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Managing Family FinanceLowenfield and Terry‐Ann Alleyne
What We Will CoverImportance of Managing FinanceThe “B” WordWhose Money?Children & MoneyFinancial Goal Setting
IntroductionLuke 16:11 (KJV)If therefore ye have not been faithful in the unrighteous mammon, who will commit to your trust the true riches?unrighteous mammon = worldly wealthHow we handle money reveals our depth of commitment to Christ
ACTIVITY # 1Worksheet 1: Your Thoughts on MoneyMicrosoft WordDocument
Importance of Managing FinanceFinancial struggles are one of the main causes of divorce in first marriagesMost people are overwhelmed by financesIt turns out finances are 80% behavior, 20% knowledge
Importance of Managing Finance• Control our Lifestyle• Live on less than we make• Have a plan• Make money behave• Have goals• … and FOLLOWING THROUGHManaging finance provides freedom and not restrictions
The “B” WordLuke 14:28 (KJV)For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it?Develop a budget TOGETHERSpend every dime on paper before the month begins
The “B” WordTrack actual spending to compare against budgetAs far as is possible spend within the budgetIn reality a budget is very liberating• Gives a sense of direction• Gives hope• Makes your money behave!• Instant Raise!
Whose Money?Proverbs 31:10‐11 (KJV)Who can find a virtuous woman? for her price is far above rubies. The heart of her husband doth safely trust in her, so that he shall have no need of spoil.
Whose Money?75% of married adults say they share all their money28% of women maintain separate accounts20% of men maintain separate accountsRestoring Our Attitudes on Finances, Dwayne Wilson, Florida School of Preaching
Children & MoneyDo you inform your children of the family’s financial condition?Do you teach your children money management?Do you allow your children to earn their money?
Children & Money• Children who are informed about the family’s financial condition experience less financial stress and make more reasonable requests/demands.• Children generally manage money that was earned more carefully than money that was given to them.
Children & MoneyAdult children given more money accumulate less while those who are given less money accumulate more.Proverbs 22:6(KJV)Train up a child in the way he should go: and when he is old, he will not depart from it.
Financial Goal SettingSpecific. Set goals you can clearly name.Measurable. Determine the amount of time and money it will take to reach them.Attainable and Achievable. Given your financial situation, the amount to set aside needs to fit within your overall budget.Realistic. You may need to be more practical about the goal you have set.Time bound. Set a specific target date.
Goal Setting ExampleGoal #1: Emergency Fund (a sample)Target Date Total Cost Amount Already Saved Amount to Save Each Month(25 months from today) March 5, 2015$150,000.003 months’ expenses (up to 6 months’expenses desirable)$10,000.00 $150,000 – $10,000 = $140,000$140,000 ÷ 25 months = $5,600permonthObstacles to overcome:• other demands for current expenses• other goals and priorities• current spending habits• limited amount of money coming in each month• an emergency fund has not been a priority before• defining what is an emergencyStep 1: Save all loose change for the emergency fund.Step 2: Buy items on sale and put savings into emergency fund.Step 3: Pack lunch at least twice each week and put savings in fund.Step 4: Direct deposit $3,000/month into savings account.
Needs, Wants, and CupcakesIcing and decorations represent wants, the extra items that make our lives interesting and enjoyable.The cake part of a cupcake represents our needs. They must be present and addressed before considering any icing or decorations (wants). When making spending decisions, consider if your needs are met before spending on any of your wants. What you determine to be a need versus a want will depend on your personal values, just like your preference for different types of cupcakes.
ConclusionSeparate wants from needs (cup cake illustration)Have a planPartner in money managementMake money behaveTeach children the value of moneyPractice SMART goal settingMicrosoft WordDocument