Managing Your Cash Flow: How It All Works

November 14, 2004

I. How to Control Your Cash Flow

A. Establish a plan.

- you have to think through the content of our 1stlesson:

* Financial planning it allocating limited financial resources among various unlimited alternatives – Ron Blue, Master Your Money, p. 26

- You have to determine your income and the set down and take a hard look at the out flow

- That allocation is determined by two things: (Input: What are they?]

#1: Commitments

#2: Priorities

- this is why we’re asking you to tell us your intentions on the Community Center by November 21st --the is CRUNCH TIME – to reveal where your heart is by where your treasure is!

- this will really reveal where our church is in it’s history – are we going to MAINTAIN or MOVE AHEAD – it will reveal our priorities

B. Assign responsibility

- go back to your summary of expense categories and make assignments regarding who is responsible for each budget category

Example: Laurie has Food, Clothing, Medical, etc. – I oversee the rest – housing, auto, etc

- It’s good for someone to take ‘ownership’ of that specific category and function like a ‘one flesh’ relationship as you work together to be good stewards of what God has given you

C. Record what actually happens!

- this includes doing your recording daily – weekly – or monthly

- this establishes accountability and an opportunity to REVIEW ‘the plan’ (cf. see below: II. Principles of Cash Flow Management, B. Practical Steps, #’s 1 & 2)

- numbers don’t lie – look at them closely on a weekly and/or monthly basis

(recommend Quicken – for financial bookkeeping –

D. Evaluate and revise as needed.

- no system is perfect and sealed in concrete

- circumstances do change things (Examples of emergencies or drastic changes)

- as you review your progress, this is a great way to communicate:

> most marriages don’t last because the communication is so bad

> the 2ndmost common reason for divorce is finances – and even in that, it’s communication issue about finances

II. Principles of Cash Flow Management

A. Biblical Perspective

1. Stewardship flows out of your theology (what you believe about God – Who He is!)

2. Four principles of stewardship (review)

3. Keep your focus and joy centered on Christ.

  • Colossians 3:23 Whatever you do, do your work heartily, as for the Lord rather than for men, 24 knowing that from the Lord you will receive the reward of the inheritance. It is the Lord Christ whom you serve.
  • Matthew 6:33 "But seek first His kingdom and His righteousness, and all these things will be added to you.

- things don’t satisfy because they are temporal

4. Practice self-discipline – learn to say ‘no’

- this is why the bible places so much emphasis on the heart – it’s about desire – it’s about what or Who are you going to worship

- do you really have a clear understanding of the difference between a NEED vs. WANT

B. Practical Steps

1. Assigned accountability

Q: How does being accountable help with the cash flow process?

- the right hand knows what the left hand is doing – for a marriage, it’s ‘one flesh’ relationship – BOTH parties are accountable to each other

2. Measure expenses against your ‘plan’

- you have to answer these questions: How are you doing? Compared to what?

- there has to be some sort of a measuring stick to see if progress is being made AND/OR what adjustments need to occur in order to get back on track or to stay on track!

3. No Credit Cards (if uncontrolled – radical amputation)

Note: People who use credit cards for all payment typically spend 34% more

Q: Why do you think that would be the case?

A: Tends to put off reality – I can enjoy the benefits of getting what I want and I don’t have to deal with the reality of paying for it

4. Be flexible

- cash flow margin is critical – over/under by a few $’s is OK, but a person needs to keep his focus on the bottom line

III. How It All Works –

A. Earn it (work for it)

- work it good – and it was good before the fall in Gen. 3 – the curse of sin actually makes it harder – but the Word is clear on this step:

  • 2 Thessalonians 3:10 For even when we were with you, we used to give you this order: if anyone is not willing to work, then he is not to eat, either.

B. Budget it (plan it)

- that’s what Lesson #1 was all about – planning!

C. Give it (share it)

- that’s what Pastor Viars has been talking about the last two weeks

D. Save it (protect it)

- this is part of the planning stage for emergencies and thinking ahead about purchases, etc.

- it’s putting a little extra corn in the barn to make sure you make it through the winter or if something happens, you’re not caught flat footed!

Input: What’s the difference between saving and hoarding your resources?

A: Attitude of the heart – being wise and looking ahead vs. trusting in the riches

  • 1 Timothy 6:17 Instruct those who are rich in this present world not to be conceited or to fix their hope on the uncertainty of riches, but on God, who richly supplies us with all things to enjoy.
  • Psalm 62:10 Do not trust in oppression And do not vainly hope in robbery; If riches increase, do not set your heart upon them.
  • Matthew 6:19 "Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. 20 "But store up for yourselves treasures in heaven, where neither moth nor rust destroys, and where thieves do not break in or steal;

E. Spend it (use it)

- you use it to meet the needs of your family

- you use it in ways to that you believe will bring the most glory to God

- the $’s are not an end in and of themselves, but are a TOOL for what God wants you to accomplish

** IMPORTANT: When this order gets messed up – you’re in BIG TROUBLE in a lot of ways!