October 12, 2014
Pastor Joe Wittwer
This is week 3 of money matters. We’ve talked about why money matters, and last week about spending. This week, we’re going to talk about saving money. How many of you are spenders? How many of you are savers? There are the misers! Nobody wants to live with a miser but they make great ancestors! Saving matters. Here’s:
The Big Idea: We save money to meet future needs, expected and unexpected, our own and others.
Let me remind you again that we’re talking about money because I want something for you, not something from you. So relax, and let’s dive in.
1. Saving matters: we save money to meet future needs.
I think most of us would agree that saving responsibly for the future is wise. The car is going to break down, the kids are going to get sick, Christmas and birthdays roll around like clockwork, and taxes and insurance bills come due, and old age happens. Count on it! If you don’t save for these and other needs, you’ll be caught short. It’s just good common sense to save to meet future needs.
Some of these are expected needs. I pay my car insurance every six months, so every month, I save money for that expected payment. It is the same with real estate taxes. These are expected expenses that I save for.
But we also save for unexpected needs. These are things that can’t be scheduled, but are bound to happen. For example: recently all of our major kitchen appliances failed in a 12-month period. I had two salesmen tell me that new appliances have an expected life of 7 years, no matter how much they cost. The most expensive and least expensive are both built to last about seven years. I guess appliances should be moved into the “expected” category. If you have no savings, no margin, these kinds of unexpected expenses can tip you over in a hurry. By the way, the typical amount that American households spent on unexpected expenses last year was about $2000, and 2/3 of that was on medical care and cars.
We save for expected and unexpected future needs—our own and others. When you spend money, it is gone; when you save money, it is still available. That money can be spent as needed or given away. The Bible teaches that one of the reasons to save money is so that you can give it!
1 Corinthians 16:1–2 Now about the collection for the Lord’s people: Do what I told the Galatian churches to do. 2 On the first day of every week, each one of you should set aside a sum of money in keeping with your income, saving it up, so that when I come no collections will have to be made.
Paul was collecting an offering for the poor in Jerusalem, and this was his advice to the Corinthian Christians. Set aside some money each week and save it. Why? So you can give it to help the poor.
Having savings allows us not only to meet our own future needs, but to help others.
ILL: Recently, a young couple was telling me how excited they were to buy their first home. They also told me that it was made possible by a very generous gift from one of their grandfathers. Had Grandpa not saved and then shared his savings with them, they wouldn’t have been able to buy the house. They were very grateful.
Saving matters: it enables us to meet future needs, expected and unexpected, our own and others.
The Bible encourages this kind of wise saving.
Proverbs 6:6-8 “Go to the ant, you sluggard; consider its ways and be wise! 7 It has no commander, no overseer or ruler, 8 yet it stores its provisions in summer and gathers its food at harvest.”
Go learn from the ant! The ant doesn’t need someone to tell it to store up provisions for the future; you shouldn’t either! If an ant can do it, this isn’t rocket science! Nature teaches us the wisdom of storing up provision for the future.
Proverbs 13:22 “A good man leaves an inheritance for his children’s children, but a sinner’s wealth is stored up for the righteous.”
A good man leaves an inheritance for his grandchildren—like the grandpa I just told you about. If he leaves something behind for his descendants, it means he hasn’t spent it all; he saved. Have you seen the bumper sticker that says, “I’m spending my children’s inheritance”? A good man saves.
Proverbs 21:20 “In the house of the wise are stores of choice food and oil, but a foolish man devours all he has.”
A fool spends all he has; a wise man saves.
ILL: Remember the story of Joseph who saved his family and the whole nation of Egypt by having the wisdom to save during a time of plenty so that there would be food during the famine. Joseph’s story illustrates the wisdom of saving for the future.
A wise person saves for future needs.
2. Saving matters: we live in the tension.
I said it’s wise to save—but as Christians, we live with some tension here. It is wise to save, but not to be selfish. It is wise to save, but wiser still to be rich toward God. It is wise to save for needs here on earth; it is wiser still to lay up treasure in heaven.
