FocusOnTheFamily

Family financial planning

Written by Ron Blue, with Judy Blue and Jeremy White

Several years ago, I had the opportunity to testify before a Senate subcommittee that was holding hearings on “Solutions for the New Era: Jobs and Families.”

While others on the panel pressed for more social programs, I told the senators and their staffs that the average family could benefit from following a four-part financial plan:

1. Spend less than you earn.
2. Avoid debt.
3. Maintain liquidity.
4. Set long-term goals.

The committee chairman paused a moment, then said, “It seems like this plan is not just for the family. It seems it would work at any income level.”

“Yes,” I said with a laugh, “including the government.”

What’s good for the goose is good for the gander. These basic steps will work for the government and for your household.

Financial planning may sound overwhelming, like something that can only be practiced by professionals in suits. But it’s pretty straightforward.

Simply stated, financial planning is allocating limited financial resources among various unlimited alternatives. When we know for certain what financial resources we have and plan to use them to accomplish God-given goals and objectives, we experience the peace and contentment that comes from making order out of chaos. Our frustration in having to choose among overwhelming choices disappears. We’re freed from the pressures of the short-term, self-gratifying society around us.

Most of us are responders rather than planners. We respond to friends, advertising and our emotions rather than planning our spending. So here are the challenges of wise financial planning:

• All of us have limited resources. Consequently, we must be selective in how we spend our money.
• Today’s decisions determine destiny. (A dollar spent is gone forever and can never be used in the future for anything else.)
• The more long-term the perspective, the better potential for wise decisions.

One principle we’ve implied but haven’t actually stated is that accumulating financial resources should never be an end in itself. Money is accumulated solely for the reason of using it to accomplish some purpose.

Money is merely a resource. It was never intended by the Creator to be anything more than that. That’s one of the most important financial principles any parent can model.

Taken from Your Kids Can Master Their Money © 2006 Focus on the Family. All rights reserved. To order this book, click here.

© 2007 Focus on the Family. All rights reserved. International copyright secured. Used by permission.

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