New Year, More P?

Hi Everybody!

I hope that you all had a great Christmas despite the difficult times. It feels like just yesterday that I was at my Church’s New Year’s Eve 2019 Crossover service, praying that the numerically aesthetically pleasing year of 2020 would be a year like no other. If the usual saying is be careful what you wish for, then the Believer version is be careful what you pray for because it definitely was a year to remember!

In all seriousness, despite the challenges the world has faced, God has blessed my family and many others this year. A great source of joy is that the major goals that I wrote down and prayed for, God has brought to fruition. Specifically, I started a new role as a financial planner, we completed a complex remortgage of our flat and we managed to tidy up our finances.

Aside from God to whom all the glory is due, the key factor to achieving these goals are that these goals were written down. Habakkuk 2:2 (ESV) says:

‘And the LORD answered me: “Write the vision; make it plain on tablets, so he may run who reads it.’

That is not to say I achieved every goal I wrote down, but by having a clear set of objectives, I had a roadmap for the year. So, as we go into the New Year I wanted to encourage you to grab a pen and paper and physically write down your vision of what a great 2021 looks like. If we pray into the physical manifestation of this vision and it is not contrary to God’s word then we can have full confidence that God will bring our visions to reality. Matthew 7:9 -11 (ESV) says:

‘9 Or which one of you, if his son asks him for bread, will give him a stone? 10 Or if he asks for a fish, will give him a serpent? 11 If you then, who are evil, know how to give good gifts to your children, how much more will your Father who is in heaven give good things to those who ask him!’

Now that we know we should write down our vision for 2021 and that our Father will give good things to those who ask him, let’s look at six financial goals that will make us faithful stewards of the resources God has given us and take us all further on the journey towards financial freedom.

1. Establish a budget

Do you know how much you have coming in? More crucially, do you know how much you have going out each month? If this information is a mystery to you then now is time to get your head out of the sand and start investigating. Go through your bank statements for the last three months to get a good idea of your income and outgoings. The Money Advice Service has an Online Budget Planner that is simple to use and it also allows you to print/download the completed budget. Here is the link to the Online Budget Planner so that you can make your own budget.

I cannot stress how important it is to make a budget as every other financial objective will flow from a carefully prepared budget. If applicable, I would suggest that you sit down with your significant other when going through your budget to ensure you are both singing off the same hymn sheet.

Once you’ve gone through the numbers and discovered where your money is going each month, you may then wonder, ‘How much of my budget should I be spending in each category?’ There are countless strategies you could use but I like the 50:30:20 rule for its simplicity. This basically says that 50% of your budget should cover your needs (mortgage, utility bills, council tax etc), 30% should be on your wants (eating out, cinema, video games 😊) and 20% should be put towards saving (Pensions, ISAs etc). (Please note that before these figures are calculated, I am assuming that you have already paid tithe of 10%. More on this later).

Assuming a monthly income of £2,000, we’ll take 10% away as tithe leaving £1,800. Needs would be £900 of the budget, wants would be £540 and savings £360. More information on the 50 30 20 rule can be found here.

Ultimately, there is no one size fits all approach and you should go with what makes the most sense for your own situation.

2. Get debt free

According to the Money Charity, the average total debt per UK household in October 2020 was £60,580, so the chances are that if you are reading this you are probably in debt of some sort. Join the club. I could reel off more depressing figures however I think our time is better spent discussing what we can do about it. I will write a lot about debt but that is for another time. Right now, we’ll focus simply on how to attack the debt head on and also how to get help if you’re really struggling.

A really effective way of paying off debt is the ‘Debt Snowball’ method devised by Dave Ramsey. This method focuses on paying down your smallest debt balance before moving onto larger ones. The snowball method is all about building momentum as you pay off debt.

It looks something like this:

Step 1: List your debts from smallest to largest regardless of interest rate.

Step 2: Make minimum payments on all your debts except the smallest.

Step 3: Pay as much as possible on your smallest debt.

Step 4: Repeat until each debt is paid in full.

There are other methods of repaying debt which focus on repaying high interest debt first, but personally I believe that the psychological ‘win’ from clearing a debt balance makes this my preference.

If you are really struggling and cannot see a way out by yourself, there are organisations that are able to provide help. Christians Against Poverty, StepChange and Citizens Advice are just a few organisations who have specialists to help you deal with your debt worries.

3. Build a Savings Plan

If you have not already, it is probably a good idea to make some kind of savings plan. First of all, make sure you have at least the equivalent of three month’s expenditure in cash as emergency savings. For example, if your monthly expenditure is £1,500 then you should keep at least £4,500 for emergencies. If you haven’t got an emergency fund at the moment, then it’s probably a good idea to review your budget, cut out some of your ‘wants’ and set aside a fixed amount each month to gradually build up your pot.

