Annual Budget - Charitable Giving

Paul wrote to the Corinthian church, "The point is this: whoever sows sparingly will also reap sparingly, and whoever sows bountifully will also reap bountifully. Each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver." 2 Corinthians 9:6-7

Many followers of Christ choose to give generously to charitable works, including us.  We feel strongly that we ought to give around 20% of our net income (around 10% of gross income) to worthwhile causes, including our local church and a few other worthwhile causes.  In the past, we have given to special projects, like water well drilling in Africa or microfinance in the developing world, and we like to regularly support summer camps for kids, overseas work in the developing world and various organizations here in Canada, especially our local church. 

We have found that choosing to give our first and best toward charitable work keeps our attitudes around finances humble and focused on our Lord.

Do you give?  Why or why not?

Annual Budget - Savings

Proverbs 21:20 says: "The wise man saves for the future, but the foolish man spends whatever he gets."

So, we try to save a bit of money each year.  Traditionally, we've been saving between 10-15% of our total income each year toward things like:

1) Retirement or, as I prefer to put it, the day when I no longer collect a paycheque or work for money. 

2) Education for our children. We won't be giving our children a 'free ride' but we have felt it prudent to ensure we give ourselves some options financially when our children attand post secondary school.

3) Medium Term expenses like vehicle purchases and home renovations.

This past year, we spent a good chunk of change on home improvements so we saved a little less but that's fine as over the long term we'll enjoy what we done to improve our living space and it isn't like we are falling behind or cashing in investments to pay for things. 

The main strategy with our savings has largely been to maximize the amount we receive in matching amounts from my employer.  They have 2 programs to invest in at work that match my contributions with dollars from the company (50% match on both programs right now) and I fully take advantage of both of those.  In addition to that we set aside a bit of money each year to deposit into a Registered Education Savings Plan which offers a 20% matching grant from the federal government. 

All told, I have invested, out of my pocket, about 10% of my income and government grants and matching contributions have added up to another 4% this past year.  This seems like an excellent use of our resources.  Havings some money saved will give us options in the future and the resources to pursue different kinds of opportunities.

Certainly, we do not want to be found hoarding our wealth like the rich man of Luke 12 nor do we want to squander it and become dependent on others for our day to day needs.  This is a fine balance and generous and cheerful giving is an important aspect of saving for the future.

Here is another thoughtful treatment of the topic of savings: http://moneyhelpforchristians.com/is-it-biblical-to-save-for-retirement-part-i/

Annual Budget - Taxes and Payroll Deductions

So we can see from my pie chart (click to enlarge) that nearly 30% of my total earnings went to federal income tax, provincial income tax, EI premiums, and CPP contributions.  If I didn't contribute to my RRSP, work pension, deduct work expenses or donate to charity the percentage to taxes would be 34%.  Clearly, there are incentives to contribute to retirement plans and donate to charity under Canadian tax law.  I am not bashful about using these incentives to the maximum practical level.  Clearly it is good practice to give generously and save for the future so I would do that anyway without the tax help but the tax laws make it easier to do so.

I don't begrudge paying income tax and Jesus certainly advised the same as recorded in the book of Matthew.  https://www.biblegateway.com/passage/?search=Matthew+22%3A15-22&version=TLB 

The writer Paul also notes in the book of Romans that we should submit to those in authority over us and he explicity notes paying taxes as a form of obedience.  https://www.biblegateway.com/passage/?search=Romans%2013&version=TLB 

There is a very thorough explanation of this theology by John Macarthur here - http://www.gty.org/resources/Study-Guides/40-5127

Your thoughts?

Annual Budget - 2014 in Review

Each year, we review our annual spending, saving, and giving to help us stay accountable to our objectives and to give us feedback on how we've been doing.  Additionally, the review gives us an opportunity to plan for the New Year.  Click on the image to enlarge.

What is your process?

Work Like a Doctor, Live Like a Nurse

Renee Lockey - Work Like a Doctor, Live Like a Nurse from Generous Giving on Vimeo.

His Stuff - He Made It

God Owns Everything, He is the Creator of the Universe

Psalm 24:1 - The earth is the Lord’s, and everything in it. The world and all its people belong to him.

Psalm 89:11 - The heavens are yours, and the earth is yours; everything in the world is yours—you created it all.

Genesis 1:1 - In the beginning God created the heavens and the earth.

John 1:1-3 - In the beginning the Word already existed. The Word was with God, and the Word was God. He existed in the beginning with God. God created everything through him, and nothing was created except through him.

Colossians 1:15-17 - Christ is the visible image of the invisible God. He existed before anything was created and is supreme over all creation, for through him God created everything in the heavenly realms and on earth. He made the things we can see and the things we can’t see—such as thrones, kingdoms, rulers, and authorities in the unseen world. Everything was created through him and for him. He existed before anything else,and he holds all creation together.

Proverbs 22:2 - The rich and poor have this in common: The Lord made them both.

The correct perspective on who owns everything is an essential starting point to being a wise manager. We need to think about how God would have us manage His stuff. This is different than how we would manage His stuff or how we would manage our own stuff. It isn't ours and it needs to be managed according to His will, not our own.

If a person gets his attitude toward money straight, it will help straighten out almost every other area in his life. - Billy Graham

Managing His Stuff, His Way - The Story of the Talents

In Matthew 25:14–30, Jesus told the story of the Talents. In this story, the master entrusts different amounts of wealth to three servants. To one servant, he places five talents of money in his care, to another, two talents, and to another, one talent.  For context, one talent was 75 pounds of gold or silver and would have been worth around 10-20 years of wages.  So each of these servants was entrusted a large amount of funds.  This is certainly consistent with what I've seen in life as different people are entrusted with different amounts of wealth and responsibliity.

 

 

When the master came back, he found that the servants with five and two talents had each doubled the master's funds. In contrast, the servant with one talent had buried it, making no effort to put his master’s money to work, and coming up with a bad excuse to boot!

It’s interesting to note that the praise God gave the servant who had five talents and earned five more was identical to the praise that he gave to the servant who had two talents and earned two more. That praise was, “Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master’s happiness!” (Matthew 25: 21, 23).

 

As for the servant who was entrusted with one talent, he was lazy, wicked, and unfaithful to God. In short, he was not a good manager.  Perhaps shockingly, he was punished severely for this poor managment and unfaithfulness.

 

Matthew 25:28-29 state, “Take the talent from him and give it to the one who has the ten talents. For everyone who has will be given more, and he will have an abundance. Whoever does not have, even what he has will be taken from him."

 

It’s important to understand what this means. The words “for everyone who has will be given more” means that everyone who has been a faithful manager, God will entrust with more. There is a compounding effect in play.  On the other hand, those have been unfaithful in their management of God's resources will lose even what they have been entrusted with. The servants who were entrusted with five talents and two talents demonstrated faithfulness to God and wise management, and thus God entrusted them with more. However, the third servant was not faithful, and therefore even that one talent was taken away from him.

We can say we are managing well for God when we:
(1) acknowledge in mind and heart that God owns everything - a critical first step
(2) act accordingly - that is, learn and implement God’s principles in managing what God has entrusted us, using our time, talent and treasure in accordance with God’s will, not our own will