Archives For January 2011

       Another way we can honor God through our work is by being good stewards. This applies to our personal finances as well, so we’ll be looking at it in more depth when we talk about stewardship. However, the concept of stewardship has strong implications for our work lives as well – whether self-employed or working for someone else.

Pay Attention!

       Proverbs provides good advice for any person involved in business, but especially those involved in managing or overseeing the operations:

       23 Know well the state of your flocks, and pay attention to your herds: 24 for riches are not forever, nor does even the crown endure to all generations.

Proverbs 27:23-24 (WEB)

       A good manager knows the condition of every aspect of the business he manages. Whether it’s your own business or someone else’s, you should be careful to pay attention to what’s going on. Being a good steward doesn’t mean you do just enough to get by. A good steward looks to maximize whatever has been put under his care – he wants to return it to his superior in a better condition than he found it. Being especially careful with things that belong to others in addition to our own things provides a strong witness that we care about the person those things belong to.

Be Faithful in All Things

       Jesus challenged us to be faithful in all things whether great or small. His teaching can apply to our business lives, our personal lives, and most definitely our spiritual lives.

       10 He who is faithful in a very little is faithful also in much. He who is dishonest in a very little is also dishonest in much. 11 If therefore you have not been faithful in the unrighteous mammon (money), who will commit to your trust the true riches? 12 If you have not been faithful in that which is another’s, who will give you that which is your own?

Luke 16:10-12 (WEB)

       In anything that is assigned to us, we should be honest and faithful regardless of how unimportant it may seem. We build trust with others by first proving ourselves trustworthy with small and seemingly insignificant things. Then we begin to build a stronger relationship and deeper trust as bigger and more important responsibilities are given to us. While those small things do not seem like they matter at first, how we handle them can have huge implications for our future relationships.

       Jesus’ teaching here applies to many different aspects of our lives – not just business – and most specifically it applies to our spiritual lives. Jesus goes on to talk about how we cannot serve both God and money. The way Jesus taught us to handle the money and possessions God has entrusted to us is vastly different from the ways of the world. Jesus teaches us here that if we cannot handle something so unrighteous as money according to His teaching, how can we expect God to give us true riches? We must prove to be faithful in the small things (money) in order to receive the greater things (the true riches of Heaven and eternal life).

       As we continue to examine God’s Provident Plan for our finances, we’ll see that He calls us to approach money and possessions with a mindset the world cannot understand. You see, the financial advice God gives us in the Bible can be applied successfully by anyone. Spend less than you earn, earn more, manage your money well, avoid debt – all of these ideas are good advice for Christians and non-Christians alike. But the results God desires – generous and sacrificial giving – are far different from the worldly views of retiring early, getting the car you’ve always dreamed of, living in a nicer home, traveling the world, or just doing anything you “deserve” because of your hard work and smart decisions. Following God’s plans to achieve His desire requires that you understand His plan and His view of the world and that you have a relationship with His Son, Jesus. You will never understand the idea of following God’s financial principles so you can give generously unless His Spirit lives in you.

       However, the rewards are vastly different as well. Instead of amassing worldly wealth that will pass away and do you absolutely no good when you die, you’ll inherit eternal life and true riches. You’ll take hold of that which is truly life and enjoy God’s creation as He meant you to. You’ll find the contentment in Christ that no one can take away from you. And that’s worth much more than any pile of cash you can put in the bank.

       I’ve gotten away from the main point here, but it’s important to understand what it really means to be a good steward and why we should even worry about how Jesus taught us to handle our finances. God wants us to handle money as if it doesn’t matter. He wants us to use it not to just make ourselves comfortable but to further His Kingdom. And that mindset of living sacrificially will lead us to follow all of His teaching on personal finances naturally. With His Spirit living in us, we will approach our spending and working with His love and understanding. And we’ll glorify Him with all of it.

       Next week we’ll finish up this study on work, and then I’ll put together a summary post for easy reference.

