Bible Study: FAMILY MONTH: FINANCIAL MANAGEMENT IN A GLORIOUS FAMILY.

THEME: THE GLORIOUS FAMILY – EPH.5:27; ISAIAH 4:2; 49:5

TOPIC: FINANCIAL MANAGEMENT IN A GLORIOUS FAMILY                             

TEXT: LUKE 14:28, PROV. 24:3-5, GEN. 2:24-25; DEUT. 32:30, ECCL. 4:9, 12.

TEACHER: DCN. MIKE OWOSENI                                                                                                        DATE: 13/10/2020 _______________________________________________________________________________________________________________

Introduction:                                                                                                                 

a.    Definition of words:                                                                                                        

-    Financial Management: Financial Management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise/family. It means applying general management principles to the financial resources of the enterprise/ a family.

-    Glorious Family, very beautiful or delightful or splendid or noble home/family

b.    Background to the presentation: The promises of God for your life are very clear that God desires to bless you and to meet your every need! It is very important that you feed your Faith and renew your Mind to this truth as you face the enemy of lack! We must seek God like never before as we await His promises for fulfilment.

1A.    SCOPE OF FINANCIAL MANAGEMENT IN AN ORGANISATION

i.    Investment decisions - includes investment in fixed assets (called capital budgeting). Investment in current assets is also a part of investment decisions called working capital decisions.

ii.    Financial decisions - They relate to the raising of finance from various resources which will depend upon decision on the type of source, the period of financing, cost of financing and the returns thereby. 

iii.    Dividend decision - The finance manager has to take decision with regards to the net profit distribution. Net profits are generally divided into two:                                                                    

-    Dividend for shareholders- Dividend and the rate of it has to be decided.                             

-    Retained profits- Amount of retained profits have to be finalized which will depend upon expansion and diversification plans of the enterprise.

 

Objectives of Financial Management: The financial management is generally concerned with procurement, allocation and control of financial resources of a concern. The objectives can be:

-    To ensure a regular and adequate supply of funds to the concern.                                                       

-    To ensure adequate returns to the shareholders which will depend upon the earning capacity, the market price of the share, expectations of the shareholders.                                                        

-    To ensure optimum funds utilization. Once the funds are procured, they should be utilized in the maximum possible way at least cost.                                                                                   

-    To ensure safety on investment, i.e., funds should be invested in safe ventures so that an adequate rate of return can be achieved.                                                                                                 

-    To plan a sound capital structure-There should be a sound and fair composition of capital so that a balance is maintained between debt and equity capital.

 

Functions of Financial Management:

i.    Estimation of capital requirements: A finance manager has to make estimation with regards to capital requirements of the company. This will depend upon expected costs and profits and future programmes and policies of a concern. Estimations have to be made in an adequate manner which increases the earning capacity of the enterprise.                

ii.    Determination of capital composition: Once the estimation has been made, the capital structure has to be decided. This involves short- term and long- term debt equity analysis. This will depend upon the proportion of equity capital a company is possessing and additional funds which have to be raised from outside parties.                                   

iii.    Choice of sources of funds: For additional funds to be procured, a company has many choices like:

-    Issue of shares and debentures, Loans to be taken from banks and financial institutions,

  -    Public deposits to be drawn like in form of bonds. Choice of factor will depend on relative merits and demerits of each source and period of financing. 

iv.     Investment of funds: The finance manager has to decide to allocate funds into profitable ventures so that there is safety on investment and regular returns are possible.

v.     Disposal of surplus: The net profits decision have to be made by the finance manager. This can be done in two ways:

-    Dividend declaration - It includes identifying the rate of dividends and other benefits like a bonus.

-    Retained profits - The volume has to be decided which will depend upon expansion, innovation, diversification plans of the company.                                                                       

vi.     Management of cash: Finance manager has to make decisions with regards to cash management. Cash is required for many purposes like payment of wages and salaries, payment of electricity and water bills, payment to creditors, meeting current liabilities, maintenance of enough stock, purchase of raw materials, etc.

vii. Financial controls: The finance manager has not only to plan, procure and utilize the funds but he also has to exercise control over finances. This can be done through many techniques like ratio analysis, financial forecasting, cost and profit control, etc.

