On Wednesday, I had the pleasure of interviewing Chuck Bentley, the CEO of Crown Financial Ministries, about his upcoming book The Root of Riches: What If Everything You Think about Money Is Wrong?. The book will be released in the next week or so, but if you’d like to get a 20% discount you can go to http://www.crown.org/rootofriches and sign up to pre-order the book and get a free sample chapter.

       I had the chance to read the book before the interview and I highly recommend it to all of you. Chuck does a good job of getting to the heart of our issues with money by highlighting how being rooted in Christ is the only way to receive true riches. The interview below will give you a good overview of the central ideas in the book and help you determine if it’s something you’d want to read.

       I’ve included the audio here which you can listen to on the website or download for later. I’ve also transcribed the interview for those of you who prefer to read. I’d be interested in your feedback on how well you liked this because it’s the first time I’ve tried doing an interview/podcast. (I was quite pleased with how my intro and outro music turned out!) Feel free to leave your thoughts in the comments at the bottom of the page, and if you have any questions I’ll do my best to answer them.

Download audio file (Root-of-Riches-Interview-with-Chuck-Bentley.mp3)
Download the audio by right-clicking here and choosing “Save as…”.
Credits: intro and outro music for the audio is from “Bucolique Utopique” by David on Jamendo


Note: I was not paid anything to post this interview. I only agreed to it after reading the book because I believed Chuck’s message in The Root of Riches is excellent and needs to become more prominent in Christian personal finance.

[0:00] Introduction

[Intro Music]

Paul: Hi, everyone! This is Paul Williams from Provident Planning. Today, I’m interviewing Chuck Bentley, the CEO of Crown Financial Ministries, about his upcoming book The Root of Riches: What If Everything You Think about Money Is Wrong?, which will be released on July 11th or at least in early July. Thanks for joining me today, Chuck. It’s great to be talking with you!

Chuck: Well, it’s an honor to be with you, Paul, and thank you for your interest in The Root of Riches and for the opportunity to speak to your audience today.

[0:43] Purpose of the Book

Paul: Well, thank you. Let’s get right to the interview. Here’s my first question for you. What prompted you to write The Root of Riches? What did you see missing in the Christian finance literature that you felt this book could fill?

Chuck: Well, thank you for asking that because I think it’s very important to distinguish this work from other works in the marketplace. I find that most books written about finance, even in Christian finance, deal primarily with the how to’s, the practical application, the principles, and behavioral changes. What I thought was missing was a comprehensive overview of what the Bible says about money and finances from the standpoint of getting rich. It seems to be sort of the silent target for many people.

       And one of the areas of frustration for me was I bought into the world’s definition of getting rich. And what the study of Scripture changed in my life was not so much going from financial failure or hardship to financial success but it changed my heart. And I wanted to write about that transformation and to give a more comprehensive look at what the Bible really does say about getting rich.

Paul: Well, I would definitely agree with you. I think, like the book’s title The Root of Riches, getting to the root of our beliefs about money and how that affects our whole life – not just those financial principles that we apply, but just how we think about money and how we view it and our relationship to it – is really important especially when it comes to getting God’s view and following Christ.

Chuck: Yes, absolutely, Paul.

Paul: And I really appreciated that perspective in your book.

[2:33] Non-Negotiable No. 1

Paul: Alright, in The Root of Riches, you cover three non-negotiables that form the broad structure of the book. And I’d like to give the listeners an overview of what they can expect from the book by reviewing each of these non-negotiables. So Non-Negotiable No. 1 is “I accept that both the cause and the solution to my money problems lie within my own heart.” Tell us more about this non-negotiable. What do you mean by it? What does it encompass? Why is it important?

Chuck: Paul, I realized that the preponderance of the teaching in the Scripture about money deals with our heart. The word “love” is associated with verse after verse after verse when it comes to money. And it seems to me that we typically leave those out, we skip over them, we avoid them.

       And I’ll give you an example. Probably the most famous verse is 1 Timothy 6:10. And I talk about it a lot because that’s the verse that the Lord used to really take me back to review the meaning of it because I had assumed I understood it. I had known it for years and years and years, and I sort of skipped over it because it became too familiar.

       But it says that “the love of money is the root of all kinds of evil”. And I went back and looked at the verse and took a hard look at it, and the word that I had skipped was the word “root”. Why did Paul describe this problem as a root problem? And I began to study the characteristics of roots and just realized that primarily they’re pervasive, they give structure to the tree because that’s the foundation of the tree, and they’re also responsible for the fruit of that tree.

       And as I got into it I realized that if our roots are flawed, which they are when we’re born into this world, then we love the wrong things. And when our roots are transformed we love the right things. And I wanted to point out that when we love the correct things then we become rich on God’s terms. So the insight, the big ah-ha for me, was that getting rich according to God’s definition was not about owning things but it was about loving the right things.

       Solomon said it this way “whoever loves money never has enough money, whoever loves wealth is never satisfied with their wealth”. He identified this connection of our heart to our very practical circumstances. I found it amazing that we tend to skip over that. It says directly your financial problems are related to what you love.

       So if we will admit that, if we will say, “I’m struggling with a financial issue because of something that’s in my heart.” Then if my heart is changed then the solutions can also flow out of my heart. And that’s a non-negotiable truth in my opinion because if we don’t start there then we just get into the old patterns of just trying to change behavior and not deal with the real root.

Paul: Right, so when you say that this non-negotiable is stated “I accept that both the cause and the solution to my money problems lie within my own heart.” the cause is loving those wrong things and the solution is that transformation to have the heart of Christ and begin loving the right things.

Chuck: The Bible says that in the end times there will be terrible days, the people will be lovers of self, lovers of pleasure, and lovers of money. Paul identified (that’s 2 Timothy 3) the problem with our roots is that we’re in love with ourself, and pleasures, and money. They’re all interlinked.

       And when our heart is changed where we love God with all of our heart and soul and we love people and we love giving and we’re cheerful and excited about giving and serving others, then we experience the liberty that leads us to the correct beliefs and behaviors about money.

       And back to the first question, Paul, the reason I wrote this is because I didn’t see it emphasized in most teaching. The transformation of the heart is such a deep issue and a mysterious issue that I see why it’s easy to skip over it. But the Lord didn’t skip over it! And the reason I wanted to start there is to try to emphasize don’t move past the issue of your heart.

       The Lord weighs the motive of the heart. I think we can have good financial behaviors and still miss the true riches that the Lord promised. Jeremiah 17 talks about those who trust in themselves are blind to prosperity. And it’s because their hearts have not been changed to what true prosperity really means. So that’s the reason that’s the starting point, Paul.

Paul: So we can clarify. When you say the solution to the money problems you don’t mean that once we get our heart transformed we’re suddenly going to be rich and we’re not going to have to worry about our bills any more, right?

Chuck: Well, I think there’s a…no, I’m not…[laughter]…I’m agreeing with you, Paul. I don’t think that they magically go away. But I am attacking this premise that money solves financial problems. That’s the assumption that most people have and it’s where we get off base. If money solved financial problems, then the wealthy wouldn’t have any problems. Right?

Paul: Right.

Chuck: But I love what a friend told me years ago that God gives every one of us a problem that money can’t solve. And that’s because He wants us to recognize that we need Him more than we need money. And that’s a heart issue. That gets to the real issue of where you place your confidence, where your security, where your significance comes from. How do we define success? Those are issues in the heart. And when we get that straight then we’re ready to go to the next step and start to see our financial problems solved once our hearts have been changed.

