Bankruptcy and The Crystal Cathedral - Pathetic or Prophetic?

The Crystal Cathedral has filed for bankruptcy.  I have no doubt that critics, skeptics and naysayers are smirking in their cheerios this morning.  My heart aches.  My hypotheses and philosophies of the future of Church finances have been supported by this event, but I find no pleasure in it.

Please, let me explain.  First, I love Robert Schuller.  In the early years of my time in full time ministry, his book, “Your Church Has Real Possibilities” was very influential in helping me form practical direction for British Isle Evangelism.  I have been to the Crystal Cathedral a couple of time and thoroughly enjoyed the experience.  I’ve never been a big fan of “The Hour of Power” and believe it has painted a terribly incomplete picture of the ministry of Robert Schuller and life of the congregation there in Garden Grove.

Despite my fondness for Robert Schuller, I do have some rather strong doctrinal variances from him.  It is not, however, doctrinal, but practical and financial weaknesses that have brought this crisis upon the Crystal Cathedral.

All living organisms reach maturity, then age and die.  A local congregation is not exempt.  Even a mega Church will eventually experience the phenomenon.  The death may be slow, even very slow, but eventually, regress happens.  

Real estate (at least the buildings), are subject to the laws of science (eg. Thermodynamics).  Buildings, parking lots, fixtures, and the like, wear out, atrophy, eventually to the point that repair is no longer viable.  Restoration or replacement can be extremely expensive. The Crystal Cathedral was once the cutting edge of Sacred Architecture, now it is a dated, aging monument to days gone by.

Even great ministries and their campuses reach a plateau.  Some, especially those which are legacies to a single man’s (or woman’s) vision, are likely to survive little more than the lifespan of the founder.  Those with the vision and savvy to create a succession plan, will live, and can even prosper for generations.  But, time and circumstance happen to us all.

The churches that last the longest continue to morph and reinvent themselves by moving campuses, changing formats and maintain a certain balance between longevity and turnover of staff.  Some even change their names as a part of the metamorphosis. 

 

I have nothing against those things, but I submit that those changes may actually mean that a new congregation has been birthed rather than a simple location change.  Some of the core may be the same, but the differences are significant enough to suggest the organization is different.

Churches are also subject to the laws of economics.   When we spend less than we earn, when we avoid debt, when we budget wisely , give generously and when we save appropriately, with an eye to the future, we prosper.  When we run up debt, spend ahead of our income, expand too quickly and have no financial cushion, we risk much.

Our current economic crisis in America (and the world), has highlighted a fundamental crack in the traditional financial thinking of many congregations.  A large number of ‘boom’ Churches are in serious financial trouble.  As the communities around them blossomed under the economic and housing bubble of the 90s and early 00s, congregations grew and expanded.  Following the example of their members, large numbers of Churches built McMansions in the suburbs.  Using easy credit, they took out huge mortgages and built oases of peace and faith that were reverent and (often) simultaneously flamboyant.

These relocated congregations frequently experienced a huge burst of activity and growth when they moved into their new facilities and added staff and ministries accordingly.  We justified our extravagance by pointing to “God’s blessings” and our noble purpose.  We convinced ourselves that we were “casting our bread upon the waters”.  Oh, what a grand time it was.

Then, like the children’s chorus, “the rains came down and the floods came up”.  The American economy collapsed.  The bubbles burst and all Hell broke loose.  Businesses closed or laid off employees by the train load, unemployment exploded, banks failed, the stock market crashed, the housing market melted, money vanished. 

Amidst the rubble of foreclosed homes, unemployment lines and broken dreams, we see church after church struggling to stay afloat.  Offerings in many places have dropped by nearly half.  Attendance has taken a hit in those places where families are being forced to leave in order to find work elsewhere.

It is a bleak reality, where once thriving Churches are faced with cutting staff and programs.  Churches born with the best of intentions and the most Holy of goals, are finding themselves struggling, or unable, to pay their mortgages.  Banks don’t want to foreclose of places of worship.  That’s not good PR.  Despite the efforts of everyone involved, both borrower and lender, Churches are defaulting on loans at a record pace.  The Crystal Cathedral is simply the most high profile example to date.

The future requires a paradigm shift, a radical change in the way churches operate financially.  I pray daily that we awaken and make the necessary changes before it’s too late to do so.

For Churches that are in financial crisis, it is imperative that we begin immediately to budget like a family rather than like a corporation.  Most congregations may be structured like a business, but we function like a household.  We would be better off to budget that way. 

On a high level, that means:

1.       Repent

2.       Pray

3.       Stop borrowing.

4.       Establish a perimeter (it looks a little different than for a household, but essentially the same)

5.       Create a Budget (a zero based budget)

6.       Develop a baseline emergency fund

7.       Eliminate Debt

8.       Have a fully funded emergency fund

9.       Pray

There will be some tough, heartbreaking decisions in the process.  It may mean some salary reductions.  It may mean some staff cuts.  It will most likely require the cutting of some ministries and services the congregation provides.  It may mean selling the building or some of the land (if you can find a buyer).  It will certainly mean scaling back on opulence.  

