What is the one asset of which everyone has an equal amount, must be spent, and cannot be saved?

Time. Time must be spent every day whether on things of high value or of low value. One of the keys to lowering stress and getting more value out of life is to really put time near the top of your priority list. This principle can drastically change your approach to personal finances.

I believe that most people agree that our best memories come from the simple experiences we have in our lives away from work. Family outings, hikes, get togethers, vacations, volunteer activities, and adventures generally all happen in our "free time". One thing that is required to have these treasured memories is to have free time. Many families have been ruined by the over pursuit of money. One or both spouses spends far too much time at work and there is not time for those great family experiences.

While all of us intrinsically know the high value of time, statistics show that more and more Americans are spending more of that precious time in the workplace. The recent upsurge in two income families automatically raises many families to double the traditional time spent at work. The recent economic bubble (1980 - 2000) was largely based on increased family income which raised home prices and allowed families to incur greater debt which leads to a dependence on working more. Also, one of the "rewards" for working longer and performing well is increased work responsibility. This whole nasty cycle seems to constantly work against our ability to control how we spend time. FULL POST

What is the Interest Game?

Attaining thriving finances is largely a result of how we play a serious game - the game of interest. Your competitors are the lending companies. They are very good at this game and they have lured Americans into higher and higher debt so they can make a lot of money.

The longer consumers stay in debt, the more money the lending companies make. Investors are hard pressed to make 17% interest but Visa easily makes this off the average person without having to worry about the economy, oil prices, investor confidence, etc... They only worry about consumers paying their bills which has hurt them lately. The money made by lending companies is probably not going to accomplish God's purpose.

Rules of the Game FULL POST

IS TITHING STILL REQUIRED?

Tithing is one of the most controversial topics in Christianity. A quick search of the Internet will reveal a large number of articles claiming that tithing is not applicable in the New Testament and a large number of articles that claim tithing is still applicable. You can research this for yourself.

I have concluded that the strict ten perent tithe is not required. It is very clear that giving is still a very important aspect of Christianity, regardless of your view on the law of tithing. I want to focus this article on where Christian giving should be focused.

IS TITHING TO THE LOCAL CHURCH REQUIRED? FULL POST

I believe time management and money management are closely related. American businesses are demanding incredible amounts of work from their employees in order to compete in the increasingly competitive global market. As Christians, who value God and family, we need to strike a balance with increasing work demands and our core values. This requires most of us to have very good time management skills. The Bible gives straightforward advice about time and money balance. Proverbs 23:4 "Do not wear yourself out to get rich; have the wisdom to show restraint".

As an Engineer at an aerospace company, I constantly deal with time management challenges. Many of my co-workers and bosses work huge amounts of overtime to stay on top of all the work.  The following practices can be utilized to remain valued at work while doing less overtime.

The 20/80 Pareto Principle
Studies have shown that 20% of most tasks create 80% of the value. The other 80% only adds 20% value. Learning to find and do the 20% can make you five times more efficient than average. Become a priority freak. FULL POST

My last article focused on key values that successful families prioritize to achieve stress free finances.  Now lets discuss practical habits that train people to think differently and develop good financial values. 

Normally, I don't tell people to stop buying lattes and invest the money in xyz because it adds up to x dollars after 25 years.  Any one thing like this will not change your future.  But, several little habits can cause a change in thinking which will automatically translate into making different big decisions.

When I was growing up my dad never ordered soft drinks at restaurants.  He did this because with a family of seven, not ordering drinks saves a lot of money (~20% of a meal). This was so irritating.  I could not wait until I could get soft drinks with every meal.  Now I irritate my kids at restaurants and they are also healthier for it. 

Here are a number of good money (and health) habits that I have practiced and/or witnessed: FULL POST

One of the most common New Year's Resolutions has something to do with getting financially healthy.  Several people I know are getting very serious about reducing debt and saving.  A recession clearly reveals the dark side of debt and the wonders of having reserve cash.

I have been searching my soul for the deep reasons why some people just can't follow through on their financial resolutions.  I am convinced it has to do with deeply held values.  We are given a choice to live the American dream as fast as possible by taking on debt or to delay the gratification and gain real financial health by "suffering" for awhile. 

