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Financial Peace University Lesson 13 – The Great Misunderstanding

January 15, 2010 · Filed Under Financial Peace University · Comment 

Unleashing the Power of Generous Giving

This class marks our final FPU lesson and introduced the final baby step.  I appreciated that this lesson was included as the final class in FPU.  I felt it was, in a way, the culmination of all the earlier lessons but not in a wrapup/summary kind of way.  Instead, this lesson answered the question, “Why?”  Why should you be responsible with your finances?  Why should you get out of debt?  Why should you attempt to build wealth?  Is it not simply to have loads of money to greedily hoard for yourself?  Or is it to gain enough to feel like you are self-sufficient and do not need to rely on God?  Thankfully, no.  So why do we do all of this…

Baby Step 7 – Build wealth and give

Dave started off this final lesson with this quote found in the workbook:

You can do everything we teach and you will prosper, but if you don’t understand this lesson, you will never have financial peace.

The “Great Misunderstanding,” as Ramsey calls it, is the incorrect view that the best way to have more money is to hold tightly onto what you already have.  Dave used the visual aid of tightly grasping some cash – yes, you probably won’t lose any out of your hand, but it also won’t be possible for more to get into your hand.  In contrast, when your hand is open and money is able to flow out of it to others, it is also easy for more to flow into your hand as well.

We are asset managers for God

Remember that we are not owners of anything in this world, we are simply stewards, or asset managers, for the real owner – God.  If you have read the Bible, you will see that we are repeatedly told to give …why are we told that so often?  Ramsey presents a number of reasons for this, some of which are:

  • Giving makes us more spiritually mature,  more Christ-like
  • Giving makes us less selfish – less selfish people are more likely to prosper in relationships and wealth
  • Giving is a reminder that we are not the owners – you’re not even giving away your own money
  • Giving is praise and worship
  • Giving is offensive spiritual warfare

Remember, neither God nor the church need your money.  What they need are “sold-out believers” and giving will just a by-product of living out that sold-out faith.

How to Give

You’ve probably heard of what has become a fairly controversial topic in Christian circles – the “tithe.”  You’ve probably heard arguments such as should Christians tithe?  Must they tithe? How should they tithe?  Where should they tithe?  Ramsey addressed these topics in the following way.  First, the tithe is a tenth (that’s literally what “tithe” means) of your “increase.”  The Bible states that you are to give of your “first fruits” – so not what’s left over at the end of the month.  Furthermore, in the Old Testament, God tells the Israelites to bring the tithe into the storehouse of the temple.  This money in the storehouse was used to take care of widows, orphans, and the Levites serving in the temple.  Our modern day analogue is your local church which is still tasked with taking care of widows (including military spouses, single parents, etc), orphans, and your church staff. The Bible also mentions “offerings” separately from the tithe.  These are given above the tithe and are given from your surplus.

So, if I interpreted Ramsey correctly, he suggests that Christians should give 10% of their gross salary to their local church and any offerings above that to other Godly organizations.

Remember this about giving…

Dave then spent a few minutes reminding us about some truths from the Bible.  He started off by telling us that the tithe was not initiated as part of the Old Testament law; it was introduced prior the law.  For instance, Abraham gave a tithe to God and so did Jacob after his ladder dream.  Finally, never give with the motivation of getting what you gave, or more, returned to you (sorry about that if you’re a prosperity gospel kinda person).  We should give because God tells us to give.  Now, God does say that we will be prospered if we do so, but that doesn’t necessarily mean financially prospered.

Wrap-up

Ramsey wrapped up this final class with these two thoughts:

Financial Peace is more than just God’s system for understanding money, becoming debt free, and building wealth.

Financial Peace is when the Great Misunderstanding is understood

So that was the 13th and final class and it was quite motivational to me.  I would love to get to the point, both in attitude and resources, where I could freely give money to help those around me.  How much fun would that be?  Frankly, I’d love to spend my days going around meeting with church planters or missionaries or school administrators or whatever handing out checks.  I’d get business cards printed up that had as my title, “Major Donor.”  Wouldn’t that be so cool!!

I’ll do at least one more FPU post next week – a wrap-up type post of what I learned, what I liked and didn’t like, what steps I still need to accomplish, etc.  In the meantime, with many new FPU classes starting up around now, if you have the opportunity to take part in Financial Peace, I would highly recommend it!

