In setting all of our goals and planning how we will get to where we want to be, we sometimes underestimate the importance of things (or people) around us.  The family of today is nothing like it used to be.  The pressures of society and the economy have forced the family unit to break down.  As a result, all generations are affected.

Our children are impacted

     For most families, the ever-rising cost of living has created the need for a two-income household.  With both parents working, children spend less time interacting with their parents.

     Many of our children have become “latchkey kids.”  They come home to empty houses and essentially miss out on the extra guidance and reinforcement that they desire and need.

     This can be especially hard for single parent households.  There is no extra person available in the household to bring in additional income.  One parent may need multiple jobs just to make ends meet.  This leads to even less parent-child bonding time.

Our parents are affected

     At the other end is the changing relationship with our seniors– our parents and grandparents.  As a child, I remember moving into my grandmother’s house when she became ill.  My parents were there to support her as her health began to fail.  I’m sure that their presence brought extra comfort in those troubling times.

     Unfortunately, that is no longer the norm.  We see the huge expansion of assisted living facilities for seniors.  With both spouses working, no one is available to stay home with our aging family members, to care for them when daily activities become more difficult.

We are still responsible

     The pressure and need to stay afloat financially has kept us out of our homes and away from our loved ones.  But that doesn’t remove our responsibilities toward them.

     In 1 Timothy 5:8, we are told that, as believers, we are accountable for the well being of our families:  “If anyone does not provide for his relatives, and especially for his immediate family, he has denied the faith and is worse than an unbeliever.” (NIV)

     We need to learn to balance our financial obligations with our family obligations so that neither is neglected.

What is most important?

     Although money helps us to acquire a lot of “things,” that is not what is important to anyone at the end of the day.  On our deathbeds, we won’t be asking to see the balance in our bank accounts, or trying to review our real estate portfolio one last time.  At that most critical point in life, we will want to be surrounded by those we love.

     I can attest to the fact that success and accomplishment feels good.  There are many things that I’ve done that I am proud of.  But the key question we should ask ourselves is, at what price?

     There is give and take in every situation.  Something is always sacrificed in order to get something else.  Some sacrifices are good, but many are not.  There are a couple of instances where I put my health in jeopardy to accomplish a goal.  Looking back, I am not sure that I can say that it was worth it.

     Let’s re-examine our priorities and see if there might be a better way to get to the same end goal.

     After considering where we are and where we want to be, we need to determine how we will get there.  You’re probably expecting me to share the secret to wealth and success.  I actually have it.  The true secret is preparation.

Use a guide

     A budget serves as our guide to helping us get to where we want to be.  There are numerous ways of setting up a budget.  We need to choose the one that works best for our own personal lifestyles so that we are more likely to stick with it.

     Many beginners choose to start off with the envelope system.  With this method, all of our available cash is divided among our expense categories based on our budget.  As bills need to be paid, the money is taken from the appropriate envelope.

     If we have budgeted correctly, the money should last through the end of the month.  However, once the envelopes are emptied, we should not spend any more money in that particular category.

     This method does help create a sense of discipline when it comes to spending.  With cash, we are better able to see how we spend our money.  We are also much more careful with our purchases because we are immediately accountable for paying the bill.  We are less likely to overspend when using cash instead of credit.

     If a computer-based budget is most comfortable, then we can choose from numerous versions of personal finance software that are available online or in our local stores.  We need to shop around and choose the program that we feel would work best for us.

     I personally prefer a manual, or handwritten, budget.  It is the easiest for me to customize because I can design it to make the most sense for me.

Keeping tabs

     To get a good budget established, it is best to monitor our spending habits.  For two or three complete months, we should keep track of every purchase we make, regardless of whether we use a check, credit card, or cash.  Each purchase should fall into one of the categories on our list.

     This may seem to be a little bit tedious to do, but the results will really help get us to the right budget.  By monitoring our spending, we will accomplish two things.

     First, we will be able to confirm that our original estimations are accurate.  If our first calculations were off, then we will be able to make the necessary changes to the budget so that we have a budget that is easy to stick with.  Remember, a budget is not meant to be a constraint.  We want to have a budget that reflects our actual spending habits.

     Second, we will be able to see where we are making mistakes.  Since we have never really kept track of where our money goes, this exercise can be an eye-opening experience.  We will begin to see how those little purchases add up.