Budget cuts do not have to mean quality cuts.  It is better to do a few things well, than offer many things poorly done.  

Restructuring will not be fun.  It will not be easy.  Feeling will be hurt and some may even leave over it.  If that happens, so be it.  We have to do the right thing, regardless of the consequences.

I’m going to interject a very personal frustration here.  Typically, one of the first cuts congregations make in times of financial difficulty is to the Missions budget.  I find that both bizarre and counterproductive.  Our prime directive is to disciple the world.  If the first financial cutbacks we make are related to evangelism, then we really have some mixed up priorities.  

A better way might be something like this (it’s only an example):  We say we have to cut 10% across the board.  After cutting all the fat we can find, we ask the staff to take a 10% cut and we share our situation with our mission partners and explain that we are doing the same with our off campus staff.  We let them know that as soon as the crisis is over, we will return to our normal level of giving.  

Let me spend a moment offering my unsolicited and unwelcome advice to recent or future Church plants: Don’t do debt!  The economic landscape has changed, maybe forever.  The tectonic plates of our financial basis have shifted.  The Church is not in the real estate business.  I urge you to stay in rented or borrowed facilities either permanently or at least until you have cash to purchase. 

If you feel you must take out a mortgage, only ever do so on your first structure, and absolutely NEVER of future expansions.  Did I say NEVER?  Good.  Build the minimum that you can get away with.  Make sure that your mortgage can be paid with the current income, and do not rely on any projected future income that will come from wished for growth.  

Make absolutely sure you use a zero based budget.  Each ministry, each service, each program, must justify its existence.  Do not expand in either staffing or campus until there is cash flow to do so.

Focus on ministry rather than facility.  The Great Commission says, “GO!” It says nothing about “Invite”.  We can be more effective and more involved if we take our work to the hurting rather than finding a way to get the hurting to us.  I think of ministry more like ‘search and rescue’ than an emergency room where the wounded are carried.  I’m all for emergency rooms, I just think a pro active role is more Biblical.

I intend to flesh these thoughts out in a future book (working title, “Paradigm Shift: a Quest for Revival, Reformation and Revolution in the Church”), but for now, I hope this rant get you thinking. 

I am cross posting this in “Recession Proof Living” and in “Paradigm Shift”.

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We are making the e-book version of IOU NO MORE available for $1.95.  I'm tired of messing around.  I want this revolution to spread.  Please order a copy and tell your friends to get one, too.  You can order from our store.  Any of the links in this update will take you to the store.

Budget Basics Refresher

1. Budgets work.  Call it a spending plan if it helps.  Call it fantasy spending.  Call it whatever psychologically makes sense to you, but do it.  Money won't master itself.  Besides, it's not really just the money you're trying to get control of, it's your life.  Budgets simply help your order that part of your world.
2. Budgets have to be written.  You can't 'do it in your head'.  If I had a dollar for every time someone told me how writing stuff down became a revelation, I'd... well... I'd have a lot more money to budget, that's for sure.
3. Establish your perimeter:  The following, in order, are the first things to budget.  Everything else follows
     a. God - Non negotiable.  He is first.
     b. Food - You gotta eat, and you know you're gonna eat.  You can't pay bills if you're too weak to work.
     c. Shelter - Duh!  Roof over your head, lights, heat, insurance, basic phone service, clothing (public nakedness is still against the law in most places).
     d. Transportation -  Umm..... make that, 'reliable' transportation.  You don't need car payments.  But you do need a way to get to work, school, church, etc.  Oh, and you need gasoline, oil, tires, that sort of thing.  Budget for them.  Plan ahead. 
4.  Use a good, simple budget template like the ones available at IOU NO MORE.  They will help you remember to cover all the basis.
5.  Have an emergency fund.  Set aside an emergency fund of at least $500 to $1000 for the unexpected.  If you are debt free, you should set aside at least 6 months of expenses (more on that in a couple weeks)
6.  Put as many bills as possible on automatic bill pay.  It really helps.  I still have trouble remembering to pay the ones I have to write checks to and mail in.  Auto pay and online pay are fantastic tools.
7.  Write down every transaction in a ledger.  Use a form or use the nice little registers that come with your checks.  But make sure you do it.  Check your account online at least twice a week.  I'm sure you have online access because you're reading this online now.
8.  If you're married, make sure you create your budget in cooperation with each other.  Being on the same page is mission critical to your finances as well as your relationship.
9.  Review your budget monthly.  Tweak it when necessary.  Do it in pencil, it makes changes easier and saves on paper.
10.  Have fun with it.  It's only money.

Sustainable, Self Sufficiency - The Third Phase of the Revolution, Part 2

During our last chat, more of a monologue, really, I described some of the thought processes that have been driving some of my decision making during the two years since the release of IOU NO MORE.  The fact is, I have changed a great deal since then.  The principles and outline for becoming debt free have not changed, my thoughts on "Life After Debt", have changed dramatically.  I will probably elaborate on that a little in my upcoming e-book, "Debt Beat Dads".  But I'll introduce the subject here, in hopes of stimulating some thought.  BTW, we always love it when you share your thoughts.