       Last week I was in Free Money Finance’s March Money Madness for Game 4. Thanks to you all, I won and will be going on to the second round for that post.

       But I was lucky enough to get two posts in this year’s competition, so I’ve got a second article in today’s Game 10. The article is called “Wake Up from the American Dream“. It’s not looking too well for me right now, so I could really use your help. All you have to do is leave a comment on today’s post saying “Game 10: Dream”. (You can vote for Game 9 while you’re at it if you want to.)

       FMF donates money to a charity of the blogger’s choice for the top 4 winners – $500 for 1st place, $300 for 2nd, and $100 each for 3rd and 4th. I’m playing for 50% to HOPE International and 50% to Mennonite Central Committee (or 100% to MCC if FMF doesn’t want to split the donations). Having two posts go on to the next round will really help the chances of seeing these charities get a donation.

       So if you can take just a minute to go vote by leaving a comment that says “Game 10: Dream”, I’d really appreciate it. Thanks for your support!

       Last month, I posted an update about how my wife and I are raising a cow for beef. This is the final post in the series. Bambi is back from the butcher and sitting in our freezer right now. Generally, we start each post by checking Bambi’s growth. That’s not an issue any more, but here he is at fifteen months old on the way to the butcher:

Bambi - 15 Months Old

       And here’s a more recent picture:

Bambi Mignon

       Yes. He is delicious.

Video Tribute

       In my last post I promised a video tribute for Bambi. Those of you who came in on the end of this little experiment can catch up on all of Bambi’s growth with this video. And those of you who followed the whole time can remember him fondly – plus you’ll get to see pictures of the processed beef in our freezer. You should at least listen to the song if nothing else… :)

The Final Tally

       All the numbers are in and I can tell you exactly what it took to raise and butcher Bambi (but this is specific to our situation – you’ll have to read the old posts for details – it’s probably less expensive if you’re in the business of raising steers). Here are the totals:

  • 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
  • Butchering Fee – $305.42
  • Total Spent – $989.60
  • Time – 102 hours

       Here are the cuts we ordered, how many pounds we got for each cut, my estimate for what it would cost to buy each cut at the store, and the total value of each cut.

Cut Lbs. Est. Retail Price Total Value of Cut
Mock Tender 3.438 $2.99/lb $10.28
Flat Iron Steaks 3.438 $3.99/lb $13.72
Petite Tender 0.781 $2.99/lb $2.34
Brisket 8.031 $2.29/lb $18.39
Short Ribs 4.986 $2.49/lb $12.42
Delmonico Steaks (Boneless Rib Eye Steaks) 12.375 $8.79/lb $108.78
Skirt Steak 1.313 $2.39/lb $3.14
Top Round Roast 9.688 $2.99/lb $28.97
Eye Roast 1.875 $3.29/lb $6.17
Sirloin Tip Roast 3.969 $3.29/lb $13.06
Soup Bones 6.875 $1.99/lb $13.68
NY Strip Steaks 9.280 $8.79/lb $81.57
Filet Mignon 4.156 $11.99/lb $49.83
Sirloin Steaks 7.156 $4.79/lb $34.28
Flank Steak 1.688 $3.99/lb $6.73
Beef Cubes 21.156 $2.99/lb $63.26
Stir Fry 6.313 $2.99/lb $18.87
Ground Beef 74.000 $2.29/lb $169.46
6 oz. Patties (4/pack) 69.000 $2.69/lb $185.61
Totals 250 lbs. Wtd. Avg. $3.36/lb $840.54

       I based the estimated retail price on a combination of data from the USDA, wholesale meat prices, and store prices. I may have overestimated on some items and underestimated on others. If you have suggestions for alternative prices, please let me know. I did the best I could with the information I had and tried to remain as accurate as possible.

       The weighted average for the retail prices I came up with was $3.36/lb. Based on what it cost us (just money) to raise Bambi, we spent about $3.96/lb. So I guess if it’s worth $0.60/lb to you to know where your beef comes from then this isn’t too bad of a deal – especially for mostly grass-fed, hormone-free beef.

