Waypoint Three: The Voyage

by: Cassandra Laymon, CFP®, MBA

By now, you are well on your way through the Stewardship Journey! While I’m covering one waypoint per week, some of these stops require months, years or in some cases even decades to complete. These blog posts are good resource to keep for reference every step along the way!

In our last post, we discussed hitting the following targets:

·        Making Offerings Above Tithe

·        Paying Off Consumer Debt

·        Increasing Your Emergency Fund to 3 Months

·        Maximizing the Match on 401(k)/403(b) and/or Start Roth Contributions

This week our waypoint is focused on three main activities: Increasing your Giving, Creating a Strategic Financial Plan, and Investing and Wealth Building.

Increasing Your Giving:  As you are more blessed, you can continue to not only tithe, but also to align your giving with ministries that you are passionate about.You will also start to be able to help meet others’ unexpected needs when you see them. It’s amazing to hear of financial needs around you and to be able to bless individuals who are facing big challenges.

Creating a Strategic Financial Plan: Up until now, we’ve been focused on paying off debt, saving, and starting to invest. This is the point where I would suggest you tap into the wisdom of a financial advisor if you haven’t done so already. (Kingdom Advisors is a great place to find a Christian Financial Advisor if you don’t have one already who is well versed in biblical principles.) An advisor can help you create financial goals that are specific to your circumstances. At Beacon Wealth, we use a tool called the VISION CLARIFIER™ to identify the goals and dreams of our clients and create a plan to accomplish them with our TRUE WEALTH SOLUTION™ Charting your progress over time and staying on course is accomplished via The TRUE WEALTH TRACKER™.

Investing and Wealth Building: At this point on the journey, you are increasing your contributions to savings and investments accounts and paying off any leftover debt, including your mortgage. You are owing less, and owning more! It might not seem like “owning more” is a God-honoring goal, but as we progress through these steps, you’ll see how that for some people, being self-sufficient frees them up to do amazing, God-honoring work for the Kingdom!

Here are some great short-term goals to shoot for:

·        Save up enough so that when it comes time to replace your car, you can do it with cash instead of financing it.  Once your car is paid off, you can keep making those payments to yourself until you have enough saved up for the next new car.  I have a friend who only buys cars this way!  She saves up the money, buys a new car, and just keeps making payments to herself for years until she needs another.

·        Nothing can increase your debt quite like home upgrades!  I’m not referring to emergencies like replacing your water heater or your roof. I’m talking about that new addition on your home, or remodeling a kitchen or bathroom. It’s hard to believe that at some point you could pay for these out of pocket, but that is a great goal to work on.

·        Next on our list is college funding. Let’s be honest. Most of us will not be paying for college out of pocket. This is the time to start saving for it, though!  One way to do that is through a 529 Plan. A 529 Plan is a college savings vehicle that works much like a Roth IRA. You save the money, it grows over time, and if you use it for higher education as intended, you never pay tax on the growth in the account! As a mom of high school senior, I can tell you how grateful I am that we started saving for college when Sam was just a baby.

Next, we’ll discuss intermediate Goals. These will take years to achieve, but you’re doing so well at this point, you’ll want to stay the course!

·        By now you should be maximizing contributions to your retirement accounts. In 2018, there will be some increases to what you can save. The 401k/403b/457 contribution limit will go up by $500 from $18,000 in 2017 to $18,500 in 2018. If you are age 50 or over, the catch-up contribution limit will stay the same at $6,000 in both 2017 and 2018. Employer match or profit sharing contributions aren’t included in these limits. Depending on your income level, you can also contribute to Roth IRAs.

·        Your Emergency Fund savings goal should now increase to six months of your income. Employment insecurity is very prevalent these days and having a safety net can give you peace of mind when the economy and external factors outside of your control are unpredictable.

There is one long-term goal on this phase of your journey: Full Income Replacement.This means that you’ve accumulated enough wealth to live off the income that is generated from your investments. That seems like a lofty goal, but I’ve seen it done many, many times. Next week we’ll discuss some exciting God-honoring goals that you will be able to fulfill when you hit this point!

 

Financial Planning & Investment Advisory services offered through Beacon Wealth Consultants, Inc.