Practical Finances

So this is an area that I'm passionate about.

I'm an accountant in the business sphere.

I started out in audit and moved into commercial companies with a ministry focus and I'm now helping churches.

So I'm not a tax accountant.

I'm sorry I can't answer your tax questions.

I have them too.

Tax is such a complicated area, especially when you have a family and family tax benefit.

Anyway, yeah, so I'm not a tax accountant.

I'm also not a financial planner, so financial planners are who you go and see when you want to talk about investing and insurances, and I'll kind of reference them a little bit.

So what I'm talking about today is generic in nature.

This is a bit of a disclaimer Go and seek financial advice for your specific circumstances.

But I am passionate about this area of personal finances and budgeting and stewardship and, as Christians, how do we manage our finances in a way that is responsible and glorifies God?

I, at a previous church, I undertook some training with Christians against poverty.

I'm going to talk about them a bit more today as well.

They have an amazing budgeting course called Cap Money and I trained up to be a Cap Money coach and ran some budgeting courses just a couple as a ministry of the local church.

So actually, from doing that course was when I dug in and did my budget properly and when I saw like it is possible to save, it is possible to give, it is possible, even in light of the decisions I was making in my career, to kind of earn less money to do ministry, I just I saw God provide and I just saw the results of having a budget and putting that in place and thinking about my lifestyle.

So that's where I come from.

I've also done Bible college as well.

I did Mauling an advanced diploma of ministry, so I've got that side of things as well.

I'm actually not going to quote so many Bible verses today.

I know it's a bit of a shock and a sermon, but we've been in this series on finance as we've been exploring the scriptures, so today is designed to be a bit more practical.

There's going to be lots of information coming at you.

I have done some slides.

I did them last night so I apologize if they don't make sense or there's a typo, so I can make the slides available.

This has been recorded so you can come back and listen to it again.

But, yeah, there's going to be lots of hopefully practical information, some resources and some steps that you can take from here.

So that's the focus today.

I'm being very careful not to use the world's wisdom in this either, just borrowing the occasional principle that is commonly accepted and that is lines up with scripture.

The last time I gave a talk like this was for the Chapel at Morene College, perth campus, just over a year ago, and at the time they were looking at a book called the Good and Beautiful Community by James Bryant Smith, and there's a chapter in that book titled the Generous Community, and if you've got a copy of that can pick it up and want to have a read.

It's a great chapter.

There's a key principle from that chapter that I'm borrowing today and it's going to come up on the screen.

It's for a Galilee creates margin which enables generosity.

For a Galilee creates margin which enables generosity.

Sounds a bit like an equation, doesn't it?

If you're hearing this today as a Christian, hopefully the idea of being generous excites you.

We all long to be in a position to give to God's kingdom, to see his kingdom advance.

We probably also want to be generous to family, to the needy, to good causes that we'd love to support, and certainly everyone would love to be in a position with a bit more margin.

So how do we get there To margin and to generosity?

We have to start with frugality.

On the next slide there's a bit of a definition of frugality the quality of being economical with money or food or thriftiness.

So in relation to money, it kind of comes down to decisions about your lifestyle.

Sometimes your budget will limit your lifestyle.

If you're a student, for example, you have very limited income.

Your budget is going to be very limited.

Your lifestyle is going to be limited.

At other stages of life, though, you might have more resources available.

Whatever your stage of life or finances, you can be proactive in thinking about, in praying about, how you want to live.

If you're a single, this is something you can do on your own, but if you're in a partnership with someone else, in a family, this is a process that you'll go through together, in praying about how you want to live, in setting some desires, some goals.

As Christians, our approach to budgeting will look different to the way the world would approach it.

For us, the concept of stewardship is key.

Rather than ownership and thinking that we are entitled to spend everything that we own, we look on our resources as stewards do.

Everything on this planet is God's, including our wealth, our money and our possessions.

1 Chronicles 29, 12-14 says Wealth and honour come from you.

You are the ruler of all.

Things In your hands are strength and power to exalt and give strength to all.

Now, our God, we give you thanks and praise your glorious name, but who am I and who are my people that we should be able to give as generously as this?

Everything comes from you, and we have given you only what comes from your hand.

You are a trustee, and that changes how you use the resources given to you.

So pray about it.