IIB.    MATRIMONIAL/ FAMILY FINANCIAL MANAGEMENT:

Basic Principles for a Financial Management for a Glorious Family, Gen. 2: 24-25, Deut. 32: 30, Eccl. 4: 9, 12,

i.    Two shall become one,

ii.    Have all things in common,

iii.    Each member brings his/her income together/ Have a common budget,

iv.    Distribution according to needs and not according to the contribution,

v.    No one had a lack,

vi.    One chases a thousand, two chase ten thousand,

vii.    Total openness in terms of earning and expenditure,

viii.   Effective Communication, ix. Complete Trust,

ix.    Confidence and Understanding,

x.    Patience and Tolerance,

xi.    Faithfulness, Luke 12: 42.

B.    Practical Applications,                                                                                                       

i.    Budgeting or Planning, Mark 6: 34-41, Prov. 22: 1. Budgeting is very important. A Couple needs to agree upon a basic pattern of spending their money together.

ii.    Discuss and Agree, Mark 6: 15-17…assets and liabilities,

iii.    Group your needs in order of ranks, Mark 6: 40,

iv.    Bless God for the Provisions, Mark 6: 11

Budget: In order to truly understand your financial situation you must keep and maintain a budget. Keep records so you can know where and what your funds are being spent on. Families will feel more secure knowing their income and debts - and will be less likely to get into financial troubles. Money management tips are essential in Christian homes - especially the biblical aspect that's associated with budgeting. It is important to remember God within everything we do - especially finances. Prov. 24: 3-5, 3 A house is built by wisdom and becomes strong through good sense. 4 Through knowledge its rooms are filled with all sorts of precious riches and valuables. 5 The wise are mightier than the strong, and those with knowledge grow stronger and stronger…NLT Luke 14: 28-29, 28 "But don't begin until you count the cost. For who would begin construction of a building without first calculating the cost to see if there is enough money to finish it? 29 Otherwise, you might complete only the foundation before running out of money, and then everyone would laugh at you… 

III.     MANAGING MONEY: MY MONEY, OUR MONEY = FAMILY MONEY

Different families handle budgeting and money management in different ways. But the general goal of a family budget is a yearly, monthly or weekly picture of what you need to spend and what you have leftover.

A family budget: why it is a good idea:

-    A family budget is a record of what you earn and spend,

-    A family budget will help you:

*    Spend your money wisely on the things you must have – these are your needs                        

*    Save money for the things you like but can live without – these are your wants                        

*    Set aside money for unforeseen expenses – for example, if your car breaks down and needs repairs,

*    Stop accidental overspending.

Working out how much money you need for everyday essentials like Food, Housing, and Utilities like gas, electricity, phone and water, Transport and Medical services can help you make sure you have enough for unexpected expenses and emergencies.

Budgeting can help you and your family take the first step towards:

-    Control of your money,

-    Can also, help you avoid debt,

-     Let you get on with being a family,

The key to budgeting is sticking to a basic rule – spend less than you earn.

-     Budgeting is to list what you earn, spend money on and owe. It is also good to put a set amount towards savings each week or month. This is the way you will have money for unexpected expenses, emergencies and long-term goals, like house repairs or renovations, family illnesses or family holidays.

Money management: working out what you spend: One of the hardest things about making a budget and managing money can be keeping track of what you spend. 

-     Some fixed expenses you might want to include in your family’s budget:

*    House repayments or rent,

*    Utilities – gas, electricity, water, phone and internet,

*    Council fees and land taxes,

*    School or tertiary study fees,

*    Health, car and household insurance,

*    Credit card and personal loan repayments.

Some variable expenses you might want to include in your family’s budget:

*    Food,

*    Home maintenance and household goods,

*    School uniforms, textbooks and stationery,

*    Medical and dental fees,

*    Car repairs and petrol,

*    Public transport,

*    Personal items like clothing and haircuts,

*    Holidays,

*    Entertainment,

*    Other things like gifts and special treats for you and your family.                                       

A typical Monthly/ Quarterly Family Budget includes the following:

1.    Tithe is a minimum of 10% and Offering:

i.    God, my Creator:  -Our Tithes to God... Malachi 3: 10-12.

ii.    Offerings…Gen. 4: 3; Eph. 5: 2. -Missions and Evangelism.

iii.    Other Church Commitments.

