How to solve the budget dilemma

Stay out of debt and stretch your paycheck to the limit with the help of these strategies.

Celia Cruz is a pastor's wife, the mother of five children, and an administrative secretary in the North American Division office of the Seventh-day Adventist Church.

The room is quiet except for the ticking of the clock on the mantel and the steady, rhythmic breathing of my dog peacefully sleeping by my feet. My husband and children are in their beds dreaming pleasant dreams. It is two minutes until mid night, and the light from a full moon is shining through the kitchen window. On the table in front of me are the check book, pen, calculator, a stack of bills to be paid, and a bank statement waiting to be balanced. How I dread this time of the month! Will we ever have enough money to cover all the bills? I breathe a silent prayer for a miracle and for wisdom as I begin the painful task of balancing the budget again.

Does this scene sound familiar? Are you caught in the trap of more bills than money? Are the clergy's families the only segment of society facing this problem? Is the problem really one of too little pay, or is it one of confused priorities and uncontrolled spending?

For years we lived from month to month, stretching each penny, hoping to have a tax refund to use for a vacation, struggling with the bills for five children in church school and academy, and trying to keep everyone clothed and the car running. It seemed that no matter how hard we tried and how much we prayed, we were never able to save a cent, even though I helped supplement the income by baby-sitting at home.

While searching for a solution to our financial dilemma, I have amassed some interesting information I would like to share with you. You see, the scope of the problem is much broader than how tight a pastor's budget may be; it en compasses our whole society, including the young.

According to the March 20, 1989, issue of U.S. News & World Report, 25 million children between the ages of 9 and 15--"tweens"--buy or influence the purchase of $45 billion worth of goods a year. Where are they and their parents getting this money? The magazine article attributes the major portion of these purchases to credit card usage.

More than 30 percent of Americans draw some form of government subsidy (welfare), and more than 65 percent of all Americans have borrowed more money than they can ever repay in their entire lifetime, says Larry Burkett, of Christian Financial Concepts. In 1990 a nightly business-news program reported that the average American family spends most of its annual income to pay off debts.

In just the first 10 months of 1990, more than 753,000 bankruptcy cases were filed, which is two and a half times the number filed in 1986! The catch is that once people have filed for bankruptcy they cannot file again for seven years. This leaves habitual debtors vulnerable to creditors, who are more than willing to lend them money again, knowing full well that now they must pay their bills and have no easy way out of debt. Besides that, now that they have a bad credit rating, they will have to pay a higher interest rate on the money they borrow.

The spiritual implications of spending

Of course, Christians have a responsibility to pay their bills, stay out of debt, and not allow their finances to become an embarrassment culminating in bankruptcy. The Lord has given us counsel on this. For example, we read in Psalm 37:21 that the person who borrows and does not repay is wicked. Luke 16:12 tells us that if we cannot be trusted with someone else's property (money), we will not have property of our own. In The Adventist Home Ellen White advises us to pay as we go, know what we can call our own, learn when to spare and when to spend, and be careful that our expenses do not exceed our income (pp. 392-394).

One of the perils of using credit cards is that it encourages spending what we do not have. Some experts estimate that a family using credit cards spends 25 percent more per year than a family without credit cards. Credit card families buy more often, pay higher prices, and are not as prudent in what they buy. This is why merchants are more than willing to sell on credit--it boosts their sales. The credit card is not the real problem; the misuse of it is the problem!

What we do in our management of money is a clear indicator of what is happening in our spiritual life. The world tells us that possessions equal pleasure and success. In our self-centered society everyone tries to get as much pleasure out of life as possible. Could it be that many Christians have unwittingly taken on the world's mind set? We seem to have forgotten that we are the stewards of the possessions God has given us to manage. We cannot live like the world does and still do God's will.

What does stewardship mean? Is it limited to paying our tithe and offerings, or does it encompass our whole life and lifestyle? I believe God expects us to be faithful with the 80 to 85 percent we have left after paying our tithe and offerings. Let us compare our stewardship to the parable Jesus told of the wealthy land owner and his servants (Matt. 25:14-30). The wealthy man gave each servant a different amount of money and said to invest it. The money did not belong to the stewards; they were just to use it to benefit the owner. The two servants who wisely invested what the master gave them were praised and blessed. The one servant who did nothing with the money was condemned. Likewise, we are God's stewards. He expects us to use wisely and to His honor all that He gives us.

Just how is it possible to survive on a pastor's salary amidst a shrinking economy in which inflation escalates almost daily? My experience has shown that survival on a pastor's salary depends on two things: controlling spending and setting up a yearly budget and financial goals.

How to control spending

The following suggestions have helped me control spending:

1. Keep a diary of your spending for 30 days. Put down every nickel you spend. List categories--housing, food, cleaning supplies, clothing, recreation/ entertainment, medical needs, transportation, etc.

2. At the end of 30 days, add every thing up and find out what it cost you to live during that time. Where can you trim your spending? When I present this concept to people, I get mixed responses. Some are willing to expose their spending habits; others are afraid to let their spouse see how free they are with the money, and some feel that their authority is being threatened. Of course, this entire process will work only if you and your spouse agree to cooperate.

3. Be willing to change your attitude toward borrowing; make changes to re verse the process.

4. Determine what your financial goal is for one year, two years, and five years. Setting a goal gives you some thing to aim at.

