Book Report: The Money Challenge

There’s a little book on the market about finances- “The Money Challenge” by Art Rainer, which is a good read. It offers a 3 step formula from the Bible: Give Generously, Save Wisely, and Live Appropriately.

GIVE GENEROUSLY

Giving is something we are passionate about so that portion of the book resonated with me. It might have something to do with the fact that my spouse & I both test out as having the spiritual gift of Giving. For a number of years before I took the spiritual gifts assessment, I could not get it why some people just don’t get it when it comes to tithing. It’s so simple.  But then on the assessment, I had to rate the statement “I experience joy in meeting needs through sharing possessions”. The light bulb came on. Other people feel the kind of fulfillment when they evangelize or prophecy or lead that I feel when I give. Evangelizing  doesn’t do anything for me. It had never occurred to me in quite that way that what is difficult for me might come natural for others and they might wonder why I can’t get it because it’s so simple. Likewise, maybe giving doesn’t do anything for them so they’re not motivated by it.

We personally hold the belief that the command in Scripture to tithe means giving 10% to your local congregation; anything you want to give to other charitable causes should be above & beyond the 10%. Originally we more or less donated to charitable causes willy-nilly, till someone shared the concept of supporting your local congregation first and foremost- it was a new thought to me and revolutionized our giving. Scripture does talk about taking your tithes to your local temple [church], does it not? I’ve heard the complaint that giving to the local congregation is giving to ourselves, but personally I like electricity at the flip of a switch, flush toilets, padded pews, and Styrofoam cups for the coffee when there are church services/events. Someone has to pay for those things. If you don’t use any of those things at your church, then by all means don’t feel obligated to contribute toward them. But that’s just our opinion.  

    

We also believe in tracking charitable contributions. I know the argument that the left hand shouldn’t know what the right hand is doing, but in our opinion that is speaking about making a big show of your giving. If you aren’t intentional about giving, you are giving less than you realize. Maybe it doesn’t work that way for you, but we’ve found it’s easy to fall behind if you aren’t paying attention. Miss a Sunday here and there and you can fall behind without realizing it. Good intentions don’t cut it. Is it possible to be accidentally generous? According to studies those who lack consistency or a plan –those who give randomly- tend to give less than they realize.  

If you wait until you have all your finances in order to start tithing, you probably never will. Don’t be discouraged- those who give away small amounts numerically might actually be the most generous. Consider this -the amount sacrificed trumps the amount given!  If you have yet to get started, this book recommends being like a plane taking off- start slow and gain momentum. Give 1% for a while, then increase to 3%, then 5%, until you work up to 10%. But you don’t have to cap your generosity at 10%. Try God out and see if He doesn’t bless you exceedingly, abundantly above what you could ask or think.

SAVE WISELY

In the USA most people wouldn’t be able to pay for a financial emergency of $400 or more. Yikes!

Why don’t we save?

1. We like instant gratification. Getting what we want when we want it. It’s too easy these days. Credit + internet + expedited shipping = entitlement.  We now can buy faster than one can say “Can I afford it?”

2. Inability to grasp future reality. Emergencies & retirement are not fun to think about so we either underestimate how much to save and how long it will take, OR ignore it completely.

3. Lack of financial margin. Too many expenses, not enough paycheck. Living above your means.

There are seasons of abundance & scarcity in life. Abundance gives opportunity to prepare for the scarcity. An increase in pay shouldn’t create an increase in spending. If you are honest with yourself, you could make do without that money before so you can manage without it now. Save it instead. Saving requires a goal, and persistence.  

Save For Now: You will run into unexpected expense. The washer gives out, a tire goes flat, you get sick, your work hours get cut… Whether you are able to cover the expenses with cash or dive into credit card debt depends on whether you have an emergency fund or not. All the financial gurus recommend having an emergency fund for minor emergencies. The less expensive but most frequent kind. And then there is the Level 2 Emergency –Job Loss. 3-6 months of living expenses is recommended; 3 months for singles, 6 if you are financially responsible for others.  

A common sense approach to Saving recommended in this book is: Give first, then save $1000 for emergencies, next pay off debt, last save for a Level 2 emergency. The easiest method of saving is: Automated. Find a no-fee account, deposit the minimum, and then set up a monthly transfer from checking to savings. The old adage is true- If you don’t have it, you won’t spend it. And if you get a bonus at work, don’t spend it, save it.

