He told about a friend—“educated and rational,” who earned a high income, but could never save any of it. Raised in a strict church that required payment of the tithe with the same level of humor and grace the IRS uses in requiring payment of our taxes, not surprisingly, his friend had drifted away from the church.

Now in middle age, with two degrees from prestigious universities and a thriving career, Karlgaard’s friend found himself in church once more. There he heard another message about tithing. But this time it wasn’t a finger-wagging lecture; it was a simple, compelling promise: give 10 percent and you will be free from financial worry.

That day he and his wife decided to take the minister up on his challenge. “Almost immediately,” Karlgaard wrote, “a mysterious transformation took place.” Besides giving 10 percent of their income to charity, the couple found they were able to start saving 10 percent as well—they call it “the 10-10-80 rule”: give 10 percent, save 10 percent, and live on the rest.

Karlgaard also wrote about another friend who said tithing helped turn down “the decibel level” of his life. “Every possession speaks to you,” he explained. “Everything you own wants attention. When I began to tithe, I found a freedom from my possessions. I don’t hold on to things as tightly any more.”

Of all the things we can do with money, giving it away seems completely, utterly irrational, doesn’t it?  It just doesn’t compute that increased giving would somehow make it easier to save money, right?  And freedom?  Doesn’t that come from a focus on accumulating as much as we can?

It turns out that generosity is a key component of what it means to use money well, and that’s why the fourth of my 11 principles for simple, meaningful success is: Give Some Away.

Here are three reasons why.

Generosity is Part of Our Design

The Bible says we were each made in God’s image, and since God is infinitely generous, that means generosity is woven into the fabric of our spiritual DNA.

When we don’t give, or give only token amounts, or give from a sense of guilt or obligation, we deprive ourselves of one of life’s great joys.  But when we give generously with grateful hearts, we live in concert with our design.  It’s no wonder that generous people are generally happier and find life more meaningful than those who are not generous.

Generosity Reminds Us of Our Priorities

The Bible says, “Where your treasure is, there your heart will be also” (Matthew 6:21).  I remember a time when my wife, Jude, wanted to give some money to a friend doing missionary work in a country that I wasn’t sure I could find it on a map.  Up to that time, I never thought of that country.  It just wasn’t on my radar screen.

However, after we started sending some money there, I noticed every time the country was in the news.  And I took great interest in each letter Jude’s friend wrote about her work.

My heart went there because some of our money was going there.

Giving regularly and generously to support God’s work in the world is a very powerful way to keep our hearts focused on God.

Generosity Leads to Blessings

I am very confident that giving in order to get something from God is nothing less than an affront to God.  I want nothing to do with the prosperity gospel.

Biblical generosity is motivated by gratitude; it’s a response to God’s generosity.

Still, many passages of Scripture clearly state that there are blessings that flow from generosity, such as Proverbs 11:24: “One man gives freely yet gains even more.  Another withholds unduly but comes to poverty.”

Some people trace material blessings to their giving.  Others experience blessings related to their health, relationships, sense of peace, and more.  Still others, such as Rich Karlgaard’s friends, find it easier to live within their means and experience financial freedom when they start giving.

It seems irrational.  It doesn’t make sense on a spreadsheet.  It’s one of those hard-to-explain but impossible-to-deny realities that there is a link between generosity fueled by a grateful heart and blessings.

Making It Practical

Next week I plan to go into more detail on generosity, responding to some of the most common questions I get about this topic, such as, “How much should I give?” And, “Where should I give?”

For now, I’d love to hear your feedback on the three major points in this post: Generosity is part of our design, reminds us of our priorities, and leads to blessings.

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He didn’t define what he meant by “radical,” but you could sense his outrage over the idea of wealth redistribution and his disdain for the protesters.

The problem is, no one is defining their terms very well – the protesters or those protesting what they think the protesters are protesting.

Wealth Redistribution Done Right

At first glance, I don’t believe in “wealth redistribution” either, at least not forced wealth redistribution.  The idea is an opportunity and initiative killer.

However, I do believe in the type promoted by a small group of “radicals” a couple of thousand years ago.

The apostle Paul taught that the primary purpose of wealth is generosity and he encouraged everyone to “excel in this grace of giving.”

In the book of James, thought to have been written by Jesus’ brother, the author implored people to put their faith into action, personally helping those in need.