Matthew 6:19–21 “Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. 20 But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. 21 For where your treasure is, there your heart will be also.
How do you reconcile Jesus’ words, “Don’t store up for yourselves treasures on earth,” with the idea of savings and retirement?
Or how about the story of the rich man who made it his goal in life to accumulate as much as possible? He built bigger barns to hold more, and then congratulated himself. “I have plenty of good things laid up for many years. Take life easy; eat, drink, and be merry.” It sounds like the American Dream, doesn’t it? Save lots of money, then retire and live the good life. But God said, “You fool! This very night your life will be demanded of you. Then who will get what you have prepared for yourself?”
Luke 12:21 “This is how it will be with anyone who stores up things for himself but is not rich toward God.”
There’s some tension here. It sounds like we need to be careful about storing up things for ourselves.
Then there is the story of the rich young man who came wanting to know what he needed to do to have eternal life. When Jesus told him to keep the commandments, he insisted that he had.
Mark 10:21–22 Jesus looked at him and loved him. “One thing you lack,” he said. “Go, sell everything you have and give to the poor, and you will have treasure in heaven. Then come, follow me.”
22 At this the man’s face fell. He went away sad, because he had great wealth.
23 Jesus looked around and said to his disciples, “How hard it is for the rich to enter the kingdom of God!”
Jesus told him to give everything away because he loved him, not to make him miserable! But he couldn’t do it—even knowing that his eternal life depended on it!
Folks, money is spiritual. A budget is a theological document; you are writing out a plan for the way you believe God wants you to live. Spending money is a spiritual issue; saving money is a spiritual issue. How much is enough? How much should I save? How does God want me to live? I believe that every Christian needs to honestly wrestle with these questions.
ILL: David Platt, in his challenging book, Radical, has a chapter entitled, “How much is enough?” In it, he asks some provocative questions:
“If we have savings, where is the line between responsible saving (which the Bible certainly advocates) and irresponsible hoarding (which the Bible clearly condemns)? How does all of this affect the way we approach investments, retirement accounts, or life insurance? How much is wise to save for potential future need when brothers and sisters around me (as well as people who haven’t even heard the gospel) are threatened by dire present need?”
David Platt doesn’t answer these questions; instead he encourages us to ask the questions for ourselves and let “these questions drive us to Christ.” (pg. 137)
Let the questions drive you to Christ. Ask the questions, wrestle with the Scriptures, and let them drive you to Jesus. “How do you want me to live?” We may come up with different answers.
ILL: At the end of his book, Forgotten God, Francis Chan tells this story.
Francis’ first book, Crazy Love, sold more than a million copies. He and his wife had to decide what to do with hundreds of thousands of dollars of royalties. They prayerfully discussed many options, but in the end decided to give all of it away to organizations that were rescuing girls from the sex-slave trade.
He was not prepared for the backlash. Guess who criticized him? His Christian friends! They told him that he was acting irresponsibly. Shouldn’t he save some of the money for future needs, save something for emergencies? He replied, “Don’t you think that a 12 year-old girl being raped multiple times a day constitutes an emergency?” If it were your daughter, would that be an emergency? What would you pay to free her?
There’s the tension: my future needs and others’ current needs. You’ve got to wrestle with the questions. The questions drove Francis and his wife to Jesus, and they came up with a different answer. What should you do? Rather than telling you what to do, I want you to honestly wrestle with the questions and let them drive you to Jesus. “How do you want us to live, Lord?”
We live in the tension: it’s wise to save for future needs, but wiser still to be rich toward God and lay up treasures in heaven. It’s wise to save, and wiser still to trust God to meet our needs.
ILL: When Laina and I moved here in 1978, we took a 35% reduction in our salary. Honestly, we didn’t care. In fact, we didn’t even know what our salary would be until after we moved here. It never occurred to us to even ask. We weren’t doing it for the money; we came here because of a clear calling from God.