       Interestingly enough, my cost to raise Bambi before considering butchering fees is similar to what I would have paid if I had bought the same amount of beef from a farmer. Bambi’s hanging weight was 406 pounds and my cost before butchering was $684.18 or about $1.69/lb for hanging weight. Farmers tend to charge around $1.65/lb for hanging weight in my area. (Hanging weight is the weight of the cow after it’s been initially skinned, gutted, and cleaned but before it is cut into smaller pieces – so there’s still a good bit of bone and fat there.)

       But if you figure in the value of my time, things don’t look so good. If I valued my time just at minimum wage ($7.25/hr), that would increase my total cost to $1,729.10! And that would bring the average cost per pound to $6.92. That’s some expensive beef! To be honest though, I probably chose the most time-intensive methods for raising a cow for beef. This was especially true for the first few months of Bambi’s life. We bottle fed him for two whole months – a total of 60 hours of time. In contrast, most farmers take calves off the bottle in two weeks or less.

       But as I’ve said many times before, this was never really an experiment to see how frugal it would be to raise your own beef. I did it more to get the experience and have something to share in common with people in my church and community. Raising Bambi was interesting and occasionally fun. I’m glad I did it, but I’m not in a hurry to raise another cow for beef any time soon. If I had wanted it to be a strictly frugal experiment, I would have gone about it a little differently.

       I will say it’s kind of nice having such a huge selection of beef in our freezer. Unfortunately, it also makes meal planning a bit too easy. To finish all this beef in one year, we’d need to eat about 2/3 of a pound every day. That’s a lot of beef to split between two people each and every day of the year – especially when we’re used to not eating much meat. All I know is we’ll be having quite a few parties this summer because we’re not even close to being on schedule to eat all of this beef within a year.

       I’d say I’m going to miss Bambi, but I’d be lying. Some of you will find that harsh, but I’m going to guess you never raised a cow for beef either – especially the way I did it. It’s not that I hate animals. I just knew Bambi’s purpose from the beginning and kept it in the front of my mind. Plus, he was a bit of a pain and that certainly didn’t help him build a place in my heart.

       As far as I can tell, this is the last post I’ll have about Bambi and our experience of raising a cow for beef. If you’d like to read all the posts, here they are in order: (There is no month 1 post. I was tracking everything the whole time. I just never posted about it until month 2.)

       If you have any questions, feel free to ask me in the comments. Thanks for following along!

       For the last few years, Free Money Finance has held a contest called March Money Madness (works like the college basketball competition). It gives bloggers a chance to highlight their best posts and see how they stack up to others. Additionally, FMF donates money to a charity of the blogger’s choice for the top 4 winners – $500 for 1st place, $300 for 2nd, and $100 each for 3rd and 4th.

       This year I’ll have two posts in the competition – one from a regular submission and another for having a top article in the Best of Money Carnival. I’m playing for 50% to HOPE International and 50% to Mennonite Central Committee (or 100% to MCC if FMF doesn’t want to split the donations).

       This week I’m in Game 4 with “The Save 10% for Retirement Rule Is Stupid“, and I’m up against Craig at Money Help for Christians. He’s a good friend of mine and a great writer, but thankfully he’s got two posts in today’s competition. So if you’d like to support us both, leave a comment on today’s March Money Madness post saying “Game 3: Writer & Game 4: Stupid”. Thanks for your support!

       God desires His children to be especially mindful of the poor. His love and mercy reach down to those in need and in struggles, so it is His love working through us that should prompt us to be quick to help the poor. We’ll look at this in much more depth as we examine God’s teaching on giving, but for now we can look at two specific ways we should treat the poor in our business and work.

Pay Them Quickly

       God gave a special law to the Israelites about how they should treat their hired servants who are poor. While we are no longer under the Law, these instructions can help us see at least one way we can be mindful of the needs of the poor. The poor who have no savings to tide them over to their next paycheck may be helped by receiving their paychecks more often. In the Law, God taught the Israelites to pay their poor hired servants every day.

