by: Cassandra Laymon, CFP®, MBA
Last summer my soon-to-be high school senior, Sam, took a required Financial Literacy course at his school. As a financial advisor, I thought this was a great idea! I wish I had taken that class! What a gift to be given the foundation of the principles of money at such an early age.
For those of you who didn’t have that class, at Beacon Wealth Consultants, Inc. we take our clients on “The Stewardship Journey,” a learning experience that meets you right where you are with your finances. It starts at the very beginning with the basics of spending, saving, and giving to the more advanced levels of creating financial independence and extravagant giving. It combines sound financial strategies with proven biblical principles.
Over the next few weeks we’ll be sharing the important steps to focus on as you move from independence to success to significance with your finances.
Today, we “Embark”. This is the starting point, whether you have just graduated from school, or if you are a little older, and find yourself saddled with some unwanted debt. I want to encourage you that no matter what difficult place you find yourself today, there are steps you can take to improve your situation.
First and foremost, I would encourage you to pray about your situation. My most fervent prayers include God giving me wisdom and discernment, and a clear path to making choices that will glorify Him. If you are married, pray with your spouse about your financial challenges and choices.
Start Incremental Giving
You may be thinking, “Are you crazy? I’m having a hard time making ends meet. How can I start giving?” I would ask you start looking for opportunities where you can bless others who are in a worse situation than you are. Blessing others with even a small amount will start to change your heart from a place of fear and scarcity to a place of confidence and gratitude.
Create a Monthly Spending Plan
If you are attending church, there is likely a basic financial class such as Compass or Crown Financial Ministries that will help you with this. Today we are so reliant on credit and debit cards, that we rarely know exactly where our money is going. While it’s a challenge, it’s important to know what you are spending so you can find the opportunities to cut back and direct extra dollars toward your debt. Set a goal to eventually be directing 10% of your income to savings, and 10% to giving (tithing).
Live Within Your Means
Once you know where your money is going, you are better able to adjust your lifestyle to fit your new goals. As stated above, the goal is to live within 80% of your income. With such easy access to anything we want at our fingertips, it will take diligence to say no to your “wants” and focus on your “needs.”
Save $1,000 in an Emergency Fund
If you are struggling with your finances, saving $1,000 in an emergency fund is a great accomplishment. $1,000 means that when an unexpected expense arises, you’ll have the cash to pay for it instead of adding to your debt. The most important step is that if an emergency does arise and you use money from this account, you must replace it as soon as possible. Your goal is to maintain $1,000 in this account at all times.
Whew! That might seem overwhelming if you’re just starting out. If you need additional help, I encourage you reach out to the stewardship ministry at your church to give you guidance and support as you embark on this very important journey. The most important thing you can do is get started!