Far too many of us are doing far too little in this area.  Generosity research shows that the average church member gives less than three percent of his or her income to their church – far lower than the biblical standard of “tithes and offerings.”

Could it be that the solution isn’t “out there” somewhere, but closer to home?  Could it be that the most significant reform needed isn’t on Wall Street or in Washington, but in our own hearts, our own relationships, and our own wallets?

Radical Generosity

What if we didn’t wait for someone else to help – the government, social service agencies, the church?  What if each of us generously supported our place of worship and gave generously to individuals in need?  Now that would be radical.

What if we actually told our close friends and family members when we had needs instead of keeping our problems to ourselves out of fear of embarrassment or not wanting to be a burden?  Now that would be radical.

And to the degree that the government can play a role this area, what if our political leaders came up with ideas and cast a vision for increased individual generosity, instead of spending time on ideas destined to reduce people’s charitable giving?  Now that would be radical.

Being the Change We Want to See

The more I think about the Occupy Wall Street protests, the more it seems that the issues all come down to one question:  Who’s responsible?

And I can’t help but remember the research of Arthur Brooks, author of “Who Really Cares.”  He found that people who believe the government should do more for people tend to be less personally generous.

That’s incredibly ironic, isn’t it?  And, as John Stossel discovered in an ABC News segment on who gives the most, it’s counterintuitive.

Many corporate and government leaders have contributed to our global economic mess.  That’s for sure.  However, as I wrote in my first post about the Occupy Wall Street Movement, Let’s Occupy Our Own Streets, our best hope for long-term economic solutions is for us – household by household – to take personal responsibility do the right things.  And one of those right things is greater personal generosity.

Those of us who step up our generosity would very likely experience more joy.  And those who receive from friends and family members would very likely benefit more as well.  If it’s your friend or neighbor who’s helping you out, you’re not going to feel entitled to that assistance, become dependent on it, or take to the streets when the assistance ends.  You’re going to be deeply grateful, and you’re going to do all that you can to become self-sufficient again as quickly as possible.

I’d like to see more corporate leaders manage their businesses with integrity, and I’d like to see a lot more vision and much better ideas from our political leaders.  However, I’m convinced that the greatest lasting changes will only come about when we make the right changes at home, such as growing in our personal generosity.

That’s my point of view.  What’s yours?  Let me know by leaving a comment.

Once a month I take a closer look at what the Bible has to say about topics related to money and material things.  Here’s why.

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While I can’t say I agree with their demands (at least, as I understand them), and I could do without all the name-calling that’s swirled around the discussion, I like the passion they’ve stirred up.

If we can clarify and unify around some actual solutions to our country’s economic woes (some big ifs, to be sure), maybe – just maybe – some lasting good can come from our economic tough times.

But before we’ll have any hope of that, we have some work to do at home.

Taking An Honest Look in the Mirror

Among the articles I’ve read about Occupy Wall Street, a sympathetic one in the Chicago Tribune claimed the protests were “hitting home with everyday Americans.”  The writer said, “Many people…feel like they’ve done all the right things: worked hard, tried to save a little money in 401(k) accounts, put a roof over their families’ heads, and paid the bills, even if they weren’t as careful about debt as they now know they should have been.”  And then they had the rug pulled out from under them by corporate greed and governmental missteps.

Please don’t shoot the messenger, but I have issues with that article.

It’s true that many corporate leaders have been outrageously and even criminally greedy.  And many generations of elected officials have put our country on shaky financial ground.

However, many people on Main Street have not done all the right things.  In fact, they’ve shunned the use of a household budget, saved far too little, bought way more house than they could afford, and been reckless in their use of debt.

Reforming Our Own Finances

Before we can credibly demand governmental or corporate change, many of us need to make some changes.  Here’s my three-step “platform” for household financial reform:

Use a budget to guide the use of your household income.

Avoid all debt other than a reasonable mortgage.  That means using credit cards responsibly and breaking the habit of financing vehicles.

Consciously set your financial priorities, putting generosity, savings, and investing ahead of spending.

Households that operate by these principles will be in the best position to stand strong no matter what happens in corporate America or Washington.  And they will be the most credible voices calling for corporate or governmental changes.

Changing the World With Our Dollars

Every dollar that we give away, save, invest, and spend, is a vote.  It’s a vote in favor of the organizations we support, those where we keep our checking, savings, and investment accounts, those that we invest in, and those whose products we buy.

