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Archives For October 2010

Personal Finance Bible Study: Work (Part 4 of 15) – Bringing Honor to God

Corey —  October 28, 2010

       In addition to providing for our material needs, hard work brings honor to our name and glory to God. People don’t look at a hard-working person and think ill of them. Diligent work brings respect and reward. It is key to remember, however, that this aspect of work is not to bring honor to ourselves. Our hard work is a sign of our dedication to God’s ways, so when we are honored because of our work we also honor God.

Hard Work Brings Responsibility and Reward

       In 1 Kings, we find the story of Jeroboam. He’s introduced by his reputation as a hard worker, and we see that this is why he became one of Solomon’s officials:

       The man Jeroboam was a mighty man of valor; and Solomon saw the young man that he was industrious, and he put him in charge of all the labor of the house of Joseph.

1 Kings 11:28 (WEB)

       As we continue reading the story of Jeroboam, we see that God used him and his position of power to accomplish His will. The good reputation we can build through hard work may put us in positions to do much good work for the Lord. This idea is also outlined in Proverbs:

       The hands of the diligent ones shall rule, but laziness ends in slave labor.

Proverbs 12:24 (WEB)

       Through our hard work, God can bless us and put us into positions of power – power that may then be used to further glorify God and do His will on earth. Though many people work hard to gain power for their own edification, Christians should use positions of power to build up the Lord and do His work.

Hard Work Brings Honor

       Our hard work may not always put us in positions of power, but it can help us influence those who are in leadership. Those who do their work well are often called upon to serve powerful people or to offer their advice:

       Do you see a man skilled in his work? He will serve kings. He won’t serve obscure men.

Proverbs 22:29 (WEB)

       We’ve seen this clearly in the life of Billy Graham. His reputation for clearly teaching the Word of God and explaining salvation simply has brought him into contact with many powerful people. God can use such opportunities in our lives to influence leaders to follow His will.

       God can work through many circumstances in our lives to accomplish His will, but our hard work can put us in a position to do even more for God. Next week, we’ll look at how our hard work can help us gain wealth that can be used to bring glory to God.

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Did You Host a Sales Party or Product Party? Don’t File a Negligent Tax Return!

Corey —  October 27, 2010

Is this the face of a tax evader?       So I was studying for my enrolled agent exam the other day and came across an interesting bit of information that I doubt many people know. If you host a sales party or product party (the kind that Pampered Chef, Tupperware, and others like them depend on), then you’re legally required to include any gift or gratuity you receive in your income. Here’s what the IRS says:

       If you host a party or event at which sales are made, any gift or gratuity you receive for giving the event is a payment for helping a direct seller make sales. You must report this item as income at its fair market value.

       Your out-of-pocket party expenses are subject to the 50% limit for meal and entertainment expenses. These expenses are deductible as miscellaneous itemized deductions subject to the 2%-of-AGI limit on Schedule A (Form 1040), but only up to the amount of income you receive for giving the party.

– From the Other Income section of IRS Publication 17

       I have a feeling the IRS is missing out on tons of revenue due to all the under-reporting that happens as a result of these parties!

What Happens If You Don’t Tell the IRS?

       Now, obviously, the IRS isn’t going to lock you up if you forget to include this income on your tax return. But if you are audited and the IRS agent can somehow figure out that you hosted such a party and received cash or items for hosting, then you will have to increase your income, pay additional taxes, and possibly pay a 20% tax penalty.

       But now you have a problem. You know about this tax rule and you should follow it. That’s going to sound ridiculous to some people, and I’m not saying our current tax system is great or makes sense. But as Christians, we must follow the laws of the government that is over us unless those laws would force us to act contrary the laws of God. This is a matter of conscience and our witness to the world – not an issue of whether the law is stupid.

       I doubt income tax laws will ever cause us to violate God’s commandments, so our aversion to an admittedly silly law is mostly because we don’t want to do it. And that’s not a very good excuse (and not one the IRS will accept either!). So as crazy as it sounds, we ought to follow these laws and report our income accurately as the IRS requires.

What Do You Think?

       I know most of you will think this is a dumb rule. I agree with you. But it’s still a dumb rule we ought to follow. My question is this: Now that you know, are you going to report this income on your tax return? Let me know in the comments below!

P.S. I’m not going to report you to the IRS either way…I just thought it would be interesting to discuss!

photo credit: (Athenamama on Flickr)

This post was included in the Carnival of Financial Planning.

