Christian Goltz, Treasurer. North German Union

The importance of family finances. Every family dreams of being a happy one. The way we manage finances should contribute to the fulfillment of this dream. But what does the reality of a happy family look like? Inquiries reveal that thirty-seven percent of all married couples in the United States say that money is the ?number one? problem in their relationship. How can we belong to the sixty-three percent of families in which money is not such a problem? How can we belong to the much lower percentage of families who are really satisfied with their financial situation? How can we build strong families, not only in love, trust, and respect, but also in finances?

Check out your situation. Answer spontaneously: Do you feel money is the ?number one? problem in your family life? If so, please go home and take out your bank statements for the last three months. Then check the balance on the last day of each monthly statement. (If you have thrown your statements away, go and buy an organi-zer and collect them from now on! This is an order!) What pattern do you see? Are your funds increasing or decreasing? If they are decreasing, you really have a problem, and there is no other way to deal with this than to take a closer look at your income and expenses. If they aren’t, think about why you feel so dissatisfied with your financial situation.

Analyze how you organize your finances. Nobody can spend more money than he receives for any length of time. This fact is as simple as it is true. Since it is usually difficult to raise your income for the short-term, you must reduce expenses. But how can you reduce expenses when you don’t know how much you are spending or where your money is going?

Some time ago a friend asked me for advice. His debts were growing monthly, he had no idea where the money he earned was going, and he just realized that he had no financial prospective for the future. I told him to write down every income and expense for a period of three months, and then we would meet again to analyze his situation.

Here is a test for you: What is your salary? I’m sure you know that! How much do you pay each month for your house or apartment? You will probably know that as well. And how much do you pay for food, personal care, clothing, your car, and your telephone? If you don’t know, please listen!

Our modern society, with all of its various credit cards and other non-cash payment systems, makes it easy to spend money without seeing it. Non-cash payments are a ?trap? for all of us, especially for those without financial planning. Banks and credit card companies who are profiting from their high interest rates on our consuming debts, try to make it as easy and as comfortable as possible for us to pay without cash.

Clever advertisements which call to the hidden needs of our hearts do their part in leading us to spend more money. If we don’t have definite financial goals and distinct values for spending money in our families, we get hopelessly lost in financial matters.

Structural problems. In the political economy, one distinguishes between cyclic (short-term) and structural (long-term) problems. Carrying this over to private finances, one family struggles because their washing machine, dishwasher, and television all break down at the same time (cyclic). Another family struggles because they regularly spend $200 more each month than they earn (structural). While short-term financial difficulties may be overcome in a few months, continual long-term deficits will lead to ruin.

Analyzing my friend’s expenses after three months, I found that the rent for his house, food, clothing, and other regular costs were acceptable. But it was obvious that his car was too expensive for him in relation to his income. It was an old, rare car that held a high sentimental value for him. It was not an easy decision, but he had to get rid of the car. He bought another, cheaper one and saved money on taxes, insurance, and gasoline. Ever since that time, his finances have been under control.

To confront a person with the reality that he is exceeding expenses is a hard thing. The need to reduce costs can bring about strong tensions in a family. Mother, father, children—all may insist on an amount of money they think they need. This leads us to the question of our priorities and goals and therefore to financial planning.

Christian principles and financial planning

The Apostle Paul has expressed the all-embracing life principle for a Christian in one sentence: ?So whether you eat or drink or whatever you do, do it all for the glory of God? (1Cor 10: 31). The way we earn and spend money should be done for the glory of God. What a high calling! Not only should the tithe be used to the glory of God, but the other ninety percent as well. I am not saying that we should give every-thing to the church offering, but that all He give us should be used in harmony with biblical guidelines.

For example—

? buy healthy food

? buy adequate products for personal care without exaggerating

your outer appearance

? buy quality clothing without being infatuated by famous brands

? choose a car or computer for practical purposes rather than for boasting

We need to question our motives, especially before we spend a large amount on a specific thing, or before we put money into a particular investment. Our relationship to money is to be guided by our relationship with God. We always have to keep in mind: ?Seek first his kingdom and his righteousness? (Mt 6:33), and, also, ?A man’s life does not consist in the abundance of his possessions? (Lk 12:15).

Financial planning—an example.Financial planning means to develop long-term and short-term goals from clear priorities, and the long-term goals determine the short-term goals. Once your family has answered questions like:

? What is God’s plan for our lives?

? Who will go to work? Only the father? Only the mother? Both?

? How many children do we want to have?

? How do we imagine our home? (size, place, own or rent)

? What do we do with extra money?

Set your long-term goals: (1) Save money to buy a house in five years, (2) Save money for a trip in 2006; and short-term goals: (1) Save $500 for a new computer in six months, (2) Reduce the cost of food by $50 monthly, within a year).

For the technical side of financial planning, there is a wealth of material in books and brochures, like check lists, forms for budgeting, and forms for writing down all income and expenses.

Four key rules for family finances

1. Avoid debt. Family finances need to be handled in such a way that you do not put additional stress and anxiety on the backs of your family members. The life of a family is usually complex enough without financial grief. The power a family needs to cultivate love, trust, and harmony should not be weakened by creating irresponsible debt. Here, I am talking about depreciating debts. Appreciating debts for investing purposes, like buying a house, are reasonable—as long as the housing expenses are limited to a ?healthy? proportion of income.

2. Resist greed. There are many books on how to get rich by investing money. They are appealing because fallen human nature longs for riches. Money has a power that fascinates mankind. But wealth is not a biblical value we are to pursue. Instead, Paul writes: ?For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs? (1Tm 6:10). And Paul ?lived? this positive, biblical principle: ?I have learned to be content whatever the circumstances? (Php 4:11).

3. Be thankful. ?Give thanks in all circumstances, for this is God’s will for you in Christ Jesus? (1Th 5:18). Be thankful for what you have, because the great, almighty God is the Owner of all things and knows what is best for you! He will give you what you need. Only thankful people have the shining face that comes from a contented and peaceful heart.

4. Consider personalities. Very often, partners with opposite personalities marry. We value qualities in our mate that we find missing in ourselves. As a result, there is a pretty good chance that at least one in the family has the organized and reliable personality to handle financial matters successfully. Give the main financial responsibility in your family to the person most gifted in this area.

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July–September, 2003

Family Finance