Debt Free Legacy

Understanding the Positive Cash Flow Margin concept

Understanding the Positive Cash Flow Margin concept

by Glen Becker

God designed this world so that you require food, clothing and shelter to live. That means that it is impossible to save 100% of your income. So, you need to plan how much to give, how much to spend and how much to use for other purposes.

There are certain priority payments which must come first: tithes, any giving you have committed to the Lord to make, your taxes, and the minimum payments on debts. Beyond these, there are the regular expenses of housing, food, clothing, etc. You have some discretion on these, but as God planned, you do need these things. Income that is not used for these purposes is available for meeting your financial goals: faster debt repayment, building a cash reserve for emergencies, savings for retirement or special purchases, and building an estate to leave to your heirs.

This available income is called “cash flow margin.” You can think of it as your freedom of choice. If your cash flow margin is:

Positive: You have real choices on what to do with your money.
Zero: You have no choice—it’s all gone.
Negative: You are forced to borrow more each month.

Thus, cash flow margin is all about choice. Sadly, most people do not know their cash flow margin. If you do not know yours, the money will disappear by default. Usually the only way to have a positive cash flow margin is to plan to have one. That requires listing your income and expenses, doing the math, and seeing the number for yourself.

God already knows the number, and He wants you to know it, too. Proverbs 27:23 (NIV) says, “Be sure you know the condition of your flocks, give careful attention to your herds.” This includes knowing whether there is enough food to feed the flock. In the same way, you must know whether your spending is allowing you to move ahead financially or not. If not, you can adjust your spending plan until you are happy with the result.

You want to achieve your financial goals. Planning for a positive cash flow margin is the practical way to begin. You will then be able to use the money according to your priorities.

Improving my cash flow control

Improving my cash flow control

by Bob & Kristi LaMontagne

Accurate records are necessary to improve cash flow control– you need to know your current financial situation and establish future financial goals. In Luke 16:1-3, we are instructed to give an account of our management, so we are clearly responsible for the administration of our God-given resources. There are three proven cash flow systems available to help you keep track of your money on a daily, monthly and yearly basis and achieve financial freedom from all debt. These are the envelope system, computerized PC based software packages, and a three form manual cash flow control system. Financial Freedom in 7 Weeks Plus, by Bill and Maureen Sitter, will introduce you to these effective cash flow control systems which will enable you to manage God’s resources more effectively while allowing you to become totally debt free.

How can I control my spending with an envelope?

How can I control my spending with an envelope?

by Amber Drabek

 

I never dreamed that I would be stuck in a financial hole, as deep as I was, three years ago. God had led me to a new chapter in life and to a new city. However, the choices I had made financially finally caught up with me. Whenever I felt empty inside, I would grab my credit card and start spending. I needed my God to fill that empty place inside of me—not material possessions! God placed it on my heart that He had plans for my life and they were beyond anything I could ever imagine! Jeremiah 29:11 (AMP): “For I know the thoughts and plans I have for you, says the Lord, thoughts and plans for welfare and peace and not for evil, to give you hope in your final outcome.” However, the question that I had for myself was: How can these plans come to fruition if my god was a credit card?

The Lord came to my rescue once again and led me to the Financial Freedom in 7 Weeks Plus book and course. God used this program to show me ways to control my spending and my cash flow. A cash flow system is a way to keep track of where your money goes and how it is spent, saved, or wasted. One of these cash flow systems is an envelope system. A flexible spending plan is projected and planned to allot specific funds to specific spending categories. Some examples of these categories are as follows: groceries, rent, clothing, entertainment, and savings.

Now, to use the envelope system, take your envelopes and label them with these specific spending categories. You can use whatever category you choose, but those that you have a more difficult time controlling are great places to start. Once you receive your paycheck, place the allotted cash monies into the envelopes. A log sheet or register should be used, for each envelope, to track incoming and outgoing monies. If your spending plan is balanced with a positive monthly cash flow, then there should exist sufficient monies for each envelope. Once the funds from an envelope are used, then spending from that category must be stopped for that time period. Money can be transferred from one category to another, if need be. However, new debt is not an option. Restraint and discipline are required for the system to work properly.