Check out my previous FPU posts:

Is Giving Really that Important?

August 26, 2008 · Filed Under Giving, PF Basics · 7 Comments 

We’re delving into step 2 on my list of Personal Finance Basics and it is a controversial one – give away some of the money you earned in step 1. Certainly some people would argue with me on this step. "Why would you want to give some of your hard earned money away? You’ve worked so hard to get it. Certainly, you should at least get out of debt before you start giving. You should save your money and invest it – when you have a lot of money to help others, then you can worry about this giving stuff."

Well, I’m going to have to disagree with those who would say that…let me tell you why. (you might be thinking about now, "uh oh, here comes more of that church and Bible stuff," and, if you are thinking that then you are correct. Even if you’re not interested in using Biblical principles to guide your life, please stick around. At the bottom of the post, I’ll provide a few secular reasons to give)

Why should I give before any of the other personal finance stuff?

Quite simply, you should give some of your money away because we are instructed to do so in the Bible. Of course, there are numerous Old Testament passages regarding tithes and offerings. And remember, these passages are directed towards all people – not just the wealthy or the ones who have managed to get out of debt. I think everyone should give what they can no matter what situation they find themselves. If you can only give a little, then give a little. If you can give more, then give more. Remember, God doesn’t ask you to give because he needs the money, so don’t worry about not having much to give. I think God instructs us to give for the following reasons, among others:

  • Giving shifts our focus from the temporal to the eternal – It is quite easy for us to get caught up in our current situations and get distracted from our focus on God and the eternal. Purposefully and periodically giving money (which most of us deem important and find hard to do) shifts our focus from ourselves to God. At the same time, we trade our earthly treasures that are so dear yet so fleeting for heavenly treasures that are eternal.

But store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also. Matthew 6:20-21

No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money. Matthew 6:24

  • Giving shifts our focus from ourselves to others – As people, we are naturally selfish and self-absorbed. It requires effort to place others before ourselves. Giving causes us to look outside of ourselves and our day to day concerns. As a result, we learn about others and are exposed to the difficulties other people have in their lives. Not only does giving help out other people, but it also helps us as well by enabling us to be content with our current situation. It’s hard to complain about how much it costs to fill up your car with gas when you are giving your money to people who not only don’t have a car but don’t even have enough money for food.
  • Giving typically results in material blessing and increase – This is the quite counterintuitive but it appears to be true. Check out this verse from Proverbs:

One man gives freely, yet gains even more; another withholds unduly, but comes to poverty. A generous man will prosper; he who refreshes others will himself be refreshed. Proverbs 11:24-25

This verse teaches that being generous towards others actually results in our own prosperity. I don’t think this is some guaranteed contract and I do think it only occurs if you have the correct attitude in giving. If you are begrudingly giving some money because you think you’ll get more money in return, I’m going to go out on a limb and say that probably won’t come to fruition.

On the other hand, here are some personal stories from ChristianPF and Capital Couples Finance via Gather Little By Little about how tithing affected their financial situations. My wife and I have regularly given a set percentage of our income since we got married. We continued this even while paying back huge amounts of student loans and somehow (I’m seriously not sure how it all came to pass so quickly) we have paid off all of our student loans decades before they were scheduled to be paid off.

How much should you give?

How much of your income to give is quite controversial as well. I really believe that amount is between you and God – there is no correct answer for all Christ followers. I’ll put some of my thoughts out here as a starting point to the discussion but these are only my opinions.

The most important component is your attitude.

image by Phillie Casablanca

If you are just giving money because you feel you have to, well, that’s alright because at least you are doing it to be obedient to God, but I do feel that you are still missing out on some of the associated benefits and blessings. On the other hand, if you are giving so others will tell you how great you are, then you are really missing out. You’ll get your reward, but it will be from a few people and not from God:

And when you pray, do not be like the hypocrites, for they love to pray standing in the synagogues and on the street corners to be seen by men. I tell you the truth, they have received their reward in full. Matthew 6:5

Shouldn’t I give 10%?

In the Old Testament, God commanded the Israelites to give a tithe, or tenth, of their possessions and income. I personally do think that it directly applies as a command to Christians.

Each man should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver. 2 Corinthians 9:7

Though I do not feel bound by the tithe, I do think it is a good starting point for investigating how much of your income you feel led to give.