Ask God what he desires for your lifestyle.

You need to be active about this, because the default is to kind of go with the flow of our culture, and our culture is all about consumerism.

We are so easily persuaded Don't answer this out loud, but who in the room here has bought something from a Facebook ad?

Or because you've seen something on social media, someone using it or highlighting it?

Getting practical.

We do need a budget Now.

I know this will bring up different emotions for people.

Some of you will be excited about that.

Some of you will be like, oh, numbers, detail.

But today we're going to start giving you some steps to break it down.

You'll look at each area of your lifestyle and you will set limits.

That's what happens when you do a budget, and I mentioned, sometimes you're limited by your income.

Other times you'll be limited by your choices.

If you are limited by your income, you need a budget.

It can be a bit painful to look at your expenditure and realize what you can and can't afford, but not doing a budget keeps you in perpetual pain and stress.

Don't bury your head in the sand.

Push through, get the budget done, have the reality check.

Only then can you start moving towards change.

Now I can't stand up here and tell you what your budget should be.

There's people that can help guide you in shaping your budget and there is help available.

But your circumstances are unique.

Your family is unique.

What God will speak to you about your lifestyle is unique.

For example, some people may have a real heart for hospitality and having people stay with them in their homes, but they'll actually need a house that can accommodate that.

Or you might like to help out friends by taking their kids after school, so you will need a bigger car to accommodate that.

Mike and I are looking at spending a big chunk of money to go and see family in Sydney and Canada next year to introduce them to their newest grandchild and nephew.

That's a necessity for us.

We knew that entering marriage, these overseas trips will be a regular thing for us, but perhaps for others it might be a luxury.

It's also not about scarcity.

Just the same as entitlement is a false narrative that we can tell ourselves, so is scarcity.

God is a loving Father and he desires to give good things.

This is where you have to put in the work and you have to discern what God desires for you.

The Lausanne movement has something to offer us as we consider the concept of fragility or having enough.

The Lausanne movement is an ecumenical or insidernominal gathering of people from all walks of life, from rich and poor, from across the globe.

It was way back in 1980 that they developed an evangelical commitment to simple lifestyle.

There was quite the process to arrive at this quite lengthy article.

There was two years of study, there was gatherings in 15 countries, regional conferences in India, ireland and the US, and then they came together in this big consultation with 85 evangelical leaders from 27 countries.

So it was an evangelical commitment to simple lifestyle and it's a really fascinating read.

I'll leave it with you to Google it and have a look.

It actually looks at a Christian foundation for looking at finances and lifestyle in light of both the poverty and the abundance in the world.

It's quite fascinating to read and quite yeah, it's good to read.

Thank you.

A section of that that I want to draw to our attention that will help us as we do our budgets.

It's a good filter through which to run all of the decisions that we have to make.

So on the next slide, there's some questions that you can ask yourself.

Is it a necessity or is it a luxury?

Is it a creative hobby, something that fulfills you, brings joy, or is it an empty status symbol, something you're just doing to keep up with the crowd?

Modesty versus vanity.

Why are you spending this money?

Occasional celebrations versus normal routine it's okay to have celebration.

It's okay to spend that bit of extra money for special occasions, to do something out of the normal.

And then, service of God versus slavery to fashion.

Is what you're looking at something that you're going to use to serve God with, or is it something that you're just doing?

Good questions to ask ourselves as we develop our budget.

So where do you start with developing a budget?

Well, as I mentioned at the start, christians against poverty have a budgeting course called CAP Money.

The website's up there.

You can Google CAP Money and it will take you to their website.

It's run for free through local churches as a ministry to their local communities.

You can jump on.

You can search around your postcode and find the nearest courses to you.

It's not overtly Christian.

It's designed so that it's accessible for people in the community, but it obviously comes with that Christian basis and that Christian understanding.

You meet up a couple of times and you work through the course material and then at the end you have a budget and you have a way of managing your money to help you stick to your budget.

It's one thing to have a budget.

It's another thing to stick to it.

So getting some tips and tricks and how you can manage your money to help you stick to your budget is so valuable.

The government also has a site called Money Smart and there's heaps of resources there.

I'll reference them a bit today as well.

They have a budget template and some guidance if you want to go home and get started or if you want to just have a go on your own.

