B R A D ' s ON L I N E R M E M O- - -
TO: Interested Onliners FROM: Brad Pendable - CFO
RE: "Where" and "Why" you have money ORIGINATED: February 2008
Too many of us inappropriately manage our finances (I am talking about Individuals as well as Ministries) almost exclusively from Bank Balance information - be it a general Checking account plus maybe a Savings Account for specific purposes. Please note the reasons when you go Here for having a "pooled" Bank Balances approach and NOT establish a Saving account for certain money you set a side. etc.
In other-words, when you rely on Bank Balance information only, you are managing your finances on "incomplete" "Where is your Money" financial information. For prudent management of your finances, you urgently need to not only know "Where is the Money", but you also must know "Why you have your Money" as it is essential in order to have "complete" financial information. You need to maintain sufficient financial records so you know what righteous constraints (self determined budget if you please) there is on the money you have on deposit. You need to know for day-to-day operational purposes to what extent you have prudently restricted its use. Hopefully, you have determined that other entities are entitled to some of this money on deposit. Therefore you personally (plus any Christian Ministry, of course) need to at least:1> Judiciously determine in advance your restricted day-to-day spending categories; then
2> Conclude before you make a deposit just how you plan to spend it; then
3> Do the essential record keeping, and reporting, so that you also have current '"Why you
have this Money" on hand - or how much is available to spend in that particular area or
category, etc.
4> Regular reports (preferably weekly) enable you to appropriately spend within your self
defined restrictions, etc.Let's suppose that you have $3,862 in the Banks ($3,047 in Checking and $815 in Savings ). By the way, you will note that I have not included any pennies here .... ask me about efficient "cents-less" record keeping. The $850 in Savings was set a side (escrowed -- if you please) for your personal future events and/or reserves, etc. You owe $1,541 to the Credit Card Company. Be sure and discuss with me the merits of paying this off weekly, You also have not yet paid your Church tithe of $300 -- plus a Mortgage payment due momentarily of $985. These commitments total $2,826 and when we subtract this from your Checking Account balance of $3, 047, it leaves only $221. Or you might have $3,047 in the Bank but you really only have $221 to spend for uncommitted purposes, etc.
You must know "Where" your money is ($3,862), since it is an essential part of the equation, but it only provides you with "incomplete" financial information. You must also know the other essential part of the equation, or "Why do you have this money" --- like the above commitments of $2,826. Only then will you have "complete" and overall essential financial information so you can make righteous and prudent future buying decisions. Information found Here about "Two sides of the same coin" might might also be of interest to you.TRUISM -- All Christian entities (People and Ministries) must handle money - it is an essential part of our lives here on this earth. When it comes to stewardship of physical resources, it seems that money has the highest profile, We hope that you make the maximum use of Banks and Credit/Debit Card Companies since you then optimize security plus you have a written record of money both coming in and going out when you use as little "green stuff" as possible.
How about these "Three Spending Control Phases"
--- PHASE ONE ---- Before you make a deposit you already know how you plan to use it - -When you receive money you place all of it into the Bank (you do not cash checks - or to get 'green stuff' you use the ATM and charge it to the applicable "Spending Area, etc.) and you already know how you plan to righteously spend it -- whether it is money that is "Internally Discretionary - you decide how to spend " or "Externally Restricted - a Ministry's donor expresses an approved preference." As soon as "Internally Discretionary" money is available you need to know how you plan to spend it per your different "Spending Areas." Know this information in advance, please do NOT decide how to spend money after you have deposited it. Or please do the essential pre-planning (budget if you please) of knowing exactly how you plan to spend your money by "Spending Area" before you actually make the deposit.
--- PHASE TWO --- Know if you have money to spend by agreed "Spending Area" - - - -
Have a money record keeping system in place, and at least weekly update it with the latest activity so you know if there is "Internally Discretionary" money to spend within your applicable "Spending Areas." This system, of course, can be written out manually or via the use of some computerized bookkeeping system. This is vitally important so you can view the available balance in each "Spending Area" and make decisions accordingly.
--- PHASE THREE --- Spend only if that "Spending Area" has some available money - -
Make righteous buying decisions based on available balances within applicable "Spending Areas" and not from the balance in a Bank Account. As emphasized above, people are too prone to spend from Bank balance information only, etc. If a "Spending Area" in your written report has no balance then you handle it as if you had gone to a "Spending Area" of your purse/billfold expecting to use such cash to buy something. But you have prayerfully disciplined yourself so that you can not buy anything because there is no available cash for that "Spending Area" purpose. Like available "Bank Balances," you might have "Cash on Hand" but it is not available for that purpose, etc.
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THRUST -- Please do your very best to have and effectively use the "Complete" financial information discussed above as you righteously manage your money as unto our Lord. Please Click Here and learn about this "SPENDING CONTROL" resource, etc.
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UPDATED LAST: November 26, 2011
Fresno, California
Please contact CFO Brad Pendable by Email at Brad@rpfin.org| OUR PURPOSE | WHY "NEST OF BEES" | WHO WE ASSIST | ASSISTANCE EMPHASIS | ASSISTANCE SPECIFICS | INFO ABOUT BRAD