Why is This Happening to My Finances?
"The way to have financial peace of mind is to spend less than you make."
- Russ Crosson
In the video, Russ Crosson, President, and CEO of Ronald Blue & Co. deals with the subject of personal finance. He describes how stress occurs when there isn’t enough money to go around. People may wonder, “Why is this happening to my finances?” when there is more month than money.
A solution to reduce financial stress is to know where your money is going.
Russ Crosson recommends developing a written plan, utilizing the five uses of money. Gross income is then divided into the following five buckets:
- Living Expenses: groceries, gas, mortgage, utilities, vacation, etc.
- Giving: church or charitable organization.
- Taxes: payroll and property taxes.
- Debt Payment: credit card, student loan, car loan, etc.
- Positive Margin: this is the money left over after the expenses are paid.
A few points to consider when developing your financial plan:
- Positive Margin: avoid spending more than you make. It is essential to make sure you have a positive margin after expenses (Living Expenses, Giving, Taxes, and Debt Payment) are paid.
- Taxes: avoid withholding too much from your paychecks with the goal of getting a big refund once per year. It may be better to have the money available throughout the year and decrease the temptation to use the tax refund for a vacation or nonessential purchases.
- Retirement: avoid overfunding of retirement from living expenses. Retirement should be funded when you have enough money in the Positive Margin bucket.
Words to Live By:
“For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it?” (ESV).
“Dishonest money dwindles away, but whoever gathers money little by little makes it grow” Proverbs 13:11 (NIV).
Grace Notes by Philip Yancey
“Does God guide? Yes, I believe. Most times God guides in subtle ways, by feeding ideas into our minds, speaking through a nagging sensation of dissatisfaction, inspiring us to choose better than we otherwise would have done, bringing to the surface hidden dangers of temptation, and perhaps by rearranging certain circumstances…God’s guidance will supply real help, but in ways that will not overwhelm my freedom.” (49).
The Truth About Money Lies: Help for Making Wise Financial Decisions – Russ Crosson
Your Life…Well Spent: The Eternal Rewards of Investing Yourself and Your Money in Your Family – Russ Crosson