These are very important votes that stand a better chance of bringing about change than the slogans on a placard, so let’s place them thoughtfully.

If you believe your financial institution is greedy, take away your vote by taking away your business.  At last count, that’s what more than 60,000 people have said they plan to do.  They’ve joined a movement called Bank Transfer Day, a grass roots effort to get people to leave their banks by or on November 5^th and move their business to non-profit credit unions.

This is a powerful example of voting with your wallet.

Changing the World With Our Votes

In national elections, less than two-thirds of eligible voters typically vote.  If we have issues with our politicians, the best way to bring about change is with the votes we place on Election Day.  In between elections, we can be in touch with the politicians who represent us, letting them know why we favor this issue or that.

Do you typically vote?  Do you know who represents you in your state and at the national level?  Do you know how they’ve voted on issues that matter to you?  Have you ever sent them your thoughts on the national deficit or other issues?

Celebrating Our Freedoms

I love this country and am thankful for the freedoms we enjoy, including the freedom of speech and the right to “peaceably assemble” that the Occupy Wall Street protesters are exercising.

But perhaps the greatest freedom in the U.S. is the freedom to make something of ourselves – the freedom of opportunity.

Those who are best at tapping into that freedom are those who take personal responsibility.  They don’t feel entitled; they feel empowered by the opportunities around them.  They don’t blame others for their difficulties; they blame themselves.  And when they make it, they don’t take all the credit and they don’t keep all the cash; they share.  Not because they have to, but because they want to.  It’s the best way they know to express their gratitude for the freedoms that gave them the potential for success.

I’ll say more about that last point – generosity – next week when I take up one of the Occupy Wall Street protesters’ central issues: wealth inequality.

For now, what are your thoughts on the Occupy Wall Street Movement?

Who else would benefit from this article?  Why not forward a link to my site? And if you haven’t done so already, you can subscribe to this blog by clicking here.  Two or three times a week, you’ll receive ideas and encouragement for using money well.

5 Ways to Get Rich, Or Poor (via MSN).  A great research-based look at five choices that make the biggest difference in our financial success.

Education Impacts Work-Life Earnings 5 Times More Than Other Demographic Factors (via U.S. Census Bureau).  We can’t do anything about our race or gender, but there’s a lot we can do about our education.  And that’s good, because it matters – a lot.  Now, if only it was easier to pay for college.

Talking to Your Teenage Girl About Finance (via US News).  A lot of this advice applies to teenage boys as well.

9 Myths on How to Build Better Credit (via Bankrate).  Will closing a credit card account will boost your score?  Find out, and gain 8 other insights into the mysteries of your credit score by reading this article.

9 Snap Judgments Managers Make in Job Interviews (via Yahoo! Finance).  Good insights for anyone looking for work.

And from the blogosphere…

12 Frugal Compromises (via Wise Bread).  Regular readers know that I don’t like the term “frugal.” However, as this article points out, there is a land somewhere in between free spending and tight fisted.

Involving Children in Household Money Management (via Consumerism Commentary).  Good (and even radical) thoughts on why and how to include kids in real-world financial decisions.

Raise Your Children to Be Generous: 3 Important Tips (via Christian PF).  Sound, practical advice from an author whose kids caught the generosity bug.

Ways to Shrug Off a Stock Market Slide & Reduce Market Anxiety (via Digerati Life).  Blood pressure-lowering thoughts for tough economic times.

10 Key Characteristics of Debt-Free People (of Modest Means) (via Len Penzo).  More proof that using money well isn’t rocket science.

Got some feedback on any of the above?  Be sure to leave a comment.

Who else would benefit from this article?  Why not forward a link to my site?  And if you haven’t done so already, you can subscribe to this blog by clicking here.  Two or three times a week, you’ll receive ideas and encouragement for using money well.

Since this is one couple that truly does have everything, they’ve asked anyone wanting to get them a gift to consider making a donation instead.

The royal couple has set up a charitable gift fund to support five causes that are important to them, with 26 charities named under the five causes.

Will Charitable Giving Become the New Trend in Weddings?

According to a recent American Express survey, only two percent of Americans would ask guests at their wedding to donate to a charity, and I doubt that the royal wedding will change that.

Let’s face it, most of us commoners don’t have everything we need.

