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Income

A smart and successful spending plan will begin with learning to live within the income you already make. Whether you earn $20,000 per year or $200,000 per year, living within the boundaries of your income will give you long-term flexibility. Most people want to have more income, and many people go to great lengths to increase their income by taking second jobs, part time jobs, or by having both partners work. In this bucket, I encourage you to make peace with your current income by learning to live within it so that when your income grows, you will be able to have margin to fund some of your long-term needs and goals. The starting point for financial freedom begins at the beginning…in this bucket.

Does it make sense for me to get another job or for my spouse to go back to work to increase our income?

Typically, the couple or person who asks this question is feeling the crunch of a tight budget. A spouse who considers going back to work to meet needs within a family should consider the true bottom line impact of going back to work.

As an example, for a couple earning $30,000 per year, tithing 10% and paying taxes at the rate of 18%, with no debt, there will be $21,600 available per year for living expenses and savings. If you would like to increase your income so that you can have more savings or so that you can spend more on lifestyle, you will need to factor several things:

  1. Be sure to consider “after tax” income

  2. Be sure to account for your tithing (10% or otherwise.)

  3. Be sure to consider the other expenses associated with the decision

    1. Day care

    2. Clothing for a new job

    3. Commuting costs

    4. Out to eat expenses

    5. Dry cleaning bills

    6. Etc.

To the best of your ability, determine what the actual bottom line benefit will be for your income if you do decide for a spouse to return to work or if you take another job.

Then, realize something else: adding income is a less efficient way to increase cash flow margin than decreasing living expenses or paying off debt. Both a decrease in living expenses and a repayment of debt have dollar for dollar impact on your cash flow margin, whereas increasing income by taking a new job comes with many hidden costs.

If your budget will not allow for a decrease in living expenses or a greater repayment of debt, please decide ahead of time that you will allocate the increased income to your highest priorities before you increase your lifestyle. Many two-income households get caught in the trap of continually increasing their lifestyle to meet the greater and greater income, thereby reducing the benefit of having more flexibility that a cash flow margin could create for them.

Related Topic: Beyond a Paycheck
Please note that the reason for going back to work that is implicitly stated above is to increase income. There are other reasons for a spouse returning to work or for adding another job, such as a calling, a passion, etc. Those issues are separate from the answer that I give above, and would be best explored in prayer and as a couple with people who know your situation well.

In my years as a financial professional, I have often counseled with couples where the wife is struggling over the question of returning to work and her struggle is about more than just the bottom line of the family finances. I’ll share with you what I believe about the deeper questions women (in particular) are asking when it comes to returning to work after children are born.

(For our purposes, the following discussion applies to wives with children who are trying to decide whether to take a job outside the home. I am aware that being a single mother has a very unique set of challenges and needs that frequently make their decision about work much less flexible.)

Question #1: What is my worth outside the workforce?

Women naturally will have questions about their worth as they move in and out of the workforce during their lives. Popular culture has placed mothers into two camps: those who work outside the home and “stay at home moms.” Women in each demographic can feel pulled into the opposite camp by feelings of guilt, need, fear, or desire. Sorting out questions of worth is important for a woman’s heart. As believers, we know that worth comes from our identity in Christ and that we are not dependent on a vocation to make us worthy. I’d encourage you to read and meditate on Ephesians 1 to be reminded of the tremendous value that God places on you, no matter where you “work.”

Another worth related question often arises for women whose careers are in fields that require updated skills or current marketability. In these scenarios, if you are wishing to stay home with children but worry that you will lose your competitive edge in the marketplace, be willing to consider the following: Are there courses or certifications I can pursue that will keep me current without requiring that I work full time? Are there other career tracks that might interest me down the road so that I can let go of worrying about the one I am leaving? If I don’t return to work, what is the worst thing that can happen and can I live with that? Finally, why do I really want to work – am I making the decision out of a need or desire for employment or am I trying to answer other self worth issues by having a job?

Question #2: What is my contribution to society and/or what is my creative outlet?

If you read Proverbs 31, you will read an exhausting biography of a woman who seemed to “do it all.” In particular, she was a great contributor to society and she clearly had a strong creative bent. She “works with eager hands” (v 13, NIV), “sets about her work vigorously” (v. 17), and “sees that her trading is profitable” (v. 18).

Some women take great delight in using their gifts and talents in the home by volunteering at schools or in the community and by pursing hobbies and interests that do not draw a paycheck. Other women pursue their gifts and talents in an arena where they get paid. In both cases, they can be a reflection of the Proverbs 31 woman who worked diligently and cheerfully on behalf of her family.

