PCW and Personal Finances

Bloom where you are planted

Today's topic is puzzling to some PCWs.

Question of the day

Since Health Care reform is stalled in congress, costs continue to rise. You become ill and needed emergency surgery one day before starting your new Call. Your health insurance took effect but since this prior condition occurred before your coverage and your parents stopped coverage on you the week before your surgery. (Thinking nothing would happen) you are responsible. The $60,000 surgery, hospital and rehab bill steals your breath. Your old CUAA Roommate says declare bankruptcy. What should you do?

Tomorrow

A fellow staff member (Assistant Pastor) does not like the Principal. They tell you they are going to send their child to a neighboring Lutheran School instead of yours. They also inform you their child won’t be in your midweek school because of a dance class conflict. How do you respond?

Why teachers hate parents?

Is this the reality in 2009?

Is this the reality in Lutheran Schools?

Is this the reality for those who work with parish youth?

If we answer yes to any of the above, how do we prevent it from being your reality?

Is this good for children?

I follow a written budget?

Yes N

o

7%

93%1. Yes

2. No

I believe that I will not be able to save any money next year?

Yes N

o

73%

27%

1. Yes

2. No

I think I will need financial assistance next year?

Yes N

o

67%

33%

1. Yes

2. No

Doctor Locke talked about 10 month Call vs. 12 month Call yesterday. What is one difference applicable to income in considering the type of call you receive?

Can you receive pay checks over the summer? (20 pays vs 24)

Can you line up summer employment?

If you have budget challenges, you really have two options. They are:

Reduce SpendingCheaper apartment/houseRoommateCutting back on wants/needs

Additional income streams (Craft, baby sitting, tutoring, music lessons)Second JobSummer JobSide Job like Officiating, Wedding CoordinatorSell on EBay

Some Key Concepts to consider in handling personal finances:

Debt

Interest Rates

Budgets

Compound Interest

Church Agencies to AssistLCEF

CEF

THRIVENT (?)

What are the pros and cons of a written budget?

Strategy to follow (P)

You know where your $ goes.

Takes Discipline*

Not Spontaneous*

Hard Work to Follow

Guides Decisions and Behavior

What are sample %’s in a Budget?

Charitable Giving 10%Taxes 15-25%Total Housing 30-36%Food 12-17%Auto 15-20%Insurance 3-7%Debt 3-7%Entertainment 3-7%Clothing 5%Savings 5%Medical Expenses 4-9%Misc. 5%Total 110%- 143%

$27,000 Salary

$2,700 Tithe (10%)$5,400Taxes (30%)$8,100 Rent ($675 monthly) (60%)$3,240 Food (72%) ($270 Monthly)$5,400 Auto Expenses ($450 monthly) 92%$1,350 Insurance 97%$1,350 Debt 102%$1,350 Clothing 107%$1,350 Savings 112%$1,350 Entertainment 117%$1,350 Medical 122%$1,350 MISC 127%

What do the totals tell you about your budget?

Fluid Document Constantly Changing

Prioritize

Hard Work

You must know your income

Tempting to Cut Charitable Giving

Easy Fix- Bring in more income

Can you divide your expenses by pay period?

$27,000 divided by 24 pay periods = $1125 each check

$112.50 Charitable Giving

$225.00 Taxes

Time when Due amount of expenses per pay period

Source Get a Grip on Your Money by Larry Burkett

What happens to your raises?

Year 1 Year 2 Year 3

4% Raise $28,080 $29,203 $30,371

Base Salary

$27,000 $27,000 $27,000

Additional Income

$1080 $1,123 $1,168

A 4% Raise on $27,000

Savings vs. Charging $1825 Saved

Years Piggy Bank

Invested 10% return

Charged 20% Rate

5 $1825 $2,329 -$2,957

10 $3650 $6,080 -$10,316

15 $5475 $12,121 -$28,626

20 $7300 $21,849 -$74,190

25 $9125 $37,518 -$187,566

30 $10,950 $62,752 -$469,681

When should you start saving?

Saving $100 monthly for the first 15 years and nothing after for the next 25 years =$431,702 at 10%.

Saving nothing the first 15 years and then $100 for the next 25 = $123,332 at 10%.

Home Expenses making a larger payment $100,000 7% x 30 Yrs.

Extra Payment

Out of Debt Total Interest

0 Monthly 30 years $139,511

$25 Monthly 27 years $121,296

$50 Monthly 24 years $107,856

$100 Monthly 21 Years $89,003

If you are in debt

Establish a Spartan Lifestyle

List debts Smallest to Largest

Pay Minimum on everything and max possible on Smallest

As Each Item paid off Amount rolls over to next item

Continue until all are paid

Is there a place for cash payments?

Advantages vs. Disadvantages

CEF Housing LoanShould you buy a house right away?

Advantages vs. Disadvantages

What does scripture say about money management?

What does scripture say about attitudes towards money?

You live near a casino. Should you regularly be seen supporting this local

business?Should you borrow from a church friend?Should you accept free doctors visits from a parishioner who offers?Concordia Ann Arbor has a future opening Professor Freudenberg tells you about. He assures you that you are the candidate. Should your congregation pay 100% for your advanced degree, which once you receive you know you will leave there for CUAA?