Mikestrathdee’s Blog


If I had a million dollars

Published in the June 24, 2013 issue of Canadian Mennonite magazine

Many of us dream about how we might spend a large, unexpected windfall. Some imagine travelling to exotic locales, or owning a new vehicle or dream home. Some dream about making a difference.

I would use my imaginary windfall to invest in our pastoral leaders and the future health of the church by funding financial literacy programs at Bible colleges and seminaries.

Debt is a huge issue confronting our society. The average Canadian owes $1.65 for every dollar of after-tax income earned. It would take over half a year’s salary for the average Canadian to repay his/her consumer non-mortgage debt.

How much training do church leaders get at seminaries and Bible colleges so they can help people learn how to live within their means? Basically nothing. When I asked about this at a Mennonite ministerial gathering this winter, some nodded and murmured assent. No one disagreed.

Not only do seminarians graduate ill-equipped to help members of their congregation in this area, increasing numbers are graduating with crippling debt loads that impair their own ability to be effective, and may even force them out of ministry. This situation also reduces the pool of candidates who are able to serve at smaller congregations. (A shortage of pastors willing or able to serve small and rural churches is an increasingly major concern across Canada, according to a recent study by the Evangelical Fellowship of Canada.)

Some seminary graduates have student debt loads approaching or even exceeding $100,000. Graduates head into ministry and are offered part-time positions, sometimes with few benefits. Many times their first churches are in small or rural communities where there are limited opportunities to earn additional income unless they are handy with a hammer or a computer.

It’s hard enough for pastors to talk about money, let alone lead by example, without the pressure of unresolved personal challenges in that area. Fortunately, some organizations are recognizing the problem and taking steps to address it.

Luther Seminary in Minnesota has a financial coaching program through its Center for Stewardship Leaders. Any student who applies for financial assistance at Luther is paired with a trained volunteer coach. Coaches are transparent about their own choices and situation, and provide a safe environment to guide students through their challenges over at least one academic year. “The job of financial coaching is to help you get your financial life in order, clear the way to a sense of well-being about money and free you to be a stewardship leader,” the coaching manual states.

After developing the coaching manual and recruiting mentors, the seminary spends only a few thousand dollars a year on the program, director Charles Lane tells me.

The United Methodist Church in Indiana takes a more holistic approach. Matching grants from the Lilly Endowment provide educational programs for clergy and lay leaders, plus grants to clergy or clergy spouses.

If I had a million dollars, I’d fund Bible colleges and seminaries to offer financial literacy programs. Tuition and materials would be free for anyone who commits to full attendance and participation. On successful completion, a graduate would get the added bonus of a grant that could be applied against student debt.

We ask a lot of our pastors. Giving them the training they need in financial matters would be a great gift for them, their congregations and the wider church.

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Tending the Body – Generosity Across the Generations

