Jun 25, 2012

Stop Neglecting Your Financial Think-Tank: Four Steps to Better Stewardship

My wife drives a minivan that we have named G.G. (that is short for Grocery Getter).  G.G. was making some funny noises the other day.  I am pretty handy so I tried to figure out the problem myself.  I pulled the wheels off and checked the brakes and the CV joints.  Nothing popped out at me and I just didn’t have any more time to waste looking at it.
I decided to drop it by the local dealer.  While waiting on the courtesy shuttle I watched as they pulled the van in, put it on the lift, and a few folks started working away.  They ran me back to my office and before I could sit down at my desk my phone rang.  The mechanic on the other end of the line rattled off a few things that were wrong.  He told me that all of the problems were under warranty. “It’ll be ready tomorrow morning and the entire cost is covered.”   

I didn’t even know I had a warranty!  I was pretty excited about the free fix and the fact that I didn’t have to do the work myself.  Even if I had found the problem, I would have paid for the part and spent most of a Saturday afternoon working on it.  This was great news.   

Just like G.G. the minivan, your finances are a mass of moving parts. Perhaps everything is running smoothly today.  Maybe there are a few problems you are aware of that you have been putting off.  No matter what state your finances are in, you can do better. 

Room for Improvement: The other day a couple called me and shared the exciting news that they wanted to make a big gift to support a mission that they care about overseas.  They told me that they wanted to pull a quarter of a million dollars out of their retirement assets to make a contribution to construct a building there.  

Two responses emerged at the same time.  One part of me thought how wonderful this was, how these clients were being generous and putting their resources to good use. They have the means to make this gift and it will make such a difference for families in this community that they care so much about. 

The other response was a red flag.  The tax implications of making this gift from a retirement account were going to be substantial. 

I asked them if I could get in touch with the other advisors they trust and see how we could make the gift most efficiently.  They were happy to wait a bit and with their permission I got to work making phone calls.  

In this sort of situation I always like to go to the client’s financial think tank.  I find the smartest people that the client talks to about money and I get them in the loop.  Like the team of experts plugging away on my van, we went to work.  As I reached out to the client’s attorney and accountant they had the same responses I did.  We worked together looking for other assets that the clients could give without such a big tax hit but we couldn’t come up with anything.  

We ran some numbers and talked about different options.  The clients were ready to start the work overseas and they weren’t worried about the tax consequences but as advisors, we wanted the clients to be able to give the gift with efficiency. If we could come up with a better solution, certainly they would be pleased.

After looking at all of the options and consulting with the clients we decided to give ½ of the contribution right away and the other half after the first of the year.  This little move saved the clients about $28,000 in taxes on their $250,000 gift.  This extra money could be used for ministry in the future. They were ecstatic.  

No matter where you are financially, there is always room for improvement. As you make minor changes and tweaks here and there, you will certainly inch closer to your goals and in some cases, you may save some real money.  Here are a few steps you can take today.  

Be a Weekend Warrior.  You may be pretty savvy when it comes to your finances, not afraid to dig in.  If you love this stuff don’t neglect it.  Be a weekend warrior.  Get passionate about it and look for opportunities to improve.  Pick up a book on finances, on stewardship or on generosity.  Read it and put what you learn to work.  Make changes, even if they are hard.  Cut up the credit card. Commit to giving 10%, even if it means cutting back.  Limit your lifestyle spending.  Do it with all your heart.  

Question Everything.  I am a financial planner but I don’t trust myself with my finances.  Even though I have the knowledge base, when it comes to my own money, I have a conflict of interest.  My wife and I invite other folks in to tell us where we could do better.  It is important to question everything you are doing.  Instead of going with your first instinct, always do your due diligence.  Ask yourself, “Is there a more efficient way to make this gift?”  Ask as you pay your monthly bills, “Do I really need this?  Which of these expenses do I feel good about and which should I cut?”  

Put Your Think Tank To Work.  You already have a group of advisors.  Just like the mechanics at the shop, they are waiting to do work.  Although your finances are not covered by a warranty, you are probably already paying for the services.  Your accountant, your attorney, the folks at your bank, the gal you buy insurance from.  These people are reading and studying and looking for the best ways to do their work for you. Find the folks you trust who are looking out for you, and put them to work. Call them and tell them that they are part of your financial think tank.  Tell them that you’d like them to talk to the other folks in this circle to make your finances sing. For those of you who are not do-it-yourselfers, not weekend warriors, put these bright folks to work.  

Celebrate the Success.  After the warranty work, my wife’s minivan is running just fine.  When folks are looking for a mechanic, I know where to send them.  We took the money and time we were going to spend on the car and got out of town for a fun weekend with the kids. 

We are too sensitive about our money in America.  If you stumble across great ideas or savings in your finances, share that victory with others. Tell others about your stewardship and encourage them along. If your trusted advisors were helpful and added value, don’t keep them a secret.  If you saved some cash, consider using it to celebrate.  Take the money you saved on that charitable donation and throw a party to celebrate and highlight the mission you care so much about.  

No matter where you are in life, there is room for improvement.  Don’t wait.  Embrace your role as the weekend financial warrior or empower your financial think tank.  You will excel as a steward as you question everything and celebrate victories with those around you.

Share your stewardship success stories in the comments.
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