I finished the last entry, with the fact that it was my Bible reading that has changed my views of wealth building and preparing for the future.  Specifically, my new thinking comes from the first 5 books of the Old Testament.  Even more specifically, from the latter chapters of Genesis and from the book of Leviticus.

Before I go into any detail, I might as well address all my Christian friends who will say, "We're not under the Old Testament Law, anymore.  We're under Grace."  You are exactly right.  If you will stay with me long enough, you'll see that I'm not advocating a return to Mt. Sinai, but rather I'm adapting some PRINCIPLES gleaned from Joseph and Moses, that I believe give us insight into the heart of God and provide some COMMON SENSE approaches to our own times and finances.

Phase two of the Revolution most profoundly impacts the categories of 'Giving' and 'Saving'.  Ok, I'll backtrack.  In IOU NO MORE, I conclude that money is really only good for three things; Giving, Saving and Spending.  That's it.  That's the list.  You could maybe add, burning, but the coins don't do that well.  The 'Cruise Control' spending plan is divided into those three categories.  You can see the plan in the Appendix of the book and it's available as a part of our 'Complete Forms Library' in the store.

In 2007, when I released IOU NO MORE, I promoted the traditional concept of giving 10% (tithe) and saving 10% (to 15%) of income.  I still believe that's a great place to start. My Bible reading, however, has caused me to raise the bar. Note: If you are trying to get out of debt, I still recommend saving up a $1,000 emergency fund and putting all other saving on hold until after you're debt free.

As I was reading through the Old Testament last summer, as part of my daily devotional time, I was struck by the fact that the Israeli's gave much more than a 10th of all they had.  While it's true that the tithe was the starting point, by the time you add up all the various offerings and sacrifices, the Israeli people were giving a minimum of 20% of their resources to God.  How interesting.  Most of us are not aware of that, because we rarely read the book of Leviticus.  I freely admit, it's not a page turner, but it sure was an eye opener this time through.

Similarly, the same book, affected my views on savings.  In several places, Moses describes the "interest rate" for buying back property, etc. as being 20%.  That made me go, 'hmmmm....'  The real kicker, though, for upgrading my views on savings came from the story of Joseph.  In Genesis 41(first book of the Bible), Joseph, of 'Amazing Technicolor Dream Coat' fame, after a series of dramatic events, becomes a prominent leader in Egypt.  He advises Pharoah to 'tax' the people 20% of their harvest for 7 years to prepare for disaster.  When the disaster (famine) came, Egypt had enough for her people and surplus to sell to neighboring nations. 

The implications of all those Bible passages was not lost on me.  Common sense, a rare commodity in the 21st century, said that 20% saving and giving was not in the Bible by accident.  God doesn't work that way.  To me, they have come to symbolize wisdom and generosity.  Wisdom, by saving 20% in order to be prepared for whatever comes our way, and to build wealth.  Generosity, by giving 20% to relieve the suffering of others and to advance the Kingdom of God.  I got very excited about it.

Here's how Brittan and I are working out phase 2 in our lives:  We began by increasing our giving.  We raised our weekly contributions to our local Church and we are giving to other causes, as well, mostly Christian Mission organizations.  Our goal is to raise our giving to 20% of our income.  We are at approx 15% now.

As for saving, we're doing that two ways.  1.  We are saving from our income via 401k and a money market account.  Our goal is to have at least 6 months living expenses in a money market account with easy access.  This is not an investment, it's insurance.  We're not trying to get rich off of the emergency fund, we're trying to make sure we have some security in time of crisis.

Additionally, we are storing up a minimum of 6 months (eventually, 1 year worth) of basic household supplies, like dried beans, rice, soap, toilet paper, etc.  We don't make a big deal about it.  We're not 'survivalists' or doomsayers.  We're trying to be wise.  We are not doing it all at once.  We buy a few items each time we go to the store.  We only buy things that have a long shelf life, and we buy basic or generic brands for our 'emergency store house'.  We also have a 'rotation' plan that uses up things that are getting close to shelf life and replacing them with fresh.  Again, our goal, through various methods of saving money and storing goods is to save 20% of our income.

I know it sounds crazy; give 20%, save 20% and live on 60%.  But you'd be surprised what you can do when you are DEBT FREE.  Can you imagine how the world would change if the debt free revolution really catches fire.  Just think about how much cash would flood the economy, how much money would be out there for charitable causes and how much less stress would be felt by the average family.  The pressure taken off of Government agencies would be enormous. I believe.  Oh, yes, I believe.  And I'm doing my best to live out my convictions. 

Coming up:  Phase 3, "The Road to Self Sufficiency".  Stay tuned.

Budgeting 101 - Part 6, Transportation

So far, we've completed 3 sides of our perimeter; God, Food and Shelter.  The West wall will complete the circle.  The final side of our perimeter is, transportation.  You have to be able to get to work, school, church, grocery store, etc.  So figure it into the budget. Plan for it so you're not surprised:

• car payments (though, these will be temporary)
• gas and oil (including oil changes)
• insurance
• license and registration
  

Later on, we'll budget for maintenance and repairs, but for now, we're taking care of the basics.