But I do highly recommend doing this with other people Gathering with other people, troubleshooting things, listening to other people's tips and tricks it's really, really invaluable.

And then you have a coach there as well who can help you if you get a bit stuck.

One thing that you will need to address as part of your budget is debt repayment.

Now, I'm not going to look at debt today.

I know there can be some very polarizing views on whether debt is biblical or not, whether we should use debt or whether we shouldn't.

It is a reality in our world, so I did want to address it this morning.

So on the next slide, there's some things, some notes about debt, or that's keeping it under control Great.

What is debt?

It's any form of borrowing Mortgages, loans for things like cars, holidays, furniture, credit cards, any form of buy now, pay later service and actually any bills that you owe that you haven't paid yet.

That is considered debt.

Common advice would be to not take out debt on any kind of non appreciating asset.

An appreciating asset is one that goes up in value over time, so a non appreciating asset is something that doesn't.

Now I'll know there's a lot of exceptions that people will want to raise, lots of scenarios such as I can't actually afford groceries this week.

What about getting a car?

I've just started work and I don't have savings, but I need a car.

I've had this emergency pop up.

My fridge broke down.

What about all the benefits that you can get with a credit card Earning points, free travel insurance, or I need a credit card to establish a good credit rating?

Again, we're not going to debate that this morning.

But if you have a solid budget in place and you have savings, you won't actually need to use debt, except for maybe buying a house.

I don't know many people who can pay for one of those outright and credit cards.

They may have their benefits, but they also have big pitfalls Annual fees, huge interest rates if you don't pay off your balance.

Yeah, there are some big pitfalls with credit cards and in Australia you don't actually need a credit card to establish a credit rating.

There's other measures that they can use.

So it's not a necessity to have a credit card.

But what if you're already in debt?

It doesn't help again.

It doesn't help to stick your head in the sand.

There's some steps that you can take and, as you're developing your budget, these are some things that you'll go through.

First of all, you need to know what you owe.

You need to gather all the information, write down the specifics of the balance of the repayments, of any consequences of not meeting those repayments on time.

You need to get help if you need it.

There are circumstances where you will be overwhelmed, where the stress will be high.

There is help available.

Christians against poverty have money.

Mentoring Again, you can check out their website People that will come alongside you and help you manage your debt.

I think they even have or a few years ago at least they were able to kind of manage it for you and help pay things off and kind of really get in there beside you and help with that.

Also, the national debt helpline.

If you just want to call someone and talk through what are the options you know.

Give me some guidance.

There's a phone number that you can call.

I would just say, in seeking out help, make sure it's from a reputable source, make sure that you know the kind of background of where the people are coming from.

There are companies out there that will want to help you get out of debt by giving you more debt or consolidating debt.

So just be really careful when it comes to that.

Often, going to places that don't have an agenda behind it will help you have more kind of less bias.

If I should say that the next step is to work out what you can afford to pay.

So you're going to look at your budget and your bare minimum expenses that you need to pay.

Then you'll be able to see what you have left over, to see what you can afford to pay on your debt.

Then you need to prioritise your debts and bills.

You need to pay the most important things first.

Some debt has bigger consequences than others your mortgage or your rent.

You need somewhere to live, so that would be high up on the list.

If you rely on your car to get to work, to earn money, car repayments may be up there as well.

So it's really important that you assess kind of the consequences of not paying each debt.

Then the next step is to start small and snowball your debt.

These steps come from the Money Smart website, so they've got more information on what that looks like, but basically there's a bit of psychology involved.

If you can get in and you can pay off some small debts quickly, it's very highly motivating.

So there's a strategy there of paying off some of your smaller debts first, to get some momentum going.

Then the last step is to have a savings mindset.

Just a quick guideline about mortgages.

I said that I won't be able to give you specific guidelines about what to include in your budget when it comes to mortgages.

There's a thing called mortgage stress.

It's commonly defined as when a household is spending more than 30% of their pre-tax income on mortgage repayments.

So if you don't have a mortgage yet and you're looking at taking one out, check out your repayments in relation to your income and aim for something under 30%.

The same goes for rent as well.

If you're looking at renting a new place, check out what percentage of your income are your rent payments and try and aim for something less than 30%.

Try, I know it's difficult, all right, moving on to margin.