Paul: Right. That’s what I like about this non-negotiable. It’s coming to that realization that the solution to your money problems isn’t necessarily money but getting to that point that Christ becomes everything to you. So even if you still have money problems after you get this right view of money and start loving the right things, they’re not going to seem like as big of a problem because you’re keeping your eternal riches in mind. You’re looking at the treasure in heaven that you have stored up. And suddenly, as Paul puts it, the afflictions that we’re experiencing now can’t even compare to our future glory. {Romans 8:18} So that’s what I like about it.

Chuck: Well, Paul, let’s flip it over and look at the other side of the coin. Suppose you’re the rich young ruler. You probably have a pretty good financial situation. I believe he was probably debt free, lived on a budget or at least had plenty of money to cover his needs, maybe had a good savings plan, a good diversified investment portfolio, and a long term plan and strategy to do whatever it was he felt led to do.

       But he had a heart problem. And his heart problem was he was struggling to let go of all of those things to follow Christ and to make Christ preeminent in his life. And the Lord knew that and challenged him on that issue of the heart. And if you apply this to the person like that you see why I say it’s a non-negotiable.

       When I was in China recently, I wasn’t talking to a population of people with debt problems because they haven’t really learned to acquire debt in their culture and they have an average personal savings rate of around 50%. So what would I take to them from the Scripture if it were simply to change their financial behaviors? What they were looking for was what does the Bible say about their attitudes, their beliefs, their affections when it comes to money and possessions. And that’s why I think it’s so important, as you agreed, that we cannot skip over this step.

Paul: Right.

[11:16] Non-Negotiable No. 2

Paul: Alright, let’s go on to Non-Negotiable No. 2 which is “I must align my beliefs with God’s Word to produce behaviors that will make me truly rich.” Tell us more about that.

Chuck: Here’s where I started to get into the real meat of the matter. As you said, after my heart has changed how do I actually start to see financial problems solved as a result of that. The Bible makes it clear that we’re to experience a transformation of our heart, a transfer of our affections to loving the wrong things to loving the right things, and then having our mind renewed that we’re changed not by our learned behaviors but we’re changed by our faith. We’re changed by what we believe.

       Colossians says we can be taken captive by hollow, deceptive philosophies that depend on the tradition of man. And what I see is many people are captive to their philosophies of this world. They’ve been taken hostage by their wrong beliefs. So if you align your belief system with God’s Word, then your behaviors change as a natural outflow to produce the good fruit that the Lord expects of us.

       If you simply tell a person, “Go behave like a good Christian. Go behave like a good Christian should with your money. Go start giving. Go start doing all of the financial practices that will improve your finances.” I think some of that works. I think you can teach behavioralism. But until you get to the belief system it’s not going to be transformative. It’s not going to be consistent with what God expects of us.

       You know we must align our beliefs with God’s Word – not the wisdom of the world. And I found in my own testimony that I share in the book that I was really aligned with what the world’s philosophy said. I knew the Scripture but I never aligned what I believed about money with the Scripture. It was a foreign concept to me. And that was getting down to the root of the issue. Do I believe God’s Word and am I willing to forgo what the world has taught me and to believe what God said?

       I’ll give you a great example of that. My behavior did not change when it came to the area of giving until my beliefs changed. And once I began to believe that what the Lord said was true – that it is more blessed to give than to receive – I actually became a cheerful giver once I believed that. I could not become a cheerful giver until I really believed that was true. I may have changed my behaviors but it wouldn’t have brought joy to my life until my beliefs were changed and aligned with God’s Word.

Paul: Right. Yeah, I’ve talked several times on my blog about that. When I discuss giving, I tend to focus more on what I call New Covenant giving. Which is, like you said, cheerful, generous, and a joyful kind of giving and often sacrificial. But that – you can’t really teach that. You can’t give somebody a standard and say, “Give this much and you’ll be meeting your obligation.” That kind of giving (New Covenant giving) requires that we have God’s love living in us.

       And then once that’s true, once that’s happening – like you said, that’s aligning your beliefs with God’s Word – then the behaviors of generous giving are going to naturally flow out of that. It’ll become a part of your life because that’s the way you think all the time. You don’t have to push yourself to do it. It’s just a natural part of your character at that point because you’re gaining the character of Christ.

Chuck: You know, you’re so right, Paul. We are controlled by our belief system. If that weren’t true, then we couldn’t be taken captive by hollow and deceptive philosophies of this world. But what we believe controls us. If I believe I should put gasoline in my car to make it operate, I’ll do that. If someone told me, “Hey, you can fill it up with water and it’ll work just as well for a lot less.” and I believe that, I would act upon it. Now in that case it would have been a lie that I believed and I would be suffering the consequences of it.

       But what the Lord wants us to do is to act out of faith. And that faith comes from when we really believe Him. And that verse about that it’s better to give than to receive is so foreign to us. It was foreign to me. I wrestled with that one. I thought, “Is that true? Is that real?” You know the Lord is saying it’s better for you if you’re a giver instead of an acquirer or accumulator. And, Paul, I just didn’t really believe that.

       And that’s why it was non-negotiable in the journey that I experienced that I came to say, “Unless I really believe it, then my behaviors will never be consistent with what God expects.” I may be operating with religious piety, but inside I’m still eaten up with greed which needed to be dealt with.

Paul: Yeah, exactly. And I think that this is probably, of the three non-negotiables, the most challenging because it can take so long to get to the point where we can see where our beliefs are not lining up with God’s Word. Our hearts are so deceptive that we just assume that what we would naturally believe is true. And I think it’s very hard to start challenging that and even to be open – have our eyes open – to where we need to challenge ourselves on that.

       And I think that’s where prayer and studying God’s Word and just having that passion for pursuing God’s ways – His Kingdom and His righteousness first – is the only way that you’re going to open your eyes to have that revelation of God saying, “Look, Paul, or look, Chuck, here is an area where you still need to be transformed. You still have a belief that is from the world and not from God.”

Chuck: You know, Paul, the way you expressed that is the way a wise man learns. I know that you’re much younger than I am and you’ve exhibited that same kind of wisdom where you, through study and prayer, come to learn where you are not aligned with God’s Word. I was not that wise. I learned the way of the fool, which was through pain. I did it my way only to discover I was wrong.

       And that’s where the subtitle came from that I woke up one day in a new world and said, “Everything I believe about money is upside down. I am absolutely conformed to the image of the world while professing faith in Christ but I really don’t believe the Bible.” And everything I believed was wrong because (A) I didn’t know the Word and (B) I wasn’t willing to apply the Word to my life.

Paul: Right. I want to be respectful of your time. We have five minutes left so I’ll move on to the next one.

[19:05] Non-Negotiable No. 3

Paul: Non-Negotiable No. 3 is “I must act upon and apply spiritual truth in order to receive true riches.” Explain that one to us in more detail.

Chuck: Well, John 13:17 says, “Now that you know these things, blessed are you if you do them.” And the Scripture is a book of faith. We experience the blessings of God when we act upon them. It’s a sequence where our hearts are transformed, our affections are transferred to loving the right things, our mind is renewed so that we know the truth.

       And then the third step is to put it into action – to step out by faith and say, “Lord, I not only believe it I’m willing to do it. If you say it’s better to give than to receive, I will become a giver. Because You’re a giver, I’ll be a giver as well and I will begin to do that. Because You say it’s wise for me to save, I will save. Because You say that it is wise to avoid debt and to get out of debt, I will do that because I want to be obedient to You out of my love for You and I will act upon it.”

       And when that happens it’s amazing how quickly everything in your life changes. Because I went from being completely opposite of what God wanted for my life to falling in love with the Lord, immersing myself in the Scripture, committing myself to put it into action and to live it out – not just to be a hearer of the Word but a doer – and everything in my life was transformed. Everything, including my finances. But the finances – that was not the original goal – the financial transformation.