A simple envelope cash flow control system has enabled me to avoid the use of credit cards and stop overspending. This has been imperative for me to remain on a road to complete financial freedom and to achievement of God’s life plan for me. Of course, for anything to flourish and prosper in life, God has to remain in the center. I have to continually pray and to remain in God’s Word. “Then you will seek Me, inquire for, and require Me and find Me, when you search for Me with all your heart.” Jeremiah 29:13 (AMP)

Computers and Cash Flow Control Software

Computers and Cash Flow Control Software

by Bob & Kristi LaMontagne

God made us and He intends for us to be good stewards, or care takers, of God’s money. Fortunately there are many modern tools that can help us do that with relative ease. Are you fearful or do you get excited when computers are mentioned? Today, there are many user friendly software programs to assist anyone interested in tracking their finances on a computer. However, discipline and accuracy are vital to properly record and safeguard information entered. With computer software programs you must faithfully enter all transactions. As a benefit, you should receive easy to read reports, and detailed summaries for your income and expenses, broken-out by the major categories you pre-select. For instance, you can customize most reports to match your spending and biblical giving plan categories.

Easily available on the market today are many popular financial software packages like Intuit’s Quicken and Quick Book Pro, which are well designed for small business and personal use. Also, available on the market are software packages that deal with money matters by Crown Financial Ministries. Larry Burkett’s team originally developed these software packages, which are reasonably priced. Then, of course, there is Microsoft offering their Microsoft Money which is generally included in their Microsoft Office software package.

Financial software programs offer great assistance to anyone willing to work with computers to take control of their cash flow and become debt free.

One big caution, if you (or your spouse – if married) do not totally understand computerized records; start with the easy-to-use Manual Cash Flow Control System, included in Financial Freedom in 7 Weeks Plus. Once you have this process down cold, then you’re ready to move on to computer-based software, if desired.

Analyzing My Monthly Cash Flow

Analyzing My Monthly Cash Flow

by Kristi LaMontagne

Failure to use a flexible spending plan is one of the leading causes for financial woes. Many people lack a clear understanding of basic accounting principles; therefore, learning a few of these simple principles can help you better manage your money (Prov.27: 23). Cash flow analysis on a monthly basis shows you whether you are generating enough cash to meet your financial obligations and how your expenditures (outflow) relate to the money coming in (inflow). A monthly cash flow analysis helps you determine where you lack capital or have a surplus. This information can then be compared monthly to the records that you have accumulated in the past months. Putting God in the center of developing your flexible spending plan will give you an assurance and peace that you are moving toward a well balanced cash flow.

Financial Freedom in 7 Weeks Plus is a Bible-based workbook that will guide singles, couples and families step-by-step through all the basics of managing money. Chapters 4 – 7 focus on the Flexible Spending Plan concept and Cash Flow Management.

Is My Biblical Giving Proportionate to My Income?

Is My Biblical Giving Proportionate to My Income?

by Kristi LaMontagne

When we stop and think about it, God owns everything in the natural world and we are merely stewards or managers of what He has entrusted us to take care of. (Ps.24:1, Deut. 8:18). God makes it clear that everything we manage for Him comes from Him. As good stewards, God expects us to wisely manage the three sources that He gives all of us: our Time, Talent, and Treasure.

In Mal.3: 8-12, God instructs us to give back to Him a tenth of what he has given to us. This is the basic amount He asks of us. The Lord also wants us to give freewill offerings to advance His Kingdom and alms (charity) to the poor.

Our tithe is not derived from our net income, after taxes, but from our gross income before taxes! Many people are unaware of this biblical truth. For example, before my husband and I learned this principle, the enemy was vexing us in the area of our finances. By failing to give God the entire tithe, we put ourselves under a curse. (Mal.3: 8-9). After learning this principle, we corrected this misconception and our finances began to get into line with God’s Word so that we were then able to hear how God wanted us to allocate His money. Within one short year, we were on our way to becoming completely debt free, except for our home mortgage…and we hope that soon follows.

Once we understand that the true tithe is what the Bible calls a first fruits obligation, and that it is 10% of our gross income, we see that as God increases our income we should be cheerful about paying a larger tithe in proportion to our income. Offerings and alms are the second and third components of a three part biblical giving plan. These are based on freewill decisions that should be prayerfully made. We certainly encourage you to increase freewill giving as God blesses you with more income.

Is the concept of giving on your “gross income” new to you? Is your response “I can’t afford to give that much”? As things appear right now, this may appear to be true, however according to Mal. 3:10-12, you will find that this is the only place in the bible that the Lord gives us the challenge to test Him. By being obedient and putting God in the middle of your finances, you give Him your permission to break the power of the enemy over your finances and that positions you to enter into the abundance of His blessings! (Jer.29:11) I’m sure glad that we did!

