Why are Budgets Important? – Part 3

Today we continue the conversation regarding the importance of budgets that we began and continued earlier this week. In this series concluding post, Beryl Jantzi ponders about how faith informs finances and offers some honesty about what he wished he knew about money when he was younger.

COMPASS: How does/should faith inform our finances?  What does the Bible have to say about money?

There is great need for the church to talk about money and provide space for questions and conversations about it.

There is great need for the church to talk about money and provide space for questions and conversations about it.

Beryl: Thanks for asking about the connection between faith and finance. There are more than 2300 references to money and possessions in the Bible. The only subject spoken to more often that money is the Kingdom of God. If the prophets of the Old Testament, Jesus, and the writers of the epistles in the New Testament spent so much time talking about this – maybe we should as well. This gets back to the money is a taboo thing.

Unfortunately, when money is talked about in church it is almost exclusively about giving. My response is that only talking about giving and ignoring subjects like personal money management and materialism or consumerism  is in essence congregational malpractice. We cannot expect people to give unless they can first manage well what they have been entrusted with. Having a blog to talk about money is a great step in the right direction.

COMPASS: What do you wish you had known about money when you were a young adult?

Beryl: I wish I would have had people willing to talk with me honestly about the do’s and don’ts of money management.  It wasn’t until I was married, we had our first child, and started wondering about life insurance that I found someone to get me thinking about developing a plan for short and long turn saving goals.  This in turn has placed my wife and I in a position where we are  more free and joyful with our giving.  Because I know I am tending to my future short and long term needs, I am freed up to be more generous as well.

As this series comes to a close, what do you think? Why are budgets important for you? How have you effectively used them? What questions remain or what are new questions you have as a result of these posts?

Beryl Jantzi and familyAbout the Author: Beryl Jantzi currently serves as Stewardship Education Director for Everence, a Christian-based, member-owned financial services organization which is a ministry of Mennonite Church USA and other churches. 

This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you see and want to know/do more? Visit the COMPASS web page and join the COMPASS community on Facebook.

Image Credit: Church, Beryl Jantzi

 

 

Why are Budgets Important? – Part 2

Today we continue the conversation that we began earlier this week. Beryl Jantzi further reflects on the importance of budgets, particularly related to living the life you want to live while on a budget and also addressing debt.

COMPASS: Young adults often must deal with limited financial resources.  Do you have any advice on how to live the life you want on the budget you have? 

What an average young adult's budget might look like if shown on a pie chart.

What an average young adult’s budget might look like if shown on a pie chart. The largest categories here likely are related to debt (usually student loans) and rent.

Beryl: One of my favorite phrases is to, live well, below your means and to live well below, your means. Note where the comma is placed and the difference that can make in the meaning between these two phrases. Too many Americans live paycheck to paycheck. That’s not fiscally or emotionally wise. We need to live below what we can actually afford so we are setting money aside for the inevitable emergencies that come along.  Cars break down and clothes wear out and fuel costs go higher than expected with extra cold winters. Being prepared means planning for the unexpected.

In addition, young adults, be they in college or getting into a career should be “poor”.  It’s the way most of us start out and learning to get by on the basics is a kind of refreshing way to establish our values and priorities.  There are some people who have this misconception that if they go to college and graduate  they can then get a job  and immediately, live large and have it all right now.  That simply doesn’t happen and isn’t realistic for most of us.

COMPASS: Young adults are often told how important it is to set aside money for retirement, to save enough money to fall back on, AND pay off debt.  When your budget is already tight, how do you put money away for each of those things?  Is one more important than the others?

Beryl: Establishing good money habits early is really important – going back to the 10-10-80 idea. Giving for me is a given. Even if it means just $1 a week, we need to establish a habit which is where most spiritual disciplines start. So to answer your question, yes they are all important, but we each have to determine which is most important or most pressing and which is least important or least pressing at any given stage of life.

