Dirty Green Paper – Why to Save it Wisely

The Echo students have been exploring this idea: our relationship with money is closely linked to our relationship with God. The truth is this: we have problems with money that have spiritual roots. This week we talked about two important things you can do with money: Saving and Investing.

This may seem a silly thing to talk to teenagers about, who may believe savng money is something they’ll just take care of later, when they’re older and have a steady income. However, if we can help them learn good principles about saving now, they’ll be prepared to build wealth like crazy once a real income starts rolling in and have the character and skills to do something great with it. Besides, aren’t there some things teens need money for now? What about saving for a car, your own computer, or college, or a mission trip next summer?

The practice of saving gives you peace of mind in emergencies and the ability to make smart purchases. By faithfully learning God’s principles for saving money, you’ll be prepared to handle whatever opportunity or surprise He brings your way. No matter how old you are or how much money you make, being broke severely limits your ability to serve other people and take care of yourself. To avoid this trap, we need to understand Scripture’s wisdom on why and how to save money.

Proverbs 21:20 – While the wise man saves and plans for the future, the foolish man lives for the moment, spending and wasting every dime he gets his hands on. This is what we talked out:

FIRST, Saving is not hoarding.
Luke 12:16-21 – tells a parable about a man that was hoarding things for himself, but was not “rich toward God.” Hoarding is about selfishness and excess. It is about the pursuit of more. Hoarding is a closed fist, it is holding on to your money and possessions with inordinate affection. The heart that clings to and trusts in money is not aligned to the Kingdom of God. Sometimes people confuse hoarding with saving, and because they fear this attitude or have been taught wrongly, they act like accumulating any wealth is sinful. They spend or give away everything as soon as they get, sometimes talking as if that is a lifestyle that honors God because you trust in God alone and not your savings. I have a hard time believing that this attitude of irresponsibility is a reflection of deep trust in God, it seems reckless and unwise. The same people are those that end up needing help in a crisis, while the ones who save and invest wisely are the ones able to actually give help. Remember, our goal with money is to be blessed by God to be a blessing to others. It’s hard to do this if you are always broke! Saving is about security and availability to the plan of God. It is a way to protect your goals and give you peace of mind.

Second, We save to prepare for the future we cannot expect. We save because the future is uncertain! When you save and invest, you need to keep your mind not only on this world, but also on God’s Kingdom. You have the ability to avert crisis or to help others through crisis when you have managed God’s resources responsibly. This is the theme of several stories in scripture: the blessing or favor of God spills over on others from God’s people. Joseph averts the crisis of the regional famine through revelation, wisdom, and good planning. Nehemiah loans money at no interest to the rebuilding of Jerusalem’s walls. And there are others – examples where people who were blessed by God were a channel for the blessing of God to flow to others. Look at how Joseph did this in Genesis 41:34-36. With savings, it is about knowing that emergencies and calamities happen, so we need some security against it. It is about positioning yourself in such a way that you will always be prepared to do what God’s Kingdom requires of you, and that you won’t have the excuse of being under-resourced.

Third, We save to plan for the future we do expect. Saving is about thinking long term. We are not very good at this! We tend to live in the moment and sometimes in doing so, we rob the future. Saving is the opposite of debt. Larry Burkett said once: “Saving is making provision for tomorrow, but debt is presumption upon tomorrow.” We have a “play now, pay later” attitude that our culture encourages steadily, but sometimes we are not prepared to pay the cost we incur. Opportunities come: a mission trip, a special project, a need in a friend’s life, an act of mercy – and sometimes we cannot respond because we have lived with so little margin up to that moment. The American way is not the way of the Kingdom of God in this regard. Our culture encourages us to live right up to the level of our means, and sometimes even beyond it. Margin is a concept that could dramatically change our stories. The Kingdom of God would demand that we live well below our means, with margin, so that we can give and save significantly. It would employ simplicity and humility to keep us from running after stuff or the temptation to “keep up with the Jones’s.” With this concept, thinking about the future, time matters.

• Pay yourself first. This is a principle of smart financial planning. It says basically that we not to be trusted! If we wait until the end of the month and save whatever is left over, we will have spent it on things that really don’t matter to us. If you save right away, that temptation is removed. Every time you get $10, give one of them to God’s work FIRST. Then, immediately put one of them in savings. This makes sure that you prioritize what matters most. ALWAYS SAVE some of every dollar that comes to you! This makes the choice to save responsibly easier, because you make that choice right away. Otherwise, you are standing there looking at the new paintball gun and saving just doesn’t seem very fun!

• Start Early! Many teens think something like: “I am just a teenager, I can’t save now.” I think they control more money than they know, but they spend it and so quickly they don’t recognize the amount. One survey showed that American teen spending exceeded $169 billion in one year. While their income may be limited, they do have a greater amount of one resource now than you will ever have: time! Even small amounts of money can grow SUBSTANTIALLY over time. Because of something called “compounding,” investments generate more earnings as they increase in value. Albert Einstein was so impressed by compounding; he called it “the most powerful force in the universe.” Compounding depends on two things: time and the rate of return. This is where the difference between saving and investing really becomes important. Saving is normally for short term goals (I am setting aside money to buy a computer) and you use a savings account for that. Investing is about LONG term goals (like college or to buy a house or retire) and this is where you take a bit more risk to get a better interest rate. Buying shares of a stock is an example of an investment. You have time now, and you need to take advantage of it! Even if you start with just a small amount, get into the habit of saving now because you are giving yourself the gift of a better future. The amount doesn’t matter nearly as much as the habit, and the amount matters less and less the earlier you start! The earlier you start, the more powerful savings becomes. Look at the difference between Ben and Arthur in this chart made famous by Dave Ramsey’s Financial Peace University. When you are dealing with investment interest rate of 12% (some would say that is unrealistically high), time matters BIG. Ben started early, and Arthur never could catch him even though he invested far more.

