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10-70-20 is formula for financial control


GLORIETA, N.M. (BP)–Desire, time and a plan are necessary to regain control of runaway personal finances, participants in Church Music Leadership Conference were told at Glorieta, a LifeWay Conference Center, July 15-20.

Jack Anderson, associate training director for Christian Financial Concepts in Atlanta, said personal financial success “begins with a desire, but it takes time and a plan.”

Like companies that plan for the coming year, individuals should set goals and make plans for their future, he said.

“Goals give you a direction to pray. When you achieve your goals, it gives you a reason to praise God,” he continued.

One effective plan to reach those goals, Anderson said, is known as 10-70-20. From total earnings, one deducts tithe, taxes and social security. Then, from the remaining working income, he said, 10 percent should go to savings, 70 percent for living expenses and 20 percent for debt and future planning.

“You can’t do this in a week,” Anderson cautioned. “It’s a lifestyle adjustment that takes time. We are not owners of money; we are managers. The first six to nine months, the budget won’t seem to work, but after that adjustment period, it will work on an even keel.”

Ingredients for financial success, Anderson said, include having a plan to save, controlling living costs and finding solutions for over-extended debts, such as credit cards, leased cars and time-share condominium payments.

“Americans spend more than we are bringing in,” he said. “As a part of the adjustment, plan to pay cash.”

Persons on a tight budget should watch expenses for home furnishings and equipment, expensive foods, life insurance, clothes, cars and their home.

Of those expenditures, Anderson said, people seem most surprised to find that cars will be the costliest expense over a lifetime, rather than their home.

“People tend to trade one of their cars every four years,” he said. “Several years ago, calculations indicated the average person invests $1,250,000 in car loans over a lifetime.”

Among suggestions Anderson offered are to consider God first, followed by considering children’s educations, retirement, early pay-off of one’s home mortgage, paying cash for cars, investments, trips and other luxuries.

In giving back to God, he said, “The tithe is the floor of giving, not the ceiling.”

“Ask how much above the tithe God would have you give,” he counseled. “Become a grace giver, one who gives money to someone in need without their knowing the source.”

The music ministries department of LifeWay Christian Resources of the Southern Baptist Convention sponsored Church Music Leadership Conference at the New Mexico conference center.
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  • Charles Willis