Debt is almost always bad – especially credit card debt or what is also called consumer debt. So pay off debt as fast as possible. Saving for retirement or another car or an anticipated vacation is also important and saving little by little adds up over time. By starting with our giving and saving goals we are then able to decide how to limit the spending which in turn determines our answers to questions like these: How much rent can I afford? Do I need to look for a roommate to help with expenses, etc? What kind of recreation and socializing is really necessary? How can I live more simply early on to open up more opportunities for the future?

Unfortunately, money is considered by many people to be a taboo subject. We simply don’t talk about it. What we really need is to find 1-2 people to talk with to help us think through these issues. I have been fortunate to have had people along the way to talk to that have helped keep me from making poor money decisions as well as helping me make wise choices that have given me more options now that I am in midlife.

Friday we will continue the conversation and conclude this three part series, as Beryl offers some thoughts about how faith can inform finances and some honesty about what he wishes he knew about money when he was a young adult.

Beryl Jantzi and familyAbout the author: Beryl Jantzi currently serves as Stewardship Education Director for Everence, a Christian-based, member-owned financial services organization which is a ministry of Mennonite Church USA and other churches.

Image Credit: Budget pie chart, Beryl Jantzi

Why are Budgets Important? – Part 1

Beryl Jantzi and family

Beryl Jantzi and family

This week’s COMPASS guest blogger is Beryl Jantzi. Beryl currently serves as Stewardship Education Director for Everence, a Christian-based, member-owned financial services organization which is a ministry of Mennonite Church USA and other churches. Prior to working for Everence, Beryl was a pastor in Pennsylvania and Virginia. He also previously served as moderator of the Virginia Mennonite Conference. He and his wife Margo Maust have two daughters who are students at Eastern Mennonite University.

This week Beryl will be sharing his perspectives about the importance of budgets. In the reflections that follow, Beryl poses a few questions related to the importance of budgeting, and ponders them particularly with young adults in mind. Today’s post is the first in a three post series in a question and answer format.

COMPASS: Why are budgets important?

Beryl: Budgets help us think about short and longer term needs and wants. Most things in life that are worthwhile require some kind of planning. Budget planning helps us become good stewards of what God places into our lives.

Budgets can provide guidelines for how we distribute not only our money but also other resources like time.  When money is limited we need to become more creative in the recreation we do and how we extend hospitality – or how we use our gift of  time.

Budgets help us discipline ourselves.  If we tend to be a saver they help us with our giving.  If we tend to be a spender, they help us find balance with our setting money aside into savings for the unexpected emergencies that can come along.

COMPASS: Starting a budget seems rather intimidating. What are some first steps to take?

Beryl: A lot of people don’t like the idea of budgets, in part because it requires thinking ahead and developing a plan. I have come across a helpful formula for personal finances.  It’s the 10-10-80 plan. Looking at the three things we can do with money this plan encourages us to share 10%, save 10% and learn to live on the 80%.

Now on paper this doesn’t look too difficult. But in reality most people don’t pay much attention to sharing and saving. If this formula seems too demanding then you can always adjust it to meet your current situation while at the same time establish a more balanced financial plan. Maybe because of debt or limited resources we can only do 5-5-90 or 2-2-96, but that’s okay.

Figure out what your right formula is and stick to it for a year. Once this plan is in place, work to adjust the formula that will enhance the areas that are low. Move from a 2-2- 96  to a 3-3-94 and so on. The idea is to start with sharing, then go to saving and finally adjust your spending accordingly. Too often we spend without thinking about the other two areas which is where a lot of people then get into trouble.

Regular givers tend to be better money managers overall because once you determine in advance that you are going to give away 2% or 5% or 10%, you will automatically be more conscious of what you do with what remains. Give it a try!

The Everence website has a lot of resources on getting started http://www.everence.com/getting-started/ where you can get advice on credit cards, find calculators, and budget outlines http://www.everence.com/calculators/ to help bring some order to what can otherwise seem a chaotic time of life.

Wednesday, we will continue the conversation and consider implications about living the life you want on a budget while also facing and paying off debt.

This blog is a component of the Ecumenical Stewardship Center’s COMPASS initiative to engage young adults in conversations about faith and finances. Like what you see and want to know/do more? Visit the COMPASS web page and join the COMPASS community on Facebook.