       And that’s where I’m trying to shift our emphasis. The overarching idea is to shift our emphasis from looking at the Bible as a self-help book to get my finances in order to a book that is much more comprehensive to get my entire life ordered around God’s purposes. And if we can do that and our riches are determined by God’s Word and not by man’s philosophy, then I say we will become eternally rich, we’ll experience freedom from the financial pain we’re in now, and we will have this confidence that no matter what happens on Earth that we will have treasures in Heaven. So to me it’s the ultimate win-win-win if we will put these things into practice.

Paul: Right. And you give some great stories in this section of the book. You talk about Oswald Chambers, and William Borden, and Samuel – you’ll have to pronounce his last name for me I don’t know that I would…

Chuck: It’s pronounced Zwemer (zwhim-er, like swimmer but with a ‘z’). A very difficult name…

Paul: Yeah, so those are examples of men who really took God’s Word to heart and followed it at great cost to themselves. Just really good examples of what it means to apply that spiritual truth and receive true riches.

Chuck: Well, they inspired me and I do hope that they inspire readers, Paul. Thank you for referencing that. I have certain heroes in my life that I’ve never met, and I wanted to honor them and let people know those examples that have inspired me to radically conform my life to God’s Word versus the world. And I believe those are examples I want to be more like.

Paul: And just so readers know – er, listeners know – that this book isn’t all philosophical, there is a chapter in this section that goes over the practices of what you call the He Tree. We haven’t talked about the He Tree and the Me Tree much, but that’s a big theme in the book. But this is the financial practices of those that have been transformed and are applying those spiritual truths.

Chuck: Thank you for mentioning that because I do believe it’s a very important section where I give some practical tips and insights of how to apply the truth in this book in a way that will make a difference in your finances. I’ve had the opportunity to teach this a few times in different settings around the world, and I gave sort of a condensed version of what I think will make the most difference in people’s lives if they will actually apply those things.

Paul: Yeah, it is very condensed but I think – like we’ve been talking about the whole time – if you get that transformation in place, you’ll naturally start to follow those behaviors that come from the truth in Scripture.

[23:50] Main Lesson of the Book

Paul: Alright, Chuck – last question. I know I’m pushing the time here but this will be a quick one. What is the one lesson you hope readers take from The Root of Riches? What is it that you most want them to remember after finishing this book?

Chuck: That riches are determined by what we love not by what we own. If the readers will take that to heart and recognize that God’s Word shouts that from beginning to end, then I think that they will be blessed by that discovery. And if they will put that truth into action into their life, they will experience God’s riches beyond measure. I do hope and pray that’s what happens, Paul.

Paul: Alright, I like that. Riches are determined by what we love not by what we own. Right?

Chuck: Absolutely.

Paul: OK.

[24:39] Conclusion

Paul: Well, thank you, Chuck, for taking the time to talk with me today. And thank you all for listening. If you’d like to learn more about Chuck’s new book, The Root of Riches, you can find more at crown.org. The book will be released in early July, but you can sign up now to pre-order a copy and save 20%. Thanks again, Chuck, and have a great day!

Chuck: Well, Paul, thank you for what you’re doing at Provident Planning and for your interest in this book. I pray God’s blessings on you and your work.

Paul: Thank you.

[Outro Music]

[25:20] End

       My friend Rob Kuban at Dollars and Doctrine has recently released a four lesson Sunday school series called Redefining Riches. I’ve had the chance to review it and I can tell you it’s an excellent introductory course to the core principles of a Biblical approach to finances. If you’re looking for something related to finances to do in your Sunday school class or small group, I highly recommend this as a starting place. (I’m not getting paid to say this, and I don’t earn anything if you buy it. I just believe Rob’s put together a great resource with a heart for helping people understand Biblical truths about God’s desires for our finances.) It’s only $3.99 for all four lessons, which includes PowerPoint slides, leader’s guides, and handouts. You can print as many copies as you need for your group, so it’s a great deal.

       Today’s post is from the content in the lesson on contentment, which I’ve reprinted with Rob’s permission. I’m not devaluing Rob’s work because the value of buying Redefining Riches is in having the lessons already prepared for you along with the PowerPoint slides. You’ll get a good idea of the content by reading the excerpts I’ll share, but you’re still missing out on some additional content Rob includes as well as the leader’s guides and handouts.

Contentment: A Steadfastness of Hope

       Contentment is the currency of God’s economy and God’s people.

       “Make sure that your character is 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.’” (Hebrews 13:5)

       The world champions consumption, but God’s word makes much of contentment. In order to live contently, we have to begin setting our mind on things above. (Colossians 3:2) When we allow the scripture to guide our thoughts and habits, we free ourselves from the insatiable appetites of the world and allow instead the fullness of God to be our portion. A content Christian finds his hope in God not in success or accumulation. (See Also: 1 Timothy 6:6-8)


       Contentment is a lifestyle based on biblical convictions.

       “And He has said to me, “My grace is sufficient for you, for power is perfected in weakness”…Therefore I am well content with weaknesses, with insults, with distresses, with persecutions, with difficulties, for Christ’s sake; for when I am weak, then I am strong.” (2 Corinthians 12:9-10)

       The Bible calls us to allow our convictions, not our circumstances, to govern our sense of contentment. True, biblical contentment is a conviction that Christ’s power, purpose and provision is sufficient for every circumstance. We are to learn how to walk through all kinds of adversity believing in and experiencing Christ’s sufficiency. We have to choose to rest on God’s good promises despite what may be going on in our lives.


       Contentment is a commitment to choose Christ over consumption.

       “Not that I speak from want, for I have learned to be content in whatever circumstances I am. I know how to get along with humble means, and I also know how to live in prosperity; in any and every circumstance I have learned the secret of being filled and going hungry, both of having abundance and suffering need. I can do all things through Him who strengthens me.” (Philippians 4:11-13)

       A Christian is called to learn to be content. This is a lifelong process, but well worth the time as we learn to lean on Christ for our strength. We are to choose to walk by faith not by sight, choose self-control over self-indulgence, choose gratitude over grumbling and ultimately, choose to set our hope on Christ. (See Also: Luke 3:14, Mark 8:35-37)

       My friend Rob Kuban at Dollars and Doctrine has recently released a four lesson Sunday school series called Redefining Riches. I’ve had the chance to review it and I can tell you it’s an excellent introductory course to the core principles of a Biblical approach to finances. If you’re looking for something related to finances to do in your Sunday school class or small group, I highly recommend this as a starting place. (I’m not getting paid to say this, and I don’t earn anything if you buy it. I just believe Rob’s put together a great resource with a heart for helping people understand Biblical truths about God’s desires for our finances.) It’s only $3.99 for all four lessons, which includes PowerPoint slides, leader’s guides, and handouts. You can print as many copies as you need for your group, so it’s a great deal.

       Today’s post is from the content in the lesson on generosity, which I’ve reprinted with Rob’s permission. I’m not devaluing Rob’s work because the value of buying Redefining Riches is in having the lessons already prepared for you along with the PowerPoint slides. You’ll get a good idea of the content by reading the excerpts I’ll share, but you’re still missing out on some additional content Rob includes as well as the leader’s guides and handouts.

Generosity: A Labor of Love

       Generosity is the result of a transformed heart.