Published in the Summer 2014 edition of Leader Magazine
When I was a boy, finding ways to earn money was easy. By age 10 I was selling greeting cards and TV Guides, then delivering the morning paper. In my teen years, even for a smaller-than-average kid, there were no end of opportunities – mowing lawns, scooping ice cream and stacking shelves at our small town store.
I had to work my way through university, helped by several part-time jobs and small student loans that were repaid within a couple of years. Debt wasn’t a huge issue, as I mostly just spent what I could afford.
Decades later, the world that my daughters face is considerably different. Jobs are scarcer. Education costs have soared at a rate many times the increases in what can be earned from part-time and summer jobs.
Credit is easy to get, but the debts that accompany its use are harder to repay. Being in debt is the norm. Our children and young people are overwhelmed with choices and opportunities to spend far beyond what we or our parents ever had. Unless a person chooses early on to make giving a part of their life pattern, there will always be excuses why not.
We dare not allow our churches to be silent on the connection between our use of material things and our spiritual walk. A giving God created us to reflect and pass on God’s generosity. That’s a tough sell in our culture.
Author Nathan Dungan says many youth will encounter as many as 5,000 advertising images in a day encouraging them to spend (ignoring two other important purposes God intends for material possessions– sharing and saving).
Irregular and incomplete messages about money are too often the norm in church settings. In many congregations, there are year-end bulletin appeals. There are pleas from the front of the sanctuary to give more to close the gap between church income and what is needed to meet the budget.
Where are the other messages we all need to hear about money, regardless of our age? We all need examples of how to live contentedly, within our means. We need to hear warnings about the cost of debt, spiritual and otherwise, and the trade-offs we need to make.
The question of how to provide counter-cultural opportunities, to help to form and grow the generosity impulse in children and young people, is a major issue for the long-term health of the church and the spiritual growth of future generations.
We need to wrestle with what the gaps are in helping young people to gain a holistic appreciation of dealing with money. Then we need to reflect on how we fill those gaps.
Some congregations do a good job of involving young children in the offering. Having a separate box or other container into which children can bring coins is a helpful practice, as is designating a special project for that offering.
What happens when children graduate to junior youth and beyond? Where are the forums for conversation, for modeling giving as spiritual protection against consumerism? When are our young people invited to regularly give, to view the offering as a spiritual act?
Mennonite Foundation of Canada has had considerable success in starting conversations about holistic use of money with a Timbit Economics/ Lifestyle Choices game. This game allows people to have fun contemplating choices around food, clothing, lodging, transportation, leisure, charitable giving and taxes, using donut holes as a form of proxy currency that can be eaten at the end of the exercise. You can get details about how to play the game at this web link:
http://www.mennofoundation.ca/downloads/timbit-economics.pdf
The game is most often done with high school or young adult groups, but works well as an intergenerational activity. It is best suited for groups of between 20 and 50 people, to allow for mixing people up into imaginary households of 5 to 7 people.
If you are seeking multi-week curriculum, Mennonite Foundation has adapted Everence’s Money Matters for Youth publication for the Canadian context. This seven lesson resource, intended for 45-minute Sunday school classes, includes sessions on biblical perspectives on money, budgeting, debt, saving and giving. It includes suggestions for accompanying print, video and music resources.
You can download the PDF file at this address: http://www.mennofoundation.ca/downloads/money-matters-for-youth.pdf
The original Everence version of this study, plus two other studies: Stewardship for Kids and Three Key Questions and Money: What’s God Got To Do With It? (for youth groups) can be found at this link: http://www.everence.com/showitem.aspx?id=12617



Wealthy Barber returns provides formula that is delightful, dangerous
November 17, 2011, 8:06 pm
Filed under: Debt, Financial Management, Generosity

A version of this column appeared in the November, 2011 edition of Christian Week Ontario

Looking for something fun to read that will improve your financial savvy at the same time?

David Chilton’s new book, The Wealthy Barber Returns is both delightful and dangerous for a Christian reader.

Chilton, a Canadian author and speaker whose first book, the Wealthy Barber, sold millions of copies  over the past several decades, delights by reducing often dry concepts to short and snappy stories. I’m told that prior to penning the Wealthy Barber; he read a couple hundred personal finance books, distilling them down to common themes and principles.

The Wealthy Barber Returns contains a great synthesis of anecdotes, principles and stories from multiple sources. Several of the chapters provide decent fodder for anyone teaching financial literacy.

One of my favorite chapters, “Ditto Diderot,” summarizes a French philosopher’s rueful reflections on how his decision to replace a dressing gown led to financial difficulties. Each new item he replaced led to discontent with something else, and spurred another purchase, emptying Diderot’s purse in the process. The warning is as relevant now as it was when penned several centuries ago.

But for all the marvelously (un)common sense calls to live within your means in Chilton’s new book and the original Wealthy Barber, there’s a lot missing. Neither book touches on planning issues that are crucial for readers of this paper.

Recently a speaker at a Canadian Council of Christian Charities conference said that a person who isn’t giving, isn’t living.