To whom should I give it?

Some people feel that your minimum tithe amount should be given to your home church and then whatever monies above and beyond that should be given to others in need. Personally, I don’t ascribe to this philosophy either. I believe that the Christ’s church is more than just a building with four walls; rather it is the collection of all Christ followers throughout the world. As such, I think we honor God by giving to wherever God’s work is being done.

For instance, we personally give 10% of our gross income (I don’t think that I should give less money to God when I do a better job of using tax deductions). We give the majority of this to our local church, but we also support a few organizations and directly support some missionaries.

What if you don’t believe in all this church stuff?

If you don’t believe in all this church stuff, I am really impressed that you made it this far into the post (sure, you probably just skipped ahead, but I’ll be optimistic). I still think it is important to give your money to others. Obviously, you won’t have the same reasons for giving as those described above. I do think it can be a worthwhile endeavor for a few reasons:

  • Give to help others – You can make a real difference in a person’s life by giving them a helping hand when they need it.
  • You can make the world a better place – direct your resources to people that need help and you improve their situation and make the world a slightly better place. Repeat this process and who knows how far you can get.
  • It feels good to help others – you generally get great satisfaction from knowing you reached out to a fellow human being and made things a little brighter for them. Don’t believe me? Try it sometime and see what happens.

photo credits: Daquella manera and Phillie Casablanca

What if Everyone only got Paid once a Year?

August 22, 2008 · Filed Under Intriguing · 9 Comments 

I have no idea what I was thinking about the other day…but this thought popped into my mind:

"Would people take better care or worse care of their finances if everyone only got paid once per year?"

I like to come up with these strange questions to try to get myself and others thinking – I feel like it stretches my brain somehow (not literally) (I guess this is why I ended up having to answer most of my own questions in that Bible study we used to host in Arizona) (I should really stop talking to myself). I know it isn’t practical and it would never work and all of that – but practicality is not the point of this exercise.

Payday

So, on January 2nd (the 1st is still a holiday) (ok, the first weekday after January 1st – how’s that?), everyone got their single paycheck for the entire year. What happens next?

At first, I thought this would be a complete train-wreck. A number of people would have that money blown by Groundhog day. On the other hand, for fiscally responsible people, this would actually be somewhat of a boon. If you had all your entire year’s salary up-front instead of accumulating it little by little throughout the year, you’d be able to earn significantly more interest during the year.

Taking into account how much credit card debt the average American has, I think it is obvious that some people have a problem delaying immediate gratification to focus on the long term.  Therefore, would people flush with cash at the beginning of the year run out and satisfy their every whim?  I would say "probably." (you might say, "at least they’re not using a credit card," and this is true…but come the end of the year all expenses would end up on the CC)

But maybe, just maybe, if people knew that they only got this one paycheck and they were not getting any more, maybe they would be inspired to be more careful about their planning and living. Yeah, you’re right, that’s unlikely and it would probably end up being worse than now.  Now that I think about it, that large lump sum would probably distract some normally fiscally responsible people and cause them to overspend early in the year as well.

So, I would answer the question like this: for some people it would work out a lot better. For some others, they would be inspired to get more serious about saving and planning. Unfortunately, I’d guess that some people would get distracted by the money, lose sight of the long-term, and end up being worse off.  And, of course, I still believe that a number of people would have it all spent by MLK, Jr Day.  The bottom line is it would be a lot better for some and a lot worse for others.

What do you think? Better? Worse? Why am I even wondering about this?

This Week in the Blogosphere

Have a great weekend and God bless…

Personal Finance Basics Part 1 – The Basics of the Basics

August 11, 2008 · Filed Under PF Basics · 2 Comments 
Personal Finance Basics

Today I am starting a series on personal financial planning basics. In this series, I’m going to go over some of the main topics of personal finance – this will be a high level introduction to the topics that most people should consider when they first get started thinking about personal finances.

Today’s post will go over the very basic necessities – these are the things that you must think about for any basic financial plan. This is the bare minimum you should consider if you want to properly take care of yourself and your family. In part 2 of this series, I will go over some “optimizations” to the plan (hey, I’m an engineer, this is just how I talk)(no, not the kind that drives trains). These first two posts are to serve as the introduction to the topic. In future posts, I will get into more detail on each topic.

So, this is my list of the basic items needed for a financial plan: Click here to continue reading…

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