Download CLERGY PER$ONAL FINANCE

CLERGY PER$ONAL
FINANCE
Respond to This
Statement:
Income is based in proportion to how an
individual contributes to the well-being of
society.
We live and minister in a world that is
heavily influenced by society and more
times than not, controlled by money.
Money is anything that is generally
accepted as payment for good and
services and repayment of debts.
But what is “money” and how do we deal
with it as ministers trying to reach a
struggling and hurting world?
“Almighty Dollar”
Bucks
Jack
So how much money do you have?
Some of the more contemporary names
for money include…
Moolah
Cash
Coins
Dough
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As United Methodists, we have strong
roots related to the use of money…
Misconceptions About Money
Less
Shows
weakness
Money will give you
multiple options
More
Is
Better
John Wesley says, “…earn all you
can…save all you can…give all you can”
Discuss…
What did you learn as child about money?
How has what you learned affected you as an
adult?
Do you feel you handle money as God would
want?
What changes do you need to make in your
personal financial management?
Respond to This
Statement:
Clergy do not receive income for their
work, but are supported financially as
part of the covenant to surrender
vocationally to the full-time ministry.
INCOME
Earned Income:
-Primary Appointment
-Spousal Income
-Free Lance
300
200
Investing in Today . . .
And Tomorrow
100
0
2
Respond to This
Statement:
Investment Income:
-Interest
-Dividends
-Capital Gains
-Rents/Royalties
INCOME
200
150
100
The financial needs of clergy families
are at the mercy of the congregation.
50
0
Interest
Dividends
Rental
Investment Assumptions
Define “Investment”
Something purchased with the intent to resell at a
higher price sometime in the future.
• All investments involves risk
• “If it looks too good to be true, it is.”
• Be skeptical & cautious, not cynical
• What goes up, must come down
• Be confident, not fearful or fretful
• If everyone is doing it, it might be wrong
• Retirement Investing A MUST.
Investment Strategies
• What are your Goals?
• What is your Temperament?
• What Stage of Life do you find yourself?
• What is your Tax Status?
• Always avoid High Risk unless you can stomach
the loss.
Spending Outflows
Giving
Savings/Investments
Insurance
Living
Income
Taxes
Debt
3
INCOME
Debt Income:
-Mortgage
-Education
-Consumption
Forgive Us Our Debts
800
600
400
200
0
Mortgage Education
Debt . . .
• Debt can be extremely deceptive
• Debt can foster enslavement
• Debt can replace trust in God and in personal
aptitude/fortitude
• Debt implies impatience rather than endurance
• Debt invites urgent over important
• Debt can make moments of pleasure into years
of pain.
How to get out of debt and stay out of debt
Credit
Cards
How to get out of debt and stay out of debt
Create a monthly budget
Spend only what you have
Get rid of credit cards
Pay more than the minimum
Once debt is paid, use funds to pay other debt
How to get out of debt and stay out of debt
Make wise investments
Use “extra money” to pay-down debt
Seek financial counseling
Bargain shop
Do not go into debt to get out of debt
Consolidate but don’t extend time
Seek wise counsel concerning finances
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How to get out of debt and stay out of debt
One spouse in-charge of the finances
Setup vehicles to ensure future financial
stability
CASE STUDY
Pastor Mary as a student loan that currently charges 5% interest
with a very small minimal monthly payment. She also rents an
apartment with a monthly rent of $800. Her salary is sufficient
to cover the rent plus offer an affordable lifestyle. Recently
her parents offered to give her sufficient funds for a down
payment on a home and she finds the perfect place for a
mortgage of $850. With her parents’ gift, she has immediate
equity in the house. The bank offers to give her an equity line
of credit on the house at a rate of 4% for the first two years,
then adjustable after that. She is considering taking the line to
pay off her student loan.
HOW WOULD YOU RESPOND?
Common Financial
Mistakes
• Living a Consumptive
Lifestyle
• Never Developing a Financial
Plan or Financial Goals
• Living without a Budget
• Having no Balance between
appreciable assets and
depreciable assets
• Buying on Impulse
• Not allowing for change or
interruptions
• Dependence on Debt
• Living beyond means
• Preoccupation on Myths
• Leaving God out of our
personal economics
• Eliminate or Reduce in this order
– Credit Card
– Consumer
– Automobile
– Education OR Second Mortgage
– Primary Mortgage
If you (and/or your family) are in a financial strain,
think back…
It probably didn’t happen overnight. Therefore, it
will not be solved overnight.
Just as there is no such thing as a “quick buck,”
there’s no such thing as a “quick fix” (that lasts!)
Be patient and pray!
Most Importantly…Practice “first fruits”
Preach and Teach it
People will know what you give, so GIVE!
Doing this puts the rest of our spending in
perspective and may lead to nothing being left
to spend on something we didn’t need anyway!
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Question & Answer
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