Chilton’s financial worldview is sadly lacking in a financial and spiritual dimension we need to balance in our planning. His only reference to giving is a put down, warning people not to count on an inheritance to float their retirement boat in case “your benefactors surprise you by leaving most of their estate to a charity.”

At a national financial planners gathering this spring, a prominent speaker suggested that with all the savings products we are urged to contribute to – RESPs, RRSPs, TFSAs and even RDSPs (if you have disabled children), most families can’t hope to do them all. We need to prioritize and make choices.

For Christians, the situation is even more complex. Looking beyond ourselves by making meaningful gifts to church and other charities complicates things.

Chilton promotes a “pay yourself first” approach by saving 10 per cent. That only works for mature Christians if we modify the formula so we pay God first, then save 10 per cent. For people who tithe (give 10 per cent), that requires living on 80 per cent (or less) of their salary. Recent studies indicate that the average Canadian is spending $1.49 for each dollar earned. Many churchgoers struggle with a similarly nasty gap between outgo and income.

There is no question that we need to spend less (or earn more without increasing spending, or some combination of the two.)

But to what end? In what do we trust and put our hope?

What difficult tradeoffs are we willing to make to ensure that we are both found faithful in our use of whatever financial resources have been entrusted to us by God, and still live within our means?

The author who melds answers to those questions with the secular wisdom of the Chiltons of this world will be doing us all a great service.

 

 



Debt
January 21, 2011, 10:14 pm
Filed under: Debt

An interesting e-newsletter that is particularly relevant in today’s difficult economic climate is Gary Foreman’s “The Dollar Stretcher” www.stretcher.com.

In a recent issue, Foreman wrote about how the human gift of self-deception can hurt our finances, in serious ways. Despite our ability to think, “we also have an amazing ability to deny the facts and believe whatever we want,” he said.

Foreman’s list of examples provides a series of inconvenient truths, but barely scratches the surface.

An article in a national business paper pointed out that consumers’ expectations about how they will pay for their retirement plans frequently bear little resemblance to reality. Up to 40 per cent of pre-retirees plan to work longer in order to build their nest egg. Yet about that same proportion of the population find themselves involuntarily retired, due to health issues or job loss, well before they would want.

When it comes to spending, one-third of people say they will be more frugal in retirement, but 40 per cent spend as much or more once they leave the workforce.

Fewer and fewer, it seems are those who take the advice of 1 Timothy 6 “if we have food and clothing, we will be content with that,” to heart.

Many of us have to work at learning to live within our means to make room for saving for retirement, let alone dreaming of how soon it will happen. Bank of Canada governor Mark Carney told an interviewer recently that he is worried Canadian households are getting too deeply into debt. Consumer debt in Canada increased by 10 per cent last year.

Outstanding credit card balances in Canada have grown by 40 per cent since 2004, even as the cost of more sensible means of borrowing, such as mortgages and lines of credit, dipped to historic lows.

Overspending is one end of the self-deception spectrum . There are also the people who mistakenly under-estimate or dismiss their good fortune with the comment: “I’m not rich.”

A quick visit to the Global Rich List website: www.globalrichlist.com provides a sobering piece of evidence to the contrary for those of us who feel that the rich are those people better off than we are.

An income of $35,000 a year puts a person in the top six per cent of the world.

Earned income of  $50,000 moves you up to the top 1.78%.

An average Canadian household, with an income of $78,689 (a figure sourced from Canadian Demographics 2009), is in the top .85% in the world in terms of income.

Even when 14 per cent of Canadians are out of work or underemployed, that still leaves 86 per cent of the workforce who are blessed to have jobs.

In the early Christian Church, believers shared freely of their possessions, giving to everyone as they had need. (Acts. 2: 44-45) These days, our communal bonds have frayed to the point where people are reluctant to let their congregation know about job loss or financial difficulty.

In a time when Christian schools, camps, relief agencies and even some of our congregations struggle due to decreased giving, how shall we respond? Let’s talk about it.