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Redefining Riches – Contentment: A Steadfastness of Hope

Corey —  October 26, 2010

Redefining Riches       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)

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Good Money Management Is About Avoiding Dumb Mistakes

Corey —  October 25, 2010

Personal finance doesn't need to be complicated.       Good money management isn’t about making all the smartest moves. It’s about avoiding the dumb mistakes. You don’t need the perfect budgeting method, the highest interest rates on your savings, the best investing strategy, or a flawless system for managing your money. Those things certainly won’t hurt you, but they’re not essential for financial success either.

       Learning to avoid the major pitfalls in personal finance is all you really need to be moderately successful. Getting a hold on the basics of personal finance is enough to get you most of the way there. The advanced stuff only helps you improve your success once you’ve gone as far as the simple stuff can take you. Let’s talk about a few examples so you can see what I’m saying.

Spending

       Dumb Mistake: Spending more than you earn.

       The Basics: Don’t spend more than you earn!

       It’s so simple that it almost sounds stupid, but spending less than you earn (or earning more than you spend…) is by far the most important step in personal finance success. Without it, you’ll be floundering in debt and never getting ahead. But with it, you’ll be well on your way to controlling your money and putting it to work for you.

Savings

       Dumb Mistake: Having no savings at all.

       The Basics: Keep an appropriate amount in savings for emergencies.

       Without some savings in place, you’ll have to rely on credit or gifts to cover your emergencies. High interest rates can crush your financial progress if you don’t repay quickly. And relying on gifts isn’t likely to produce much success if people keep seeing you make poor financial choices – eventually their generosity will dry up. Having access to savings will help you weather hard times and give you the ability to seize good opportunities that come along.

Insurance

       Dumb Mistake: Ignoring insurance because you think you can’t afford it.

       The Basics: Make sure your major risks (life, disability, home, auto, health) are covered if they need to be.

       I’m not a big fan of insurance myself, so I can understand why people tend to ignore it and put it off. It can be confusing and it’s difficult to get objective advice from someone who’s not just out to sell you a policy so they can get a commission. But taking time to learn about insurance, figuring out how much you need (if any), and shopping around for policies will be well worth the reward. Insurance can help protect the financial progress you have made and ensure that setbacks won’t destroy your finances.

Retirement

       Dumb Mistake: Saving nothing for retirement and hoping it all just works out.

       The Basics: Take a little time to estimate how much income you’ll need for retirement, save the right amount every year, and invest in it in a low-cost, diversified portfolio of index funds with an appropriate asset allocation.

       Ignoring retirement because you’re not sure what to do isn’t going to help anything. Too many people wait until 10 years before they want to retire to start thinking about whether they have enough saved or not. That’s just about the dumbest thing you can do in retirement planning because there’s very little you can do at that point without some drastic changes to your life. But a little basic knowledge and small time commitment can help you come up with a plan to save a bit each year for retirement. Revisit that plan every few years and you can approach retirement with more confidence.

Stop Worrying and Get Started!

       The basics of personal finance will get you a long way in your journey but not if you don’t start implementing them now. Yes, there’s much more to discuss about personal finance than the few things I’ve laid out here. But these few examples show that just a little basic knowledge will get you most of the way there. You can worry about all the complicated stuff as you get farther along, but if you don’t start using the basics now you’ll never get to a point where the complex stuff even begins to matter.

       So stop worrying about whether you’ve got it all figured out yet. If you know the basics, start doing that stuff now. You can improve things as you go along to increase your chances of success, but neglecting the basics will ensure that you’ll never have to worry about all the advance moves you could make in the future. Master the basics and you’ll be fine!

photo credit: (Eric Wüstenhagen on Flickr)

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Personal Finance Bible Study: Work (Part 3 of 15) – Providing for Our Needs

Corey —  October 21, 2010

       We’ve already seen that God desires Christians to work hard as a way to glorify His name. But that’s not the only reason He calls us to work. There is value in hard work, and these tangible benefits are impossible to achieve without effort. Today, we’ll look at how hard work provides for our material needs.

Will Work for Food

       With the money we earn from work, we can buy the things we need. Food and water, shelter, clothing, fuel for warmth in the winter, and other necessities can only be obtained when we are willing to work for them. This could mean earning the money to buy those things, or putting in the time and effort to make or produce those things ourselves. Unless we are willing to work hard, we will not get the things we need to survive.

       One who works his land will have an abundance of food; but one who chases fantasies will have his fill of poverty.

Proverbs 28:19 (WEB)

       Working hard with what God gave us will provide an abundance for our needs. But sitting around talking about what we could do or will do brings us nothing but poverty. This clear advice from Proverbs tells us that we need to focus on actually doing the needed work instead of chasing fantasies. Those dreams of getting easy riches from the stock market or some get-rich-quick scheme will bring you no closer to actually meeting your needs.

