Managing Money God’s Way

Are you financially secure?

With the economy at the top of almost everyone’s watch list, job security is a thought that comes up often in discussions with others. Each day the number of people losing their job increases and for some the idea of trying to go out and find another job is a very scary thought. Depending on what research you read, most people stay only 3 years at a job, before they are looking for the next one, but most of the time they leave because they want to, and they already have another job lined up. For the majority of people, losing their job would destroy their financial life, because they are living paycheck to paycheck. They have not taken the time to ensure financial security.

What are you doing to add some security to your current financial position? If you were let go from your job, how would that impact you and your family financially? I came across an article at Kiplinger.com that lists Eight Keys to financial security. These keys perfectly describe successful personal finance – make good decisions, be patient and get ready to win.

1. Invest in yourself

You are your number one money making scheme. Seriously, whether you are in debt or saving for your next big purchase, you need to be working on making yourself “layoff proof”. If you have been with the same company for many years, and you feel like you couldn’t get a job anywhere else, that is a bad thing. Don’t wait for a pink slip to motivate you to ‘invest in yourself’.

2. Protect yourself and your loved ones

One are that most people never include in their financial plan is insurance. Having the right amount and the right types of insurance is crucial to a firm financial foundation. Check back next week when we look into the differences in Term Life and Whole Life insurance. Probably the most under insured area for most people is disability insurance. What would you do if you became disabled and could not continue in your current line of work?

3. Borrow sparingly

Kiplinger and I disagree on this one. They say to only use credit on things with lasting value and they include education and maybe a car. We have paid cash for our last two vehicles and although we hope they last a long time, they are still going down in value. As far education goes, we are saving for college and will expect our kids to do their part by working during college and going to an in-state school. A couple of scholarships wouldn’t hurt either.

4. Pay yourself first

This one is sort of cliché, but it is true. If you pay all of your bills and then try to save what is left you won’t get very far. We teach that giving and saving are the first two things on your budget; the only exception is when you are trying to get out of debt. If this is where you are, save a small emergency fund and everything else should be going to debt elimination. Once the debt is gone, save like you have never done before. Whether you are saving to finish off your emergency fund, retirement, college or car replacement make it a priority. If you feel like there is no more room to save anything maybe a second, part-time job is going to be required to get things moving. The only way to be financially free is live on less than you make and save the rest.

5. Don’t go for the home run

If it sounds too good to be true, then it is. You can’t get rich quick, it takes time and it usually hurts. Don’t get trapped into bad decisions just because you are tired of things going slowly. Remember how long it took you to get where you are; it didn’t happen overnight, so you won’t be able to get out quickly. The goal is financial freedom and you can get there with a few singles and doubles, it doesn’t have to be a homerun.

6. Diversify, diversify, diversify

As you work yourself out of debt and you begin saving for the long-term, don’t try to be smarter than you are by investing in overly complicated schemes. A few good mutual funds that have been around for 20+ years that have good track records is a great way to spread your wealth building income around. You will also be better protected in the event of a single company or two goes into bankruptcy.

7. Live simply today for a more comfortable tomorrow

If you look in Philippians 4:11, you will be reminded that the apostle Paul taught that we need to be content where we are. If you can prolong the extravagant purchases until you can afford them, you will have a much better retirement. Dave Ramsey says, “If you live like no one else, later you can live like no one else”.

8. Give generously to create a better world

I love giving to others. There are few greater feelings than knowing you have put yourself into a position to be able to help those less fortunate than yourself. However, don’t be guilted into giving to every worthwhile cause. You will have to pick and choose where you help, but remember you can only help from a place of strength. The weak can’t help the strong, so secure your own finances and then you will be able to do great things for others.

If you haven’t settled on goals for this new year, this list is a great place to start

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