STEWARDSHIP NEWSLETTER

February 2008 

      Last month I touched on the macro and micro financial pictures. The macro picture being the financial environment we currently live within, while the micro picture involves our personal financial experience within the macro picture. I fully intended to move into the financial principles this month; however the macro picture continues to deteriorate and impacts all of us. The current financial arena warrants further attention.  The subprime mortgage mess has not only affected real estate prices but has slopped over into our personal investment portfolios as well.  As I write this article, Congress appears ready to provide a 100-150 billion dollar stimulus package while the Fed is considering lowering interest rates by at least 1/2 percentage point. The monetary powers are clearly concerned with the current state of the economy. The “R” word (recession) is heard often these days.

      So how does all of this affect us as we attempt to manage our personal finance? For one, it affects the value of our assets. Our property values have declined and our investments in vehicles like 401k’s and deferred compensation programs have taken a beating as of late. It remains unclear whether Congress and Fed action can stop the current downtrend. The question for each of us is this; how do I manage my personal financial situation and protect my assets within this current uncertain environment? First and foremost, don’t panic. Panic leads to poor financial decisions and loss of hard earned assets. Second, learn the financial principles and begin implementing and following them. Panic is not one of the financial principles.

      Following the financial principles does not eliminate risk; however it minimizes its impact and gives us a degree of insulation during uncertain financial movements in the larger arena. Following principle based finance is only minimally affected by the larger picture. If you follow the advertising media and practice unrestrained and undisciplined consumerism, you are likely to find yourself being blown by the “winds of circumstance” in directions you may not want to travel. 

The financial principles we are going to touch on this year are:

1. Have a written “proactive” goal.
2. Have a written plan to move toward the goal. Update the plan annually.
3. Track your financial expenditures and know your assets and liabilities.
4. Learn to manage personal debt.
5. Learn to save for immediate emergencies and for the long haul.
6. Learn to give; it is the key to living abundantly.
7. Investing wisely through 401k and deferred comp programs.
8. Being transparent and honest with financial management.
9. Educating ourselves in financial matters.

   Although the list is not all encompassing and inclusive, if you follow the newsletter series and actually apply each financial principle, your finances will improve more efficiently than you believed possible. The major problem I have observed is this; people say yes and nod their head yes but don’t actually commit to the actions. That’s like understanding the need for physical fitness and healthy eating and never following the fitness principles. Obviously you will not succeed in your goal of healthy living without following the healthy principles. Personal finance requires the same diligence. The good news is that the rewards are amazing. 

Blessings; Ted

Note! If you are struggling with personal finance, follow along with the monthly newsletter and start taking charge of your financial picture. If you don’t, the advertising media will be more than happy to do it for you.