Finances

The quickest way to change your financial problem

There's few things as painful as the consistent stress of finances. Money troubles can create a sense of drowning and all too often we simply submit to it.  I read in Malcom Gladwell's awesome new book David and Goliath: Underdogs, Misfits, and the Art of Battling Giants a U-Curve exists for us in our regards to how much money we make and how happy we are.  You might need to read this quote twice:

The scholars who research happiness suggest that more money stops making people happier at a family income of around seventy-five thousand dollars a year.

I know a lot of people who make a combined income higher than $75K but the financial struggle is real for them.  And more often than not the complaint that follows the issue is there simply isn't enough income!  This is backwards thinking and I have been there plenty of times.  For example, I saw a significant increase of pay in 2002 because of a promotion.  What was the first thing I did when the paycheck increased?  I went out and bought a brand new SUV because I thought there was room for a car payment.  And there was but the car payment kept other things from happening, like vacations, a savings account, finances for home repairs, and investing.  But I was driving a sweet new SUV getting 13 miles to the gallon.

Since our personal lives can fall to the thought, "There is an income shortage," we can also fall into the same trap as organizational leaders.  "There simply isn't enough revenue."  "If we don't raise more money then..."  I'm not trying to make light of financial problems in our organizations either, I'm arguing we have a tendency to be more concerned with whats coming in instead of taking a good hard look at what we're spending.

Would you like to see a financial turn around personally or as a leader?  The quickest way to change your financial situation is to change your spending.  Try some of these ideas:

1.  Look for unnecessary spending - Are there things in your life you paying for because of brand name?  Brand names are often more about how we feel about ourselves then they are about the product.  "Do we have the right things to look like we financially do well?"  If this happens in your personal life it's probably happening in your organizational leadership.

2.  Kill sacred cows - Believe it or not, the grocery store for some people is a sacred cow.  The reason a grocery store becomes a sacred cow is because it's comfortable and spending less money and shopping in a new place is uncomfortable but so is massive debt.  "I couldn't get any work done without an office," Is not an uncommon thing to hear from an organizational leader but work space is often a sacred cow.   But is the argument true or is it uncomfortable to find a new way to work?  I've been there.  For the last two years I've been office-less.  It took me about a year to get adjusted but now I have a hard time imagining going to work in the same spot every day.

3.  Be willing to sacrifice - It's almost painful to write but it may be the best thing you can do, sacrificing things or money for a short time will have a reward.  But hear me on this - SACRIFICE IS SEASONAL.  I know it feels like it could be never ending.  That you will always have to do without but these things simply aren't true.  When you make smart financial sacrifice in one season the next season can have lots of financial reward.  Don't let the lie creep into your brain that you will always feel this hurt.  Be willing for a season to sacrifice.

I love the start of a new month, especially looking at finances because its a new opportunity to do better.  I feel this personally and I feel it as an organizational leader.  Becoming financially healthier is like chiseling a statue.  Day after day, week after week, and month after month you have to keep hammering to get where you need to be.  The question is are you willing to chisel away at your spending in order to become more financially successful in the coming months?

God or Money: Which makes you more comfortable?

I'd be intimidated in a conversation if someone were to ask me, "God or money: Which makes you more comfortable?" How about you?

I've had an interesting relationship with money.  The ups and downs of this relationship comes from leading in non-profit work.  You can't just buy house, you wonder what people think if you live in too nice of a neighborhood.  You can't just buy a car, you wonder how people will respond to the brand you buy. It's almost like you operate in a bizzaro world (excuse my Seinfeld reference).  For others, these "life upgrades" are suggested signs of success.  For non-profit folks they are signs of excess or viewed as suspicious personal spending.

But the bigger danger for me is not what others think, it's what makes me comfortable.  Jesus said, "You cannot serve both God and money."  I'm learning when my eyes are set on doing good things hoping for financial reward rarely does the financial reward become the return.  Yet, when I discipline myself in personal finances and serve generously I am financially rewarded.