Watch out for impulse purchases

     Small and impulsive purchases are usually the reason that our money does not make it through the month.  Lots of little purchases can end up eating away a significant chunk of our monthly income because we don’t really see it happening.  The money disappears a little at a time, so it doesn’t hurt until we look at the big picture.

     To make this monitoring exercise easier, it is best to ask for receipts for each purchase we make.  In the interim, we can keep the receipts in envelopes labeled for each category.  Then, we should take time at the end of each day (or at least once each week) to review our receipts and tabulate the totals for each category.

    At the end of the month, we get the grand total spent in each category.  After two or three months, we will have more information to work with.  We will then be better able to find trends in our spending habits.  We can compare our actual spending to the original estimates and make any adjustments that are necessary to make our budget accurately reflect our spending lifestyles.

     The most important thing that we should remember is that all of these things take time.  We need patience in the preparation process.  We need patience in identifying our habits.  We need patience in the process of getting on the right track.  But we can do it.

     Inheritances were very important in the Bible.  By definition, an inheritance is a possession.  It is considered both permanent and valuable.  It is something that someone owns that can be passed on from an ancestor to one or more heirs.

Are We Carrying on the Tradition?

     I think that one of the greatest concepts discussed in the Bible with respect to inheritances is that we, as Christians, are the people of God’s inheritance.  As it reads in Deuteronomy 4:20, God called the Israelites out of Egypt and chose them to be the recipients of His abundant blessings.

     In the Old Testament, the Israelites inherited the promised land.  In the New Testament, we received an even greater gift.  We see that through Jesus Christ’s death and resurrection, we have been given “an inheritance that can never perish, spoil, or fade – kept in heaven” for us.  (1 Peter 1:4 NIV)

     Knowing the value that has been placed on inheritances in the past, we should evaluate whether we are doing our part to carry on the ancient tradition.  Are we not only respecting the value of our own inheritances, but also passing them on?

The Seen and the Unseen

     Let’s start with our physical possessions.  In life, we all acquire things.  Very few of us have trouble spending money.  We buy homes, cars, clothing, food, and tons of other items that enable us to be comfortable and happy while here on earth.

     Then, there are the non-physical possessions.  In this category, we should consider our morals, our beliefs, or our philosophies on life.  What are we teaching our children?

     Do our children see us using our credit cards for every purchase?  Are we using those cards because we are trying to build up a bigger cash back bonus, or because we don’t have any cash in the bank account?

     Will our children know Jehovah Jireh as their provider in the tough times, or have we taught them to run to Visa and Mastercard?

     Do our children see us working really hard?  While that can be a great example of determination and perseverance, we must also consider our motives.  Are we spending so much time at work because that’s what it takes to pay the bills and provide for our families?  Or are we burning the midnight oil (even on Sundays) to buy more things so that we are better able to keep up with the Joneses?

     Will our children be in church on Sundays and midweek thanking God for His infinite blessings, or will they voluntarily go into their offices on Sundays, hoping to earn a few more dollars to buy more “stuff”?

     Are the extra things we want (not need) to buy worth the time that is taken away from the family?

     It is great to be able to leave our children with some temporal possessions that may enable them to have fewer struggles than we had, but there is a deeper question to consider as we work toward building that inheritance.  When our wills our read, do we want our children to have memories of the “stuff” we left to them or of the time we spent with them?

     We know the importance of having a financial map.  We also know that getting the map together requires asking the three big questions.  After looking at the first question (Where are we now?), we should consider the second question: Where do we want to be?

Be free

     Once we have a clear picture about where we are now, we want to figure out where we want to be.  This is the fun part.  We can be totally free and creative here.  This is no-holds barred.

     We should let our dreams loose and really think about the things that we want out of life.  Often times, we find ourselves just floating through life day by day, not really thinking too far into the future.  However, that old saying is true: out of sight, out of mind.  If we don’t see what we want to accomplish in life, it is easy to forget about it.

     There are lots of things to consider when doing this exercise.  If we have families and spouses, we should make sure that everyone is included in the dreaming and planning process.  Everyone should be in agreement so that there is complete cooperation in reaching the goals that the family sets.

Baby steps

     We also need to set goals based upon our present financial situation.  While we can, and should, dream big, we want to make sure that we take baby steps at first.  We should gradually increase the size of our goals until they can become a reality.

     Setting smaller goals along the way also allows for mini-victories.  If we are continually accomplishing smaller goals, we become more motivated to move on to the next level.