       “Each one must do just as he has purposed in his heart, not grudgingly or under compulsion, for God loves a cheerful giver.” (2 Corinthians 9:7)

       God loves a cheerful giver and if we let Him, He will cultivate a joy in generosity within our own hearts. This is how we learn to give with pure motives and pure hearts. We are wasting our money and embittering our hearts when we give out of guilt or obligation. As we allow Christ to transform our hearts, we joyfully give first, proportionally, secretly and sacrificially. (See Also: Proverbs 3:9-10, 1 Chronicles 29:5-9, Acts 11:29)


       Generosity is a lifestyle of giving and loving fully.

       “Remember the words of the Lord Jesus, that He Himself said, ‘It is more blessed to give than to receive.’” (Acts 20:35)

       The call to generosity is hardly limited to the offering plate. We are called to be generous people. We should gladly choose to be generous with our money, time, energy, talents, gifts, and on, and on. Generosity, when understood Biblically, is a way of life. (See Also: Galatians 1:3-4, John 15:13)


       Generosity is a spring of life to those who give Biblically.

       “Instruct those who are rich in this present world…to do good, to be rich in good works, to be generous and ready to share…so that they may take hold of that which is life indeed.” (1 Timothy 6:17-19)

       The Bible teaches that it is better to give than to receive. We are told that generosity is one component of taking hold of “that which is life indeed”. When we give, we live as Christ calls and love others well. When we withhold, we follow the world’s idolization of consumption and love ourselves well. (See Also: Luke 6:38, Philippians 4:17, Proverbs 11:25, Proverbs 22:9, Proverbs 28:27)

       My friend Rob Kuban at Dollars and Doctrine has recently released a four lesson Sunday school series called Redefining Riches. I’ve had the chance to review it and I can tell you it’s an excellent introductory course to the core principles of a Biblical approach to finances. If you’re looking for something related to finances to do in your Sunday school class or small group, I highly recommend this as a starting place. (I’m not getting paid to say this, and I don’t earn anything if you buy it. I just believe Rob’s put together a great resource with a heart for helping people understand Biblical truths about God’s desires for our finances.) It’s only $3.99 for all four lessons, which includes PowerPoint slides, leader’s guides, and handouts. You can print as many copies as you need for your group, so it’s a great deal.

       Today’s post is from the content in the lesson on stewardship, which I’ve reprinted with Rob’s permission. I’m not devaluing Rob’s work because the value of buying Redefining Riches is in having the lessons already prepared for you along with the PowerPoint slides. You’ll get a good idea of the content by reading the excerpts I’ll share, but you’re still missing out on some additional content Rob includes as well as the leader’s guides and handouts.

Stewardship: A Work of Faith

       Stewardship is respectful of God as Creator and King.

“For all things come from You, and from Your hand we have given You…O LORD our God, all this abundance that we have provided to build You a house for Your holy name, it is from Your hand, and all is Yours.” (1 Chronicles 29:14,16)

       When we properly understand God’s ownership of all of His creation, we will view ourselves as managers of the resources with which God has entrusted us. Like the parable of the talents, we will seek to utilize our resources according to our master’s desire. The way we handle our money matters. The volume of scripture regarding money and possessions is profound. When we consider how often the Law, the prophets, Christ and the apostles spoke of such things, we can no longer view the way we handle our money as insignificant. (See Also: Psalm 24:1, Psalm 89:11, Deuteronomy 10:14, Romans 11:36, John 3:27, Matthew 25:14-30)


       Stewardship is revealing of our heart’s true treasure.

       “The good man brings out of his good treasure what is good; and the evil man brings out of his evil treasure what is evil.” (Matthew 12:35)

       ”Where your treasure is, there your heart will be also.” (Matthew 6:21)

       The way we handle and acquire money reveals a lot about our character and priorities. Are we generous, honest, selfish, content, humble or greedy? How we obtain our money and where it ends up reveals a lot about what we value. Christ constantly spoke of the impact our internal conditions have on our external acts. The use of money is a perfect example of this principle. (See Also: Proverbs 15:6, Luke 16:10)


       Stewardship is rewarding when done Biblically and wisely.

       “Do not store up for yourselves treasures on earth…But store up for yourselves treasures in heaven.” (Matthew 6:19-20)

       We will give an account for how we have managed and invested such a powerful asset. Are we investing in the kingdom or ourselves? The Bible clearly relates that heavenly reward awaits those who choose to invest in the kingdom of God. We must recognize that money has huge amounts of “potential energy” and we will be accountable for how we utilized and where we invested what God has entrusted to us. (See Also: Luke 12:33-34, Luke 14:12-14, Matthew 19:21, Hebrews 11:6)

       A while back, I received a free copy of Upside Living in a Downside Economy by Mike Slaughter from the publisher for my review. Mike is the lead pastor at Ginghamsburg United Methodist Church in Tipp City, Ohio. In this book, Mike offers insight into God’s perspective on our money concerns using passages from the book of James and other Bible verses. At 96 pages and 5″ x 7″, it’s a short little book. However, it contains some powerful ideas about how Christians should approach their personal finances. I’ve broken down this review into the four chapters you’ll find in the book:

Seeking God’s Perspective

       In the first chapter, Mike focuses on getting the right perspective on our finances. First, he looks at God’s character as a loving father. Next, he mentions a couple of God’s perspectives on money and emphasizes that we must seek to put God first and serve Him with our money. This is key to following God’s plan for our finances and fully understanding His desire for our lives. Then, Mike talks about checking our motives. We have to be careful about pursuing material things and loving money. Finally, he finishes the chapter by asking us to look at the source of our motives and who we are listening to. He warns of listening to the media and recommends that we seek God’s Word and wise advice from Christians instead.

Rebalancing Life Investments

       Mike then looks at seven “right actions” we should take as a response to God’s priorities for our finances and lives:

1. Do the first “right” thing: planned giving to God.
2. Seek wise counsel through an accountability group or counselor.
3. Write or rework a budget.
4. Perform plastic surgery and reduce your debt.
5. Set future goals and practice delayed gratification.
6. Nurture an attitude of gratitude.
7. Pray, pray, pray.

       These seven actions cover some important ideas God teaches us through the Bible. They’re not comprehensive, and Mike’s discussion of these actions is mostly motivational. It is not a step-by-step guide, and Mike never claims that it is.

Do It Today

       Mike then discusses the importance of planning in accordance with God’s Will. Planning for the future does not mean we are not relying on God. Throughout the Bible, God encourages us to prudently plan and prepare for the future. However, when we are planning for the future, we should be careful to make sure we approach it prayerfully and seek God’s Kingdom first.

       Mike covers what he calls the “fundamental life principles of sowing and reaping”:

1. You reap what you sow.
2. You determine the size of the harvest at the time of planting.
3. You will reap more than you sow.
4. The harvest comes in a later season than the sowing.
5. You are responsible for the work of sowing; God is responsible for the harvest.

       Anyone familiar with gardening or farming can tell you these are accurate statements regarding sowing and reaping (with the exception of disasters that wipe out the entire crop). When you apply these principles to your finances, God can bless you just as He has promised. Your actions show your faith in His promises.

       Finally, Mike talks about seven steps in creating a financial plan:

1. Do a financial analysis.
2. Begin an aggressive program of debt reduction.
3. Create an emergency fund.
4. Be sure you have adequate life insurance.
5. Write a will.
6. Look at your giving.
7. Create a budget.

       Again, this is not a full list of the things you should do when creating your financial plan, but they are a good start. If you can do these seven things, you’ll be ahead of most people. This section is more about leading you down the right path rather than directing you along the way.

