Friday, November 21, 2008

Crown Financial's Money Map

After covering Dave Ramsey's Baby Steps in my previous article, I would like to expand by talking about another plan we are following to get out of debt. It's called the Money Map by Crown Financial Ministries.

To give you some background, Crown Financial Ministries is a company founded in 2000 "dedicated to equipping people around the world to learn, apply, and teach biblical financial principles". They have a special outreach created to help teach these principles through small groups at various churches internationally. I have been through this class twice now; once by myself and once with my husband. I found that it was very helpful in getting your basics setup so you can start on the path to financial freedom. It covers core issues such as budgeting, giving, and our perspective on ownership of material items. I may go into more depth on that in the future but for now I want to focus on their Money Map.

The Money Map, similar to Dave's Baby Steps, is comprised of 7 destinations. Crown Financial differs from Dave in that they want you to work at several things at once. With Dave he emphasizes single minded intensity on whichever step you're on before moving toward the next. Also, with Crown Financial, they have steps that you should complete prior to starting the 7 destinations. The steps are labeled "Prepare for the Journey" and include the following:

1) Complete "My Life Purpose", "My Life Goals", and "Foundational Principles"
This is where you sit down either with yourself or your spouse and discuss your major goals and why you're going to do this journey.

2) Start giving to the work of the Lord - giving should be a regular part of our Christian lifestyle.

3) Read or listen to Your Money Map (A book that goes along with the study)

4) Execute a current will

5) Evaluate your career and income potential

6) If you have children, begin teaching them God's way of handling money

7) Acquire basic insurance, depending on your needs, age, and financial ability (auto, health, life, disability, and long-term care)

8)If you employer matches your retirement fund contributions, begin saving for retirement now as long as you can continue making consistent progress on the journey.

9) Make a list of all your assets and liabilities to get a clear picture of your net worth.

Not all of the items are tasks that you just check off, but rather, some are ways we should be living our lives during this process of getting out of debt and obtaining financial freedom.

Once the above items are taken care of then you can move on to the 7 destinations. You will see there is another way the Money Map differs from Dave's Baby Steps. Each destination has multiple things to accomplish underneath it. They are as follows:

1) Emergency Savings
Begin using a Spending Plan (or Budget as some may know it)
Save $1000 for Emergencies

2) Credit Cards Paid Off
Pay off Credit Cards
Increase savings to 1 month's living expenses

3) Consumer Debt Paid Off
Pay off all consumer debt (auto, student, personal loans)
Increase savings to 3 month's living expenses

4) Save for Major Purchases
Begin saving for your next car, a home down payment, etc.
Begin saving for retirement if you haven't already
Begin saving for your child's education

5) Buy Home and Begin Investing
Buy an affordable home
Begin prepaying the mortgage
Begin investing wisely

6) Home Mortgage Paid Off
Pay off your Mortgage
Fully fund your child's education
Make sure estate plan is in order

7) True Financial Freedom
Retirement is fully funded
Give more of your time and money

We're currently on Step 2 of this plan. Our credit card is paid off but we're still working on getting a full month's worth of living expenses saved up in our Emergency Fund. We're plugging away at it though.

1 comments:

Julie

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