So the next slide when it comes to budgeting, we don't want to set our lifestyle at 100% of our income.

A budget is just an estimate.

Life is unpredictable.

There's going to be things that come up, things that cost more than you expect.

So, in order to avoid debt, we need to have that bit of margin and we need to have some savings in place.

When it comes to savings, there's a couple of different things you can look at and they're listed in order of priority.

I guess the first thing you want to do is set up an emergency fund.

An emergency fund is money you save to cover urgent or unexpected costs.

It could be car repairs, unexpected travel, medical bills.

A commonly accepted target for an emergency fund is three months worth of expenses.

So once you've done your budget, have a look at your monthly costs, times it by three and that's your goal for an emergency fund.

And a good way to build this up is to put a little bit aside.

Each time you get paid, or if you come into some money like a tax return, just pop the tax return straight in there and you build it up and then keep it topped up.

Other savings goals you might have other savings set up for other goals that you have in your budget.

This is usually things that you would spend kind of annually or every few years, so cars or replacing furniture or electronics, that kind of thing Saving up for holidays, a house deposit, even education, if you're looking long term.

Some practical tips when it comes to saving, look at setting up separate savings accounts.

Don't lump it all into one account.

The temptation is too much to dip into other funds that are set aside for other purposes.

There's a bunch of online banks these days where you can actually set up like 10 accounts and you can name them different things.

They're usually free fees, so just have a look.

Find one that doesn't incur monthly fees for having each one set up, so that you can have your different savings buckets if you like and don't have card access to them if you don't need it.

So if you've got a debit card that you can take and tap, that is super easy to spend that money, whereas if you need to transfer it and leave time for it to transfer into your debit account, it actually might help you really think about the purchase that you're just about to make.

Consider interest rates as well.

So for your savings accounts, you want them to be working for you.

You want them to be earning some money, so have a look at accounts where you can earn some interest.

The rate that you can achieve will depend on how long the funds are there for, whether you need them in the next year, three years, five years.

Do your research and find something that suits, and the final tip is just to automate your savings.

Have it leave your pay like, set it up with your employer that part of your pay goes into the savings accounts, or use your online banking and manage it yourself.

You want to set and forget.

You want the money to leave your account before you have the chance to spend it.

Some other forms of savings that you should consider is superannuation, so it's your retirement savings.

Not many of us think about that until it's basically time to access it.

But just a word, especially to younger people it's never too early to start, and in fact, it's the small amounts over the long term that can have huge impact.

So don't think that you're too young to start.

There can actually be tax benefits for adding to your super.

There's code contributions available too if you're on a low income, where the government will actually contribute some money as long as you're contributing as well.

The final area of savings we'll just touch on today is investing.

So we're looking at fixed interest property shares, alternate investments.

Again, you might be tempted to think I don't have enough money or I'm too young.

These days, you can start investing with as little as $1,000.

You've just got to find the right product and the right thing that will suit you.

What you choose to invest in will depend on your timeframe of your goals and also your risk tolerance.

This is highly, highly personal, so this is where you'll want to seek a financial planner to help you figure out what is best for your circumstances.

A word about insurances, often an area we don't think about either, and it's another expense to cover something that might happen.

Hopefully, you don't need insurance, but if you do need insurance, you're going to need it because it's a big expense.

Again, insurances is not my area.

I can't advise on it.

But to highlight some of the main types of insurance car insurance Now, you might think that your car is not very valuable and that you could live without it or you could get another cheap car, but some forms of car insurance actually cover the other cars that you might hit or the other property that you might hit or damage.

Home insurance for both the building and the contents.

Again, it's lots of money when you add it up, if you think about replacing everything in your home.

That is a lot of money.

Private health cover this covers things like hospital stays, both planned and unplanned, and some of your bigger health costs.

It's not really designed to be something that you get all of your benefits back by getting some physiotherapies and acupuncture every year.

It is insurance and it's designed for those big things that you don't expect to happen.

Then there's life insurance.

That helps with income if you were to end up with a permanent disability.

It helps your family in the event if you're deaf, if the income that you earn is no longer available to your family and they can't pay the mortgage and they can't buy groceries.

Yeah, that can have devastating effects.

Not things that we like to think about particularly, but it is worth considering as you're looking at your finances.