The Proverbs 31 woman seems like superwoman, but reading about her affirms that scripture recognizes a woman’s need to contribute and to be productive and creative, sometimes in the workplace.

Women can be productive and creative at home or in the workplace or both. So, as you make your decision as a couple, remember the validity of a woman’s need to contribute and to have an outlet for creative energy and factor that need into your decision. Also remember to consider many alternatives rather than thinking of the question as simply: should I work outside the home or not? If your primary goal in working is to have a greater impact or more of an outlet for your energies, consider home based businesses, ministry opportunities, and other venues for service. Think outside the box when making your decision!

Related Topic: Spousal Unity and the Decision Making Process

As with any major issue between a husband and wife, unity is so important in making a decision one way or the other about a wife working. Whatever the decision is (to stay at home or to work or some combination), the wife needs to know her husband supports her decision and the husband needs to know that the wife respects and understands his thinking as well.

I have been married for over 40 years and know that a non-emotional major decision is rare for a couple. Decisions can be land mines of emotion and conflict, particularly when the “role” of one party is under examination.

In order to minimize the conflict and impact of emotions in our decision-making, Judy and I rely on something that we call the Decision Making Matrix. Although it sounds dry and detailed, it has saved us countless hours of conflict and many wrong roads in our marriage.

What is a biblical view of bankruptcy?

It is a sad fact that many people in this day and time find themselves in a position, whether it is due to job loss or illness or simply too much borrowing, of not being able to repay their debts. The Bible is fairly clear that God considers someone “wicked” who borrows and does not repay. (Psalm 37:21) I do think that there are certain instances where a person cannot repay their debts, and to protect themselves, they might consider filing for bankruptcy. A good example of this is a person who is recently divorced, with children to raise, and the debts of their former spouse to pay. You have to provide for your family. If you need to hold the creditors at bay in order to feed your family, then maybe you feel like you must file bankruptcy.

I think the most Biblical answer to the question of should a person file for bankruptcy is probably no. However, God is a God of grace and forgiveness. Another point, and you said you do this yourself, is that we would always encourage someone who has to file bankruptcy to do whatever they can, no matter how long it takes, to repay their debtors.

Some Bible verses related to bankruptcy:

Psalm 37:21
The wicked borrows and does not pay back, but the righteous is gracious and gives.

Proverbs 22:7
The rich rules over the poor, and the borrower becomes the lender’s slave.

Ecclesiastes 5:5
It is better that you should not vow than that you should vow and not pay.

I Timothy 5:8
But if any does not provide for his own, and especially for those of his household, he had denied the faith and is worse than an unbeliever.

Here are two articles that address the issue of bankruptcy from a biblical perspective:
Article One
Article Two

What is the biggest mistake a person can make regarding their finances?

Biggest mistake:
Assuming my income will cover all my living expenses without taking into account giving, taxes, debt repayment, and saving.

Biggest opportunity:
Live within my income and save. If I do this, I will never have a debt problem.

What financial goals should we set?
  • How much do you want to give and where?

  • How do you want to plan for your taxes?

  • What do you want to do about the debt that you have? This includes credit card debt, car loans, and home mortgage.

  • What about your savings? What are you saving for in the long term, and how much do you need for that? This could include retirement, financial independence, and college education for your children, a vacation home, or other long-term goals.

  • What are your goals relative to your lifestyle? Most people do not set lifestyle goals. They simply continue to increase their lifestyle instead of setting a finish line.

If you set goals in these five areas, you will have direction in your financial life. When you have a plan, you can have peace.

Do I give based on my gross or net income?
  • Gross income is the total amount of your paycheck.

  • Net income is the amount of your paycheck that actually gets deposited in your bank account, after taxes, insurance, 401(k), and other expenses taken out by your employer.

  • What you need to realize is that you actually receive the gross amount of your paycheck. There is just money taken out by your employer to pay bills that you owe.

  • The bottom line: tithe on the gross because that is actually your income.

My household income is inconsistent. How do I know how much to give?
  • One alternative: Give whenever you get paid as a proportionate amount of your paycheck.

  • Another alternative: Make an estimate of what you plan to earn during the year, and give weekly based on that estimated amount.

  • Giving on a regular basis is best because it will remind you every week where your resources come from. This way of giving is a weekly recognition of God’s ownership and provision.