As you can see, I'm only describing BASIC transportation.  I highly discourage automobile loans.  They are not necessary. If you've read IOU NO MORE, you know I've outlined a plan so that you'll never have to make a car payment again......ever.

On a side note, I can't even begin to describe how much I loathed the recent "Cash for Clunkers" program.  The memory of it, still makes my blood boil.  Millions of Americans now have new debt they can ill afford.... Ok, Sam, relax.  Have a coke and a smile.

There are still a few things we can do to save on transportation costs.

1. Sell your car and buy a 'cash car'.  It's the only kind I drive.  I rent nice ones on vacation, but I drive paid for older ones for every day.  It saves, by eliminating payments and reducing insurance
2. Increase your deductable on your insurance
3. Car Pool 
4. Whenever your job allows it, work from home one day a week
5. Walk, or ride a bicycle to things that are close enough to do so.  This saves money and improves health at the same time.  I love multi tasking.
6. Change your oil every 5k rather than 3k miles.  Many studies have shown that this is optimal.  But, DO change it.  Changing your oil costs a little at the time, but will save on costly repairs in the long run.
7. Put a little thought into your excursions so that you accomplish multiple tasks on a single trip, rather than taking multiple trips out.  
8. Use public transport whenever possible.  When I lived in the United Kingdom, I used bus and train services frequently.  There are places here in the States where this is still a valid option.  Take advantage of it.  It could save you a bucket full of cash.  

Saving money on transportation is not as easy, or as sexy as some of the other boundary items, but it's critical.  Transportation costs can be real budget busters, so plan carefully, write it down and stick to the budget.  Your wallet and your future will thank you. And remember, we'll happily provide you with a FREE Basic Spending Plan.  We're here to help.

Budgeting 101 - Part 5, Shelter

We have two walls of our budget perimeter in place, God and Food, so now we turn our attention to the East boundary, which we call, 'shelter'.

Again, without trying to become too repititve, the walls of our perimeter come before ANYTHING ELSE.  We budget and pay these things first, regardless of who screams, calls, threatens or postures.  We're going to pay ALL our debts, to be sure, but one of the fundamental behavior modifications in Recession Proof Living, is correcting our priorities and sticking to them.  It will be hard, sometimes, especially if others are hounding us for payments, but if we do the right things, and do the right things right, everything will turn out right. 

Ok, back to the East boundary.  We want to keep a roof over our heads, we want to keep the lights, on, stay warm and dry, etc. so our third priority is, shelter.  Under shelter, I include, electricity, heat, house payment and basic phone service.

Let's take them one at a time:

Electricity:  We are fairly dependent on Ben Franklin's discovery these days, so paying the light bill is high up our priority list.  We use electricity for light, running appliances, powering our telephones (in most cases) and sometimes even for heating our residences.  Therefore, I recommend staying current on the electric bill.

I also recommend doing all we can, to keep the electricity bill as low as is reasonable.  There are many things we can do to save on electricity:

• as light bulbs burn out, replace them with the new energy saving flourescent kind.  They are more expensive to buy, but consume only a fraction of the power and last for years.  You will start saving the very first year
• turn lights off when you leave a room
• use window air conditioners rather than central air (where practical) and only cool the rooms you're in.
• set air conditioning at something like 78 rather than 68.
• open windows and use electric fans when weather permits.  It's much cheaper.  Besides, I'm sure you're mother told you, "Fresh air is good for you!"
• lower the thermostat on your water heater
• run dishwashers and clothes washers and dryers only with full loads.  Better still, air dry (when possible and practical)
• unplug computers, televisions, printers and other non essential appliances when not in use, to save on 'electricity leak'.  I don't recommend unplugging the refrigerator.  I'm just sayin'.....

Hopefully, these tips will get your creativity cranking and you'll think of other ways to save.

Now, let's look at heat.  The best way to save on heat is to set your thermostat lower.  Brittan and I are famous now, for setting ours at 62 degrees in the winter.  People think we're crazy.  We think we're crazy like a couple of foxes, when our heat bill is a fraction of those of family and friends.  We do turn it up when we have guests, because not everyone is acclimated to our world.

We stay warm with layers.  It's a little trick I learned living in Scotland, where frugality has reigned for centuries.  Americans want to be able to run around the house in our gym shorts in January and be comfortable.  And that's ok, if you have piles of cash somewhere, but most of us don't, so we shouldn't act like we do. 

I like to wear sweat pants, or similar, on winter evenings.  I complement those with comfortable slippers and a nice ankle length house coat that Brittan bought me some years ago.  And I promise you, I am never cold.  Brittan, dresses similarly.  She accessorizes with some nice throw blankets that we have on our sofa and chairs.  She usually has a dog or two sitting in her lap as well, which helps. 

The point is, we are comfortable and save a bunch of money.  Anyone can do it.  It's all about common sense and behavior change.