Now, here this!  The reward is not a massive external blessing.  The blessing is from the discipline not the reward.  Because even the smallest financial reward becomes greater when I take my personal financial discipline more seriously.  Money goes further. Every penny is taking advantage of.  "Give us this day our daily bread," is a struggle for contentment in regards to daily needs not a limitation to how I can daily serve.  When I am content I receive financial reward through discipline not a larger paycheck.

I'll finish with this: I do not believe money is evil.  Having a lot of money does not make someone a bad person.  Nor does having a lot of money mean you've spent your entire life serving money.  As twisted as it can get the modern business model is still serve people well and receive financial reward for your service.  The hardest part for me is not falling into the mindset of, "I serve people well so I deserve a reward."

I'm learning a lot about my relationship to money.  What about you? Just add your comments below!

Leadership freedom begins at financial freedom

As leaders we can get stuck trying to control things we can't. We then turn to obsessing how to fix the issue or getting people to do what we need even though the result was never something we could control in the first place.

Many of us will choose to live under this pressure financially. The thought is, "When I make (this amount) of money, things will be much better." However, the amount becomes allusive because people will typically spend more if they make more. When we live this way we can't ever take control of feeling free of financial pressure.

A key to being content as a leader is living under your means, that means living on less than you make. If our leadership exists under the pressure to perform better so that we make more we will make decisions based on what we need instead of thinking about the need of those we serve. Did you catch that? Leaders who operate under the consistant pressure to make more money make decisions to look good and not to serve. The belief that looking good will lead to a higher position resulting in more money.

There are a couple of keys to living under your means to free you from this pressure:

1. Shop Generic - Please tell me you know that generic means someone has figured out how to do it cheaper, not to do it worse? I can promise you that your hang ups with shopping at a place like Aldi is based on your status and appearance more than the condition of the store, people who shop there, and most of all the quality of product.

2. Appropriate Living - If the cost of your living space (mortgage or rent) in a month is more than 40% of your monthly take home pay, you're putting yourself in harms way. If you plan on living on 80% than you've already spent 50% of what you are bringing home.

3. Fire Cable TV - No one is taking you to the cleaners more so than local cable companies. If you live in a major metropolitan an HD antenna can be found on Amazon.com for under $40. With the existence of Netflix, Hulu, Roku, and other streaming channels through gaming systems there is absolutely no need to pay for cable and DVR. The biggest obstacle to this is "man land." In other words, "What about ESPN?" I can promise you that as long as gambling exists, you will be able to find your favorite team playing online somewhere if it's not on one of the major networks that's free over an HD antenna.

If I live at or above my means I am transferring the pressure I feel to make it financially over to the decisions I need to make to care for people.

What are you doing to live below your means?

Financial issues can rob you

Financial issues are rarely external.

I was sharing with some new folks in ministry that personal finances can be a thief of a calling. I believe it's in the top three reasons I see people leave jobs they feel called to. It is one thing to feel alone, it's another thing to feel overwhelmed, but to feel poor is an absolute killer.

When I encounter someone who is financially stressed my first thought is, "Do you operate on a budget where every penny is accounted for?" If you don't know where your money is going then you are a slave to mystery. My money will always work for me instead of me working for it. That's our relationship. I should own it, it shouldn't own me. A budget where every penny is accounted for is my way of saying, "Money! Go make me a sandwich."

My second thought is, "Do you know what poor looks like?" In college I had the opportunity to travel to Eastern Europe and serve homeless children in Romania. I saw poor kids. Poor is when you stop thinking about money and begin to think survival. People with a lack of finacnes are struggling with comfortability not survival. There is a BIG difference. I'm not going to categorize myself as poor, or allow anyone else to make me feel poor. Fixing a financial issue is all to often uncomfortable, it requires us to change and we hate change. However, I can't think of another time we are more motivated to change and we should milk that emotional cow and make a plan.

My final thought is, "You will never win with debt." Debt may be the biggest place we have gotten complacent as a western culture. I heard a Christian say, "Debt is a inevitable, might as well die with it."

Victim.

Financial freedom is found in a zero debt lifestyle. When you owe no one you are free to spend your money however you want.

What have you done to win financially?