     For example, a single, full-time college student renting an apartment cannot expect to purchase a home to immediately replace the apartment while living on a part-time income.  However, with proper planning and the right perspective, that student can start saving money and putting other strategies in place that will make home ownership a reality in the very near future.

What matters most?

     In deciding where we want to be, we should consider the things that matter the most in our lives, whether that is family, financial freedom, a stress-free “retirement,” or being able to help others.

     Create a list of top goals.  Husbands and wives should discuss their goals together so that they are on one accord.  This list is extremely important in making things happen.  Writing our goals out forces us to think about them and to figure out how they actually fit into our lives.  We have a chance to dream, to visualize what we want to accomplish.  By seeing ourselves at that point in our lives, we get a little bit more motivated to turn those goals into realities.

Constant reminder

     Remember that we need to eliminate the saying, “out of sight, out of mind.”  We should have our lists in places where we have to see them every day – whether that is on our bathroom mirror or on the door of the refrigerator.  If we don’t write our goals down and keep them where we can see them, then we may not find ourselves continually motivated to accomplish them.

     Lastly, we should always include a specific deadline date on our goals.  This helps us hold ourselves accountable to each of the goals we set.  Without a date, we can continue to procrastinate about when we should reach the goal.  If there is a definite end point, then we work hard every day toward making that goal happen.

     Happy planning.  Remember to dream big!

     Let’s say that we want to take a short weekend vacation to San Francisco.  There’s an event that we’re really interested in attending.  We’ve made all of the necessary arrangements, but now we just have to get there.  If we were planning to drive and don’t know how to get there, there is one key tool that we cannot do without: a map.

     To use the map, there are two main questions that we will ask ourselves: (1) Where are we now? and (2) Where do we want to be?  After answering these two questions, we can use the map to answer a third question: How will we get there?  We then look at the map to find the best route to take to reach our chosen destination as soon as possible.

     In the same manner, we need to apply these three big questions to our financial lives.  We need to carefully analyze and reflect upon our current financial positions.  Then, we should consider where we would like to see ourselves in the future.  Lastly, we will create a map that tells us the best way to get to our goals.

     Today, we will look at the first question.  Later, we will look at the second and third questions.

Where are we now?

     There may be a lot of chaos in our lives now, but remember that there is hope in the midst of the chaos.  Although many of us are in denial about certain parts of our financial lives, there is always room for improvement.  Some characteristics of our spending habits are very obvious, while others are hidden.  The only way to make this work properly is to bring everything out into the open.

     This is particularly true for spouses.  We cannot expect our households to run smoothly if we are keeping financial information from our spouses.  Whether good or bad, now is the time to mention everything so that nothing is left off of the financial map.

     The critical step that we need to take to determine where we are now is to create four lists:  the first two lists tell us what we OWN; the last two lists tell us what we OWE.

What do we OWN?

     The first list of what we own is a list of our assets.  This list includes everything that we have been able to save and/or acquire so far.  This would consist of all banking accounts; personal investment savings and retirement accounts; equity in our homes and vehicles; and the resale value of some personal items.

     The second list is a list of our sources of income, such as jobs or pensions.  We would also include social security or disability income, as well as other sources, such as child support.  Any money that is coming in would be listed here.

What do we OWE?

     The first list of what we owe is a list of all debts and expenses.  Every dollar spent should be accounted for, including those quick trips through the drive thru or the coffee we pick up on the way to work.  We may not have actual figures for every expense, so it is OK to guess at this point.  However, it would be good to start tracking spending habits so that the list can be correctly revised later.

     The second list is list of irregular expenses.  This list is designed to help us identify those irregular payments that we make throughout the year.  Examples of this would be our property taxes (if not impounded) or the gifts we purchase throughout the year.

     These expenses are often the budget busters that throw everything off when not planned in advance.  Since they require large cash amounts within a short period of time, an entire paycheck may disappear at once.

     This list should help us avoid that problem in the near future.  To help us prepare for those often-unexpected surprises, we should estimate the costs of these expenses.  We then divide the total by 12 to get estimated monthly costs so that they can be included in our regular budget.

     Completing these four lists can be an eye-opening experience.  Although we pay our bills every month, we seldom take the time to add up everything that we spend.  When irregular expenses are included, our totals get even higher than we had realized.  But the whole point of this exercise is to get a true idea of where we stand financially so that we know how to move forward to reach our goals.