       14 You shall not oppress a hired servant who is poor and needy, whether he be of your brothers, or of your foreigners who are in your land within your gates: 15 in his day you shall give him his hire (paycheck), neither shall the sun go down on it; for he is poor, and sets his heart on it: lest he cry against you to Yahweh, and it be sin to you.

Deuteronomy 24:14-15 (WEB)

       As I said before, we are no longer under the Law. But this commandment makes sense even in light of the New Covenant. If we have a poor person who works for us, it would be better to pay them more often because they need the money as soon as they can get it. This is especially true if it would help them avoid using a payday lender. There are other long-term solutions that could help them better manage their money, but this is an easy way to help them avoid the less desirable alternatives (payday loans, credit cards, etc.).

Do Not Show Favoritism to the Rich

       Many people respect the rich and treat them better than they would the poor. This could be because of what the rich have done for them in the past, or it could be because of what they think the rich could do for them in the future. Either way, such favoritism and respect based on net worth is not from God. Jesus taught us to “love our neighbors as ourselves”. He didn’t say “love your rich neighbors as yourself, and show a little love for the poor while you’re at it”. There’s no distinction between our neighbors – we are to love all people equally regardless of their position in this world or even whether they show us love. James provides clear teaching on how this applies in our churches, but it should apply equally in all areas of Christian life:

       1 My brothers, don’t hold the faith of our Lord Jesus Christ of glory with partiality. 2 For if a man with a gold ring, in fine clothing, comes into your synagogue, and a poor man in filthy clothing also comes in; 3 and you pay special attention to him who wears the fine clothing, and say, “Sit here in a good place”; and you tell the poor man, “Stand there,” or “Sit by my footstool”; 4 haven’t you shown partiality among yourselves, and become judges with evil thoughts?

James 2:1-4 (WEB)

       When we make distinctions between the rich and the poor, or any other distinction that affects how we treat people, we become judges and fail to follow Jesus’ teaching and His Spirit. The Spirit of Love shows no partiality among people but loves all the same. The application of this teaching can easily be seen for our business lives – we should give the same quality of service to the poor that we would give to the rich. I’m not saying the people should get what they don’t pay for, but they should be treated with the same respect, courtesy, and kindness regardless of how much they buy from us. We must never forget that all people are the work of God’s hands, and we should show no distinction among anyone when it comes to showing love just as God has shown no distinction in the gift of His Son. Job acknowledges the fact that all are made by God and He shows no favoritism:

       Who doesn’t respect the persons of princes, nor respects the rich more than the poor; for they all are the work of his hands.

Job 34:19 (WEB)

       When God looks at us, He sees each one of us individually and knows us personally. But He loves us all the same, regardless of how righteous or unrighteous or poor or rich we are. He seeks to reconcile all of us to Himself through His Son. It’s with this same love – this blind love – that His Spirit compels us to love our neighbors. This love is not blind to the needs of people, but it is blind to their faults and mistakes. Loving people like God loves them while looking after their needs means that we love the poor as we would anyone else and we do what we can to help them. So be mindful of the poor in your work, and show all people God’s love.

Uncle Sam says,        With tax time fast approaching, I thought it might be a good idea to share a tax tip with you all that I’ve found useful for my clients. By combining a Traditional IRA deduction with the Retirement Savings Contribution Credit (sometimes called the Retirement Saver’s Credit), you can reduce your taxes by quite a bit after the tax year has ended because you don’t have to make IRA contributions until April 15. You may be able to reduce your taxes (and increase your refund) by up to $2,000 with this tip.

This tip works because the size of the credit increases as you reduce your adjusted gross income (AGI). Making a deductible Traditional IRA contribution lowers your AGI. Depending on your income, you can make yourself eligible for the Retirement Savings Contribution Credit or increase the amount of your credit. Here’s what you need to know.

