Randy’s message on Sunday included a brief rundown of our best money practices. We believe it’s extremely important to have good money practices, but the purpose of good money practices is more than building a savings account or preparing for the future. The real purpose of good money practices is to honor God. John Wesley said, “Earn all you can. Save all you can. Give all you can.” It’s about honoring God with our finances.
So, FWIW, here’s what we think our best money practices are. We hope they will be helpful to you.
1. Tithing/Giving. Our best money practice, hands down, is our commitment to give a percentage of our increase (everything we receive) to God. We believe the tithe (10%) is a good benchmark for us to start with. As we grow, we plan to continually (gradually) increase our giving. We currently designate a little more 10% for “tithes,” which we distribute to the churches we serve. We also designate an additional percentage for “offerings” to support special offerings and other ministries (see some of the “great causes” in the sidebar for some examples). We try to increase our giving every couple of years or so.
2. Tracking expenses. Next to tithing/giving, tracking our expenses has been one of our best money practices. It helps us know where our money goes and where we may need to make adjustments in the future. We track our expenses (and income) using an Excel document (which works well), but we are in the process of searching for alternatives (simply to see if there’s a better way). One service we’ll probably look into is Yodlee. “Earn all you can. Save all you can. Give all you can.” (John Wesley)
3. Budget. Our budget, which we see our budget as more of a guideline than as something rigid, grew out of tracking our expenses. We have a good idea where our money will go because we know where it has gone in the past. At the beginning of the year, we can adjust the budget as necessary. One of the best things we’ve done is to budget amounts for individual things (e.g. clothes). In those areas, we don’t need to ask each other for permission to buy something as long as we have the money in our budget. It minimizes any conflict we might have over spending decisions, not to mention, sparing us the wasted time and energy. It also helps that neither of us are impulse spenders, and we’re both fairly frugal.
4. Use of credit cards. We’ve been using credit cards for (most) everything possible since we’ve been married. Because we use cash back credit cards, we have probably earned a few thousand dollars in cash back over the years. We pay as we go and have the full payments drafted from our bank account every month so we don’t have to worry about extra charges.
5. Planning for the future. In the last several years, we have been receiving a pension benefit through our service as pastors in the UMC. We also contribute part of our salaries to our pension plans as well. In the last couple of years we have tried to be more intentional about preparing for the future. As we expand our family in 2008, we will also begin thinking about saving for our child’s college expenses. The main thing is to plan ahead as much as possible.
These are our best money practices. Having good money practices is important. We’re sure there are some things we could do better. What are some of your best money practices? What areas do you need to work on? Let us know by leaving a comments below. Also, feel free to discuss any of the above.