Still working on thisThe Financial Shepherd is a contemporary and practical guide for effective money management in today's tough economic climate. The book details how to build a personal financial plan that ultimately leads to financial recovery and financial freedom. Chapter 1 identifies the Money Mistakes Many People Make and sheds understanding on why countless individuals are in need or in debt due to a lack of financial planning. Chapters 11 and 12 discuss investment principles, wealth creation and long-term planning for retirement. The Financial Shepherd also focuses on the Christian psychology of money, and why people spend, save or invest the way they do. Learn 'Why Money Matters to God' and how you can reap the benefits of His financial plan for your life. The book challenges readers to become informed Financial Shepherds by learning and living a financially responsible lifestyle - and then passing that knowledge on to others. Authors Glen Wright, Certified Financial Planner, and Sy Pugh, Licensed Professional Counselor, assert that if you want to change your life, you must first change your mind. Combining the authors' expertise in counseling, reality therapy and financial planning, The Financial Shepherd helps readers discover how they feel and act toward money, and how to create a plan for a successful financial future.

The Financial Shepherd

Why Dollars + Change = Sense By Glen Wright, II Sy Pugh

AuthorHouse

Copyright © 2011 Glen Wright, II and Sy Pugh
All right reserved.
ISBN: 978-1-4634-0494-9

Contents

Introduction...................................................................1Chapter 1 – Money Mistakes Many People Make..............................9Chapter 2 – The Unlikely American Dream..................................17Chapter 3 – The Foundation of the Financial Shepherd.....................23Chapter 4 – The Importance of Wise Counsel...............................31Chapter 5 – The Warning Signs of Financial Failure.......................42Chapter 6 – Is the Mirror Broken, Or Am I?...............................49Chapter 7 – The Battle for Financial Freedom.............................58Chapter 8 – Plan Your Financial Future...................................68Chapter 9 – Your Financial Plan is Personal..............................79Chapter 10 – Invest in Yourself..........................................98Chapter 11 – Planning for Retirement.....................................112Chapter 12 – Life Has Its Challenges, Be Prepared........................123Chapter 13 – Hope for the Best, Plan for the Worst.......................132Chapter 14 – Blessed to Be a Blessing....................................141

Chapter One

Money Mistakes Many People Make

American author and philosopher Henry David Thoreau wrote, "If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. Let him step to the music which he hears, however measured or far away." In today's words, that would translate that we should not endeavor to measure ourselves or our progress in life by the standards of others. Instead, we should follow the path that has been laid before us or better yet, blaze a new trail that best suits our needs. When it comes to managing our finances, we must be able to make tough, responsible decisions—regardless of what others around us are doing—and then accept the consequences of our actions.

One of the most effective systems of checks and balances in money management is accountability. Although most people seemingly desire to do the right things when it comes to finances, societal pressures (peers, greed, selfishness, etc.) allow them to lose focus. However, having someone ask questions and inquire about their motives makes them accountable to someone and something other than their own whims, motivations and selfish desires. Seeking out financial accountability is a crucial step to avoiding several of the money mistakes that most people make.

Confusing Wants vs. Needs

[Glen] When it comes to money and material things, I believe most people intuitively know what they need, and understand what they want – and why they want it. On the other hand, knowledge of such information isn't necessarily enough to compel them to take responsible action and live within their means. At the source of most financial disasters is a blurring of the lines between what is truly a need versus a want. Understanding the difference between wants and needs and being able to patiently wait for the manifestation of either or both means that people must take responsibility and ownership solely for what God has given them. In addition, they must demonstrate faith in His ability to provide for them in His own way, and in His own time. This is often much easier said than done. The line between having what we need and getting what we want is often blurred and frequently confused. More often than not, people who cannot effectively distinguish their wants from their needs end up crossing that line and then suffering financial hardship as a result.

If we go back to the basics, food, shelter, clothing, and education are the absolute essentials for survival in modern-day society. In truth, beyond the basics, everything else is a want or simply a desire for more. But in reality, most of us can't, won't, and don't stop there, because the allure of a life of excess and indulgence is much too appealing.

Even though we affirm that food is a need, we constantly see individuals and families spend excessive amounts of money on food and dining out. Yes we need food, but we do not need gourmet dining or catered meals every night. I find that many individuals, especially single people, spend far too much money on food. Whenever I meet with a new client who is having trouble with his or her cash management, extra food and grocery expenses are usually the culprit. Because we need to eat every day, it's easy for extra food and beverage costs to sneak in throughout the day and week. Although it may be easy to budget for a weekly or monthly grocery bill, it's easy to forget how much early-morning custom coffees and midday lunches can add up. In addition, a lot of people like to eat out and splurge on the weekends, above and beyond the dining budget they have established. So now what was supposed to be a $250 budget has turned into a $600$1,000 extravagance per month depending on the size of the family and the type of restaurants they frequent.

Ironically, I've also observed that many clients who are already on tight budgets tend to eat out even more often because they are stressed out or unhappy and spend money as a form of "therapy" to nurse their emotional wounds. They splurge and treat themselves to extra smaller perks since they cannot realistically afford to take a vacation or indulge an expensive shopping spree. No matter how big or small the expense, it is a common money mistake to think that you can consistently spend money you don't have without paying a bigger price down the road.

Without question, everyone needs somewhere to stay, but does each child really need his or her own private suite or wing in the home? It's amazing to me to hear people that grew up years ago with four brothers and sisters in a 1,400-square-foot home now tell me they need a 10,000-square-foot mansion because they have two children and one on the way. As opposed to viewing a home as a dwelling place, many families bought into the idea that they would invest in their homes and use them for financial leverage. Unfortunately for millions of people, they didn't do all the necessary research and legwork to make sure they could legitimately afford the house they purchased. There was no emergency reserve fund in place. There was no savings account, and there was no contingency plan in case one or both spouses lost their jobs. Though there are a thousand different variations of that story, the end result is often the same: failure to plan for the worst resulted in planning to fail the home ownership test. Who said that you have to own a McMansion? Who are you trying to impress ... and why?

Wardrobe is another area where people tend to spend excessively. No one is questioning whether or not clean, warm clothing is essential, however designer labels are not necessities. Clothing can be a big budget buster.

I have studied books about frugal millionaires who live like paupers; eventually growing too old or decrepit to enjoy their wealth. I've also read articles and books asserting that Christians are not supposed to have, enjoy, and maintain wealth. I disagree. I believe that Christians are supposed to have all that God has made available for us. We see examples from the Old Testament to the New Testament (from Solomon's regal raiment to Jesus' seamless robe) that indicate quality...