2.    Bills:

I.    Feeding - Food and Food-Related items: - Rice ( local ) - Gaari - Vegetable oil (olive oil) - Detergent for washing plates - Elubo ( Yam / Plantain powder - Palm oil - Detergent for washing clothes - Wheat powder ( local ) - Gas Refilling  - Tea/ Beverages etc. - Beans/ Moimoi/ Akara  - Bathing Soap - Pad (female) - Indomie / Biscuits - Lumps of yam - Toothpaste/ Toothbrushes - Loaves of bread - Soup. Varieties - Body & Hair creams - Hair-cutting/ Hair-do - Ogi/ Akamu.

ii.    House Rents.

iii.    Daddy and Mummy: - Self-maintenance, - Pocket Money, - Clothing etc.

iv.    Family Car(s)/ Generator /Others:  Fuelling of cars/ Servicing - Fuelling of Generator / Servicing - Electricity Recharge - Community security fees - Decorder Recharge - Sanitation fee (LAWMA)

v.    Children: Children upkeep - School fees - School Materials

vi.    Our Parents: - Upkeep - Other Dependants.

vii.    Projects: - Building a family house - Establishing a family business - Investments/ Savings, Eccl.3: 6

Tips for Healthy Financial Management in a Glorious Family: I can tell you without a shadow of a doubt that money affects a relationship more. Finances can affect the health of your relationship in many ways:

-    When you and your partner want to spend money in different ways, it can lead to disagreements.

-    Healthy financial management in a relationship involves learning how to spend and manage your money wisely, Couples who communicate openly about money, have little or no issues, as they do not spend more than they earn tend to be happier and more stable in their relationships.

-    Couples who struggle with financial issues often have increased stress and tension in their relationships. 

-    Identify money habits and attitudes – You and your partner will be more likely to handle financial discussions and conflicts in healthy ways if you both have a good understanding of each other’s habits and attitudes towards money.

-    Prioritize spending and live within your means – Living within your means requires that you spend less than you earn. To do this, you need to sit down with your partner to discuss your household’s needs (what is necessary) versus wants (what is desired). Where does the money go? - Track and reduce expenses while following a budget – Start by first carefully identifying all expenses you and your partner spend in a specific period of time (such as a week or month). Then try to find ways you can reduce expenses.

-    Avoid debt and manage loans wisely – Choose credit cards with a low-interest rate when possible. If you have debt from credit cards or other loans you owe, try to pay a little extra each month on the card with the highest interest rate.

-    Build good credit – Paying bills on time is very important because it will help you build a credit history with a good credit score. The better your credit score, the more likely banks are to loan you money when you need it. They will also offer you a better interest rate since a good credit score lets them know you are low risk and will pay on time.

-    Think about getting a safety deposit box because, for a small fee per month, you will have a safe place to keep your important documents like birth certificates and Social Security cards. Having an account also builds a relationship with the bank.

-    Have an emergency fund – Try to develop an emergency fund for both small and large unexpected expenses. For example, you can set up a system for saving a portion of each paycheck to put toward an emergency fund. This way, you won’t be stressed when a family member gets sick or your car breaks down because you will have put money aside just for these situations.

*    Ask tough questions and set goals,

*    Sit down with your partner and discuss,

*    Talk about different goals you can set to help work toward that future.

*    Start with small goals like writing down your household monthly budget.

*    Work toward saving for your emergency fund or paying off a specific high-interest loan.

*    Learning good financial management skills that can help you and your partner build a happier and more stable life together.

*    Following these tips and discussing healthy financial management practices, you can learn and develop the skills that will help you and your partner to be happier and more prepared to deal with times of stress.

