keep it simple. Use the envelope method for spending (placing designated amounts of money in separate envelopes to cover monthly expenses), and stay away from anything you don’t understand.
3. Consider the cost of two jobs. Be sure you analyze the cost of both parents working: cars, wardrobes, child care, eating out, lawn care, home maintenance, etc.
4. Communicate about finances. Give a clear picture to your spouse so that purchases and direction stay in budget. Before marriage, be up-front about prior obligations (debt, child support, alimony, etc.).
5. Trust each other. Make no preparation for divorce by having separate accounts and prenuptial agreements.
