nc/sd April 2010 — Good News, etc. — 19

Ask the Professional!

The economic turmoil of the last two years might raise more questions than answers. With outrageous unemployment, soaring government defi cits, and diminished personal wealth, how do we proceed? Colleagues in various fi nancial professions share their thoughts here on the economy, the future, and how God’s Word can help guide us. Here are their thoughts.

– Coordinated by Anthony Saffer, CFP®

1. What Scripture or biblical principal, given the economic turmoil of the past two years, is most important to remember right now and why?

Stacy: That it is all God’s. When you remember that the toothpaste you use is only because of his provision, it is so much easier to truly trust and not worry! Luke 12:22-32 gives great comfort!

Ben: 1Peter 5:5(b)-11 & Matthew 6:25-34 are a couple of my favorite Scriptures for these tough times. They focus on casting all of our cares and anxiety on the Lord and trusting in His care and provision for our lives. These also point out the importance of standing fi rm in our faith and continuing to pursue righteousness and God’s will.

Fred: Scripture tells us that wealth and the economy are always uncertain. Consider Paul’s writings in 1Timothy 6:17: ”Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment”.

Steve: 1Thessalonians 4:11 (The Living Bible): “This should be your ambition: to live a quiet life, minding your own business and doing your own work, just as we told you before.” As a result, people who are not Christians will trust and respect you, and you will not need to depend on others for enough money to pay your bills.

2. Are you optimistic or pessimistic about the future and why?

Stacy: Optimistic! Enthusiastically optimistic! Because I know that whatever the Lord has in store for me, it is for my good. The trials we are facing strengthen us, help us to have empathy for others, and deepen our love for one another and the Lord.

Ben: The joy of being a Christian is knowing the future is bright. We may be going through diffi cult economic times right now, but God promises joy for the redeemed (Isaiah 35). As for the specifi c economic crisis we are going through, I am optimistic that things will turn around. I believe it will take a lot of time, but I think America is very intuitive and people will strive to get back on their feet.

Stacy DenHerder is an estate planning

attorney with DenHerder & Associates.

Fred M. Vaught is president of Capital Resource Management, Inc. in

Escondido.

Ben Goode is a mortgage professional with Goode Mortgage Services in Temecula.

Steve Tague is president of Tague Insurance Agency in Carlsbad.

our decision-making processes. It is the primary cause of all economic uncertainty and is idolatry that denies the suffi ciency of God as outlined in 2 Corinthians 3:5, “Not that we are competent to claim anything for ourselves, but our competence comes from God.”

Steve: Over spending. Buying items they can not afford by using credit cards. This is a very serious problem for most Americans.

4. How important is budgeting and why?

Stacy: Extremely important, but we all hate to do it. It is a simple formula: Spend less than you earn. Simple. But hard!

Ben: Budgeting is extremely important. If people are conservative with their fi nances, they can avoid the pitfall of getting too deep into debt.

Fred: I fi nd that most families that I minister to in my practice as a fi nancial planner do not have budgets, and if they do, they have failed miserably. Budgets, like diets, work for a short period of time, then old habits prevail. What has a greater chance of working is developing and monitoring the results of a spending plan. There are only fi ve uses of money: giving, taxes, saving/investing, debt, and lifestyle. If any one of these buckets gets allocated too much, then the other buckets may suffer. The most challenging buckets are lifestyle and debt. Lifestyle unchecked will overfl ow into the debt bucket. The debt bucket has devastated families and nations.

Steve: It is very important because it restrains you from impulse buying. If it is not in the budget don’t buy it.

THE ECONOMY

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A Cris r O r nit

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Fred: I am optimistic. Pessimism is borne of the fear of the future. It is interesting that things are not as good as they appear nor are they as bad. The economy is always an illusion and is not what it appears to be. The economy is always laying the seeds for the next market cycle. Planning for our future can help with a pessimistic mindset. If we choose to believe that God is in charge of all times both good and bad, that should give all of us great optimism about our future (Jeremiah 29: 11-12).

Steve: Optimistic. The reason is based on many facts. First, we are Christians and we know that everything that happens to us is allowed by God. See Romans 8: 28-31. America is a country that even with all the problems that are highlighted daily on media outlets, is still a wonderful place to live and work. We have a national debt that is 13 trillion dollars. Approximately 70% of our GDP. Most people do not compare that with other western type countries. Great Britain, Germany, France, Italy, Spain, and Japan all have a greater percentage of debt relative to their GDP. It is too bad that we can not tear up the credit cards, appropriation bills from Congress. I do not condone the actions of our Congress, I am just pointing out a relative position of our government.

3. What is the most common fi nancial pitfall many people have embraced?

Stacy: Debt. I want it now, so I will buy on credit. I will spend more than I earn and not worry about how to repay it.

Ben: The most common pitfall I see is an overleveraged lifestyle. I deal with a lot of people who took on big loans and purchased additional properties, and they are now struggling. Some could afford it, but others took advantage of “easy money” because they had a plan to sell for profi t. However, for many people this didn’t work out, and they are now dealing with the unfortunate consequences.

Fred: It is the choice of allowing money and possessions to become the primary measure of success and signifi cance. This paradigm then becomes the driving force in all of

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5. How can parents use the current fi nancial crisis to better prepare their children to handle fi nances?

Stacy: We have talked to our children about the abundance we have experienced…and whether we have been good stewards of what we have. The answer was “no.” Our kids left toys outside in the rain – not good stewardship; we didn’t clean out our rain gutters from last season…not good stewardship. We borrowed money for things that we decided (in retrospect) weren’t important. Just a few examples of helping our kids (and us) remember who owns it, and our responsibility of

good stewardship. We also give them an allowance and require them to segregate it: one-third for spending and giving; one-third for investing for big purchases we agree with them on; and one-third for college.

Ben: I think it’s important to teach our children to be content. They must learn to spend their money wisely and to not be frivolous with what God has provided.

Fred: It certainly depends on the age of the child, but whether they are just toddlers or they are grown, there are four biblical principles of fi nancial success to live by. 1. Spend less than you earn. In order to do this, you need a spending plan. 2. Maintain emergency savings. This helps you ride out the surprises of life and helps avoid the use of debt 3. Minimize the use of debt. Use of debt increases your ability to have more now but it also increases risk and reduces your ability to have more in the future. 4. Think long term with goals and investing. The longer the better.

Steve: Put them on a budget with their allowance or on the money they make from a part-time job. Sometime parents forget they are the parents and will be accountable to God for how they administer that responsibility.

6. What’s the single most important advice you have for people who want to improve their fi nancial picture?

Stacy: Find a solid person (fi nancial advisor preferably) to be your accountability partner….so you can reduce debt and excess spending.

Ben: Live within your means, be content and seek the Lord and His will. Fred: Be generous with God. This comes with a promise. (2 Corinthians 9: 6-15) Steve: Tear up your credit cards or use a debit card.

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