Biblical Giving in Your Family

Biblical Giving in Your Family

by Joyce Shoemaker

My parents never talked to me about tithing, giving, or the sowing of alms. I went to church only when my parents felt like taking me. My only example of biblical giving while growing up was when the offering plate came around; dad would reach in his wallet and drop in a $20 bill, since they only took me to church for Vacation Bible School, Christmas and Easter, I did not develop an understanding of responsible biblical giving. When I began to understand what God’s Word says about biblical giving, I fully realized it was my responsibility to pass on a legacy of financial principles to our children so that their children’s children would walk in the prosperity of God’s promises.

I like what The Message Bible says in Malachi 3:8-10 about being blessed or cursed when we tithe or don’t tithe. “Begin by being honest. Do honest people rob God? But you rob me day after day. You ask, How have we robbed you? The tithe and the offering—that’s how! And now you’re under a curse —the whole lot of you—because you’re robbing me. Bring your full tithe to the Temple treasury so there will be ample provisions in my Temple. Test me in this and see if I don’t open up heaven itself to you and pour out blessings beyond your wildest dreams. For my part, I will defend you against marauders, protect your wheat fields and vegetable gardens against plunderers.”

When both of our children began to receive monies, we taught them the principle of the tithe. When they cheerfully gave of their tithe, they received blessings. When they withheld their tithe, they got dropped from their work schedule, or got their hours reduced. They quickly learned and lived the lessons of Malachi. Have you passed the torch of biblical giving to your children? What have you modeled in your generation that will carry on from generation to generation? 
The Message Bible tells us in 2 Corinthians 9:6-8:

“Remember: A stingy planter gets a stingy crop; a lavish planter gets a lavish crop. I want each of you to take plenty of time to think it over, and make up your own mind what you will give. That will protect you against sob stories and arm-twisting. God loves it when the giver delights in the giving. God can pour on the blessings in astonishing ways so that you’re ready for anything and everything, more than just ready to do what needs to be done. As one psalmist puts it, He throws caution to the winds, giving to the needy in reckless abandon. His right-living, right-giving ways never run out, never wear out. This most generous God who gives seed to the farmer that becomes bread for your meals is more than extravagant with you. He gives you something you can then give away, which grows into full-formed lives, robust in God, wealthy in every way, so that you can be generous in every way, producing with us great praise to God.”

As covenant-keeping Christians, it’s our responsibility to learn what God’s Word says about resources, tithing and giving beyond the tithe. God owns everything and He is our only source of resources. Our children will learn, live and do what we have modeled for them…let it be a godly legacy.

Bankruptcy

Bankruptcy

by Elaine Bechtel

Ever ask yourself: “How did my finances get into such a mess?” Or “Is bankruptcy my only option?”

Most often, financial mismanagement or even greed brings us to the point where we feel bankruptcy may be our only option…however, it is almost never a good solution. The Bible warns us in Proverbs 21:17 (NAS) “He who loves pleasure will become a poor man: He who loves wine will not become rich.” And in Psalms 37:21 (NAS) we read, “The wicked borrows and does not pay back. But the righteous is gracious and gives.” Being unable to pay our obligations does not speak well of a God who supplies all of our needs. We may need to ask ourselves a tough question: Are our financial problems the result of satisfying our wants (greed) rather than meeting genuine needs? There is a big difference.

Whatever happened, here are some action steps to help us climb back from the brink of bankruptcy:

  1. Admit your spending habits need to change.
  2. Ask God for help and find an accountability partner.
  3. Take a financial course (like Financial Freedom in 7 Weeks Plus) and learn about freedom from debt action plans.
  4. Put a hold on credit card purchases for now.
  5. Create a debt repayment schedule and commit to repayment.
  6. Call each creditor and discuss your options. Ask that they reduce the interest rate. Let them know that you intend to pay them back.
  7. Outline your repayment plan for them in a letter stating that if you get no response then you will believe that they agree to the plan, and send it by certified mail. (This may possibly help you if they take you to court or turn you over to a collection agency.)

Coming back from the brink of bankruptcy is not easy, but it is the right thing to do. So let Romans 13:8 (NAS) be your guide “Owe nothing to anyone except to love one another; for he who loves his neighbor fulfills the law.” And draw strength and confidence from Philippians 4:13 (NAS) “I can do all things through Him who strengthens me.”

What are Assets?

What are Assets?

by Elaine Bechtel

Deuteronomy 8:18 (NAS) “But you shall remember the Lord your God for it is He who is giving you power to make wealth, that He may confirm His covenant which He swore to your fathers, as it is this day.”

Proverbs 10:22 (NAS) “It is the blessing of the Lord that makes rich, and He adds no sorrow to it.”