       In all hard work there is profit, but the talk of the lips leads only to poverty.

Proverbs 14:23 (WEB)

       Hard work will provide for our needs. Talking about our needs and how we wish we had the money to get the things we need does absolutely nothing to bring us closer to meeting our needs. God’s wisdom has not changed throughout the ages – this is as true today as it ever was in the past.

       Before I go much further, I want to stop and look at what our needs really are. When I’m talking about needs, I mean the things we actually need to survive. Food, clothing, a place to live, a way to stay warm in the winter, transportation to our jobs (if necessary), etc. – these are things required to survive. Cell phones, cable/satellite, entertainment, eating out, internet, and other things that aren’t absolutely necessary for our survival are luxuries or wants. We’ve forgotten these definitions of needs and wants in the U.S., but spend any amount of time learning about living conditions in third-world countries and you’ll start to realize how easy we have it here.

       It’s important we understand the difference between needs and wants when we start talking about budgeting or giving. Part of denying yourself and taking up your cross is realizing what the “wants” are in your life and choosing to forgo those in order to help the poor. In some cases, this may even mean helping yourself. If you’re struggling to get by every week and keep going deeper in debt, one of the first things you need to do is break down your expenses into absolute needs and unnecessary wants. Eliminating the wants can give you the cash flow you need to make it to the next week and begin getting out of debt.

       Once we know what our real needs are, we know what our soul desires and requires to survive. Then, through hard work we can meet the desires of our soul:

       The soul of the sluggard desires, and has nothing, but the desire of the diligent shall be fully satisfied.

Proverbs 13:4 (WEB)

       God can bless us and fully satisfy our needs. But we must be willing to work hard instead of sitting around waiting for God to hand everything over to us. Working hard is no guarantee that we’ll get everything we want. But God promises to meet our needs if we diligently work and trust in Him.

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Raising a Cow for Beef: Month 14

Corey —  October 20, 2010

       Last month, I posted an update about how my wife and I are raising a cow for beef. This is a summary of our activity and costs for month 14. As always, let’s first check Bambi’s growth. Here he is at thirteen months old:

Bambi - 13 Months Old

       And here he is at fourteen months old:

Bambi - 14 Months Old

       I had a hard time getting a good picture this month due to lighting levels and moving cows. (Still haven’t gotten Bambi to say cheese…) It’s hard to tell from the pictures, but he did seem to be a bit bigger to me than the last time I saw him. He should certainly bulk up now that he’s being fed a high corn diet. We’ll see how he looks in a month!

Costs & Time

       I’ve finally got the costs for boarding Bambi included in this update. I’m paying about $1/day for boarding him, which seems to be a reasonable rate. (Is it? Anyone know for sure?) This is actually a better deal than feeding him myself, but that’s because farmers are able to buy feed in bulk and/or grow most of it themselves.

  • Cost of Bambi – Free!
  • Castration & Dehorning – $16.00
  • Milk Replacer – $45.54
  • Miscellaneous – $46.87
  • Feed – $362.77
  • Hay – $88.00
  • Straw – $20.00
  • Medicine – $5.00
  • Boarding – $100.00
  • Total Spent – $684.18
  • Time – 102 hours

       I paid ahead for the next month or so for Bambi’s last bit of boarding costs, so next month there won’t be much to add. The final update (after he’s slaughtered) will include the last $10 or so for boarding plus the butcher fees. I’m not sure yet, but I’m estimating butcher fees will be around $300. So maybe I’ll have a final cost of right under $1,000 (more if I include the cost of my time). I have no idea how much meat I’ll get, so it remains to be seen how this all works out financially.

       This month Bambi moved from one farm to another. Why? Well, the friends that have him now are the ones who will be taking him to the butcher when they take their cow, so it just makes things a little easier. But also, several people recommended finishing Bambi by feeding him lots of corn for the last couple of months and we can’t do that where he was staying before. He was in with many other cows, so we couldn’t feed him anything special. Now that he’s at our other friends’ farm, he’ll be staying with just one other cow and they’ll both be on a heavy grain diet.

       Other than that, there’s not much to talk about. We’re still looking for a freezer. I think I’ll need at least 14-16 cubic feet of storage space for the meat. And we still have to decide on the cuts we want, but there’s plenty of time left for that. I’ll probably focus on getting these things done in November before he goes to the butcher in December.

       If you haven’t already make sure you sign up for free updates to Provident Planning so you don’t miss out on the final steps in the process of raising a cow for beef!

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Redefining Riches – Generosity: A Labor of Love

Corey —  October 19, 2010

Redefining Riches       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)

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