Sure, wedding gifts can get excessive, and if a couple truly does have most of what they need, or perhaps in the case of a second wedding where the friends and family of those getting married have already given them gifts, asking for charitable contributions in lieu of other gifts makes a lot of sense.

For most couples, though, wedding gifts can go a long way toward helping them set up their household.  Plus, gifts are a tangible way to celebrate such a special life event.  Jude and I have been married for almost 12 years, and whenever we use something we received as a wedding gift, it reminds us of all the love and support we received from family and friends.

Still, There Are Lessons We Can Learn from Prince William and Kate

I see two take-aways from the royal couple’s philanthropic mindset that are applicable to others. First is the importance of talking about charitable giving before getting married.  The fact that Prince William and Kate have selected 26 charities to benefit from their charitable gift fund tells me they’ve had a few conversations about this.

It’s important for all couples planning to marry to talk about charitable giving.  What has been each person’s pattern to date?  How much do they give away each year?  Is the amount chosen based on a percentage of income or through some other process?  What organizations does each person support?  Which ones will they support once they are married?

Setting Up Your Own Charitable Gift Fund

The second point, which is applicable to all, not just couples, is whether you’d like to create a foundation or charitable gift fund (also known as a donor advised fund) at some point. It may not be realistic to create such a fund when you’re young, but wouldn’t it be a great goal to create a charitable giving mechanism that continues to make a difference long after you’re gone?

We know one couple that has done this.  They thought about using year-end bonuses and appreciated stock to set up their own foundation, but discovered that using a donor-advised fund would be easier. They have chosen various charitable organizations to benefit from the fund and also have the flexibility to give from the fund as they see needs.

Since the organization managing their fund invests the money wisely, they found that even in a year when their personal income was down due to the economy, they were able to increase their giving.

Most of the big brokerage houses can help you set up a charitable gift fund, whether Fidelity Vanguard, T. Rowe Price, and others.  There are also faith-based organizations such as the National Christian Foundation and the Barnabas Foundation (the organization chosen by our friends).

You can contribute cash, stock, real estate, and other assets, taking a tax deduction in the year that you make the donation, but the money does not need to be distributed that year.  It is professionally invested.  Then you choose how much to contribute and to which organizations over time.

What are your thoughts?  Will the royal wedding spur more couples to ask for charitable contributions instead of wedding gifts? And what do you think about creating a foundation or a charitable gift fund at some point in your life?

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She was dating a guy who was bad news; she was even experimenting with drugs.

With the workshop fresh on his mind, Don made an offhand comment that Jason’s daughter wasn’t living a very good story.  Jason was intrigued and asked Don to tell him more about the elements of a good story.

You Can Rewrite Your Story

A few months later, Don saw Jason again and things had changed.  Jason said his family was living a better story.  Now it was Don’s turn to be intrigued.

Jason explained that during their previous conversation he realized that his daughter wasn’t, in fact, living a very good story.  And it dawned on him that he hadn’t mapped out a story for his family, so his daughter had chosen her own story, one in which she was wanted, even if she was only being used.

Jason decided to create a better story to invite her into.

Remembering that every good story involves someone who wants something and overcomes conflict to get it, one night he heard about an organization that builds orphanages.  He found out that it costs $25,000 to build an orphanage and on the spot decided that his family would fund one even though they didn’t have the money.

It sounded like a story worth living.

It Won’t Be Easy

When Jason told his wife and daughter about it, they were so mad they both refused to talk to him.  He realized, of course, that it was a mistake not to have included his wife in the decision.  However, after explaining that they weren’t taking any risks – they weren’t helping anyone – and how their daughter was losing interest, his wife got on board.

Soon enough, his daughter got interested.  So much so that she wanted to visit the country where the orphanage would be built, take pictures of the kids, post them on her web site, and see if others would help.

Then she broke up with her boyfriend.

As Jason explained it, “No girl who plays the role of a hero dates a guy who uses her.  She knows who she is.  She just forgot for a little while.”

I love that.

Living for Something Larger

As I read that story, I remembered the words of one of the leading researchers on human happiness, Martin Seligman.  He said a meaningful life is one that attaches itself to something larger than we are, and the larger that something is, the more meaning in our lives.

Donald Miller puts it this way: “People can’t live without a story, without a role to play.”

