Many Americans – particularly in times of uncertainty – fear not having enough money to last throughout their lifetime. This fear can be one of the greatest obstacles to experiencing the joy of giving generously.
Sometimes, fear exists, even when not based on the financial facts.
This is where setting a “financial finish line” can help. At NCF, we encourage givers to set a finish line for their income and wealth accumulation … a cap on their income or lifestyle at a pre-determined point. This is important to do in advance, because as your wealth increases, so do the endless ways to spend, save, or invest it (Psalm 62:10b) – and the finish line gets pushed further and further back.
Ask yourself these questions, so you can base your plan on faith, not fear.
1. Why have I been entrusted with these resources?
This is a highly personal question that goes straight to the heart of the matter: What is the purpose of my wealth? You may want to think about the resources God has entrusted to your care and how you can leverage them for his purposes. God has allowed you to acquire, use, manage, and dispose of this wealth. It’s up to you to steward it as he directs.
2. How much is enough for my family and me?
After you’ve acquired and preserved wealth, how should it be used? Setting a financial finish line is essential to answering this question. Let’s look at an example from one of our co-founders, Larry Burkett.
During his life, Larry was a noted author and Christian financial expert. He set a modest standard of living and gave away the rest. For example, one year before he passed away, his book sales were so strong that he was able to give away $800,000 – an amount that other people, regardless of their net worth, might have chosen to pocket for personal use or save for future security. “Larry knew what it meant to stop at the finish line each year,” recalls Terry Parker, a close personal friend of Larry’s and fellow NCF co-founder. “And he never lacked for anything.”
It’s helpful to remember that determining how much is enough to live on is not so much a formula as it is a guard against excess accumulation. Although the target may change over time, depending on your circumstances, the process of trying to determine how much is enough is still helpful. The end result is recognizing that an estimated amount, or range, is enough.
3. How much should I give to the next steward?
Don’t forget to consider who the next steward is, and if that person is prepared. Most parents and grandparents give very little thought to this question. The typical plan is to divide an estate equally among heirs, pass on as much as possible at the lowest possible tax cost, and never discuss those plans before death.
But this approach overlooks crucial factors to planning God’s way, such as instilling a good work ethic and preparing children to manage wealth with grace and generosity. In Ecclesiastes, Solomon says that both wisdom and inheritance are good things we pass on to our children. But only one of them is guaranteed to protect the one who possesses it (Ecclesiastes 7:11-12). In other words, consider passing on your values before you consider passing on your estate.
4. Should I give now or later?
Once you’ve determined how much is enough for you and your heirs, the rest of your estate is free for giving. Why wait? By giving now instead of waiting until after death, you enjoy lower taxes today and have the benefit of seeing and experiencing the impact of your giving during your life.
5. Start with this generous end in mind
Setting a financial finish line is one of the most important keys to fostering a generous family. Ron Blue, Founding Director of Kingdom Advisors and the third of NCF’s co-founders, says, “When I ask the question, ‘How much is enough?’ most people immediately start to think about how much money they need to live on, or to save, or to achieve their long-term goals.
These considerations are important, but I challenge givers to look at the question another way: How much is enough to give? Instead of trying to figure out how much you can give out of whatever’s left over, flip-flop your perspective. Start by asking yourself how generous you want to be … and you just might discover the answer to true wealth.”