All right, the final area of generosity On the next slide.

It's another aspect of our budgeting.

Mark Chappell is a pastor over East who I really respect.

In his teachings on finances he says that sacrifice or giving, generosity, is an act of defiance.

It is rebelling against greed, against hoarding selfishness and materialism.

Our very nature is to want to cling to things, to hold on to them, to keep them, sacrifice, and giving is blatantly against this nature.

It's defiance.

It does not come naturally.

Andy Stanley has a phrase he says don't let your standard of living determine your standard of giving.

We sacrifice and we give in proportion to how God has provided for us.

Now we could have all sorts of discussions again about the biblical amount that you should sacrifice, especially when it comes to tithing, giving to the church.

Often 10% is something that we suggest is appropriate.

That has its roots in the Old Testament, but we're liberated from the Old Law.

We're no longer under that.

The truth is, god could call you to sacrifice more.

10% of a $500,000 income is very different to 10% of a $50,000 income.

Do you think that you might have more margin to give more than 10% if you were earning $500,000 a year?

There may come a point in your life where you are able to give more than 10% without your lifestyle being affected.

So how do you become a generous person?

What are some practical steps?

When I started going to church, I was about 17 and I was working at Big W as a casual checkout chick.

The idea of giving 10% of my pay at the time was overwhelming.

We're talking small numbers, but at the time it was just huge.

So I started with $5 and I increased it by $1 each month until I was giving 10%, and then I maintained that through into my full-time career.

Once you've built that capacity into your budget, it is easier to maintain.

One thing I did much later on was incorporate a blessings line into my budget.

So on top of my tithing, I would set aside a small amount each pay.

I'd put it into a separate account again.

That would enable me to give spontaneously as I heard of need.

This helped me to not be limited to what was in my wallet or what was in my bank account at the time.

You know, when you hear of a need and your heart is stirred and you want to give, you can be limited by what's in your wallet or you can have planned and set aside in advance.

That enables you just to give more freely.

And, yeah, by working giving into your budget, like I said, you're not limited to what you have at the time.

I mean, I used to think that spontaneous giving was somehow more holy.

I don't know where I got that idea from, but the truth is it's hard to be generous if your lifestyle is maxing out your funds.

The key is always always hearing from God and doing what he says.

Sometimes he'll ask you to give when you don't know where it's going to come from, and sometimes it is okay not to give when a particular opportunity presents itself.

The book that I referred to at the start encourages you to learn ways to give.

That takes intentionality Knowing what's close to your heart, sitting down and thinking about what are the things that I'm passionate about and then finding out the ways that you can support it.

Honestly, I didn't know much about supporting missionaries until I moved to my second church and I heard more about it.

I saw it modeled, I think, like it did happen in my first church, but for some reason it just wasn't something they talked about or something that I saw.

So when I implemented my first budget, when I did the CAP money training, I found that I could start.

I had a bit of margin and I could start supporting missionaries myself.

I was tithing and supporting three different missionaries.

By the time I felt called into self-funded missions myself.

I was tempted to think that now I was moving into missions, I could reasonably give up on this kind of generosity, but instead I prayed.

There was no big booming voice in response.

There was just a sense that I should just continue as I had been doing.

And lo and behold, I was able to continue supporting each of those missionary families without changing the amount and without missing a month.

Now.

There were times when I didn't know exactly where those funds were coming from, and I communicated to them a couple of times.

Look, you know, I am intending to do this.

God provided every time.

Now, over my years in missions, two of the three families left the mission field, enabling me to increase my giving to the third family.

But all that to say that I am amazed at the generosity of God towards us when we are generous to others.

Frugality creates margin, which enables generosity.

Pray about it.

Develop a budget.

The last slide that I have got just summarizes the practical tips that we have talked about.

So just to go over those quickly again your mortgage or rent should be no more than 30% of your pre-tax income.

Focus on reducing your non-mortgage debt.

Set up an emergency fund equal to three months of expenses.

Set up a savings plan for other big expenditure.

Consider insurances.

Decide on giving and set it in motion.

Lots of information, hey, potentially overwhelming Hope.

Not too overwhelming.

It is work, it is confronting, but there is help available.

You don't have to go through it on your own.

I would just invite Alex up to close us out.