On our last Sunday night in Eugene, I spoke and the church gave an offering for us–it was almost $3,000, which represented more than 4 months worth of salary for us. That offering became our nest egg, our savings that we used to make up the deficit in our monthly income.
About a month after we arrived, Laina and I felt the Lord wanted us to use some of that nest egg money to buy a car for another young couple that was struggling financially. It was our savings…but it was God’s money, and that was His direction, so we did it.
A month later, the church’s vacuum cleaner died, and the church didn’t have money to replace it, so Laina and I prayed and thought the Lord said to use some of our savings to buy the church a vacuum a cleaner. (I was the one doing the vacuuming!) It was our savings…but it was God’s money, and that’s what He directed, so we did it.
Why would we give away our savings? We needed that money to live on! Because it wasn’t ours; it belonged to the Lord and we just managed it for Him. And because we trusted Him to meet our needs.
We learned that God takes good care of us. The Lord provided everything we needed. We never lacked for anything we needed…ever.
This principle was taught by Jesus in Matthew 6:25-34, where he tells us not to worry about food and clothes. If God cares for the flowers of the field, and the birds of the air, we can surely trust him to take care of us. Jesus concludes, “So do not worry, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ For the pagans run after all these things, and your heavenly Father knows that you need them. But seek first his kingdom and his righteousness, and all these things will be given to you as well.”
You can trust God to take good care of you. Laina and I are amazed at God’s faithful provision for us through the years. We have never lacked.
We live in the tension between planning ahead and trusting God. Responsible saving is good. We should save, but not be selfish. We should remember that everything is God’s, including our savings, and manage it as He directs, and trust Him to provide for us.
3. Why is it so hard to save money?
Because we spend it all! Far and away the biggest reason for our inability to save is our undisciplined spending. The problem is not how much we earn, but how much we spend!
How many of you have ever thought, “If only I earned more money…then I could save. I just need to earn more.” I’m going to make a radical statement. You already earn enough to save some money. In fact, you probably already earn enough to save lots of money!
Most of us will earn a fortune in our lifetimes. Consider this: if you earn $30,000 a year over a 40-year career, you’ll have earned $1.2 million. Most of you will earn more than that. Write this down: “I already earn enough money to save some.” You’ve got to believe that; if you don’t, you won’t save any money. You’ll always be waiting for your ship to come in.
Most of us will earn a fortune in our lifetimes. And yet almost one third of American workers retire with less than $1000 saved. Why? We spent it all. We’re lousy savers. We lack self-control.
The leadership of Jesus makes such a huge difference in our lives. Under His leadership we establish a standard of living and a budget that reflects Christian values. But Jesus not only gives us His values, but also the power to live them out. Gal. 5:22-23 list the fruit of the Spirit, the character qualities that the Holy Spirit produces in us. One of those is self-control. That means that as the Holy Spirit lives in you, He produces the self-control we need to handle His resources responsibly. If you are having a hard time saving, I hope you’ll ask the Lord to help you; His power makes it possible to do His will.
4. Saving matters: practical steps to becoming a good saver.
A. Understand the latte factor.
You can’t save if you spend it all. The way to financial well-being is to spend less than you earn for long time. If you aren’t doing that now, there are only two possible solutions: earn more, or spend less. And the problem with earning more is that we will probably spend it all too! The problem is not how much we earn, but how much we spend.
So, how can we spend less? The most painless way is “the latte factor.” What is the latte factor? Simply put, many of us dribble away our money on small things. We waste a couple dollars here, and a few dollars there, and dribble away a fortune.
ILL: David Bach, in his book, The Automatic Millionaire, tells about a young lady named Kim who attended a financial seminar he was teaching. When she insisted that she couldn’t afford to save any money, he asked her to describe a typical day. On her way to work she stopped for coffee. “Plain coffee?” No, a double non-fat latte. Price: $3.50.
“Is that all you have?” No, a non-fat muffin too. Price: $1.50.
“So, you’re not even at work yet, and you’ve spent $5.”
