A number of months ago, I was asked to serve as the chair of our stewardship team at church. This event, in itself, is a short story about God's will and the Holy Spirit. I went to bed the night before my decision was due telling God that I wasn't his man, that there were too many problems with the finances and that I was too nice to address them head on. I was thoroughly discouraged as I lay my head down on my pillow that night. During the night, however, I had a very clear dream of serving in that role, addressing the very problems that I feared with even temperament and grace. I woke up feeling encouraged. I believe the Holy Spirit worked in my heart through my dreams to encourage me and inspire me to service. I woke up with a mission and a vision: sort things out with our finances and improve the accountability and accuracy of our record keeping.
One of the responsibilities of my new role is writing for the church newsletter when I am able. I thought I would publish these notes here as they invariably deal with finances and are more geared towards Christian living than the largely neutral tone of my other financial articles.
December, 2012 Newsletter (updated and edited)
I hope you enjoyed Christmas in all the ways that matter. Did you make any New Year's resolutions this year? How's that going? Sticking with them? If not, I'd like to suggest one or two.
We derive a lot of comfort from our possessions, don't we? Warm coats are especially comforting in Winter, as is a well insulated home with a heater that works. And a pantry with the basics in stock is always a welcome thing. Perhaps this past Christmas, you've been made aware of those who go without or are less well off. I suspect a lot of us are one paycheck away from having to do without, ourselves. Indeed, many Americans live paycheck to paycheck making thoughts of tithing or charitable giving far removed from daily life. For some, this is a cause of stress and can bring strife into marriages and even friendships. Asking to borrow money from a friend can have lasting repercussions on a friendship: that feeling of a debt owed, the shame of being unable to pay it, the awkwardness in each meeting with that friend... being a borrower is a tough thing. How fortunate are we that we have one friend who has paid our debts who doesn't charge interest or ask to be repaid. We can look at our Lord and Savior without shame! Amen.
Then there's the debt to credit cards, when we're charged interest by a bank. Interest you earn is great - it compounds slowly over time and grows your investment in a predictable and low risk way. Interest you pay on credit also compounds, but adds to your debt if you only make minimum payments. Are you in debt with credit? Can I encourage you to begin digging out by paying more than the minimum payment? If the minimum payment is $25.00 a month and you can afford to pay $5 more, you'll be chipping away at that debt a lot faster than you were, and on your way to being free from debt. If you can double it, even better. If you can pay off your card each month, that is ideal. Carry no debt if you are able. Getting rid of a sin debt is easy - we give it to Christ, lay it at the foot of the cross, and walk away. Financial debt though is a bit more difficult to shake. Getting out of debt is like the battle for holiness in our lives... little by little, persistence and consistency wins the race.
If you're already living without a credit card (I commend you!) but you still find yourself in a holding pattern on needed expenses (food, clothing, shelter and transportation) -- living paycheck to paycheck -- I encourage you to start a savings account, even if it's a minimum deposit to open it. If you can tuck away $5 or $10 a week, do it right when you get paid. You may have to give up some treats or sweets or find cheaper alternatives, but the rewards of diligence accumulate and pay off. Pay God first, then your bills and put whatever is left, or a set portion of it, in savings. Building savings and getting just one paycheck ahead gives you enough breathing room so that your finances will not distract you so much from your worship life or bring discord into your quiet time before God. I'm definitely not saying that you should seek peace in a pile of cash. On the contrary, the Bible is clear that storing up here on earth where moth and rust destroy and the thief breaks in and steals is by no means security, and that's not what we're talking about here. We're talking about stewardship... setting aside just enough for tomorrow so our finances are not a distraction from a life lived in service to Christ.
Why am I encouraging you to manage your money this way? Because once you free yourself from the paycheck to paycheck cycle and the fear of the world, you will no longer have a problem being a cheerful tither and acts of charity will now seem possible without the worry that a bill will be late or you'll be short on food. Don't mistake this as me saying you shouldn't tithe if you're poor. Financial teacher Dave Ramsey says he has tithed into and out of bankruptcy... it's a choice he made to remain faithful to God even when times weren't their best. Also don't take away the message that conquering our financial situation conquers all fear. Only your faith in Christ can do that. But when we take some simple steps in discipline, we are more at ease and more naturally cheerful in giving God his first fruits, and we build the discipline we'll need to manage our affairs with the remaining 90%. It is then much easier to remember where our eternal security is; not in the crude matter of our current existence, but in the Salvation of Christ Crucified.