If you have a wood burning fire place, use it.  But don't buy wood.  Go out to the woods and pick up your own.  Spend some time in the summer splitting logs and letting them season.  You need the exercise, anyway.  You know you do.

We close the vents and doors in rooms we don't use, to avoid wasting heat on empty spaces.  Again, there are lots of ways to save on heat costs. 

House payments.  Really, the only way to save on these is to make sure you don't have 'too much house'.  If you're a home owner, your payment should not exceed 25% of your take home pay.  I know that some lending institutions will loan higher, but that's because they have their own best interests, rather than yours, at heart.  You should have a fixed rate mortgage.  Any other kind will do you more harm that good in the long run.  If you're renting, make sure you look around and get the best deal possible. 

Keep in mind, that being a home owner also means things like, property taxes, water bills and etc. that must also be budgeted.  I recommend using the same formula that we do for everything else.  Using property taxes, take the annual tax bill and divide it by your number of pay days.  In my case, that's 26.  By doing so, you'll know how much to set aside in each pay period.  Use a simple money market account or savings account for this.  It's not an investment.  It's merely a place to set the money aside to pay it when it's due.  I don't recommend wrapping your insurance into your mortgage payment.  All that does is loan the money to the mortgage company.  I'd rather pay......ME.  I don't get much interest from my little savings account, but at least I'm in control of it.

Next is, basic phone service.  We need to be able to stay in contact with family, friends and emergency services.  These days, most companies offer unlimited long distance in the basic service for a pretty low price.  In fact, telephone service is cheaper now than it was when I first got out of college many years ago.

Don't go crazy with a bunch of add on services that you don't need.  And you'll notice I said nothing about cell phones, unlimited text messaging or premium cable.  You don't NEED any of those while you're trying to save money.  That is poor stewardship of your resources.  The key word is BASIC.  Sometimes, often, in fact, cable companies have some great deals on 'all in one' serivces for phone, cable and internet.  Shop around.  Do the math.  Make good choices.  The best financial choice may be basic phone, no cable and dial up internet..... for a while.  When you need high speed, go the the public library.  It's only for a while.  I'm not talking forever.

In our case, we were able to maintain a great rate on an all in one package the whole time we were in our 'get out of debt' phase.  So you might not have to go too spartan.  But we were, and are, prepared to go that route to win.

We also got rid of some cell phones.  While you are trying to gain control of your finances, some cell phones and certainly premium services, need to go.  If you're on the road and need a phone, get a phone.  Not a hand held computer/social networking connectivity recepticle, a PHONE.  Consider a pay as you go phone.  Remember, you're trying to win.  Cool can come later.  Besides, I think winning is cool.

Shelter is important.  Be wise about it.  Establish your perimeter.  Victory is in sight.

Budgeting 101 - Part 4

Establishing a perimeter, continued....

Millions of Americans (and millions more around the world) will tell you that money is not just tight, right now, it's scarce!  With unemployment growing and the dollar shrinking, it's more than difficult to make ends meet, it's difficult to get them to see each other.  That's why creating a household budget is more important than it's ever been.  This is war.

The first thing an invasion (or defense) force needs to do is, establish a perimeter.  A perimeter represents the boundaries of their operation.  Everything behind the line will be defended at all costs.  The forces' very lives and future depend on it.

In our last post, we established God as our North boundary.  The first thing we budget is our tithe to Him.  Now it's time to take a look at the South boundary, which is food.

Many people are nearly as incredulous about prioritizing the South boundry as they are the North.  For some odd reason, we think that food should be the last thing we budget.  To the contrary, food is second only to God in a wise budget.

You have to eat.  Your children, if you have them, have to eat.  That is a fundamental fact of life.  It is non negotiable.  Master Card can wait.  They might scream, but who cares?  If they do, just chew louder.

In order to have the strength to work and earn the money to pay your bills and debts, you need nourishment.  That comes from a little something I like to call.....food.  It is not noble to put debts ahead of nutrition.  It's foolish.  God wants us to be wise.

Frankly, women find that last paragraph harder to fathom than men.  I have known many women, including my own mother, who would go without food, but never be a day late on a VISA payment.  Rarely, though, do I meet men with such a sense of honor.  With us, it's "Feed me, Seymour, Feed me."  I assure you, if you take care of your basic nutritional needs, you will be in much better shape to master your finances.

When I talk about food being our number 2 priority, I'm not saying it has to be luxurious or expensive.  It has to be filling and nutritious.  Mac and Cheese may replace Wine and Cheese, and Beanie Weenies may replace Steak and Lobster.  You may very well have to give up eating out for a while.  And cooking may become a brand new hobby.  You might try checking out sites like Cheap Cooking for ideas to help you get started (in a fit of gratuitous self advertising, Brittan is currently compiling a "Recession Proof Cookbook" which we hope to have available early in 2010.  Keep your eyes out for that.)

One of the ways we found that helps save a ton of money at the grocery store, is planning our menu out before we go to the store.  By doing so, we know exactly what we need, how much of it and when we will need it.  Then, we make a shopping list to help minimize impulse buying.

