If you are like every other youth worker out there then you have a pretty humble income. Like every other youth worker out there you have these thoughts of what your future financial situation might be. How are you going to help you children in their university or other schooling choices? How are you going to live into retirement? What types of long term care can you help ensure for yourself? This is the first in a series of blog postings on financial planning with you the youth worker in mind. These post are not to be considered financial advice (call that a disclaimer if you like) but some thoughts and plain english speak to help guide you take control of your money and ensure some securities for the future.
As with any process of planning you need to recognize where you are. This now becomes the start that makes a lot of people stop. I am going to say it, you need to figure out your Budget. Yes, as lame as that sounds, you need to figure out what money you have coming in and what, as well as where, your money is going out.
Example for a month
- You bring in $3400
- Food Expenses are $500
- Home Utilities are $600
- Home Loan is $1400
- Health insurance is $400
Which leaves $500 in spendable income. Not a whole lot of money when you think of insurance, clothes, gas, car loan, student loan, etc. that might be tapping into that. Certainly this budget is very simplistic and inflated in areas to you. But if you are eating out as a family, or even shopping groceries without thinking about the money spent you can easily spent more than you realize and start using credit to cover costs. Then you have an extra expense.
Know what you spend and have so that you can control your money, and not be controlled by it.
When we did our family budget one of the excess costs we realized was our cable bill. Eliminating cable and only using some of the online options (Hulu & Netflix) combined with base cable (due to our location we couldn’t take advantage of digital antennas. base cable just have network channels and a few odd ones for around $10). We cut out $100 expense quickly and paid off some lingering debt in no time. We realized we didn’t miss cable so much and has continued to be part of our spending sending that extra into missions giving as well as added to our savings account.
If you need more thorough help with this. Many people enjoy doing Dave Ramsey’s Financial Peace programs. His financial programs are made up of a lot of common sense, but done with a group of people or walking a program as a family can be helpful. Especially helpful are these programs if you are having trouble getting started. Or just try on this 50/30/20 concept for categorizing your spending & saving budget.
Talk Some Goals
Once you have an good idea of what your money is doing currently as well as some idea of making changes. Set some goals for your money in the future. This is where family prayer & discernment come into full practice. Commit to goals that live into the life God wants for you, not just something culture tells us we want.
Be realistic with goals, making $40,800 a year (my $3400 a month from prior) is going to make it unrealistic to have a million dollar a year retirement yearly income. But it can allow you to live comfortably after retirement if those goals and practices are kept.
- Set a goal of vacations or other bucket list lifestyle extras.
- Set some goals related to your children and what you wish to have for them as they grow up (education, weddings, personal gifts / loans).
- Knowing you as a youth worker you might have some really big goals doing some big life impact mission type stuff (raise money for a clinic, orphanage, non-profit, etc).
Goals don’t always have to be just about numbers to retire with. Think of how you want to live and let you life’s work impact the world. Getting there will take work and sacrifices, but to live the life God is dreaming for you is totally worth it (over leading someone else’s life).
Find a Friend
Chances are there is someone in your congregation or network of people who is a financial planner. They know you are not one of their ‘big accounts’ but will be willing to help you navigate some of the basics of setting up IRAs, Savings Accounts, Insurances, 401K, 529 plans, etc because they believe in what you are doing. For many of these entities you can even use your local bank for setting up. If you keep your portfolio simple then many times your financial planner is willing to keep track and help out setting things up with little or no cost. Many planners will work with a company and have to incur some cost if they use their tools. At the minimum you can get a consult where they throw your household portfolio into their calculator (they all have some tool like that) and give you some suggestions to put into practice from there.
DON’T BE scared to talk to congregation members or friends about money. For whatever reason (family upbringing, cultural norms) money talk is almost as taboo as talking about sex. Most likely a batch of committee members know what you make, so what’s the secret there. Ask folks what they do for their savings and plans. Ask who they work with. One of those lessons of “Rich Dad Poor Dad” is that the rich talk about their money planning. Don’t let the assumption of having less money than someone ‘rich’ prevent you from planning for your family’s future.
Now Get Started
- Figure out your money. If you need help download a blank budget sheet, or use a phone app.
- Set some Goals. Have the conversation and write them down. This really is fun to do and even better to realize.
- Find a friend. Ask some of your other friends. Get comfortable talking money and get someone you trust to help you get there.
- Next Up we will talk about Investment options out there