Investing in God’s Future Harvest

       In the final chapter, Mike discusses three ways we can invest in God’s future harvest. First, he looks at living and giving thankfully. We must realize that all we have is from God, and we should be thankful for the blessings he gives us. We need to appreciate what we have, even during hard times. Second, he talks about living and giving faithfully. God calls us to live by faith regardless of our circumstances. We must always lean on God and trust in His teaching. In this way, we can live free from fear.

       Finally, he covers living and giving sacrificially. As Christians, we have to remember we are the body of Christ. We are how He blesses and cares for people. Our purpose is to complete the work He has prepared for us—not to achieve the “American Dream” or other materialistic goals. Mike challenges us to give everything over to God—our money, our time, our entire being. Though it seems foolish or impossible from the world’s viewpoint, it is the true calling God has for those who follow Christ and it is possible through faith in Him.

Rebalancing Your Life

       At the end of the book, there’s a short section where you can reflect on the ideas in the book and write down goals for yourself. It’s only four small pages, but it’s a start to looking at how you should use the lessons in this book in your own life.

My Recommendation

       Upside Living in a Downside Economy is not a book that will guide you through the steps needed to fully align your finances with God’s Will. But it will give you a good start at understanding God’s perspective on our finances and our lives.

       My only concerns with Mike’s teaching in the book have to do with his emphasis on tithing and the incongruity of his views on giving to the poor and his own personal life. Any emphasis on tithing as God’s desire for Christians fails to acknowledge that Christians are called to give much more generously than just 10% of their income. There are also other problems with teaching the tithe that I will address when I discuss giving in my personal finance Bible study.

       I also found it hard to give credence to Mike when he discusses how Christians must live and give sacrificially in the same book where he explains that one of his personal goals was to have a mountain home by 2004. It’s difficult for me to think that having a second home of any sort is really sacrificial when millions of people around the world don’t even have suitable shelter. There were a couple other passages in the book that gave me this same feeling. I don’t mean to attack Mike and I’m not saying I’m better than him. There are areas of my life where I am not congruent in my actions and God’s teaching, but God is changing me as I grow in Jesus Christ. I agree with his ideas about living and giving sacrificially and most of his ideas in the book, but I would have liked to see him living out examples of this more clearly as a teacher of God’s Word.

       At a cost of $8.00, I’m not sure I can recommend that you buy the book. It is short and doesn’t contain much on the side of practical application. However, if you’re just starting to seek God’s perspective on money and want to start with an easy read, Upside Living in a Downside Economy may be right for you. Borrow it from the library, your church, or a friend if you can, otherwise feel free to click the picture of the book above and purchase it on Amazon.

 
       Welcome to the Carnival of Personal Finance #271 – The Secret to a Successful Budget eBook Edition! My friend Craig Ford at Money Help for Christians is launching a new eBook today. It’s designed to help you discover the secrets to successful budgeting.

       I think it’s a great resource for anyone who’s ever struggled with budgeting, so I’ve included some quotes from his eBook throughout this carnival. You can get the book for 30% off if you buy before midnight (EDT) August 31st, 2010. Be sure to read through to the end of this carnival because I’ll be giving away two FREE copies to two lucky winners!

Editor’s Choice

       Here are my top picks from the submissions this week:

• Mike Piper from Oblivious Investor presents Dealing with Investment Confusion, and says, “What’s the best approach to dealing with the confusion that comes from being a new investor?” – [Mike shares some good advice for people who are confused about investing. It won't immediately cure your confusion, but applying this strategy over and over will help you make informed decisions you can stick to.]
• Briana Ford from Go Banking Rates presents Why Americans Can’t Afford to Die [Infographic], and says, “If you never thought about this problem before, take a look at how expensive funerals really are. You may discover you, like many Americans, simply can’t afford to die.” – [What can I say? I'm a sucker for infographics.]
• Len from Len Penzo dot Com presents A Simple Trick to Get Your Credit Card Interest Charges Waived. – [I wish more people realized the power of Len's simple trick!]
• Lauren from Richly Reasonable presents 4 Bad Deals, and says, “The term “Bad Deal” is relative. Not only is Necessity the mother of Invention, she is also the mother of many a Bad Deal. Necessity has a TON of children.” – [Funny, smart, and witty - and likely to open a few eyes at least!]
• Jacob A. Irwin from My Personal Finance Journey presents Adjusting My Monthly Budget to Account for Home Ownership, and says, “A look at the steps I have recently taken to adjust my personal budget to account for the various elements of home ownership.” – [At our current rent rate owning a home just doesn't make sense. Just look at all the costs involved!]

       Congratulations to the editor’s choice picks! Here are the rest of the articles from this week’s submissions.

Money Management

• MD from Studenomics presents Quick College Students Guide To Personal Finance.
• Jason from One Money Design presents How Do You Live Well on Less Pay?, and says, “There are plenty of people that don’t make a lot of money and have trouble covering basic expenses each month. There are 5 essential tips to follow to live well on less pay.”
• Revanche from A Gai Shan Life presents Shopping for the single life .
• ispf from Grad Money Matters presents The American Dream of Home Ownership: 10 Things You Can Do as a Student.
• Jim from Wanderlust Journey presents Royal Caribbean Cruise Lines Shareholder Benefits.
• Jason from Live Real, Now presents Check Your Bills, and says, “Can you automate your finances too far?”
• Elle from Couple Money presents Financial Tips for College Success, and says, “Many college students are surprised to see how easy it is to build a financial foundation for themselves. Learn how to set up bank accounts, pay your bills, and start a graduation fund.”
• DE(a)BTh from Murder Your Debt presents Your Wasted Life, and says, “You thought financing a house and a fast car meant freedom. That an expensive education would lead you to a rewarding career where you could earn lots of money. You were wrong, weren’t you? You hate your career but you’re stuck. You’re stuck because you swallowed the lies you were sold. The lies that material possessions bring success. The lies that more money means more happiness. And now what? You’ve got it all; the cars, the house with the huge yard, the sexy outfits and shiny shoes. But you’re STILL not happy!”
• vh from Funny about Money presents Social Security’s Bizarre Rules, and says, “Social Security’s restrictive rules make it impossible to get out of poverty when unemployment forces one into early retirement and stock-market losses militate against retirement fund drawdowns.”
• J. Money from Budgets Are Sexy presents What would you do with an extra $1,000?, and says, “Montel Williams wants to know ”
• Bob from Christian Finances presents How to spend unexpected income: 3 questions to ask, and says, “It can be tough to know what to do when you receive a large sum of cash – this article will give you some questions to help you figure out what to do with it…”
• Mr. GoTo from Go To Retirement presents How Much Long Term Care Insurance Should You Have?, and says, “Insuring against a long term care event is part of personal risk management. Estimating the amount of long term care coverage to obtain requires careful consideration of several factors.”

If you are working 40 or more hours a week to earn your money, don’t you think it is worth an hour or two to set up a budget?

Isn’t it worth spending about an hour every week to manage the money you work so hard to earn? It is always better to manage what you have than to work yourself crazy trying to get more money.

- from page 21 of The Secret to a Successful Budget by Craig Ford

Finance

• eemusings from Musings of an Abstract Aucklander presents Does $60k constitute a high income?, and says, “Just what is a “high” household income? The stats are surprising.”
• Miss T from Prairie Eco-Thrifter presents 10 Important Steps You can Take to Better Plan For Retirement.
• RJ Weiss from Gen Y Wealth presents The Mike Tyson Guide to Financial Planning, and says, “You might be wondering, what in the world can Mike Tyson teach me about financial planning. I promise you, will be surprised.”