Some other things that will help reduce the cost of food:

• use coupons
• buy store brands
• watch for 'day old' items on sale
• buy in bulk 
• shop in the 'club stores'
• use the internet to watch the grocery store sites
• study the circulars that come in the mail
• shop in the 'off peak' stores like Aldi and Sav - a - lot
• grow some of your own fruits and vegetables (more on that in a few weeks)
• buy fresh vegetables only when they are in season
• incorporate pasta, rice or potatoes into your dishes (in my day, we called foods with those things 'casseroles')

There are many other things you can do.  Hopefully, this list will get your creative juices flowing.

I also recommend going shopping at pretty much the same time each week, and don't go when you're hungry.  Make grocery shopping a game.  For Brittan and me, it's a fun time together.  It's just the two of us and acres of food stuffs to choose from.  It's great.

Remember, God comes first.  After Him, as the old T.V. commercial says, "You gotta eat!"

Budgeting 101 - Part 3

Now it's time to begin 'establishing a perimeter'.  You have your pencil, Basic Spending Plan, calculator and recent bank statements?  Good.  Let's get started.

One of the FAQs I receive is whether to budget weekly or monthly?  The answer is more complicated that I'd like.  The simple answer is; whatever works best for you.  Since most bills are monthly, that option is the one normally pursued.  But some, like car insurance or property taxes are quarterly or even annually.  That complicates things just a bit.  Here's what I recommend.  I recommend budgeting 'per paycheck'. I'll use house payments as the example.  Take the monthly payment and multiply it by 12 which will give you your total house payments for the year.  Then, divide that by the number of paychecks you receive in a year and you'll know how much to budget per paycheck.

I get paid every two weeks.  So, staying with our example, and making the numbers easy, we'll say my house payment is $1,000 per month.  I will multiply that by 12 and come up with $12,000.  Next I will divide that by the number of paychecks I receive, which is 26.  Many people assume that bi-weekly translates to 24, but there are always two months that get 3 checks.  I love those months.  Anyway, I take the $12,000 and divide by 26 and I get $461.54 (technically, it's a long decimal fraction, but rounds to to that.)  So I put that amount down in the Spending Plan as the amount I need to budget each paycheck.  Simple.  And easy if you have a calculator.

Now, back to our regularly scheduled perimeter:

The North Wall of your perimeter is "God".  On the Basic Spending Plan, I call it "Tithe".  There are still an amazing number of people who remain bewildered at this being the first item budgeted.  I, on the other hand, am bewildered that anyone would consider anything more important than God.

Let me explain my world view.  I'm glad this is a blog rather than Twitter, because I'm going to need more characters.

I am a Christian.  My relationship with God is the most important relationship in my life.  I love my wife, my children, my grandchildren, with every fiber of my being.  I have friends I hold very dear.  I love my country.  But nothing compares to my love for God and what He has done for me.

I won't bore you with the details of the triumphs and tragedies that are my life, but despite my numerous flaws and failures, Jesus loved me and spilled His blood on a cross, so that my sin could be forgiven and I could have a relationship with Him.  It is a remarkable love story.  And it has an extremely happy ending.  After three days, Jesus rose from the grave.  He conquered death itself. He is totally able to forgive my sin and give me a new life here on earth and eternal life later.  I intend to make the most of the opportunity.  The only thing that would make the end happier, is if you had a relationship with him, too.  He is waiting and eager to welcome you into the family.  You can read about it in the Bible.  If you don't have a Bible of your own, you can borrow mine.  Alternatively, you can read the love story of Jesus right HERE.

Brittan and I made a decision long ago, that God would receive the 'first of the best and the best of the first.'  It's like laying the foundation for a building.  If the foundation is good, the building has a chance at survival.  If the foundation is bad, 'Lucy, choo got problems."  So, if God is first, then He is first in our budget.  Frankly, I don't believe the IOU NO MORE plan would work any other way.  I'm certainly not going to test it.  My mamma didn't raise no fool.

Tithe literally meant 10%.  We give the first 10 percent of everything we make to God.  The first check I write each week is made out to our local Church.  If I get a bonus, or windfall, 10% of that goes to God right away.  Bonus money gets split between the local Church and a variety of ministries we support.  (Note:  if you stay tuned till the end of this series, you'll discover a plan to raise your giving to 20%.  Same thing with your saving.  And you'll still have more than enough to live on, quite comfortably.  But it's way too early for that.).

I don't want to get into a big, hairy debate about tithing on gross vs net.  Just start somewhere.  If you're afraid to start with 10%, start with 5% and plan to raise it to 10 when you see how amazing God is at honoring your faith.  If you have questions about tithing or about how to begin a relationship with Jesus, drop us a line.

One more side note:  Currently, the IRS allows Americans to take a tax deduction on our tithe.  How cool is that? Give money to God, and then get to write it off your taxes. You should take full advantage of that.  It's not unspiritual.  I don't recommend giving FOR the deduction, but I don't think we should reject the offer, either.