Many of us really value being able to spend the money we earn (or even more than we earn).  We really value the ability to buy things, eat out, drive nice cars, or have a big house.  Not to get these things when everyone else has them feels like suffering.  Why should I suffer when I am working so hard.  This set of values is re-enforced by the fact that I don't really think I will ever get ahead so why not just enjoy my money. FULL POST

Americans, both Christian and non-Christian, have been sold a bill of goods by the American corporate system. I don't think the corporate system or the American people have done this intentionally. Our desire to live the American dream and the corporate desire to make money have led us down this path over several decades and both sides share blame equally.

The scam goes like this. You and your spouse work as much as you possibly can, at least 50 hours a week, and promise to commit nearly all of your current and future income to the system, and the system will give you the great American dream now. You can have the big house, new cars, vacations, RVs, three big screen TVs, and a time share, and all the system wants is your time and money. Few of us really believe that these things are that important, but when you look at American working and spending trends, we, as a whole, have bought it hook, line, and sinker. Even though we live in the land of the free, we have somehow become slaves to the system. The borrower is servant to the lender.

The result is that Americans are sleeping less, losing earned vacation, and experiencing more stress related medical problems than ever before. The family system is suffering as evidenced by increased marriage and parenting issues. The corporate system was as profitable as it could be, before the recent economic recession, based on more productive workers (workaholics) and massive credit spending. FULL POST

• The average consumer is expected to spend $849 on 26 gifts.
• Most consumers use credit to fund much of these purchases.
• Many people take six months to pay off Christmas debt.
• Many of us receive gifts we don't really need or want.

Suggested Rules for Giving:

• Don't feel compelled to buy lots of expensive gifts if you do not have the money to buy them in cash without draining your savings.
• Don't be afraid to warn your relatives that you are not expecting much and will not be buying much this year. They probably won't mind. Most people want to reduce their extra stuff.

Counter-cultural Giving Ideas:

• Email or write your extended family and request that fewer gifts be given to your family. You might even ask them to give to your favorite charity instead.  It may take a couple of holidays for them to adjust.
• Have each of your children help buy gifts for kids who are needy. We do this through a work sponsored stocking program.  If you sponsor children you can have your kids help fund their Christmas gift program.
• Give extra to a homeless shelter or help serve food near Christmas. We have served food at Thanksgiving and it was very memorable.
• Give gifts of time rather than things. Send dinner coupons and such to far-away relatives. Take local friends and family out for a day of low cost activities.

Financial gurus have a tendency to focus on various mistakes Americans are making such as not saving enough and not giving enough.  The fact is that America is one of the most giving societies on the planet.

Consider the following statistics from the National Philanthropic Trust and other sources.  Let's be thankful that America gives.

• Americans give, per capita, three and a half times as much as the French
  • Seven times as much as the Germans
  • 14 times as much as the Italians.
• Americans were 15 percent more likely to volunteer their time than the Dutch
  • 21 percent more likely than the Swiss
  • 32 percent more likely than the Germans
• 89 percent of households give
• It is estimated that between $6.6 trillion to $27.4 trillion in charitable bequests will be made between 1998-2052
• There are approximately 1,010,400 charitable organizations in the United States
  • There are approximately 355,000 religious congregations
• The number of U.S. non-profits has doubled in the past five years
• 55 percent of Americans volunteer their time
• 75 percent of all contributed dollars was given by individuals in 2008

The magical investment principle of compounding works both ways.

You have probably read articles about the wonderful effects of compounding when you invest consistently for many years. The original money plus yearly earnings forms a larger cash base each year. The bigger the base, the more dollars you earn from the same interest rate. 10% of $100 is $10. 10% of $1000 is $100. It is better to have $1000 invested at 10% than $100. See the story of two brothers for a full example of this.

The danger of investing in things that often lose value (stocks, bonds, commodities, etc...) is that negative compounding comes into play. If your portfolio loses 50% of its value due to severe recession, it takes a 100% gain to recover. $1000 becomes $500. Now you are only making interest on $500. It takes a gain of $500 (100 percent) in order to get back to $1000.

For this reason, it is very important to have a strategy to avoid huge losses in investing so negative compounding does not ruin your investment goals.  This is also why people are told to move money into more stable investments as they get older.  FULL POST