Investing

• Dividend Growth Investor from Dividend Growth Investor presents 33 Dividend Champions to Consider, and says, “Dividend investor David Fish has created a list of dividend stocks which have raised distributions for 25 consecutive years and has named it the dividend champions list. His list includes 100 companies, which is more than twice the size of the Dividend Aristocrats. I ran a screen on the list in order to identify stocks for further research.”
• Mike from The Financial Blogger presents Use the Loonie’s Strength to Invest in the Eagle Market, and says, “Canadian dollar is strong compared to the US dollar at this time. Use this as an opportunity to invest in US stocks.”
• Div Guy from The Dividend Guy Blog presents Dividend Investing with Less Than $1,000 Part 3: How to Pick Your ETFs and/or Dividend Funds, and says, “Starting to invest is quite motivating but as a young investor, you must put greed and hype aside and start by looking for sound investments.”
• Squirrelers presents Small Stocks = High Return and High Volatility, and says, “Small stocks, particularly those in the lowest deciles, have performed very well over the long-term. They can be an important part of your asset allocation, provided you can stomach the associated risks.”
• D4L from Dividends Value presents My Top 6 Performing Dividend Stocks Just Might Surprise You, and says, “As I have stated many times, my goal is to create an ever growing income stream from dividend stocks. Secondarily, it is my desire to beat the S&P 500 over time. With that said, I rarely look at the capital performance of individual stocks. However, I recently sorted my portfolio by Total Gain % (total gain/basis) and was mildly surprised at the top performers.”
• ElizabethG (Modern Gal) from Modern Gal presents Investing for Inflation in 2010.
• DSO from High Dividend Stocks presents Big GE and it’s big dividend, and says, “One of America’s oldest and most prestigious companies has become an accidental high yielder.”

Budgeting in and of itself is useless.

Budgeting is part of a larger financial plan.

- from page 9 of The Secret to a Successful Budget by Craig Ford

Budgeting

• Money Beagle from Money Beagle presents Why The Kindle Price Wars Mean Absolutely Nothing To Me.
• Craig Ford from Money Help For Christians presents You Might Need a Budget if …, and says, “31 signs that it is time to start a budget.”
• Michael from The Dough Roller presents 7 Tips To Help Manage Your Finances When Out of Work, and says, “Being out of work can be pretty awful but if you manage your finances properly, the blow can be lessened.”
• Betty from Control Your Cash presents Health Care. Cheaper than you Imagined., and says, “While a visit to the vet will probably never be enjoyable for the patient, a pet wellness plan can make that visit a lot more palatable for the patient’s chauffeur.”

Saving

• Jim from Bargaineering presents How to Deal with Losing Your Wallet While Traveling.
• Amanda from My Dollar Plan presents 7 Ways to Further Your Education Without Paying Full Price, and says, “This is a GREAT article for anyone looking to further their education at a low cost.”
• Laura @ Move To Portugal from Move To Portugal presents Could you increase the amount you’re saving?
• Adam from Magical Penny presents Financial Lessons from Toy Story 3, and says, “Amidst the humour and tension there are some powerful life lessons in Toy Story 3 so here’s a few I picked up and how they relate to growing and saving your pennies!”

Frugality

• ElizabethG from Modern Gal presents Are You Tired of the Smug Frugals?.
• Hedy from Penny for my Thoughts presents How to: Save money on College Textbooks.
• Matt from Debt Vigilante presents Extravagant Frugality.

You need to focus your finances on accomplishing one major task at a time.

If you don’t, the danger is that every dollar will be diluted to a point that it makes little impact helping you reach your goals.

- from page 9 of The Secret to a Successful Budget by Craig Ford

Debt

• Kris Bickell from Debt Tips presents Who should you turn to for honest advice about debt settlement?
• Ramsay from Moneyedup presents Debt Goal, and says, “Paying off a large sum of debt can be overwhelming. Setting debt goals can make the process much easier.”
• mbhunter from Mighty Bargain Hunter presents 15-year fixed mortgage rates are below 4%, and says, “You may have seen ads for cheap mortgages in the past, but I’ll explain why these rates are different.”

Credit

• Tim Chen from NerdWallet Credit Card Watch presents Amex is Hiking Fees on the Starwood Preferred Guest Nearly 50%, and it’s Still a Good Deal , and says, “American Express has started sending out letters to its cardholders, informing them that it plans to raise the annual fee from $45 to $65 starting October 14th, and it’s modifying the rewards program a bit. If you’re a cardholder, you may be considering canceling the card in anger at the prospect of a higher fee, but we don’t think you should.”
• Ramsay from Moneyedup presents Credit Report Vs Credit Score, and says, “Credit scores and credit reports are two very different things. Know the difference before you sign up for a free credit report.”
• Cecil Dellison from Clear Choice Credit Card Blog presents NFL Credit Card Owners Lose Points in Bank Change.
• Michael from The Dough Roller presents Get Your Free Credit Score with Identity Guard, and says, “The best source to view your three credit scores for free.”
• Jesse from The Penny Saved presents Fixing bad credit, building new credit, and how to be the tail that wags the dog.
• Adam from Rabbit Funds presents 3 Reasons Dave Ramsey is wrong about Credit Cards, and says, “I have been asked if and when using credit cards makes sense. As a general rule, I tell people to never use a credit card. However, if you can exhibit self-control, then there are three reasons I would use a credit card.”
• Clint from Accumulating Money presents Is Visa Signature Better Than Platinum?
• Neal Frankle from Wealth Pilgrim presents 5 Ways to Improve Your Credit Score Fast, and says, “You probably don’t need me to convince you that you should always be looking for ways to improve your credit score. A good credit score will help you get lower rates when you need to borrow money and much more. It can help you get a good job too.”
• Craig from Free From Broke presents What IS A Secured Credit Card?, and says, “Sometimes a person is unable to get credit either because they haven’t had credit or they had credit problems in the past. Enter the secured credit card! Here is what it is and why it can be useful.”
• Big Cajun Man from Canadian Personal Finance presents Large Wallet Syndrome, and says, “Just how many credit cards do I need to carry around these days?”
• Junior Boomer from Consumer Boomer presents What is Peer to Peer Lending and is it Risky?, and says, “Peer to Peer lending (sometimes called social lending or person-to-person lending) allows people to borrow money from other people, or lend money to others, without traditional bank participation.”
• David from Credit Card Offers IQ presents 5 Rules for Co-Signing, and says, “Don’t take co-signing lightly!”
• Julie Sherrier from Taking Charge presents What’s driving more women to seek debt help?.
• John from Passive Family Income presents 18 Tips on Using a Credit Card Rewards Program, and says, “If you are going to open up a credit card, my suggestion is to find one that offers a cash back or rebate program. While most financial experts tell you to stay clear of these type of accounts, I believe a credit card rewards program can be used to your advantage.”
• The Smarter Wallet from The Smarter Wallet presents Cash Back or Airline Credit Cards? What’s Best For Travel, and says, “Comparing cash back cards to airline cards. When should you choose one or the other?”
• Mr. Credit Card from Ask Mr. Credit Card presents New Card Act Provisions.
• Cecil Dellison from Clear Choice Credit Card Blog presents Bowlers Benefit from the New USBC Platinum Visa Credit Card.

The goal of the budget is to help you spend less than you earn.

Therefore, this becomes the single criteria for an effective budget – does it help you spend less than you earn?

- from page 12 of The Secret to a Successful Budget by Craig Ford

Reviews

• PT from PT Money presents Free Prepaid Credit Cards, and says, “A thorough, original review of the best free prepaid credit cards, including those that are free of activation and monthly fees. These cards are great for those who need to avoid debt, or those that can’t get a traditional bank account.”
• Silicon Valley Blogger from The Digerati Life presents Citi Dividend Platinum Select MasterCard Review, and says, “Here’s a review of a credit card I actually like.”

