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Save & Invest

If you want to get to the bottom half of the bucket diagram, you have to spend a good bit of time here, first. “Spend less than you earn and do it for a long time” has consistently been my advice to people who ask me how to best manage their finances. To save money for emergencies or to save for any of your long-term goals requires that you have “extra” to put away each month, and that discipline is the hardest part. I hope that you find encouragement, practical steps, and sound advice about your savings plan and your investing goals in this bucket!

What are the three questions everyone is trying to answer about their finances?
  1. Will I ever have enough? Will I be able to retire, or have enough extra to pay for emergencies?

  2. How much is enough? Have I set finish lines so that you know how much is enough?

  3. If I have enough, will it continue to be enough? People are living longer now than ever before, so is my lifestyle going to be supported by what I have accumulated?

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 is the best investment there is?
  • I hesitate to give investment advice. However, I do have one investment I endorse: this investment will give you a guaranteed return of 18 to 30%, with no risk, tax-free. The investment is to pay off your credit cards!

  • The best way to start your financial planning is by paying off all of your credit cards. If you do this, you will save yourself whatever percentage the credit card company is charging you – it is like earning that amount of return on an investment.

Should I ever borrow to invest?
  • When someone presents an investment opportunity to you, it is never as a bad investment. The opportunity always looks good up front. However, no investment is guaranteed, or without risk – even cash is a somewhat risky investment because it can lose its value due to inflation.

  • It is okay to take risks, and to make long-term investments. But never, ever borrow to make an investment.

What can you tell me about IRAs, 401(k)s and 403(b)s?
  • In our current economy, the individual, even if a corporation offers one, funds their own retirement plan.

  • You should maximize contributions to your retirement plan. You will pay no taxes on the contribution now, the income you earn is tax deferred, and you get to use the magic of compounding pre-tax until you retire.

  • An IRA, 401(k) and 403(b) are not investments; rather, they are vehicles through which you can make a choice of investments. You are responsible for choosing your investments and deciding where you are going to invest.

  • You should manage these investments conservatively, with a long-term perspective.

How do I set a budget or spending plan?

To control spending with budget, begin by calling it a spending plan, not a budget. A plan is a road map that sets guidelines, not a law that is strict.

There are three important principles to remember as you develop your plan:

  1. Time: It may take as long as two years to get a good spending plan.

    1. Start with keeping track of where you are spending your money.

    2. When you know where your money is being spent, decide how you can control your expenses.

  2. Flexibility: This plan is not the law. It will change over time because of changing circumstances.

  3. Unity: Work with your spouse, so that you both have ownership of the spending plan.

Proverbs 16:9 (NASB)
“The mind of a man plans his way, but the Lord directs his steps.”
Christian PF describes how to create your budget, including a link to ten budgeting worksheets.

Click Here to View the Full MasterYourMoney.com Blog


Save & Invest

If you want to get to the bottom half of the bucket diagram, you have to spend a good bit of time here, first. “Spend less than you earn and do it for a long time” has consistently been my advice to people who ask me how to best manage their finances. To save money for emergencies or to save for any of your long-term goals requires that you have “extra” to put away each month, and that discipline is the hardest part. I hope that you find encouragement, practical steps, and sound advice about your savings plan and your investing goals in this bucket!

 

SoundMindInvesting.com has a newsletter about investing from a Biblical perspective.

Yahoo discusses how to get out of debt and save at the same time.

Christian PF has ingredients for a good financial plan.

SoundMindInvesting.com archives general investing articles.



Save & Invest

If you want to get to the bottom half of the bucket diagram, you have to spend a good bit of time here, first. “Spend less than you earn and do it for a long time” has consistently been my advice to people who ask me how to best manage their finances. To save money for emergencies or to save for any of your long-term goals requires that you have “extra” to put away each month, and that discipline is the hardest part. I hope that you find encouragement, practical steps, and sound advice about your savings plan and your investing goals in this bucket!

Genesis 41:34-36
Let Pharaoh take action to appoint overseers in charge of the land, and let him exact a fifth of the produce of the land of Egypt in the seven years of abundance. Then let them gather all the food of these good years that are coming, and store up the grain for food in the cities under Pharaoh’s authority, and let them guard it. And let the food become as a reserve for the land for the seven years of famine which will occur in the land of Egypt, so that the land may not perish during the famine. (NASB)

Psalm 1:1-3
How blessed is the man who does not walk in the counsel of the wicked, nor stand in the path of sinners, nor sit in the seat of scoffers! But his delight is in the law of the Lord, and in His law he meditates days and night. And he will be like a tree firmly planted by streams of water, which yields its fruit in its season, and its leaf does not wither; and in whatever he does, he prospers. (NASB)

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

Proverbs 20:18
Make plans by seeking advice; if you wage war, obtain guidance. (NIV)

Proverbs 24:27

Finish your outdoor work and get your fields ready; after that build your house. (NIV)

Ecclesiastes 11:12
Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth. (NASB)

Luke 14:28

“For which of you, when he wants to build a tower, does not first sit down and calculate the cost, to see if he has enough to complete it?” (NASB)

   


 

 
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