When we first went on this program years ago, we set as our first goal to be out of debt in one year (except for our house and car payments). The thought was overwhelming because we had so many debts, but we decided we had nothing to lose. Our finances could not be any worse than they were.

5. Commit yourself to living on what you make--no credit cards and no bank loans (except for buying a home).

This can be very hard to do if you are locked into a high-cost area of the country. Years ago it was much easier to accept a pastoral call and move the family to a new area. But today, with the cost of living being totally out of proportion with pastoral salaries, it has become necessary to study carefully each call to determine the financial impact the move would have on the family.

6. Stop using credit and stop doing impulse buying. We get into debt by spending money we do not have. The only way out of debt is to underspend. If you do not borrow money, you will not get into debt. If you stop borrowing money, you will not get further into debt.

7. Begin paying off your debts. You probably will not be able to pay off your house, but pay off your car, credit cards, small loans, etc.

As we paid off each small loan, it freed up money to apply toward another debt. Instead of taking 12 months to pay off all our debts, we were able to do it in 8 months! We were thrilled! As a matter of fact, we celebrated with a party.

8. Discover ways to cut your expenses. Find a salvage depot where you can buy dry food items like beans, rice, and canned foods at very discounted prices, and a farmers' market where you can buy vegetables and fruits by the bushel and save. If a bushel seems like more than you can use, find another family willing to split it with you.

In one place we lived we found a salvage depot where we could buy many items for a fraction of their cost. Once we bought a 100-pound bag of sesame seeds for $1.00! We put them into quart-size freezer bags, gave a lot away, and still had sesame seeds for several years. I put them in homemade granola, sandwich spreads, bread, crackers, and everything else I could think of.

In another town, I joined a local co-op where I could buy food items at a lower price than at the grocery store and make new friends from other faiths at the same time.

9. Begin the habit of saving--even if it is only $10 a month.

As you are able, put more aside. Soon you will be surprised by how much you have. Do you realize that if you start brown-bagging your lunch on workdays instead of eating out, you will save about $1,000 a year? Double this amount if your working spouse does the same thing.

How to set up your yearly budget and financial goals

Setting up a yearly budget and deciding on financial goals is a tremendous help. The following budget allocations are only a guide. You can adapt them to your own situation and income. This sample budget assumes that your taxes have already been deducted. As you can see, some of these expenses are fixed monthly expenses and others are yearly (the asterisks denote the ones that are yearly). Set up sub-accounts to take care of each budget item. That way, when the money is needed for a specific thing, it has already been set aside, saving you a lot of anxiety.

Here are some suggestions concerning the yearly budget items:

1. Furniture: Look in the local newspapers and advertising papers for ads about moving sales and furniture salvage stores. We have been able to buy good-quality furniture for a fraction of the cost this way. We found a salvage depot selling furniture that had been in a warehouse fire. The only thing wrong with it was that it was smoke-stained. We bought dressers, chests of drawers, nightstands, and bed frames, and cleaned them thoroughly at home--good as new. That was in 1974. We still have the furniture, and it still looks good after weathering 10 subsequent moves.

2. Clothing: Establish a clothing budget for each member of the family. We give all our children over 12 years old their own clothing allowance, let ting them decide what they need and then having them make their own purchases. They have learned to shop for bargains, no longer turning up their noses at the idea of patronizing clothing stores. They take much better care of what they have paid for, and have learned to save some of their money for big items like winter coats, shoes, boots, etc. A side benefit for us is that they no longer come to us asking for new things.

3. Christmas: We decide how much we can afford to spend on each member of the family for Christmas, and we save with that in mind. As I find items on sale throughout the year, I can buy them and put them away because I already have money to shop with. Careful planning even makes it possible to begin next year's shopping at this year's after- Christmas sales.

4. Vacation: Be innovative; find ways to take a vacation on less money. Maybe you can go camping or take day trips to interesting places nearby.

5. Entertainment: Determine how much you can afford to spend on entertainment during the year and divide that amount by 12 months. This includes renting videos, sports, eating out, having a party, miniature golf, hobbies, etc. If you do not spend everything in a given month, the next month you can do something extraspecial.

6. Miscellaneous: Choose a certain amount to put in a miscellaneous fund, specifying what kinds of things it can be used for. We use ours for buying birth day presents, flowers and cards for the sick, and any other legitimate need that does not already fit in one of our other categories.

7. Savings: Put something aside regularly throughout the year to make the long-term goals you set a reality, such as a new car, a nicer house, college education for the kids, etc. You and your spouse know what you need or would like to have. Setting specific goals you want fulfilled makes it easier to save.

As we pledge ourselves to giving God His portion first and to turning our finances around and being faithful stewards of all He entrusts us with, we can claim the promise found in Deuteronomy: "The Lord will open the heavens, the storehouse of his bounty, to send rain on your land in season and to bless all the work of your hands. You will lend to many nations but will borrow from none. The Lord will make you the head, and not the tail. If you pay attention to the commands of the Lord your God that I give you this day and carefully follow them, you will always be at the top, never at the bottom" (28:12, 13, NIV).

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Celia Cruz is a pastor's wife, the mother of five children, and an administrative secretary in the North American Division office of the Seventh-day Adventist Church.

December 1991

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