Assuming that you have your emergency plan in place, you should consider saving for your short to medium term goals (1 – 3 years). This could be for a holiday, house deposit or new car etc. The important thing is that you calculate how much you need in total, what the timeframe is and that you save consistently. I recommend setting up a monthly standing order from your current account to your savings account to automate the process. Pay yourself first.

4. Start investing regularly

Now to the really cool stuff. If you have eliminated your debt, you have emergency savings and have put cash aside for your short-term goals, then you should really consider investing. If this fills you with apprehension, then don’t worry I will show you that it’s not as scary as it seems.

Realistically, investing in the stock market over the long term (10 years +) is the most probable way to build generational wealth and reach financial freedom. ‘But what about the stock market crashing and me losing all my money? What should I invest in? Isn’t it all really complicated?…’ These are questions that I hear often and honestly while there is risk in any investment, with a proper understanding of what is actually happening, you will see that the process is actually quite simple.

It is important to understand that NOT investing is also a type of risk. If you hold lots of money in cash, then the real value of your money will decrease over time as result of inflation. Investing in the stock market over the long term is a good way of ensuring that your funds grow faster than the rate of inflation.

Given the infancy of my blog, I have not yet written a guide to investing yet but it is definitely on my to do list. There is a lot to cover and I will eventually break it down into bitesized chunks. Thankfully, Ryan from the Instagram page @makingmoneysimple has given me permission to share his great Ebook ‘Making Investment Simple’. You can download it here. I have read it and can honestly say it is a great guide to help you get started with investing. We share the same investment philosophies and I can tell that like me; he really wants to help people.

Please note that there is no specific financial advice being given by Ryan or myself. You will need to engage with a financial adviser if you want to obtain tailored financial advice to your individual circumstances. What is being provided is financial education to empower you to make informed decisions about growing your wealth.

5. Pay your tithes

Yep I went there. If you attend church regularly and have not been paying your tithes, then I would suggest that 2021 is the year that you start to do so. Malachi 3: 8 – 9 (ESV) says the following:

‘8 Will man rob God? Yet you are robbing me. But you say, ‘How have we robbed you?’ In your tithes and contributions. 9 You are cursed with a curse, for you are robbing me, the whole nation of you.’

To be clear, tithing is giving the FIRST 10% of your income to God. Let me rephrase, it’s giving BACK the first 10% of ‘your’ income to God. We don’t own anything remember. We are only stewards of what God has blessed us with and tithing shows our obedience to Him.

You might be thinking, ‘I can’t afford it,’ or ‘How do I know what the church is doing with my money? The pastor drives a Bentley’ etc. These arguments and all others are redundant as it’s not about the money but it’s about your heart. In a previous post I quoted where Jesus said that you cannot worship God and money. Each month, when you decide to (or not to) tithe, you make an implicit decision about what you worship.

It honestly is a privilege to tithe because of the blessing of God for our obedience. He puts a covering over our life that far outweighs what money could buy. Verse 10 of the above passage says:

10 Bring the full tithe into the storehouse, that there may be food in my house. And thereby put me to the test, says the Lord of hosts, if I will not open the windows of heaven for you and pour down for you a blessing until there is no more need.

Amen. This is definitely a topic that I will go over in more detail in the New Year, but I’ll leave you with a story from RT Kendall. He asked a pastor, ‘How many of your congregation tithe?’ The pastor replied, ‘They all do.’ Surprised at his response RT Kendall asks, ‘How is this possible?’ The pastor replies, ‘Half of them give their tithe willingly and the other half, God takes it from them!’ The full sermon on tithing is here.

6. Give generously

Despite the challenges of this past year, 2020 has also shown us countless examples of kindness and generosity to those in need. In 2021, let’s make a commitment to be a part of that kindness or generosity. Hebrews 13:16 (ESV) says:

16 Do not neglect to do good and to share what you have, for such sacrifices are pleasing to God.

There are so many ways to give. You could donate to a favoured charity, give food to your local foodbank or even give a no-strings gift to a friend or relative in need. It doesn’t even have to be money, giving your time to someone else can be just as valuable. As long as you pray about it and do what feels right in your heart, no act of kindness is too small.

If you’re really serious about giving in 2021, why don’t you set aside part of your monthly budget as money to give away to make your generosity a habit?

I hope I’ve given you a few ideas to make 2021 a successful year for you. Forget New Year, New Me, next year its New Year, More P! Let me know what your goals are in the comments here or on our IG page @tentalentsuk, or feel free to send an email to [email protected].

Have a great New Year!

Ten Talents