Money management: working out what you want to save: Your budget will tell you whether you are currently spending more or less than you earn. If you are currently spending more, a simple savings plan can help you spend less. And if you’re already spending less than you earn, a savings plan will help you put some of your leftover money aside for unexpected expenses, emergencies and long-term goals. Sit down together as a family and look at how you can save. Some tips on SAVINGS:

-    Build a savings buffer. Keep some money in a separate savings account. You can use this money for unexpected or emergency expenses, which can help you avoid going into debt.

-    Decide what you’re saving for. What are your goals? Give yourself plenty of time – saving can seem to take forever.

-    Set a deadline for your goal. But be realistic, and you’ll avoid feeling the pressure.

-    Open a fee-free bank account, which is separate from your main account. You can use this account only for saving towards your goal. You can set up a direct debit from your main account to regularly transfer a set savings amount. - Look into other options, like asking your employer to split your salary payment, so some of it goes into your separate savings account. Speak to your bank, financial institution or financial adviser if you want more advice.

Money Management for the Christian Family: If money is causing tension in your family, consider this three-step plan.

i.    Give to God first.  As Christians, our first financial priority, just as in every other area of life, should be God and His work. The issue of managing all of our gifts, including our finances, is of great importance to God. Tithing, or one-tenth of our income back to God. This is a great starting point for Christian giving and should be calculated on the gross salary or on net income before taxes for those in businesses for themselves. The more we have, the more we think we need. It is one of the many mysteries of how God works.

ii.    Set aside funds for regular savings. You will be surprised by how much can be accumulated by a simple but disciplined savings program. The purpose of saving is to provide for legitimate future needs, and for some, it will allow you to become one of those special people who can fund important needs of others.

iii.    Spend the rest on what you need. The key to good money management is expense management. We need to learn to live below our means and be content with what God has given us. The key is to develop a good budget, which is basically a spending plan. If you have never had a budget, spend two or three months tracking your spending. Try keeping a log every time you spend money so that you can improve your budget understanding. Then examine your habits and determine how you would like to proceed and where you need to cut back. Be patient and stick to your budget spending, because it really does work.

Always discuss finances as a couple. One spouse likely has more financial skills than the other and will naturally take the lead, but this is no excuse for the other spouse not to be involved in the family financial situation. You both need to understand the issues that you are facing and make decisions as a team. Financial problems are listed as a major cause of strife in the marriage relationship. Finances can be a dividing factor in marriage, but they can also bring you together in a new and deeper way, as you trust God together and follow His plan. Follow this simple plan and begin to intelligently and prayerfully give away 10% of your income, I believe your financial situation will improve. More importantly, you will be storing up treasures in heaven, which is what really counts in the journey of life.

IV. CONCLUSION:

-    Couples can forego today’s luxuries for some long-term benefits provided there is complete and perfect agreement between them. Prov. 16: 22-24, 22. Understanding is a wellspring of life to him who has it. But the correction of fools is folly. 23 The heart of the wise teaches his mouth, and adds learning to his lips. 24 Pleasant words are like a honeycomb, Sweetness to the soul and health to the bones…NKJV

You can only achieve understanding by practising. Even if you do the right thing, if you do not keep on doing it, you will not understand or realize the essence of what you are really doing. With understanding, you also become a good teacher. Your words become pleasant, not only to people who hear them but to you as well. So choose a healthy lifestyle, do it and keep on doing it. And when you understand what you are doing, teach it so you would inspire other people and they will bless you more.

-    Pray for Wisdom to manage wealth in such a way that it will not hinder Spiritual growth or cause backsliding or break the marriage… Prov. 4: 7-8, 7 Wisdom is the most important thing; so get wisdom. If it costs everything you have, get understanding. 8 Treasure wisdom and it will make you great; hold on to it, and it will bring you honor…NCV                                                                       

Financial planning is important to maintaining a stable financial household. Good financial planning and achieving financial stability will also help to prevent financial crisis. Rev. 5: 10 And hast made us unto our God kings and priests: and we shall reign on the earth. Father, enlarge my coast exceedingly and let your glory flow through me, Thank you God for answered prayers, in Jesus mighty name I have prayed, amen.

ENJOY GLORIOUS FINANCIAL MANAGEMENT IN YOUR GLORIOUS FAMILY