Let’s get back to basics.  When I teach my kids about money, we set up three piggy banks:  one for spending money, one for savings, and one for giving.  The same framework holds true as we become adults.  But how much should we put in each?  For a starting point, try to put 10% towards giving, 20% into savings, and live on (spend) the rest.  The 20% for savings can be thought of as 10% set aside for emergencies and saving for large purchases like furniture or a car, and the other 10% towards long-term savings.  The goal over many years is to grow the long-term savings to the point that it earns enough that we can place a larger percentage of income towards giving.  Basically this means living on 70% of our income or less.  Yes, it can be done!  Some people may put 10%+ toward paying down debts instead of long-term savings until they’re debt free.

Hi friends, it’s been too long since the last posting! Life events have taken me away for a time, but I’m itching to continue the conversation. I have some topics I’ve been chewing on for awhile, but I’d also love to address what’s on your mind today. There is an EMAIL ME button on the main page. Please send me some ideas for topics you’d like to read about.

I’ve had the pleasure of speaking with groups of high school seniors as they are about to start their college careers, and help to educate them about handling their finances.  We talk about checking accounts, utility bills, the benefits and pitfalls of credit cards, and financial aid.  While I’m no expert on the subject of financial aid, I have spoken with lots of people in the 20s and 30s that have excessive student loan debt many years after college.  It seems that there’s a missing piece in the college selection process that sometimes causes us not to pick the college with the right price for us.

The Biblical Principles that guide what we do:

1.  How we handle money impacts our relationship with the Lord

Luke 16:11  So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches?

Money is the key competitor with God for our attention.  How we handle money, and not let money handle us, can determine how trustworthy we will be to God.

2.  The Lord is owner of everything

When giving a talk about money, I sometimes start by asking people for a list of verbs we can use in reference to money, like filling in the blank “They _____ money.”  People start off with the usual list you’d expect:  earn, spend, save, give, borrow, lend.  Then you start getting a little deeper:  need, waste, steal, hoard.  Sometimes it can get really deep:  hate, covet, trust, love, worship.

That last list is the one that makes God really jealous and angry, when we feel emotions for an inanimate object, particularly love and worship.  The very first two of the ten commandments are exactly this; put no other god above the Lord our God and don’t make a man-made idol and worship it instead.  When we start to put our faith and our trust and our security in money, that’s violating these commandments.  When we love money, then we cannot love God.

Matthew 6:24  No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.

Money is mentioned so many times in the Bible because it is the main competitor with God for our love and our trust.  When we love money, then our goals are aimed at getting more money.  There’s never enough, we always need more.  So when we love money, how do we answer these questions:  Are we generous?  Are we giving regularly?  Are we thinking about people we work with as ones to serve and care for or as competitors for promotions and raises?  Are we saving consistently or seeking quick gain with big risks?  Are we trustworthy or more likely to cheat/steal for our own gain?

You can read more here:  http://matthew2521.wordpress.com/2010/03/17/what-does-it-mean-to-serve-money/

What do you say?  I’m always looking for stories!

Certainly the press seems to indicate that the economy has recovered a great deal from the depths of late 2008.  If you follow the economic indicators or even just your 401K balance, you’ll have noticed a lot of improvement.  If you look at the mall, you’ll see plenty of people carrying bags with their purchases.  Certainly it’s an uneven recovery and still lots of unemployment, but supposedly it “feels” better.

So is it really all clear; time to borrow and spend some more?  I don’t know if it’s all clear for the economy.  I do know that it’s always a good time to get out of debt.  So if things are going well for you, please consider paying down your debts as quickly as possible.  Also consider avoiding big-ticket purchases (car, home, etc) that require a lot of debt right now; instead first save up so that you have enough to weather another round of economic crisis (consider saving enough for 3 months of expenses; if you have that already then go for six!).  Just my humble opinion and advice.

I’m curious, how does the economy feel to you?

I contributed a post to the Not the Religious Type conversation, titled My Three Most Profound Lessons About Money Problems. You can find it here. While you’re there, browse around!

There are loads of stories of miraculous provision in the world – I thank God for all of them! I am all for faith for God’s provision. When we follow God’s lead, we enter into a promise of having our needs met. You may be familiar with promises such as:

Matthew 6:33 But seek first his kingdom and his righteousness, and all these things [food and clothing] will be given to you as well.

According the verse above, and several just like it, we shouldn’t expect anything more than having our needs (think basic necessities) met. Not only that, we should be content that those needs are covered.

1 Timothy 6:8 But if we have food and clothing, we will be content with that.

This is great! But here’s the big Q: When can we expect God to provide and when can’t we?

I’ll guess you’ve heard the phrase “the love of money is the root of all evil.” And perhaps you’ve also heard this: “No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.” These verses are from the Bible and also have made their way into the mainstream. Look at how the love of money is described: the root of evil, and a master mutually exclusive to God. This is serious language. It’s worth some time to think about this. Let’s ask ourselves: Do I love money, and do I serve money? What does it means to serve money?

Here’s a great topic to think about (quote from betterworldshopper.com)  ”As citizens, on average, we might vote once ever 4 years, if at all. As consumers, we vote every single day with the purest form of power…money.  The average American family spends around $18,000 each year on goods and services. Think of it as casting 18,000 votes every year for the kind of world you want to live in.”

Great idea!  I love this … it’s practical, actionable and gives us power.  There are organizations out there that are ranking companies and brands across numerous spending categories and helping us discern the good from the bad.

Here’s an example.  Walmart celebrates themselves for offering low prices and consumers have made them one of the biggest retailers in the world.  But how do they offer such low prices?  They have been accused of buying from overseas suppliers engaged in sweatshop practices, and they also are notorious for not offering much in the way of benefits to their employees.  Maybe that low price at Walmart is only low because their lack of values lets them engage in business practices that responsible companies won’t.  Perhaps that low price has a cost somewhere else in the world, and the real price to the world is higher.  I’d rather pay more and know that I’m supporting sound, environmentally sustainable, & socially responsible business practices.

Here are a couple of organizations, check them out:

The Better World Shopper (this one has an iPhone app, so you can always have the rankings with you):

http://www.betterworldshopper.com/rankings.html

Green America Responsible Shopper Guide

http://www.GreenAmericaToday.org/programs/responsibleshopper/

What do you think?  Know of others that do this?  Do you have any favorite ways of spending to vote your values (like do you buy organic, or from local farms, or Fair Trade products)?  Let’s challenge ourselves to think of three ways we can change our spending to make the world better this month.  You may have read my other entries to know that I’ve moved my banking.  I’d love to hear what you’re going to do!