Save For Later: Compounding interest is pretty simple really. You put $100 in an account earning 10% interest. At the end of the year you have $110. You start year 2 with $110 instead of $100 so you earn $11 interest. You end year 2 with $121. Over time the increase adds up faster and faster. So if you get your first job at age 16 and instead of wasting your earnings on cute shoes and lattes or whatever your weakness is, you open a retirement account with $2000. Then you add $2000 when you’re 17, and again at 18. Even if you never add another penny the rest of your life, you would have almost $600k at age 65. [Full Disclosure: I think the book is using 10% interest rate. So at our current LOW interest rates, adjust that figure down a bit.] If you kept putting in $2000/yr., you would [could] be a millionaire at retirement. That’s compounding interest. The key is to start early. Most of us aren’t 16 anymore but go ahead and start saving anyway. The old adage ‘better late than never’ is still true. Retirement may seem an eternity away, particularly to young people, but it arrives faster than you think.

This author recommends working your way up to 15% of your annual income in a Roth IRA. There are online retirement calculators to help you figure out how much you need to save for retirement. Because I like this kind of thing, I plugged in the answers to one of these awhile back. I was fully expecting it to tell me something along the line of “good job! You are well on your way.” Pat, pat. I was shocked when our results came back that we need a cool 3 million to retire. Say what?! I don’t think those things take into consideration the frugal Mennonite lifestyle. J

LIVE APPROPRIATELY

This is talking about managing your resources in a way that is both financially healthy and Kingdom-advancing. Your lifestyle can either help or hurt your ability to live generously. It’s about having a realistic view of possessions –it’s just stuff! More stuff won’t make you happier. Living appropriately is knowing what you can afford, spending less than you earn. If you don’t have the money, don’t buy it. Living appropriately is understanding the impact of purchases on giving & saving. It’s giving first, saving second, and then adjusting spending according to what’s left –not waiting to see what, if any, is left to give.

Some questions addressed in the book:

Should I buy a house? Would your mortgage payment be 30% or less of your monthly income? Higher than that is more house than you can afford.

Should I buy a car? A brand new car is one of the biggest wastes of money. As soon as you drive it off the lot it depreciates 11% on average. Buy used. Keep it as long as possible.  Pay cash –never put it on payments. We’re old enough to remember when cold hard cash had buying power at a dealership, but it doesn’t hold the same advantage these days- the salesmen look at you funny if you show up with a bag of cash. J

What about Food & Entertainment Expenses? For many, these expenses fly under the radar. Eating out has become a way of life for Americans. It’s so easy to swing through a fast food restaurant when we’re on the go and pick up a burger, it’s just a $1. But it adds up. Limit your eating out… pack a lunch… make a shopping list and stick to it… look for free entertainment options… When money is “tight” the first place to cut back is this category.

Generosity Killers

1. Keeping up with the Joneses –trying to maintain the lifestyle of those around you. Discontent comes from a belief that our stuff is actually ours; we get attached. We forget we’re just the manager of our possessions. And maybe it’s just a façade anyway- maybe the Joneses are broke. The average US household has more than $15k in debt. Contentment comes in focusing on what we have, not on what we don’t have (appreciating the older camper you do have or the vacation you can take)... Realizing you are entitled to nothing makes you more grateful… Reduce social media use... Give stuff away (especially things you haven’t touched in 3 years)… set your sights on eternity & storing up treasures in heaven.

2. Debt. The total US household debt is in the trillions, 60 billion of it is credit card debt. Say what?! 

3. Disorganization. You need a plan/budget. Don’t make it too complicated or you won’t do it. Figure out what your income is, make a list of your expenses and group them into a few simple categories. If it helps, use cash. When the envelope is empty, you don’t spend any more until the next paycheck. Your cupboards are not bare -you won’t starve. You might have to get a little creative with meals, but it’s a good feeling to use what you have.

51% of couples admit to arguing either frequently or occasionally about finances. We enter marriage with different financial personalities. There are spenders and savers… some of us grew up in homes where financial discipline was modeled while others come from a financially broken household. And then opposites attract. And create tension. So get on the same page- agree that you need to agree. Replace “my” money with “our” money. Dream together, then set goals to reach those dreams.

Take generosity to the next level. Try helping someone who, in your opinion, doesn’t deserve it. Putting yourself in the financial position to be generous isn’t always easy but getting to the place where your concern is not which credit card payment to make, but which person or ministry you can help next is so worth it. God designed us to be generous conduits through which His generosity flows. We need to manage well so we can live with our hands wide open. Generosity is the why behind becoming financially healthy.

So there you have it -in a nutshell- what the book is about. With my thoughts interjected. If you read the book, let me know what stands out to you or steps on your toes.