Real Estate

• FMF from Free Money Finance presents How to Hire a Home Inspector, and says, “When you buy a home, you need to be sure you hire a good home inspector to identify any potential problems. This post gives tips on how to do this.”
• Jeff Rose from Good Financial Cents presents Should You Upgrade to a Larger Home”, and says, ”
  In many markets, home owners are looking at homes in the next price range up as good buys, since foreclosures and a slow market are resulting in good deals. But, as tempting as it is to upgrade to a larger home, is it really a good idea? Here are some things to consider before upgrading to a larger home.”
• Rob from Two Wise Acres presents 3 Things to Avoid When Buying a Home, and says, “When buying a home, it’s critical that you avoid these three credit mistakes.”
• ctreit from Money Obedience presents Do renters really save money in the end?.

Taxes

• pkamp3 from Don’t Quit Your Day Job… presents Tax Incidence, and says, “Who really pays for a tax when it is enacted? If the government enacts a new tax on washing machines, is the entire tax on Maytag? The consumer? Cameron Daniels breaks down the details.”

A budget lets your spouse see your values and priorities in a tangible way.

A budget forces you to communicate not just about your life goals, but also about your daily financial preferences.

- from page 16 of The Secret to a Successful Budget by Craig Ford

Career

• Kristina from Dinks Finance presents A DINK in The Office, and says, “As a married or unmarried employee with no children, are you treated differently than your colleagues with kids?”
• Nicole from Nicole and Maggie: Grumpy Rumblings presents Why did you go to graduate school?, and says, “Nicole and Maggie discuss reasons for graduate school and how sometimes we’re directed into a career for the right reasons and sometimes we fall into it for the wrong reasons. But it turns out OK anyway (or maybe it doesn’t, but you can always change your mind).”

Economy

• Bret from Hope to Prosper presents Trillion Dollar Public Pension Shortfall, and says, “An article in the New York Times stated that there is a $1 Trillion dollar public pension shortfall. Despite repeated denials from PERS and public employee unions, public pensions are in big trouble.”
• JLP from AllFinancialMatters.com presents Democrats, Republicans, and the Federal Debt Since 1979, and says, “Though the title may suggest it, this is not a “political” post.”

Budgeting is a process, not an event.

You won’t wake up tomorrow with an effective budget. Instead, you will start with a decent budget that later becomes a good budget. Eventually, it is a great budget.

- from page 16 of The Secret to a Successful Budget by Craig Ford

Other

• Donna Freedman from Bargaineering presents Sick happens: How to prepare for an illness or injury, and says, “Sick happens. And sometimes it happens to YOU. Get your finances, your work life and your support network in order.”
• Ken from Spruce Up Your Finances presents Why Start A Home Based Business.
• Paul Williams (that’s me!) from Provident Planning presents I Am More Than My Income, and says, “Do you value your self-worth based on your income? Do you beat yourself up because you’re not making enough, or do you gloat because you earn so much? I did that to myself, but now I’m realizing that my worth has nothing to do with money.”
• Kevin from Financially Poor presents Grow Up And Stop Acting Like A Child.
• Suba from Wealth Informatics presents Credit cards take from the poor and give to the rich, and says, “Credit card users (rich) are taking money from the the cash users (poor)? Is the reverse Robin Hood theory true?”
• Sean Smarty from Grow Money presents Why You Need Life Insurance.
• Myke from In Search of Salt presents Spending Can Be Good

The Secret to a Successful Budget eBook Giveaway!

       As promised, I’m giving away two free copies of The Secret to a Successful Budget courtesy of Craig. To enter, all you need to do is leave a comment on this post telling me how budgeting has helped you OR your biggest struggle with budgeting. I’ll use random.org to select two winners tomorrow evening (August 24, 2010) at 5:00 PM EDT so be sure to enter by then!!! I’ll update this post to announce the winners, but use a valid email address when you comment so I can reach you if you win. Good luck!

[Update: Laura has won a free copy of The Secret to a Successful Budget! Congratulations!!!]

       I borrowed The Complete Tightwad Gazette by Amy Dacyczyn from my local library a while back because I’d read so much about it on other personal finance blogs. I started reading through it, and I found so many good tips and ideas that I decided to buy a copy for myself from Amazon. This post is part of a series where I’ll share my take on some of my favorite tips from the book.

Calculating Your True Hourly Wage

       In discussing the net value of a second income, Amy brings up a useful technique that’s also discussed in Your Money or Your Life by Joe Dominguez and Vicki Robin. The idea is to calculate exactly how much money you’re making from your job after you account for all the related expenses. Divide that by the number of hours you spend working, getting ready for work, getting to work, and relaxing after work and you’ll have your real hourly wage.

       How much do you really make after you take out taxes, transportation costs, clothing, meals, the things you do to relax after a hard day at work, and all the things you pay others to do because you don’t have enough time? How many extra hours do you spend getting ready for work, driving through traffic, or watching TV to de-stress?

       This number is useful for two reasons. First, you’ll open your eyes to what you’re really bringing home from your job. Second, you can use this figure to decide if it’s worth it to pursue certain activities or to do things yourself instead of hiring someone.

What about Bob? (An Example)

       Let’s use a simple example to show how you’d do this calculation. Bob makes $18/hour working 40 hours a week at his job – making a total of $720 each week. First, we’ll take out taxes. His federal, state, and local taxes add up to about $110/week leaving him with $610/wk after taxes.

       Bob lives 10 miles from work and estimates he spends 2.5 hours driving every week and about $30/wk on gas & maintenance for his car. So now he’s down to $580/week for 42.5 hours spent.

       Bob doesn’t have to wear anything special for work, but he does have a tendency to eat out instead of bringing his lunch from home. Additionally, he usually ends up eating out for supper twice a week because he just doesn’t feel like cooking after getting home from work. His lunches and eating out cost him about $80/week. While he could eliminate those expenses now, Bob is honest with himself and admits he probably won’t do that as long as he’s still busy from work. This drops his net pay down to $500/week.

       Bob figures he must have at least an hour every evening in front of the TV just to relax after work. He could do something else if he didn’t feel so stressed out from work, so he adds 5 hours/week to his total bringing it to 47.5 hours. Additionally, Bob spends Friday and Saturday nights going out with his friends to get away from thinking about how much he hates his job. He figures this costs him about $40/week and 2.5 hours. (Now he’s at $460/week and 50 hours for those playing at home.)

       Finally, Bob pays about $20/week in services he buys because he doesn’t have enough time due to his job. These are things like home maintenance, simple car repairs and maintenance, and someone to mow his yard. So he’s down to $440/week for 50 hours of effort – or $8.80/hour. That’s less than half of what he “earns” at his job!

Your Own Situation

       Bob’s calculations aren’t going to work for you. But you can follow the same sort of process to figure out your real hourly wage. Carefully consider all the expenses and time attached to what you do to earn money but also try to be realistic. This can be an especially eye-opening exercise for two-income households with kids. If both parents work and you have to hire babysitters or pay for child care, you could easily be better off if one parent quits their job to stay home with the kids.

       Make sure the expenses you relate to your job will actually go away if you quit your job. If you’re not willing to do some of those things, that’s not going to change if you work less. This is especially true when thinking of the frugal activities you could pursue if you had more time. You have to be willing to actually do them or you’re not saving any money at all!

       Finally, don’t take my example of Bob too seriously. There are definitely things he could do to improve his real hourly wage by making some simple choices (like brown-bagging his lunch). But the point is that Bob’s job pushes him to do those things because of stress, time constraints, or whatever other reasons keep Bob from eliminating those extra expenses.

