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. Instead of assuming we’ll know when we have finally accumulated “enough,” a finish line for your income sets a predetermined cap on your income or lifestyle. 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 deciding when you have enough can get pushed further and further down the road.
Ask yourself these questions as you consider a financial finish line.
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 make the most of 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.
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During his life, Larry worked as a Christian financial expert and author. 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 been tempted to save for personal use or invest 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.”
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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. A lot of parents and grandparents give 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.
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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 how you will pass your values to your heirs before you consider passing them 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. Then, why wait? By giving now instead of waiting until after death, you enjoy lower taxes today and have the joy of seeing and experiencing the impact of your giving during your lifetime.
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, co-founder of NCF and founding director of Kingdom Advisors, says that when he asks people “How much is enough?’”most people immediately start to think about how much money they need to live on, to save, or to achieve their long-term goals. These are important considerations, but he also challenges them 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 your perspective,” Ron says. Start by asking yourself how generous you want to be … and you just might discover the answer to true wealth.”