Living like a rich person is different than you might think
January 21, 2011, 10:05 pm
Filed under: Debt, Financial Management, Investing

Living like a rich person is different than what you might think

As spring approaches, some people will start planning annual spring cleaning projects.

Spring is also a great time to re-examine habits and ways of thinking around money.

For anyone who is interested in building wealth for the future, Thomas J. Stanley’s new book Stop Acting Rich …And start living like a real millionaire is worth a read.

Stanley, a U.S. researcher known for his best-selling book The Millionaire Next Door, has a lot to say about spending.

He takes the old “a dollar saved is $2 earned” thinking several steps further, explaining how the truly wealthy free up money to invest by sticking to reasonably priced goods.

Acting rich is a major obstacle to becoming wealthy, he writes, detailing items that “aspirationals” (his term for wannabes) overspend on for the sake of perceived prestige: homes, cars, clothing, watches, food, beverages, vacations and entertainment.

“Eating off the appetizer menu is what many of us do. We buy select prestige brands, symbols from within product categories that we can barely afford.”

About 86 per cent of all luxury makes of cars are driven by non-millionaires, he discovered. As for the truly wealthy, think Toyota, not BMW. Stanley includes the story of a surgeon who was stopped by a hospital parking lot attendant who didn’t believe that someone in a beat up Honda Civic really worked there, and could be who he said he was.

From the many rich people he studies, Stanley found that ego products and brands are not common among the affluent population. Most rich people become wealthy and stay that way because they are frugal and are investment, not consumption, oriented.

The principles he outlines have wide application, whatever your income level. There is much better chance of becoming wealthy, he suggests, if you don’t imitate the consumption patterns of people who society tends to look up to. Often high status leads to big spending urges, apparently.

In many ways, it is not how much one earns annually that counts: It is how one lives each year. It is how much one saves and how much one invests annually that really matters, he writes.

If you want to become wealthy, the market value of the home you purchase should be less than three times your household’s total annual income, he says.  Nothing has a greater impact on your wealth and your consumption than your choice of house and neighbourhood.

And speaking of property, most millionaires do not own a vacation home.

Stanley found that while there is a strong relationship between income and satisfaction with life, spending the extra money doesn’t make people happier. There is some evidence that giving “enhances one’s level of happiness.’

Within groups of people with the same income level, people who save, invest and are frugal give more, and spenders give less.

Overall, the happiest people are those who live below their means.

Living below our means and giving as a route to happiness. What will they think of next?



Dealing with debt
January 21, 2011, 10:04 pm
Filed under: Debt | Tags:

Heard any sad debt stories lately? Chances are you know someone who is struggling financially as a

result of overspending, job loss or health issues.

The amount of debt owed by Canadians has been increasing at a staggering rate in recent years, and

shows no signs of slowing down.

Asked what will happen with their personal finances in the next six months,

about one person in five who answered a recent national Nanos poll said their debt will increase. Almost half said their debt load will stay the same, and only 30 per cent said it will decrease. Looming interest rate increases will change some of these situations from dangerous to desperate.

By the time people realize their situation is serious, and reach out to a friend, pastor or lay leader

at their church for help, the problem is often complex and not easily solved.

In many cases, the people who are asked to assist aren’t well equipped to do so. They are unaware of

the services offered by community counselling agencies, or the limits of same, let alone the hefty fees

charged by the rapidly growing for-profit debt counselling sector. They don’t know how to set

appropriate boundaries, such as insisting on full disclosure before agreeing to help someone in difficulty.

Nor do they usually understand the ins and outs of making a proposal to creditors, or the process and

consequences of declaring bankruptcy.

Lawyer Mark Silverthorn addresses many aspects of this information vacuum in his book “The Wolf at

the Door – What to Do When Collection Agencies Come Calling.’’ Silverthorn is well versed in what

happens when people can’t or don’t pay their debts. He spent 12 years working for collection agencies,

and now has switched teams – helping consumers in their dealings with bill collectors.

Silverthorn’s book provides a useful overview of how different types of debts are collected, negotiated

downwards or written off, depending on circumstances and the passage of time.