The day may come when giving to God is no longer a tax deduction.  My behavior will not change at that time.  I give because I love Him.  Everything I have ultimately comes from Him.  Jesus is Lord of all.  Even the tax code.

To summarize:  The very first thing to budget is your tithe.  Determine how much you will give.  Write it down. There, don't you feel better already?

Budget 101 - Part 2 - Establish a Perimeter

There are probably 3 keys to effective budgeting.  Yep, only 3.  This is not rocket science.

1. Create a Written budget
2. Create the budget in the right order.
3. Implement the budget

Of course, if you're married, there is a 4th key:  Create the budget together.

In our last post, we discussed the importance of Keys 1 and 4.  The next several installments will relate to Key 2, Create the budget in the right order.

Perhaps doing the budget in a certain order seems a bit silly, but I promise you, the whole process usually stands or falls on this step.

A typical budget process goes like this;  A motivated individual, or couple, grabs a sheet of paper and starts jotting down all the bills: house payment, car payment, credit cards, electric bill, etc.  Since the regular amount, or minimum payment is generally known, the numbers are fairly easy to come by.  After all these bills are added up, the sum is subtracted from the monthly income.  Finally, whatever is left over is written down, "for food".  Usually, that number is pretty small.  Already, the once motivated budgeter is a bit concerned.

Then its time to go to the grocery store.  Its amazing, how we budget food last, but go to grocery shopping the most.  Anyway, the once highly motivated, now somewhat concerned budgeter, goes to the store and buys groceries.  At the checkout, he/she is hit right between the eyes with a bill that totally blows their written budget out of the water.  Discouraged, the now disheartened, once highly motivated budgeter, pays for the groceries and trudges to the car.

As she/he loads the bags into the back of the car, the totally defeated, once highly motivated budgeter, says something like, "This is stupid.  Budgets don't work.  It can't be done.  It's all a lie.  Debt in inevitable.  I wish I'd never bought that stupid book."

I know it happens that way, because I talk to people almost every day who've done it that way.  Oh, and then there's the fact that I tried it that way..... several times.  Hey, I never said I was a quick learner.

The order in budgeting is crucial for morale.  But it also helps us align our spending with our priorities.  And most of us need to get our priorities in order.  Our spending patterns synch precisely with the order of what's most important to us.

I think of finances as a war.  It's a matter of survival and conquest.  And I'm determined to win.  My family and my own life are dependent on the outcome of this struggle.  So, just like a commander would be foolish to enter a battle without a plan, we would be equally foolish to expect to win the cash flow wars without a strategy.

The first step is to 'establish a perimeter'.  Most of us have seen movies where the invasion, or defense, force does just that to determine and protect their base of operations.  In the old westerns, it was, "Circle the wagons!"  But it's the same idea; form a boundry that protects what is most important.  Everything behind the perimeter line is mission critical and precious.

We want to build the 4 perimeter walls quickly and in this order (I'll explain the order later):

1.  North Wall:  God
2.  South Wall: Food
3:  East Wall:  Shelter
4:  West Wall:  Transportation

These are the 4 categories that we protect with our lives.  Once we have secured the perimeter, we can build a strong defense and later prepare for an invasion.  Yes, I said invasion.  Our long term goal is not survival, but conquest!

In our next post, we'll start building our perimeter walls.  If you just can't wait, you can get all the details right here.

Oh, don't forget you can always write to us with your questions.

Budget 101 - Yep It's That Time of Year Again (First in a Series)

Fall's here, footballs are flying, leaves soon will be, so it's time to start thinking about the Holidays and the New Year beyond.  It may come as surprise to you but 2009 is almost over and Christmas falls in December this year.

The Holiday Season (From Halloween through New Year), does amazing damage to the American pocket book.  We all know about Christmas and Thanksgiving, but it's quite impressive how much Halloween costs.  Besides mountains of candy, we spend a fortune on costumes and decorations.  Many communities are as extravagant in their Halloween decorations as they are with Christmas.  We are Americans.  We love lights.  We love opulance, we love gaudiness (Think Time Square or The Vegas Strip).  And apparently we love debt.

Well, it's time to kiss the whole debt thing goodbye.  Kick it out of the house and let it join the circus or something.  But we are through with it.  Right?  Right?......................

Ok, if you're still here, let's go over the basics of how we can accomplish all of our financial goals.  First, we have to have goals.  Let me suggest a few:  1.  Live on less than we earn, 2. Get out of debt, 3. Build a nest egg for the future, 4, Give to worthy causes, 5. Stop having to WORRY about money.

Those will do.  You might add some of your own related to vacations, education, buying a house, etc.  But the 5 above pretty much cover the core.

In this series, We're going to focus on #1, Live on less than we earn.  We'll touch on the other goals, but we won't stay long.  If you want a step by step plan on all 5 goals, you should check out IOU NO MORE.

I don't know many people who get excited about budgeting; at least not not at first.  But once we learn to do it right, budgeting is a lot of fun.  Ok, a little fun.  But, I guarantee you  that it's not a drudgery.