The other night over dinner with my family, Aziz came up in conversation.  He’s the boy in Burkina Faso we sponsor through Compassion International. When we’ve sent him extra money in the past, he has sent back pictures of what he did with the money, like the one above that shows him with the soap he bought for his family.  Another time he bought extra rice.

Jude mentioned that Aziz has a birthday coming up and our seven-year-old was quick to suggest that we all chip in to send him some extra money.  He and his five-year-old brother were genuinely excited about taking some money out of their piggy banks to contribute to the cause.  I don’t think our two-year-old fully understood, but she seemed excited too.

We’re not funding an orphanage (at least, not this year!).  We’re just sending a few bucks to one young boy who has so much less than we have.  But it’s a good step, a very tangible way we can work as a family to invest in something larger than ourselves.

Is Your Story Big Enough?

If you listen to the chatter of our culture, it’s easy to think that our lives are mostly about cars and clothes and where we’re going on vacation this year.  It isn’t that such things are unimportant or that we should feel guilty for pursing them.  But I think deep down we all know who we are.  We know that we were made for a bigger story.

We just forget sometimes.

What is it for you?  What’s the bigger financial story you’re living?

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But it isn’t always easy for couples to talk about money.  Nor is it easy to understand the truth about the other person’s finances just through observation.  You can see if they’re a generous tipper, but just because they drive a nice car doesn’t mean they’re doing okay financially.  The car may have come hitched to a boatload of debt.

That’s why, if you’re seriously considering getting married, it’s important to talk about each other’s finances.  When asking the following questions, focus on listening and understanding, not judging or fixing.

Five Key Financial Questions

Here are my picks for the five most important pre-marriage money questions.

1) How much debt do you have? Research shows that having debt increases the likelihood that couples will fight about money, and couples that argue about money are more likely to divorce than any other topic of dispute.  If one person has a lot of debt, find out what happened.  Did it come about through some unusual circumstance or plain old overspending?  The key here is to see if the cause of the debt has been addressed.  If not, hold off on the wedding until it is addressed.

2) What’s your credit score? Scores range from 300 to 850.  The higher the score, the better.  If a person’s score is below 700, you’ll want to dig deeper.  Do they tend to pay their bills late?  Whether or not bills are paid on time is the most influential factor in determining your score, counting for 35 percent.  A really low score may also indicate a prior bankruptcy or foreclosure.

It may sound boring or intrusive, but it’s an act of love to share your credit reports with each other.  Just as with the first question, if there’s a problem, the key is to see if steps have been taken to fix the problem.  If the person has a history of late payments, is that still going on or was that in the past?

Get your free credit reports from each of the three national credit bureaus at AnnualCreditReport.com and then buy one of your credit scores for $19.95 from MyFICO.com.  You’ll have the option of buying scores from two of the bureaus, but you just need one for now.  It doesn’t matter which one you choose.

Watch as several married people give money-related advice to those who are planning to get married.

3) Do you want to have children? This one isn’t directly a financial question, but the natural follow-up question has huge financial implications: will one of us stay home full-time if and when we do have kids?  I encourage all couples to live primarily on one income, but this is especially important for couples that want to have children and want to have one parent step out of the paid workforce.  The single most helpful financial move you can make to prepare is to live your pre-children days primarily on one income.  Are you both on the same page on this?

4) Do you use a budget? National research I’ve conducted has found that couples that use a budget experience fewer financial disagreements than those that don’t.  Do you both agree that you will operate your household with the use of a budget?  Even better, put together a budget for your first year as husband and wife before you get married.

5) How much do you give away each year? If generosity is a priority for you, you’ll want to make sure your spouse is like-minded.

There are plenty of other questions to ask as well.  In fact, early in my new book, “Money & Marriage: A Complete Guide for Engaged and Newly Married Couples,” I devote two chapters to questions and other exercises designed to help you get to know each other financially.  But I believe these are five of the most important questions to discuss before getting married.

What about you?  Are there other questions you think should have made the top five?  Leave a comment below.

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It’s tricky business teaching about generosity these days.  Preachers of the prosperity gospel are packing their pews and selling lots of books.  Theirs is a “give in order to get” message, based on a misinterpretation of verses like Luke 6:38:

“Give, and it will be given to you.  A good measure, pressed down, shaken together and running over, will be poured into your lap.  For with the measure you use, it will be measured to you.”