Income

A smart and successful spending plan will begin with learning to live within the income you already make. Whether you earn $20,000 per year or $200,000 per year, living within the boundaries of your income will give you long-term flexibility. Most people want to have more income, and many people go to great lengths to increase their income by taking second jobs, part time jobs, or by having both partners work. In this bucket, I encourage you to make peace with your current income by learning to live within it so that when your income grows, you will be able to have margin to fund some of your long-term needs and goals. The starting point for financial freedom begins at the beginning…in this bucket.

 



Income

A smart and successful spending plan will begin with learning to live within the income you already make. Whether you earn $20,000 per year or $200,000 per year, living within the boundaries of your income will give you long-term flexibility. Most people want to have more income, and many people go to great lengths to increase their income by taking second jobs, part time jobs, or by having both partners work. In this bucket, I encourage you to make peace with your current income by learning to live within it so that when your income grows, you will be able to have margin to fund some of your long-term needs and goals. The starting point for financial freedom begins at the beginning…in this bucket.

Deuteronomy 8:16-18
In the wilderness He fed you manna which your fathers did not know, that He might humble you and that He might test you to do good for you in the end. Otherwise, you may say in your heart, “My power and the strength of my hand made me this wealth.” But you shall remember the Lord your God, for it is He who is giving you power to make wealth, that He may confirm His covenant which He swore to your fathers, as it is this day. (NASB)

Psalm 23:1
The Lord is my shepherd, I shall not want. (NASB)

Proverbs 10:4
Lazy hands make a man poor, but diligent hands bring wealth. (NIV)

Proverbs 10:22
It is the blessing of the Lord brings wealth, and He adds no trouble with it. (NIV)

Proverbs 12:11
He who works his land will have abundant food, but he who chases fantasies lacks judgment. (NIV)

Proverbs 13:11
Dishonest money dwindles away, but he who gathers money little by little makes it grow. (NIV)

Proverbs 14:23
All hard work brings a profit, but mere talk leads only to poverty. (NIV)

Proverbs 21:5
The plans of the diligent lead to profit as surely as haste leads to poverty. (NIV)

Proverbs 22:29
Do you see a man skilled in his work? He will stand before kings; he will not stand before obscure men. (NASB)

Proverbs 23:4-5
Do not wear yourself out to get rich; have wisdom to show restraint. Cast but a glance at riches, and they are gone, for they will surely sprout wings and fly off to the sky like an eagle. (NIV)

Proverbs 28:19-20
He who tills his land will have plenty of food, but he who follows empty pursuits will have poverty in plenty.
A faithful man will abound with blessings, but he who makes haste to be rich will not go unpunished. (NASB)

Ecclesiastes 5:10
He who loves money will not be satisfied with money, nor he who loves abundance with its income. This too is vanity. (NASB)

Ecclesiastes 5:12
The sleep of the working man is pleasant, whether he eats little or much. But the full stomach of the rich man does not allow him to sleep. (NASB)

Ecclesiastes 5:19
Furthermore, as for every man to whom God has given riches and wealth, He has also empowered him to eat from them and to receive his reward and rejoice in his labor; this is the gift of God. (NASB)

Matthew 19:23
And Jesus said to His disciples, “”Truly I say to you, it is hard for a rich man to enter the kingdom of heaven.” (NASB)

Luke 3:14
And some soldiers were questioning him, saying, “And what about us, what shall we do?” And he said to them, “Do not take money from anyone by force, or accuse anyone falsely, and be content with your wages.” (NASB)

I Thessalonians 4:11-12
And make it your ambition to lead a quiet life and attend to your own business and work with your hands, just as we commanded you, so that you may behave properly toward outsiders, and not be in any need. (NASB)

II Thessalonians 3:10
For even when we were with you, we used to give you this order: if anyone will not work let him not eat. (NASB)

I Timothy 5:18
For the scripture says, “You shall not muzzle the ox while he is threshing,” and “The laborer is worthy of his wages.” (NASB)

I Timothy 6:6-8
But godliness actually is a means of great gain, when accompanied by contentment. For we have brought nothing into the world, so we cannot take anything out of it either. And if we have food and covering, with these we shall be content. (NASB)

I Timothy 6:17
Instruct those who are rich in this present world not to be conceited or to fix their hope on the uncertainty of riches, but on God, who richly supplies us with all things to enjoy. (NASB)

Hebrews 13:5-6
Let your character be free from the love of money, being content with what you have; for He Himself has said, “I will never desert you, nor will I ever forsake you,” so that we confidently say, “The Lord is my helper, I will not be afraid. What shall man do to me?” (NASB)



 

 
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