Getting Started in Investing, part one

money_stuff

I’d like to let my youth ministry friends in on a dirty little secret. While pay has dramatically improved for youth workers in the past two decades the most consistent reason people leave youth ministry once they reach their mid 30s and above is mounting financial pressure. In other words, there are some glass ceilings on the personal income side of things that will eventually cause you to look for higher paying work in the church or not in the church if you don’t plan ahead. Plan ahead and you relieve the pressure bit by bit. Don’t plan ahead and that pressure builds and leads to a catastrophic failure.

Here is a short list of those pressures:

– Housing expenses skyrocket: That rental gets old, doesn’t it? Buying a house can be great when you land in the same place for 10 years or more. But buy and sell a house a couple of times when you change jobs and you’ll quickly see that’s a bad strategy for financial security.

– Retirement savings becomes important: Most churches either don’t offer a retirement plan for their associate staff or it is extremely inadequate. Even if you are in a denomination that pays into a pension fund… getting ordained in order to get vested in that fund can be more costly than the pension you’d earn in the long run! (And with many mainline denominations tanking financially, you really need to wonder if that money will be there in 30 years.)

– Kids get more expensive as time goes on: When you first have babies you think diapers and formula is a blow to your budget. Just wait! Eventually those kids will need braces, outgrow clothes every two weeks, want to go to camp, need a car of their own, and gulp… want to go to college.

– Medical insurance won’t cover it all: Again, when you are young and/or first married this doesn’t seem important. But with premiums soaring churches are cutting back on benefits. So as you age into needing good insurance chances are your church is increasing co-pays and other out-of-pocket expenses.

– Pressure to keep up with your peers: There’s only so long you want to live like college kids. Eventually, you are going to want grown up furniture, go on nice vacations, and have a little extra something here and there. I don’t mean that you’ll get more materialistic as time goes on… but you just get sick of scrounging.

If you do nothing, eventually these pressures will leave you with no other option but to leave the ministry. You can do everything right in the 9-5 activity of working at your church. But if you don’t have a plan to address these mounting pressures, it will sneak up on you and the pressure will grow so intense that you may have no other option but to leave the job you love for a job that pays better. If the choice is lose your family or lose your ministry you will chose lose your ministry 100% of the time, right?

My goal for this series is to encourage those in youth ministry– you don’t have to bail out!

If you want to join along I will help you with a few basic strategies that will lessen these pressures. My hope is to help you stay in youth ministry longer. While things like soul care and youth ministry strategy are super important for staying in it for the long haul… I’m going to help you deal with the dirty little money secret that could eventually knock you out of ministry.

Part two: Dealing with debt and savings

Part three: COLA-  and I don’t mean Pepsi or Coke.

Part four: 401ks, IRAs, 529 and other numbers that are important

Part five: Outside income opportunities

Comments

9 responses to “Getting Started in Investing, part one”

  1. Nick Avatar

    Do you get your info from Dave Ramsey? My wife and I have been on his plan and will be debt free in a couple of months. Then on to our fully funded emergency fund. Then retirement saving! WooHoo!

    Good stuff. I’m interested in what you have to say on this idea of finances.

  2. adam mclane Avatar

    @nick- I’m not opposed to Dave Ramsey in any way. But I don’t prescribe to his methods. You may see shadows of his stuff here as we both use the same “common sense” type of thinking.

    I can see the next post sounding a little like Dave’s stuff… but the rest is really geared towards money specifically for those working in churches.

  3. jeremy zach Avatar

    Seriously every youth pastor needs to read this series.

    It is my understanding that church employees fall under the 403b retirement fund. Will you be talking about that?
    Also are you going to suggest some tax strategies a youth pastor may need to consider?

    I am also really excited to hear about other income opportunities a youth pastor can employ. Early on in my YM career, I got sucked into those internet freebie websites and pyramid schemes. I only lost money.

  4. adam mclane Avatar

    @jeremy- yep, part 4 is all about retirement stuff. 401k & 403b are essentially the same thing. One for non-profit sector workers, one for for-profit sector workers.

    I think we’ll talk tax strategies in part 4 as well. I assume you are talking about “opt in or opt out” of social security as well as housing allowance stuff?

    I’m going to be totally responsive to the needs expressed as well. Feel free to shoot me questions via email or in the comments. If I don’t know the answer I certainly have access to getting you the answer I need.

    As far as income opps… yep, I’ve got some proven strategies well beyond pyramid schemes and Tupperware sales.

  5. Matt Cleaver Avatar

    On your comment that pensions may or may not be around in the next 30 years: I’m no expert, but if your “pension” is a denominationally administered 401k (which is, I believe how the ELCA does things) type account that allows you to personally hold shares in mutual funds, stocks, and bonds, then your money should always be safe. I’m pretty sure the denomination can’t just decide they need some money and tap your S&P 500 shares to pay off debt. Your retirement fund will always be worth the shares that you hold.

    Now, if a denomination is a defined-benefit plan where you get $X per Y years of service, then it could be a wholly different story.

  6. adam mclane Avatar

    @matt- yup. We’re going to hit that. We’ll explain the difference between a pension fund and a 401k/403b. One is secure, one is secured in name only.

  7. Joel Mayward Avatar

    I’m genuinely excited for this series of posts! It’s super practical stuff, and something that doesn’t get talked about very often. Plus, I’m more or less clueless about investing, taxes, and retirement.

  8. adam mclane Avatar

    @joel- well, hopefully you can get a little less clueless. 🙂

  9. alaina Avatar

    i think the pain receptors in my brain just ruptured. 🙂
    no, really, this is great, i just hate numbers and forms that are known by their numbers.

Leave a Reply