Many people criticize the example of Ben and Arthur because of the unrealistic rate of return. Even with more modest numbers, like 7% instead of 12%, starting early is astonishingly effective. Imagine you start investing $2000 every year when you are 18. You put it into a mutual fund making 7%, and you do this for 10 years. Ten years later, you have a baby and you stop feeding the investment because you have to buy diapers or something. Your sister, who sees that you always seem to have money and she is always broke, decides to do the same, but she doesn’t start until she is 31. She puts $2000 a year into the same mutual fund that you used, and does it for the next 35 years. So, you have invested a total of $20,000, and your sister will have invested $70,000. Who will have more money at age 65? Believe it or not, you will. She will never be able to catch you because of the compound interest over time! You will have $361,418, and she will have $276,474. That is a difference of $84,944! That is the power of time! If you kept investing and didn’t stop, you would have $706,000 by age 65!

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Dirty Green Paper

Money is powerful stuff! It might not seem like a topic that should come up in church, but money matters to us so it matters to God. Our country has a problem when it comes to money. We do not know how to deal with it. We are part of a VERY small percentage of the richest people on earth, and maybe even in history, yet we forget how rich we are because we are a part of a system that constantly tells us we do not have. Sometimes money works like this: if we get it, it gets us. If we don’t have it, our lives are spent trying to get it. When we do get it, we don’t own it as much as it owns us.

For these reasons and more, your relationship with money is closely linked to your relationship with God. Jesus spent a lot of time talking about money and how we relate to it, and he taught there is a line of connection from our wallet to our heart. The truth is this: we have problems with money that have spiritual roots. We will never truly find financial peace if we ignore the inner condition of our hearts that make us susceptible to money pitfalls like greed and debt. God talks about money all over the Bible, and if you were to follow his instructions, you would have more money, give more money, and make your money work harder for you. Money isn’t evil. It isn’t the root of all evil. The love of money, however, is the root of all kinds of evil. Money can be something powerfully evil, but it can also be something powerfully good! I think at a very basic level, our relationship with money should look like what God told Abraham in Genesis 12:2-3. God wants to bless us, and it is our job to channel that blessing to others! With this in mind, Echo is having a conversation over the next several weeks about how to relate to money righteously.

After we get some of it, we can basically do 4 things with it:
• Spend it.
• Give it.
• Save it.
• Invest it.

This Sunday, we talked about spending.

First, Good spending starts with settling the “ownership” issue. Jesus explained this once using a coin in Matthew 22:15-22. The way Jesus phrases his question would have reminded his audience of Genesis 1-2, where human beings are created in the image of God. In whose image was the coin created? Caesar’s. In whose image were we created? God’s! When Jesus says “give to God what is God’s,” he is not saying God is not concerned with money. Jesus is implying that God is asking for all of us. The message of the Kingdom of God is one of total surrender. Why should we be concerned about our cash? Because our feelings toward it and how we use it are a huge part of who we are. Remember, there is a line of connection from our heart to our wallet. The starting point to righteous attitude toward money is settling the ownership issue: everything belongs to God, so I have to use whatever He entrusts me with responsibly.

Second – Spending easily becomes out of control, and our culture has even invented ways of spending more money than you have. You combat this with a budget, which is a spending plan. A budget is a tool to help us plan and to help us make our money work toward our goals. It helps us do something we all have a hard time with: telling ourselves “no.” A budget means you have a plan, you have counted the cost, and you are working toward a goal. Budgets can be complicated or simple as long as they balance income and expenses. The simplest lesson anyone ever taught me about money: every time you get 10 dollars, give one of them to God’s work, put one of them in savings, and spend 8 of them wisely.

Third – Your spending habits reflect your values.
If you spent $50 a month on Mountain Dew, we could confidently say you really like Mountain Dew. The problem with that comes in when you consider “opportunity cost.” It means that if you use your $50 to buy the Mountain Dew, you won’t have that $50 to buy your friend’s x-box game when he sells it. We might have all the money we need, but we can’t have everything we want. What a budget does is help us make choices about how to spend money in advance, so our choices will better reflect our values instead of just buying things on impulse. Marketing is so effective, people often buy things unplanned in the moment and regret it later. Living on a budget, no matter how much money you make, will protect you against this. Another thing to consider is what you actually spend money on. This is about recognizing that you vote with your wallet. When you choose to guy a product from an organization or person that you don’t agree with, you are actually supporting them and their issue. You can do this the other way too: actively support products and companies you think are doing something right. This is just another way money is powerful.

Questions for discussion with your teen:

*Talk about the family’s budgeting process. If you can, invite your teen to join you paying the bills or planning the budget for the month. If you don’t have a budget, why not?
*Do you think you are more of a spender or a saver? What do you think about your spending habits?
*What does it mean to “vote with your wallet?” Is there anything we support as a family with our money that doesn’t reflect our values?