“Give in order to get” may be appealing, but that is not the message taught by the verse above or anywhere else in the Bible.

What Does the Bible Say About Generosity?

Here’s what can be confusing: There are many Bible verses that do say we will be rewarded for giving generously.  For example, in Malachi 3:10, we find the only place in Scripture where God said to test him, and it’s all about generosity: “‘Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,’ says the Lord Almighty, ‘and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it.’”

In Proverbs 11:24, we read: “One person gives freely, yet gains even more; another withholds unduly, but comes to poverty.”

2 Corinthians 9:6 contains these words from the apostle Paul: “Remember this: Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously.”

It’s How We Were Meant to Live

We all receive something beneficial from our giving because to live generously is to live in concert with our design.  I’m sure that’s why researchers have found that generosity increases people’s happiness.  It’s like eating healthy or being honest.  Life just works better when we live as we were meant to live.

Many years ago I heard someone teach that the best forms of generosity don’t come from a heart attitude of “in order to…” — they flow from a heart filled with a “because of…” sense of gratitude.  That seems to be where king David was coming from when he said to God, “Who am I, and who are my people, that we should be able to give as generously as this? Everything comes from you, and we have given you only what comes from your hand.” (1 Chronicles 29:14)

Paul made a crucial point when he asked, “Who has ever given to God that God should repay him?” (Romans 11:35)  In other words, God is the giver.  He gave us life; he gave us his Son; he gave us all that we have.

Give in order to get?  No.  We give out of a humble, grateful, joyful response to everything that God has given to us.

What are your thoughts on the motives for generosity?

With my first post of every month, I explore what the Bible teaches about money.  Here’s why.

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Financial Success That Deeply Satisfies

I believe successful money management is about knowing our purpose and following a trustworthy process.  We have to know our purpose first because if we just focus on the how-to’s we run the risk of making great time but moving in the wrong direction.  Starting with purpose gives us the best chance of achieving financial success that deeply satisfies.

Purpose is universal.  No matter what your religion, race, or favorite reality TV show, there are three overarching purposes to each of our lives.  First, we were designed to live for something bigger than ourselves.  For me, as a Christian, that’s God.  But no matter what you believe spiritually, even the best secular researchers have found that living for something bigger than us is the only route toward a truly satisfying life.

Second, we were made for relationships.  The happiest people are those who are connected to others in meaningful, supportive relationships.  And third, we were designed to use our unique talents and passions to make a difference with our lives.

The most effective uses of money are those that are in synch with these three purposes.

First Financial Things First

As for process, the first step is to have a plan – a tool that enables us to pre-determine how our income is going to be used and that gives us feedback as to how well we’re following that plan.  Yes, that’s a budget, which I believe is simply the most powerful tool available for effective money management.

When it comes to what we actually do with money, there is a way of prioritizing money that works extremely well.  As counterintuitive and countercultural as it may sound, our first financial priority is generosity – using a portion of all that we receive to help others either directly or by supporting a cause we believe in.  We were designed to be generous.

Our second financial priority is to save a portion of all that we earn.  If you have any debt other than a reasonable mortgage (the ideal is to spend no more than 25% of monthly gross income for the combination of mortgage, taxes, and insurance), getting out from under that debt should be a very high priority.  Build a small emergency fund, go after that debt, and then build your emergency fund up to six months’ worth of living expenses.  Once you’ve done all that, you’re ready to invest.

I believe in the timeless fundamentals of investing.  Don’t try to time the market.  Do get your asset allocation right.  And unless your last name is Buffett, go with low-cost index funds.

In order to make all of the above possible, it’s important to be really smart in how we spend on everything from cars to clothing.  That doesn’t mean choosing the cheapest option available because it turns out that cheap often comes at a steep cost – not just the financial cost of having to frequently replace cheap stuff, but more importantly, cheap stuff often comes at a human rights cost, a health cost, a relational cost, and an environmental cost.  Spending smart is about knowing how to get the best deals on the truly best stuff.  I plan to write a lot more about this topic in the months ahead.

It’s All in the Execution

Smart money management isn’t rocket science.  However, I do think it requires a willingness to take a path other than the one suggested by our culture.

I also realize there’s a lot of seemingly non-financial stuff that can impact how we do the whole money thing – different priorities among spouses, temperament, early life experiences with money, and more.  I’ll do plenty of writing on these topics in the New Year as well.

