The terms don’t matter. Answers matter!

The terms don’t matter. Answers matter!

Last week, we began by looking at a 2015 survey that analyzed the personal financial situations of more than 4,000 pastors across the USA. Grey Matter Research & Consulting concluded that an alarming number of pastoral families suffer financial stress.1 More recently, GuideStone Financial Resources released a report detailing four mistakes ministry families commonly make that sabotage their financial well being.2

Whether someone labels mistakes as sabotage or not matters little. The effect is disruption, or possibly destruction, of the family’s future security. What sound advice may be offered to help ministry families avoid the mistakes and chart a new financial course? That is what matters.

Choose to Live frugally

Debt is the destroyer of living in freedom…always. Forty years ago, while seeking to arrange a loan for our congregation’s first building, a banker told me he never liked to loan money to anyone whose profession began with the letter “P.” It does not matter which professions he specifically mentioned (one was “preacher”). What does matter is the culprit that destroyed each of the professions was debt. Yes, no matter whether the profession is lucrative or not, people allow debt to destroy their financial lives. Physician, preacher, practicing attorney, and plumber all need to learn to spend less than they earn.

Living frugally must be a family decision!3 Many in the serving occupations will look at various lifestyles, concluding they are living frugally even while accumulating debt. Choosing to buy a pre-owned car rather than a new one is a step toward frugality. Locating a similar car eliminating options driving the price up without truly adding value is the next step toward true frugality. The goal is to make financial decisions that a) eliminate or reduce debt, and b) leave funds in the budget to save for the future.

Don’t fall prey to mortgage ads

I am a talk-radio junky. From news talk to sports talk, I listen. My favorite stations have an incredible number of daily mortgage advertisements touting their unique ability to refinance your home, lower your payment, AND allow you to “pull equity out.” Yes, that dream car, vacation, or private school education for the children may be yours. Don’t do it!

Pulling the equity out of your mortgage may not be in your best interest. Unless you are eliminating credit card debt and eliminating the accompanying credit cards, you may well be headed into a deeper hole. Reducing your monthly payment is a wise decision, if you are making another step into frugality and saving the difference. However, if a family reduces their payment in order to make another purchase, the result is often beginning a new 30 year period to pay off the home.

Save with a vengeance

“Americans across the country, and all age groups, are drastically under-saved for retirement.”4 No generation, from Baby Boomers to Millennials, intends to arrive at retirement with insufficient savings. There are some in each generation that truly believe a retirement income is owed (and will be provided) by a government entity or family member, but these are in the minority.

Not attacking saving is normally the problem. We may serve in a generous ministry that offers a dollar for dollar matching plan for retirement up to 4% of our salary, but if we do no more than contribute to get the match, we will not save enough for retirement! While we may be doing better than some of our ministry team members or friends, we will arrive at retirement and wonder, “What happened?”

Don’t accept excuses

Ministry families are not alone in failing to save enough. CNBC recently published an article about the lack of retirement saving by small-business owners across the United States.5 A disturbing 34% of entrepreneurs have no savings plan.

The top three reasons business owners offered for their savings failure included a) not making enough money, b) having to use previous savings for other needs, and c) planning to sell their business in the future to fund retirement. The first two are identical to those offered by ministry families. The third reason for ministry families is they plan not to retire, but continue earning money until they pass away!

If we are to break this cycle savings failure, we must stop accepting our excuses! No one will save enough if we wait until we are making enough to save. The key is spending less than we make, as simplistic as that seems. We have to make a commitment to not raid our savings to pay for other things. It seems innocent (or necessary) to raid the retirement account when the need x, y, or z. Unfortunately, we lose the amount saved and all the money those funds would have earned!

Everyone is not going to be able to enjoy productive ministry that will compensate us in our later years. We need to save now and prepare for life later. The advice gathered and presented here is simple to understand but difficult to implement. If we plan wisely and attack our plan, we will be much closer to true freedom in the future.

1 Grey Matter Research & Consulting. Evangelical Pastor Study. National Association of Evangelicals. July 2015.
2 GuideStone Financial Resources. Four ways to sabotage your financial well-being. July 26, 2017.
3 How to Get Your Partner On Board With Frugality. everythingfinanceblog.com
4 Malito, Alessandra. Where did baby boomers go wrong? This generation isn’t financially prepared for retirement. July 31, 2017. MarketWatch.com.
5 Summerville, Abigail. Survey: 34% of entrepreneurs lack retirement savings plan. July 27, 2017. CNBC.com

2017-11-09T02:40:15+00:00 August 1st, 2017|