Sign Up for Free Updates!

       If you want some more good ideas on saving money from The Complete Tightwad Gazette, make sure you sign up for free updates from Provident Planning. I write on a wide variety of personal finance topics, so even if you’re not interested in frugality I’m sure you’ll find something useful here.

       I borrowed The Complete Tightwad Gazette by Amy Dacyczyn from my local library a while back because I’d read so much about it on other personal finance blogs. I started reading through it, and I found so many good tips and ideas that I decided to buy a copy for myself from Amazon. This post is part of a series where I’ll share my take on some of my favorite tips from the book.

Everything You Already Know

       Amy makes a point of explaining that personal finance advice is a lot like dieting advice. It’s mostly just a bunch of stuff you already know. We all know that to lose weight we need to eat fewer calories than we burn. To save money and get ahead in our personal finances, we need to spend less money than we earn. They’re both simple, and you already know those things. I’m not providing some great insight when I tell you to spend less than you earn.

       But in personal finance advice, you’ll run into some strange ideas. I’m referring to the philosophy of “Don’t worry about being frugal and spending less. Just focus on earning more.” They’ll even go to the point of saying that frugality is stupid and a waste of time. But the problem is that this approach is one-sided and blind to the advantages of a combined approach.

       The equivalent in dieting advice would be saying “Don’t eat less, just exercise more.” How many health professionals do you hear giving that kind of advice? None! The best dieting advice is a combination of eating less and exercising more.

       In the same way, the best personal finance advice is a combination of spending less (frugality and smart choices) and earning more (diligent work, entrepreneurship, and smart investing). That’s what I aim to give you on Provident Planning – a balanced approach. Indeed, God’s Provident Plan is designed with this approach in mind. Contentment and hard work combining to yield generous giving.

       But Amy offers a second part to this analogy. When she joined Weight Watchers, she already knew how to lose weight. But she kept going to the meetings because of the support network they provided. In the same way, she hoped The Tightwad Gazette could serve as a support network for those looking to save money – confirming what they already know, providing some useful tips, and encouraging each other along.

       That’s my desire for Provident Planning as well. I want to create a community where we continue to learn about God’s desire for personal finances and encourage each other along our journey. Together, we can support each other as we seek to glorify God through our personal finances. You can help me with this effort by continuing to read and comment, and I will help by continuing to write what I hope are useful articles. You can help even more by contacting me with any feedback that can improve Provident Planning for everyone.

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       If you want some more good ideas on saving money from The Complete Tightwad Gazette, make sure you sign up for free updates from Provident Planning. I write on a wide variety of personal finance topics, so even if you’re not interested in frugality I’m sure you’ll find something useful here.

       I’m not sure if you’ve seen the commercials for Prudential’s Retirement Red Zone website, but I had and decided to see what it’s about. The commercial claims there’s a video on the website that will help you learn how to plan for a successful retirement when you’re near or just entering retirement.

       But when you get to their website, all you’ll find is one huge sales pitch for variable annuities – probably one of the worst choices you can make when it comes to retirement investments. Not only will you pay high expenses for the insurance side of things (the guarantee of income for life), you’ll pay high expenses on the investment side of things as well (the variable part of the annuity). Variable annuities, especially deferred variable annuities, are only suitable for a small number of people – and it’s not usually retirees (or those near retirement). Annuities can have a place in retirement planning but they’re not for everyone (which is what Prudential and other insurance companies would like you to think).

       The video you’ll find at Prudential’s Retirement Red Zone is not educational either. If you want to learn about annuities, you need to go somewhere else. They’re not something I’ve discussed yet on Provident Planning, but I’ll get to them eventually. Just know that there are some good reasons you probably shouldn’t be buying a variable annuity any time soon:

1. High Fees – The fees for most annuities are quite high, and this is even more true with variable annuities. Costs do matter, so it’s important to consider them when making investment choices.

 

2. Complexity – Each annuity comes with a prospectus, which is supposed to explain the product and costs to you, the buyer. But trying to read one of these documents is almost impossible. First, they’re HUGE. I downloaded a prospectus for one of Prudential’s annuities and it was 264 pages (8.5″ x 11″)! Second, they make up their own meanings for words so you must check their definitions, but even those can be difficult to parse out. And third, they’re not laid out in a way that’s easy to understand – even for financial professionals, much less the average consumer.

 

3. Better Options – Finally, there are better ways to secure guaranteed income in retirement than variable annuities. As I said before, I’ve not explored these options so far, but I will as time goes on. Just know that you really need to consult a trusted financial advisor before purchasing an annuity. Once you buy it you can’t change your mind. (You can switch to another annuity, but you generally can’t get your money back without huge penalties.) And when I say trusted financial advisor, I don’t mean your stock broker or insurance agent. You need to find someone who is held to a fiduciary standard – which means they are legally required to put your best interests first when advising you.

       So that’s my public service announcement for today. If you want to continue learning about personal finance without the sales pitch, then sign up for free updates to Provident Planning today!

       I borrowed The Complete Tightwad Gazette by Amy Dacyczyn from my local library a while back because I’d read so much about it on other personal finance blogs. I started reading through it, and I found so many good tips and ideas that I decided to buy a copy for myself from Amazon. This post is the first in a series where I’ll share my take on some of my favorite tips from the book.

Track Your Spending for 3 Months

       One of the first tips you’ll find in the book (on page 9, in fact) is to track your spending for 3 months. Amy says the first step for anyone who’s looking to become more frugal is to find out where your money is going now. I agree with her. It’s hard to know where you should start looking to save money if you’re not sure what you’re spending it on.

       By taking the time to track all of your expenses, you’ll learn two things. First, you can categorize your expenses into essentials (needs) and non-essentials (wants). Breaking things down this way will help you see where you can make room in your spending.

       Second, you’ll see just how much you’re spending on your budget categories. Knowing this helps you target the biggest expenses to get the most impact. It will also make you more aware of where your money is going. Blind spending is a quick way to destroy your finances.

How to Do It

       So if you want to track your spending, what are your options? Here are some ideas:

• Paper – You can always do it by hand with pencil and paper. This is a time intensive method and makes it difficult to work with the data you collect. I wouldn’t recommend this method.

 

• Spreadsheet – Microsoft Excel, Open Office Calc, Google Spreadsheets, or Zoho Spreadsheets can be also be used to track your expenses. This is another manual method that takes a bit of time, but at least you can sort and use your data. If you’re not dedicated to routinely entering your expenses, it won’t work for you.

 

• Budgeting Software – Three of the best software choices for budgeting and tracking expenses are Quicken, You Need a Budget, and Gnu Cash. The advantage of these programs is that they store all the information on your computer, and they can automatically download your transactions from your banks and credit cards. They also offer more advanced reports than you’ll want to create in a spreadsheet. This is a much easier solution than the first two.

 

• Online Budgeting Websites – There are multiple options if you’re interested in using an online budgeting website. Mint, Thrive, Wesabe, and Yodlee all offer a free, online solution for budgeting and tracking your spending. You might not be able to use these sites if you bank at a credit union or small local bank, and you might be concerned about security issues with having all your info in one place. Security was my initial concern, but I did some research and decided to go with Mint. I like it so far, and I’d recommend you read their FAQ if you’re interested. This is by far the easiest solution. It only took me about an hour to set it all up the way I wanted.

Sign Up for Free Updates!

       If you want some more good ideas on saving money from The Complete Tightwad Gazette, make sure you sign up for free updates from Provident Planning. I write on a wide variety of personal finance topics, so even if you’re not interested in frugality I’m sure you’ll find something useful here.