Tithing Teaches Budgeting
There is more to family financing than sitting down and watching God cause paper money to grow on trees in your backyard or garden. I have not yet heard God has done that — and I'm sure he won't. But he will bless you — if you will diligently apply his way.
God said, "The laborer is worthy of his hire." He did not say the man who sits around will get rich.
When you begin to pay God his tithes, God will begin to add to you as he sees fit. But you must learn to control your income. The chances are God will not give you a salary increase double your present amount the very first month you begin to pay tithe.
First, you must learn to handle your present salary.
Budgeting principles can be learned from the tithing principle — this teaches dividing your income and expenditures up by percentages.
The first thing you should do when you receive your pay is give God the 10 percent that is his in the first place. (In most nations, the government will already have taken its tax revenues out before you even see your check)
Remember, though, God's tithes come out of the total increase or adjusted gross income, not on the after-taxes amount.
God has given you control over 90 percent of the remaining income. (The government, of course, has taken whatever it has decreed is its fair share) The remainder becomes your responsibility to handle. It may not make sense to you now — and you probably will not be able to put it down on paper — but when you begin to properly tithe, God will see to it that your 90 percent will go further than the entire 100 percent used to — one reason being you begin to make wiser decisions.
Follow These Basic Rules
Once you have decided you will handle your finances God's way, you have a place to start. How you control your after-tithe-and-offering and after-tax income now becomes a matter of budgetary discipline and wisdom. There are rules you must follow if you want to be financially successful.
Since living conditions are so different from one part of the country to the next — and different in one nation from what they might be in another nation — it is difficult to properly advise exactly what each of you should do. But there are basic rules which apply to all people everywhere.
The first financial need most families face is that of housing. You will either rent or buy a home. There will be furniture for the home. Once settled in a residence, you must provide food and clothing for your family. After those things, there will be smaller day-to-day necessities and you might have room for a few luxury items that must be placed last on your list.
The first and foremost rule of family financial planning is never obligate yourself to more than you can afford to pay back.
Principal Budget Areas
Follow that basic rule of thumb and you will never be in debt above what you can afford to pay. There are many books available on the subject of family money management and budgeting. Most family financial planners will advise that an average family in Canada or the U.S. must plan to spend about 25 percent of income for home mortgage or monthly rent payments. Because of the spiraling cost of mortgage rates and housing costs, this percentage might have to be increased to 30 percent. Any family that spends more than 25 percent of income for the monthly house payment needs to realize there will be sacrifices in other areas. This housing payment should generally include the cost of utilities and furnishings where possible.
After housing costs, you will have to consider food and items purchased at the grocery store. This will generally average about 20 percent of the monthly income in developed countries. Of course, married couples without children can spend less than larger families. Food is cheaper in some areas of a country than others. Many more families are turning to backyard gardens and forming neighborhood co-ops in order to save money in food purchases. You can adapt a particular percentage to your own local condition — know how much groceries cost and how to properly spend your money for food. This responsibility is often delegated to the wife in the family. A wise and cautious shopper who buys the best quality foods at the best possible prices can be a real asset to family budgeting.
Some families can get by on clothing expenditures of approximately 5 percent to 10 percent of their annual income. Other families where certain type clothing might be required for business might have to spend more. This is another area where self-control becomes important. Changing fashions and intensive advertising campaigns draw our attention to clothing items, and we become easy targets for over extension of our budget in this area.
This is a good time to once again encourage you to exercise caution in using credit card purchases. It is not at all unusual to purchase clothing items on credit plans and have the item of clothing worn out, or in the case of children, outgrown, by the time it is paid for.
After these three basic necessities — food, shelter, clothing — you will probably have to take care of your transportation needs. For most, that will be in the form of a car payment and operational costs for your automobile or for public transportation. Don't forget to budget car repairs. If you live in an area where public transportation is available you may use public transportation more frequently and not buy as late a model car as you might if you simply have to have a car for daily transportation needs. If you must purchase an automobile, purchase one you can afford — it may have to be an older model than you would like and don't forget to calculate the cost of operation.
If you've been keeping track of the percentages, you soon will realize that the basic necessities of life often consume the lion's share of your salary. After God's 10 percent plus offerings, the government takes perhaps 20 percent, and 25 percent goes to housing, 20 percent to food and 5 percent for clothing. All of a sudden, 85 percent or more has been consumed and you have not been able to buy insurance, get the dry cleaning done, go to the dentist, and you haven't had any entertainment built into your budget or set aside savings.