Kim was a little annoyed, but she went on. At her morning break, she bought a juice drink. Price: $3.95. Then a friend in the room reminded her that she always asked for the Gingko booster—another 50 cents. Oh, yeah…and a Powerbar for $1.75.
“We’re not even to lunch yet, and you’ve already spent over $11 and haven’t really had anything to eat!”
So David pulled out his calculator and said, “Let’s suppose that you could save $5 of that $11—just $5 a day—skip the latte and muffin. That’s $150 a month, $1800 a year. Let’s say we invested that at a 10% annual return, which is what the stock market has averaged the last 50 years. How old are you (23)? How much do you think you’d have by the time you’re 65?”
She guessed $100,000, $200,000, $500,000. Nope. Almost $1.2 million. Kim’s eyes went wide. “You mean my lattes are costing me $1.2 million?”
That’s the latte factor. “But I don’t drink coffee.” So what else do people waste money on? Eating out, cigarettes, alcohol, soft drinks, candy, video games, movies, cable TV, smarty phones, an extra car, etc. What’s your latte factor? If you don’t seem to have any money to save, I challenge you track your spending—all of it, even the little expenses—for a week, and I’ll bet you can find a latte factor. Would you be willing to forego a $5 purchase today to have a million dollars later?
You can’t save if you spend it all. The problem is not how much we earn, but how much we spend. Look for the latte factor.
B. Pay yourself first second.
I crossed out first because I don’t really believe you should pay yourself first. I think you should pay God first. The Bible talks about honoring God by giving to Him first. So “pay yourself first second”!
Our natural tendency is to spend first and save second. But when we do that, we rarely have any left to save. It’s better to save first, and then spend.
ILL: When you get your paycheck, who actually gets paid first? The government! Before you ever see your check, the government takes out income taxes, Social Security taxes, Medicaid and unemployment. The government gets paid first. It hasn’t always been that way. Up until 1943, people got their money when they earned it and paid their tax bill the next spring. The problem, of course, was that most people didn’t save money to pay their taxes when the bill came due in the spring. Now the government is pretty smart. They made sure that they were paid first. And to do that, they automated the process. Their money is deducted from your check before you ever see it, so you don’t miss it as much.
What if we were as smart as the government? What if we paid ourselves first? Deduct your savings from your check before you start spending, and live on the rest…just like the government does with you, only you’re paying yourself, instead of them!
How much? Saving 10% would be a good goal. But if you can’t start there, don’t be afraid to start small. Start with 1%, and then give yourself a raise next year to 2 or 3%, and so on. It is important to start now even if you start small.
Remember that $5 a day that resulted in 1.2 million bucks when saved and invested? Often we fail to save because we think that we have so little, what difference will it make? But remember that money has time value. It grows with time. Financial counselors call it the magic of compounding. The earlier you start, the more compounding will work for you.
ILL: Susan invests $5000 a year for 10 years, from age 25-35, a total of $50,000. Tom invests $5000 a year for 30 years, starting at age 35 to 65, a total of $150,000. At 65, who has more saved? Susan: $602k to $540k. It pays to start early!
Start small, start early and be systematic.
And that’s the last thing: the government not only pays themselves first, but they make it automatic.
C. Make it automatic.
You don’t miss your taxes because you never see them; they are deducted automatically. You can do the same thing with savings. You can have a designated amount deducted from your check automatically and invested each month, or transferred to your savings account. The money can be invested in a retirement plan such as a 401-k or 403-b; it can be invested in stocks, bonds, mutual funds, money market accounts, or simple passbook savings (although I wouldn’t recommend that since interest is so low). Talk with a qualified financial advisor about setting up a retirement account; or there may be a payroll person at your work who can help you. Some companies even offer matching funds for retirement accounts.
If you can’t do a payroll deduction, consider setting up an automatic payment plan with your bank. They can deduct the money from your checking account and transfer it automatically for you into the investment of your choice.
But the key is to make it automatic. You decide once and it’s done. It works because it’s easy. It doesn’t require lots of discipline. You will be amazed at how easily you can learn to live on a little less, and it gets easier as time goes on. It’s automatic.