The Drawbacks

This tip won’t work if you’re under 18, a full-time student, or can be claimed as a dependent on someone else’s tax return. Those are basic requirements for the Retirement Savings Contribution Credit. If any one of those apply to you, this won’t work.

Additionally, this tip only works at lower incomes (and it works best at very low incomes). The problem here is that people with low incomes often have a more difficult time contributing to retirement accounts. Here are the adjusted gross income limits for 2010 before counting the IRA deduction:

  • Single or Qualifying Widow(er) – $32,750 ($33,750 if you’re 50 or older)
  • Head of Household – $46,625 ($47,625 if you’re 50 or older)
  • Married Filing Jointly – $65,500 (up to $67,500 if you’re both 50 or older, $66,500 if only one of you is 50 or older)

This tax move doesn’t work if your filing status is married filing separately because the phaseout range for a deductible IRA contribution is so small.

Finally, the Retirement Savings Contribution Credit is not a refundable tax credit. This means it will only reduce your tax liability to $0 – beyond that it won’t get you any extra money. That doesn’t mean it’s useless though. If you have other refundable tax credits, this tax tip could increase the refund you get back from those credits because it reduces your tax first.

How to Do It

Assuming you meet the requirements, your income isn’t too high, and you have some tax due, the next thing you’d want to figure out is how much you should contribute to an IRA to get the most benefit from the Retirement Savings Contribution Credit. You’re going to need to do a little math to figure this out, including considering ira rates. Alternatively, you can just do your tax return several times using different IRA contributions to see how things work out.

If you’re going to figure it out manually, you’ll need to first look at your tax due to figure out how big of a credit you need. On Form 1040, you’ll find your tax due on line 60. As I said before, the Retirement Savings Contribution Credit isn’t refundable, so you only need a credit as large as your tax due. Any more than that is useless.

Once you know the maximum amount you’d need from your credit, you’ll want to figure out how much of a credit you can get. There are two things you need to keep in mind. First, the Retirement Savings Contribution Credit is calculated as a percentage of your retirement contributions. But the credit is only calculated on up to $2,000 in contributions (or $4,000 if you’re married filing jointly – $2,000 for each of you). Second, the percentage depends on your adjusted gross income (after your IRA deduction) according to the table below. You can also find this information on Form 8880 – Retirement Savings Contribution Credit.

Filing Status 50% Credit 20% Credit 10% Credit
Single or Qualifying Widow(er) up to $16,750 $16,751 to $18,000 $18,001 to $27,750
Head of Household up to $25,125 $25,126 to $27,000 $27,001 to $41,625
Married Filing Jointly up to $33,500 $33,501 to $36,000 $36,001 to $55,500

So let’s say you’re single and your AGI is $30,000. You wouldn’t qualify for the Retirement Savings Contribution Credit unless you make a deductible IRA contribution of at least $2,250 to bring your AGI down to $27,750. That would get you down to the 10% credit range. Your credit would then be $200 (10% of $2,000). It doesn’t matter that you contributed $2,250. The credit is only calculated on the first $2,000 of your retirement contributions. But you might have to contribute more than $2,000 to make yourself eligible.

Want to see a more exciting example? Let’s say you’re married filing a joint return and your AGI is $37,500. As you stand now, you’d be eligible for the 10% credit on any retirement contributions you’ve made (this credit includes 401(k) plan contributions and similar accounts). But by making two deductible IRA contributions – $2,000 for you and $2,000 for your spouse – you can bring your AGI down to $33,500. This makes you eligible for the 50% credit and would lower your taxes by $2,000 ($4,000 * 50%). You just made a $4,000 contribution to your retirement accounts at a net cost of $2,000! I’d say that’s a good deal.

I like this tax tip because I’ve seen it work for myself and many others quite well. There are a few other aspects of this tip that I didn’t cover here, but I’ve given you enough info to get started on it. It’s a great way to boost your retirement savings while reducing your taxes – sometimes by quite a bit!