Recently, I was covering some of these principles in my college class and we all jokingly concluded at the end of the lecture that with all of these costs and percentages, we could not afford to be alive. Of course, that's not true, but it does illustrate the point. No matter how much money we earn in salary, it seems we'll always be able to spend it. Only a few wealthy individuals make more money than they can spend. Since we are in the same boat trying to keep up with spiraling inflation and enjoy the conveniences of modern life, we all face the same problems of budget and control.
If you want to control your money and stay out of debt, you will have to know where you're spending it.
The most helpful hint I can give you here is to keep records. One of the best things a family can do is sit down together and plan a realistic budget and help each other stick to it. Perhaps it means moving into less expensive housing quarters, or stepping down in the style of transportation. It often means delaying purchases for items you would like to have but really can't afford at this time. Then, make an accurate listing of all expenses for a period of about three months. This will help you analyze your outgo. Whether you keep your records in a notebook or shoe box, keep them where you can have them available. Set up some kind of system so you can write down your needs and payments every single paycheck.
And most important, before you buy any major new item, or before you take that trip — sit down and talk it over as a family! Impulse buying is one of the great culprits in creating consumer debts. The salesman knows how to tempt you and lead you into the purchase. Many salesmen are trained experts. They subscribe to a study that generally states most purchases will be made on the first visit. Have you ever wondered why that used car salesman puts so much pressure on you when you're wandering through the lot merely looking out of curiosity or because you had a little extra time? If he can get you interested, see the glint in your eye over a particular car or in the case of housing, if you express an interest in that time-sharing plan, he will put the pressure on. And thousands of people fall for it every day.
Make it a personal rule in your family that you will make no purchases, make no financial decisions, until you have gone home and talked it over. Sit on it for a day, or a week — even a month. In most cases, it will still be there when you go back. The salesman would like you to believe it's a once-in-a-lifetime opportunity — pass this deal up today and it will forever be gone. If that's the case, let it be gone. At least you won't go bankrupt.
As you budget, base your budgeting expenses on what you need — not what you want. Set up a system of budgeting that best adapts to your own needs — and be sure you stick to it!
What about Credit Cards?
Early in the article, we talked about credit cards and installment buying, which have a great deal to do with our present day financial situation.
If it were not for mortgages, most of you probably would not have the home you now live in. You probably could not be driving your car, using your furniture or even wearing the clothes you have on.
It is not wrong to have a credit card — or to take out a 30-year mortgage on your home. That is, it is not wrong if you can adequately make the payments. But many over-extend themselves. For these, it is not all right. Perhaps some should not be sitting on a particular item of furniture or they should not have that extra coat they bought at the department store on credit. That put an extra strain on the budget that was already near the breaking point. A wallet full of credit cards for half of the stores in town can become a curse.
If you can't control installment buying, don't have credit cards — and don't open charge accounts.
If you have been able to control credit buying, be careful it doesn't sneak up on you — thousands get in trouble thinking they have enough money to go ahead and say, "Charge it."
A word about installment buying. While hire-purchase or time-payment buying can at times be helpful, it must be used with great care and caution. The cost of credit is out of sight — and most people do not stop to think of what they're doing when they buy on time. In the last few years, credit buying plans have become increasingly more expensive. Interest rates are soaring beyond 24 percent per annum and credit cards can now cost upwards of $50 a year. That's expensive credit!
Truth in lending laws in the U.S. have helped consumers understand exactly how much it's going to cost to take out a loan or to make a credit purchase. Be sure you fully understand the terms of the loan or the credit arrangements. You'll have to determine if the item you wish to purchase is worth the interest charges — or whether it would be better to save and buy it for Cash later.
Start Now!
It is never too late to start straightening out your family financial problems. The longer you delay, the deeper in debt you are going to be.
The 1980s well could be a time of economic concern greater than any since the Depression of the 1930s. Gold and silver prices have fluctuated wildly up and down in the last few years. Interest rates have soared and fallen. World economy rides the roller coaster ups and downs with balance of trade deficits and costs of importing oil from the Organization of Petroleum Exporting Countries (OPEC). Double-digit inflation has us still rocking and reeling.
The financial future is at best uncertain.
You want to be on sound footing. You want your finances under control and blessed by God. The laws of financial success start with God and end with your wise money management. Break any aspect of those laws and you will suffer economic crisis.
Keep them and you will weather the storms. Try them and see if they won't work for you. Write for our free booklets Ending Your Financial Worries and Managing Your Personal Finances. They will go into even greater depth of the whys and hows of getting out of debt.