He also explains how the “debt collection game” is played in Canada, chronicling instances of

commission-based collectors making illegal threats, false or misleading statements in an effort to

meet their quotas and keep their jobs.

Silverthorn provides timing tips – as with buying used cars, the best time to

negotiate with a collector is near the end of the month, especially in December. He also airs the dirty

laundry of a nasty, sometimes unethical industry that should face greater government oversight.

Three chapters are dedicated to ways of dealing with unprofessional bill collectors.

Silverthorn’s book would be a great addition to the toolkit of elders, deacons or anyone else who is

trying to help others figure out their options. Whether you want to give this book to someone who is in

debt is another question. Some of his suggestions, such as the chapter entitled “How to Avoid Paying

Your Outstanding Accounts” get into murky ethical waters, particularly for people

who believe the biblical admonition (Romans 13: 7-8) that we should repay others what we owe.

For more information, see Silverthorn’s website, http://www.helpwithcollectioncalls.ca



Money and Marriage
January 1, 2009, 5:47 pm
Filed under: Communication, Debt, Financial Management, Marriage
Money and Marriage
From the Jan. 8, 2007 issue of Canadian MennoniteMoney and marriage

—Mike Strathdee

Money problems are a leading cause of failed marriages, the cable TV series Til Debt Do Us Part suggests. In the program, Canadian author Gail Vax-Oxlade works on financial makeovers for couples who are in over their heads, unable or unwilling to agree on how to make things better.

As many as 90 percent of all marriage breakdowns relate to money problems of one sort or another. So why is the discussion of financial issues in pre-marital counselling and marriage renewal courses often relegated to the margins, glossed over or neglected altogether? Even the Marriage Course, an eight-session video study produced by the people who put together the Alpha program, fails to give serious attention to issues around family life and mammon. Money is the greatest cause of arguments in marriage, the course mentions in passing, then moves on to the next topic.

In a society in which almost all of the financial messages that people receive are “spend, spend, spend,” if Christian communities don’t have strong voices urging couples to live frugally and model the nitty gritty of positive choices, it is almost as if we’re silently affirming the culture. Vax-Oxlade cites statistics indicating that 70 percent of people spend more than their gross income every year.

An article in Psychology Today noted that most adults—67 percent of women and 74 percent of men—enter marriage with at least some debt. Far fewer have a plan on how to deal with the situation, or an understanding of the negative effects the unacknowledged presence can have on their household. This can compromise what Scott Stanley calls the three important elements of safety in relationships:

• The ability to talk freely,

• Safety from physical harm, and

• A sense of security about the future.

Shared understandings around the use of money—who pays for what, when do I need to check in about a proposed purchase—need to be talked through early and often to avoid resentment and mistrust. Too often, the conversations needed to develop a common philosophy around spending, saving and giving don’t happen. Remaining stuck in family-of-origin patterns around finances, be they unhealthy hoarding or compulsive spending, can be equally damaging to a partnership.

Challenges to face and deal with these issues are absent from pre-marriage counselling, in some cases because pastors feel rushed, uncomfortable or ill-equipped to address the topic. Yet these transitional milestone times provide opportunity for introducing new thoughts and approaches, to encourage communication and full disclosure as cornerstones of relational health.

When a colleague and I did a presentation on marriage and money to a group of recently and soon-to-be wed couples this fall, we noticed several things. All of the participants did their pre-work and eagerly received resources offered for them to take home. The common theme in post-event evaluations was a desire for more conversation, both as couples and in a group setting. There can be considerable power and healing in shared stories of strengths and struggles.

Can we take the time and make the space in our congregational communities, in livingrooms and other settings to allow these conversations to multiply and flourish?

Mike Strathdee, CFP,  is a stewardship consultant at the Kitchener, Ont., office of Mennonite Foundation of Canada (MFC). For stewardship education, estate and charitable gift planning, contact your nearest MFC office or visit mennofoundation.ca.