Building cash discipline builds a disciplined life. It will also improve your discipline in pursuing the things of God. Check out Proverbs 13:18 and 19:20, and have a blessed month!
Monday, December 19, 2011
Tuesday, December 13, 2011
Self Employed, Salaried or Hourly?
It might seem like an odd question given the difficulty many people are having landing a job these days, but I suppose that also makes it a great time to be thinking about it. Should you shoot for a salaried position, an hourly pay scale, or go self employed and reap what you may? I've done all three and I hope my experiences and reflection on what it has been like are helpful to the reader.
Self Employment
I've started three businesses in my life. One still remains. Owning your own business is an interesting, and at times, terrifying experience. You get out of it what you put into it. If you fail, it's no one's fault but your own. If you succeed, you have tomorrow to contend with and striving yet again for success. You're responsible for your own taxes, your own medical plan (if you chose one), insurance (if required) and so forth. You have to be part salesman, part accountant, part customer service manager, and all CEO, laborer and gopher (unless you've got kids). If you are good at what you do, you may be lucky enough to be able to hire some employees to help out... and then you have to worry about their taxes, their benefits (if you decide to offer them) and managing their time as well as your own.
Being self employed, once upon a time, was a very simple thing. It's what most people did - learn a trade or skill or specialty, open up shop in your kitchen, barn or front room and set about making a name for yourself. These days, regulations and laws intended to keep large companies in line make it so difficult to run a small business it's practically punitive and certainly provides much discouragement trying to make a go of it. But, if you can keep yourself straight with the tax man and keep your customers happy, a little careful planning can take the one-man shop a long ways.
As a self employed individual, I was also contracting hourly. I prefer hourly wages as it more accurately rewards my efforts and investment of time. If I need more money for some big expense, I can drum up a bit more work to cover me. If I am doing fine and don't need to kill myself, I can take every other Friday off. Money exchanged for value on a scaled basis is very equitable, especially if you take the view that you negotiate what you need and reject that which is too low. You're in charge. Proceed with three parts confidence and one part fear and you'll do just fine. You'll probably like the boss, too. If you can't get a job due to a past criminal record or bad credit or just a lack of experience and resume, starting your own business can be a great way to establish yourself and build your own success.
Hourly Wage Earner
Working hourly for someone else, however, is another matter. Especially where you're restricted to a set number of hours or expected to put in the minimum while observing unpaid vacation days. Self employed, all vacation days are "unpaid", but you build that into the rate you charge. Being employed by someone else on an hourly basis takes a bit more negotiating, a willingness to walk away from the job if they're not meeting your expectations or needs, and a willingness to bend to their schedule rather than one you set. You still have the equitable value for money paradigm, but you're likely viewed as just hourly labor that can be replaced easily. It takes special care to build and maintain a good relationship with your employer so that you are the preferred choice for hourly work. So, even if you're employed as an hourly worker, treat your employer like a customer and they will treat you like a preferred vendor. Unless of course they're just exploiting you... in which case, walk. No skin off your nose. Don't be a chump.
Salaried Employee
Working salaried is a different mind set. You're paid the same amount whether you work 8 hours or 12 hours a day. Overtime is likely not paid (you're probably listed as exempt) unless you specifically negotiate it in your hiring package to be paid for OT. Being salaried, the value for money exchange isn't as direct, but it's there. You have to have a much longer view and should definitely be talking about performance bonuses and the like. Working harder, earning more for the company should be rewarded. Ask for it. As a salaried individual, you have to advocate for your career more than yourself as a service provider but the relationship should still be viewed as a customer relations effort on your part. Never fall into the trap of assuming you are indispensable just because you're a salaried employee (or associate as many companies call them these days), or the trap of assuming you are owed something you are not or that you are above certain work.
Attitude
In all cases, be humble but be honest - if you think the pay isn't fair or the work isn't your thing, say so, but be willing to try your best working at new things. It always pains me when I hear someone say "I don't do that" or "it's not my core competence, so no thanks" when offered a chance to do something different. I prefer to say "it's not my forte but I would really enjoy working on that with you. Can you give me a (few hours / days / a week) to come up to speed on that (system / technology / process)?" Opportunity knocks. Don't send it away. Realize though that not being the expert puts you at a disadvantage. You'll need to have built a strong relationship with your customer to get the nod in a situation like this.
Where are you?