I especially enjoy helping young people get started in the right financial direction.  And I enjoy helping people navigate some of life’s most important turning points (first full-time job, first home, marriage), solve some of life’s biggest financial problems (debt, financial friction between spouses), and answer some of the most important financial questions (how much insurance to carry and what type).  Look for some added emphasis on money and relationships this year, since I have a new book on the topic coming out in March.

I have loads of article ideas covering the topics above, but I’d love to hear what turning points you anticipate going through in the year ahead.  What are your biggest financial problems?  What are your most important financial questions?  What financial goals are you intent on achieving in the New Year?  Let me know by adding a comment below and I’ll make sure I cover that topic.

So, that’s it.  That’s where I’m coming from financially. If that sounds good to you, stay with me this year and I’m confident you’ll find yourself in much better financial shape this time next year.

All I ask is that you read this blog with an open mind and participate.  I want to hear what you disagree with, and I want to know what other ideas you have that add value to each topic. If you know others who could benefit from being part of this conversation, please send them a link to this blog.  And if you haven’t signed up for a subscription yet, please do so.

I’m thrilled that you’ve taken the time to read these words and I would count it a blessing and a privilege to be able to help you go further in achieving financial success that deeply satisfies.  Here’s to a great 2011.

In August, I wrote about the importance of knowing where each other is coming from, financially speaking.  Last month, the focus was on knowing where you’re going.  This month, I’m looking at a financial issue that, like no other, causes financial discomfort among couples and raises the chances for financial fights: debt.

Take Off the Shackles

The Bible says, “The borrower is servant to the lender.”  Living as a servant to a lender isn’t wise for any of us, but it’s especially problematic in marriage.

Researcher Jeffrey Dew at Utah State University has found that not only does consumer debt (credit card debt and other installment loans) fuel a sense of financial unease among couples and increase the likelihood that they will argue about money, but “this financial unease casts a pall over marriages in general, raising the likelihood that couples will argue over issues other than money and decreasing the time they spend with one another.”

Dew’s research shows that newlyweds that take on substantial consumer debt become less happy in their marriages over time. On the other hand, newly married couples that pay off their consumer debt within their first five years of marriage are more satisfied with their marriage. Those findings held up no matter whether couples were rich or poor.

Whose Debt Is It?

How couples approach their debt is important as well.

When Scott and Karen got married, Karen brought $50,000 of non-mortgage debt into the marriage.  Scott jokingly referred to it as a reverse dowry.

One of the things I love about their story is that from the earliest days of their marriage, whenever Karen would talk about “my” debt, Scott would correct her by saying is was “our” debt. Now there’s a guy who is committed to financial oneness.

One other notable part of their story is that their faith-based convictions motivated them to give away 10 percent of their income throughout their journey of getting out of debt. Karen remembered seeing their year-end giving statement, and thinking, ‘Gee, we could have gotten out of debt so much faster if we had put that money toward our debts.” And she remembers hearing other people’s stories of unexpected blessings they felt came about because of their giving. “I started wondering where’s my cool story?” she said.

Six-and-a-half years after getting married, Scott and Karen made their last debt payment. It was a day neither one of them will ever forget. “It was amazing,” Karen says. “We felt like it was a hard road we had traveled, but we did it, and we did it in a God-honoring way. We are 100 percent debt-free.”

Scott will soon be able to retire with a full pension at a much younger age than most people, having put in over twenty years as a Chicago firefighter. They’re thinking about getting an RV and spending a year traveling the country.

Sounds pretty cool to me.

Be Done With Debt ASAP

If you are engaged or newly married, make it one of your highest financial priorities to get out of debt and then live the rest of your lives with no debt other than a reasonable mortgage (One that requires no more than 25% of monthly household gross income to pay for the combination of your mortgage, taxes, and insurance).

Put together a spending plan that enables you to maximize debt repayment.  You may find it helpful to use the recommended spending plans found in the “Money, Purpose, Joy,” workbook, which contains detailed plans for four different size households across nine different annual incomes.

Very often, when couples get married they get excited about all that they’ll be able to afford with two incomes.  However, if you have debt, I strongly encourage you to base your lifestyle mostly on one income, using the other income to get out of debt and build savings.  Doing so will make all the difference in helping you build a solid financial foundation and live with financial freedom.