Think of it as "Fantasy Spending".  We all love to spend.  Back when I was a phone rep in a Call Center, as a part of our offer, we entered prospects and customers into a sweepstakes with a grand prize of $1,000,000.  We would ask people, "What would you do with ONE MILLION DOLLARS?"  I loved listening to the far away sound in their voices and customers spent that money in their imaginations. 

Think of a budget the same way.  It's spending the money on paper, before we spend it at the store.  Nerdy, detail oriented types love this part.  I've seen some people's budgets that rival a major coporation in their granularity. I don't recommend that.  Use something simple, but practical.  We've already done the outline work for you and if you like, you can get a basic budget plan for free right HERE.  Just tell us you want the free Basic Spending Plan and email it right out to you.

It's important to do a WRITTEN budget.  Doing it in your head just doesn't work.  As we say in the south, "That dog don't hunt."  Writing it down will help you focus and it will assist you in making sure you cover all areas.  If you are married, you should do this with your spouse.  It's ok if one of you does the heavy lifting.  But make sure you are both in agreement on the numbers and priorities.  Marriage is not about dominance or dictatorship, it's about teamwork and mutual submission.  You remember the ceremony right?  All that 'putting the other person first' stuff.  Well, budgeting TOGETHER is one way of actually doing what we promised.

Use a pencil rather than a pen.  I know, now I sound like the nerdy, detail oriented type (which everyone who knows me knows I'm not).  But I am practical.  There will be a great deal of erasing.  Pencils have erasers.  They are designed for work that has to be done over.  Ink pens..... not so much.  They are all about permenance.   Hey, what happened to my spell check.  It's missing..... bummer.  Ok, back to the subject.

You'll need a calculator and a copy of at least your most recent bank statement.  Good news, both are probably availble on the computer you're using to read this article.  You'll find the calculator under the 'accessories' tab in your start menu (if you are using a PC.  If you have a MAC, I have no idea.  I'm not cook enough for a MAC.  You'll have to find it yourself).  For the bank statements, go to your bank's website and log into 'online banking'.  If you haven't yet set up an online banking account, now is the time to do it.  If you already have one, you'll know that it's a great place to keep track of your spending patterns.  I check mine every day.  It's a safety thing.

Ok, you have a pencil, a budget form, some historical information and a calculator.  We're ready to begin.  In our next installment, we'll do just that.  We will look not only and the categories, but which order in which to budget them.  The order is mission critical.  But that will have to wait till next time.  I have to take a shower and go to work.

Coping With Rising Unemployment

Unemployment is set to hit 9.7% nationally.  Many places are already in double digits.  There are no signs of imminent turnaround in those numbers which means stress levels on millions of American families is going to remain at code red levels for a while.  I know how it feels.  I have experienced two long stretches of unemployment in my life.  I remember the frustration, the hopelessness, the helplessness and the bewilderment.  It's difficult to describe the attack on one's self esteem. 

Here are some coping tips for those facing or experiencing unemployment:

• Trust.  First, trust in God.  He has you in the palm of His hand, even when it feels like you're free falling.  Secondly, trust in yourself.  You have skills.  You matter. You have strengths.  You offer value.  Far from worthless, you are a priceless treasure, created in the image of almighty God.  But you may have to remind yourself of that from time to time. 
• Abandon Credit Cards.  Statistically, many people use credit cards in times of unemployment for many basics like groceries and utilities.  In the end, it makes the financial hole bigger.  Credit Cards are not for emergencies.  They create them.
• Get on a written budget.  Desperate times call for desperate measures.  Now more than ever, you need to make every dime count.  For budget help www.iounomore.com.
• Create a routine.  The despair from unemployment can easily turn even the most stout hearted individual into a couch potato.  Face each day with a plan.  Write it down just like you would if you were creating your task list at work.  Formalize your schedule with set times for job hunting, resume work, exercise (I treated exercise like a part time job and got very fit. My only regret was not keeping that up after I found employment), yard work, house work, prayer time.  Don't let life happen to you.  Make life happen FOR you.
• Get creative.  Look at your skills and talents rather than just your resume as you seek the next phase in your career path.  There are multiple options for you to pursue outside of 'what you've always done'.  You can find some great tips, tools and resources at www.48days.com.
• Make a game out of bargain hunting and finding ways to cut costs.  Even after all this time, I still get a thrill out of finding a way to save a buck on anything, especially things like utility bills.
• Stay focused.  You will have times of great hope and times of deep hopelessness. Make sure you work your plan rather than allow yourself to be carried along by your emotions.  
• Help others.  Nothing will help you take your mind off your own problems better than assisting another person with his/hers.  Volunteer at a nursing home.  Help out at Habitat for Humanity.  Help out at your Church office.  The opportunities are endless.

You will find work.  Maybe it will take a while, maybe it won't.  And you may find out that the next job is better than the last one, so don't assume that you will have to settle for less.  That's exactly what happened for me.  After a long period of unemployment, I found a job that put me on a career path that has been fruitful in more ways than I can count.  It ain't over till it's over.  You can win!