Want More Tax Tips?

If you want more tax tips that will help you keep more money in your pocket, make sure you’ve signed up for free updates to Provident Planning!

       In the last part of this series on work, we looked at God’s desire for us to treat each other honestly and fairly. But we also find a special emphasis on the fact that we should maintain this honest and fair treatment of others at all times. God provides no exceptions for Christians to be honest and just to anyone. Keeping your honesty and fairness at all times and sticking to a moral code is called integrity. God wants us to keep our integrity at all times, which will further strengthen our witness to the world and the success of our work.

Our Guiding Light

       When we keep our integrity in all situations, we are looking to God for direction. We are seeking out His ways so we can do His will. When we let the Spirit lead us in everything, work or play, we are keeping our integrity – our strict adherence to looking at what the Father is doing and wants us to do. It’s in this way that our integrity will be our guiding light.

       The integrity of the upright shall guide them, but the perverseness of the treacherous shall destroy them.

Proverbs 11:3 (WEB)

       The Bible tells us that our integrity shall guide us, but the perverseness of the treacherous shall destroy them. This is a powerful witness to the importance of keeping our integrity at all times. When we allow Satan to twist our thinking and turn our eyes away from God’s ways, we are walking down the path to destruction. And it doesn’t take much. It’s so easy to ruin our reputation, and Satan is glad to find a way to tarnish any witness we might have to the world. That’s why it’s so important to keep our integrity all the time – not just when we think people are looking.

       Many people, thinking no one was looking, have compromised their integrity to benefit themselves – often monetarily. We see this all the time in corporate, political, and even church scandals. But God tells us it’s not worth it. There is no amount of money worth compromising our integrity or risking our good name.

       A good name is more desirable than great riches, and loving favor is better than silver and gold.

Proverbs 22:1 (WEB)

       And again:

       Better is the poor who walks in his integrity, than he who is perverse in his ways, and he is rich.

Proverbs 28:6 (WEB)

       Though it may seem like maintaining our integrity – even when we don’t think it matters – will do little to benefit us here and now, following God in all things has immense benefits to our spiritual lives and will draw us ever closer to Him. It will also make our witness as Christians even more powerful – not because of the good things we’ve done, but because of the love God has given us and shows through us for all people. This love is shown greatly when we continue to treat everyone honestly and fairly no matter what the situation.

Keeping Your Integrity

       So how do we go about keeping our integrity. What can we do to make sure we don’t fall into Satan’s traps or become disillusioned by the false promises of riches? God gives us practical advice in this area:

       25 Let your eyes look straight ahead. Fix your gaze directly before you. 26 Make the path of your feet level. Let all of your ways be established. 27 Don’t turn to the right hand nor to the left. Remove your foot from evil.

Proverbs 4:25-27 (WEB)

       We need to keep our eyes focused on God. If we look to the side, Satan will rush in with excuses and reasons we should stray just a little this once. “It’s OK to cheat on your taxes…everyone does it, and the government will just waste the money anyway.” “It won’t hurt anyone if you take a little extra. Who will know?” If we keep our eyes focused on Jesus and His message, these thoughts will not be able to withstand the power of His love and teaching and we’ll be able to keep our integrity.

       God also tells us to make our path level. We should remove any obstacles, distractions, or temptations that might cause us to stumble as we try to walk in His ways. By doing this, we make it easier to keep our focus on Him alone. He also wants us to “establish” our ways. We need to make a habit of always seeking God’s will – a habit of always taking time to stop and let the Spirit teach us how God wants us to handle the situations we encounter. The simple act of taking some time to pray before acting can save us from so many dangers and sins.

       It’s clear that God wants us to be honest and just. But it’s equally clear that He wants us to be that way all the time. He wants us to keep our integrity – so we’ll become closer to Him, and so we’ll be even greater examples of the power of God’s love in our lives. Take time to consider how you can better keep your integrity and honor God with your life completely.