So, which is best? It's up to you. How do you work best? Are you more motivated by the security you have with a steady paycheck in a salaried job, the reward for your every effort of an hourly wage or the many exciting things you get to challenge yourself with being self employed? Knowing the answer to that will prepare you to find, or better yet - create, the perfect job for you. Good luck, God speed!
Self Employment
I've started three businesses in my life. One still remains. Owning your own business is an interesting, and at times, terrifying experience. You get out of it what you put into it. If you fail, it's no one's fault but your own. If you succeed, you have tomorrow to contend with and striving yet again for success. You're responsible for your own taxes, your own medical plan (if you chose one), insurance (if required) and so forth. You have to be part salesman, part accountant, part customer service manager, and all CEO, laborer and gopher (unless you've got kids). If you are good at what you do, you may be lucky enough to be able to hire some employees to help out... and then you have to worry about their taxes, their benefits (if you decide to offer them) and managing their time as well as your own.
Being self employed, once upon a time, was a very simple thing. It's what most people did - learn a trade or skill or specialty, open up shop in your kitchen, barn or front room and set about making a name for yourself. These days, regulations and laws intended to keep large companies in line make it so difficult to run a small business it's practically punitive and certainly provides much discouragement trying to make a go of it. But, if you can keep yourself straight with the tax man and keep your customers happy, a little careful planning can take the one-man shop a long ways.
As a self employed individual, I was also contracting hourly. I prefer hourly wages as it more accurately rewards my efforts and investment of time. If I need more money for some big expense, I can drum up a bit more work to cover me. If I am doing fine and don't need to kill myself, I can take every other Friday off. Money exchanged for value on a scaled basis is very equitable, especially if you take the view that you negotiate what you need and reject that which is too low. You're in charge. Proceed with three parts confidence and one part fear and you'll do just fine. You'll probably like the boss, too. If you can't get a job due to a past criminal record or bad credit or just a lack of experience and resume, starting your own business can be a great way to establish yourself and build your own success.
Hourly Wage Earner
Working hourly for someone else, however, is another matter. Especially where you're restricted to a set number of hours or expected to put in the minimum while observing unpaid vacation days. Self employed, all vacation days are "unpaid", but you build that into the rate you charge. Being employed by someone else on an hourly basis takes a bit more negotiating, a willingness to walk away from the job if they're not meeting your expectations or needs, and a willingness to bend to their schedule rather than one you set. You still have the equitable value for money paradigm, but you're likely viewed as just hourly labor that can be replaced easily. It takes special care to build and maintain a good relationship with your employer so that you are the preferred choice for hourly work. So, even if you're employed as an hourly worker, treat your employer like a customer and they will treat you like a preferred vendor. Unless of course they're just exploiting you... in which case, walk. No skin off your nose. Don't be a chump.
Salaried Employee
Working salaried is a different mind set. You're paid the same amount whether you work 8 hours or 12 hours a day. Overtime is likely not paid (you're probably listed as exempt) unless you specifically negotiate it in your hiring package to be paid for OT. Being salaried, the value for money exchange isn't as direct, but it's there. You have to have a much longer view and should definitely be talking about performance bonuses and the like. Working harder, earning more for the company should be rewarded. Ask for it. As a salaried individual, you have to advocate for your career more than yourself as a service provider but the relationship should still be viewed as a customer relations effort on your part. Never fall into the trap of assuming you are indispensable just because you're a salaried employee (or associate as many companies call them these days), or the trap of assuming you are owed something you are not or that you are above certain work.
Attitude
In all cases, be humble but be honest - if you think the pay isn't fair or the work isn't your thing, say so, but be willing to try your best working at new things. It always pains me when I hear someone say "I don't do that" or "it's not my core competence, so no thanks" when offered a chance to do something different. I prefer to say "it's not my forte but I would really enjoy working on that with you. Can you give me a (few hours / days / a week) to come up to speed on that (system / technology / process)?" Opportunity knocks. Don't send it away. Realize though that not being the expert puts you at a disadvantage. You'll need to have built a strong relationship with your customer to get the nod in a situation like this.
Where are you?
So, which is best? It's up to you. How do you work best? Are you more motivated by the security you have with a steady paycheck in a salaried job, the reward for your every effort of an hourly wage or the many exciting things you get to challenge yourself with being self employed? Knowing the answer to that will prepare you to find, or better yet - create, the perfect job for you. Good luck, God speed!
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