If you ask an accountant what assets are, they will tell you that assets are items of value; which is a true statement. To Christians it is much more. Assets include our time, talent and resources. Bill & Maureen Sitter, in their book Financial Freedom in 7 Weeks Plus, define prosperity as “Having all the time, talent, and resources needed to accomplish what God has called us to do”. This broadens the scope of what assets are, and speaks to where your heart is. What will you classify as an asset in your life?

In the accounting realm assets come in two types: Liquid and Non-Liquid. Liquid assets are those that can be converted into cash in 1 year or less. A partial list of examples are:

  1. Cash in your wallet.
  2. Cash in your checking or savings accounts.
  3. Stocks or Bonds.
  4. Life insurance cash values.

These items when totaled equal your liquid assets. Non-Liquid assets are those that take longer than 1 year to convert to cash. A partial list of examples are:

  1. Market value of your home or land.
  2. Net worth of a business.
  3. Vehicles as in cars, RV’s, ATV’s, Jet skis, boats, etc.
  4. Furniture.
  5. Collections like stamps, coins, crystal etc.
  6. Retirement fund balances.
  7. Money due to you from others.

These would equal your Non-Liquid Assets.

Together, Liquid and Non-Liquid assets are your total assets. This information is used to determine your net worth, which will be discussed in another article.

If you have more assets than you need, consider selling any surplus or idle assets to reduce your debts, so you can achieve your financial goals.

Do you need a Will?

Do you need a Will?

by Debt Free Legacy

A will is one of the most important documents you can create in your lifetime. Think of a will as the financial blueprint of the distribution of your assets after your death. Your will can clearly state who will be guardian of your minor children, who will inherit your assets, when they will inherit your assets, and any conditions that must be met for them to receive your assets.

If you die without a valid will, the court does not have your instructions to follow. Therefore, it has no way of knowing how you may have wanted to distribute your assets. The state where you lived steps in and makes the decisions for you, according to the distribution schedule set forth in its intestacy statutes. The state’s decisions may or may not conform to your wishes, or to what is best for the people closest to you. And your loved ones will likely have to hire an attorney and incur delays to determine who will receive your assets.

Common Misconceptions
Myth #1: My assets are so small that a will is not necessary.
Think again. You are generally worth more than you think. Even if some possessions do not hold great monetary value, they could hold an enormous amount of sentimental value — and that’s something you can’t put a price on. Failing to indicate who receives these treasures in your will can cause friction among family members that lasts for decades.

Myth #2: When I die, my spouse will get all of my assets.
Maybe, and maybe not. Any assets held jointly with right of survivorship automatically pass to the joint owner. And assets with a beneficiary designation, such as IRAs, life insurance and annuities, pass as stated on the beneficiary form. What happens when your surviving spouse dies? What happens if your beneficiary form is outdated? Will your children receive their share at too early an age? Does your spouse have the financial skill to manage the family wealth?

Myth #3: I can create a will on my own and save the legal costs.
“Do-it-yourself” wills often do not contain all of the necessary components as required by state law. Anyone who might benefit from an invalidation of your will can contest it, and if the courts decide in his or her favor, your estate may have to pay for all legal costs. The few dollars you save now can cost your loved ones thousands of dollars later.

Myth #4: I don’t want my final wishes to be set in stone. I’ll create a will later in my life. 
The terms of a will can change as often as needed. Legal experts agree that you should reexamine your will periodically to make sure it is up-to-date. A will should receive a “checkup” whenever there is a substantial change in your life.

How Do You Create a Will?
Drafting a will is difficult and is not an endeavor you want to tackle single-handedly. It’s important that you call on the services of an estate-planning lawyer. A lawyer might help you:
Determine what type of will you need
Help you make the right decisions as to how your assets should pass
Change the terms of an existing will, if appropriate
Save on estate taxes
Take advantage of estate planning opportunities people often overlook

Life Insurance and Wills
How does life insurance fit into the picture? Life insurance is a vehicle you can use to help make sure your estate has the cash needed to pay expenses at your death, such as funeral costs, debts and estate taxes. Without liquid assets, the estate may be forced to sell assets — securities may have to be sold in a down market and other assets may have to be liquidated at a discount. In most instances, life insurance proceeds are paid income tax-free to your beneficiaries. If desired, life insurance can be owned by a trust or a third party and also not be subject to estate taxes.

Don’t Wait Until It’s Too Late
Despite the importance of an estate plan that includes a will, 65% of Americans today do not have a will. Why? Creating a will forces each of us to come face-to-face with our own mortality — and dealing with death is difficult. But it will be much more difficult for your loved ones if you don’t have a will. To ensure that your will is legally viable, seek the services of a qualified attorney to draft and refine it.