On Preaching and Ministry presented by The Jenkins Institute
George Bernard Shaw once said, ““The surest way to ruin a man who doesn't know how to handle money is to give him some.” Money has been the ruin of too many people, good people, Christian people, and yes, preachers. The Word of God teaches us that it is the love of money which is the root of all evil. Life teaches us that the abuse of money or not understanding the use of money properly has ruined many wonderful people. Most preachers don’t attend business classes, finance classes, or seminars on how to handle finances. Some were blessed by parents who taught us well how we are to be the kind of stewards that are pleasing to God. In this issue of ON Preaching & Ministry we have brought together financial advisors, accountants, elders, and preachers to help us get a better grasp on this hot button issue. Our longtime friend and advisor, Dale Hubbard has penned two outstanding articles. He has written the lead article for this issue of ON, “Ministers & Monday,” as well as an excellent piece dealing with “Ministers & Taxes.” There is an excellent article by the one and only Jerrie Barber about “How to Talk to Your Leaders About Money,” which includes advice on when and how to ask for a raise. In addition to several more superb articles, there are a few shorter boxes discussing, “What I Wish I had Learned in As A Young Minister About Ministry & Money.” Our prayer is always that ON Preaching & Ministry will be helpful to the men who have committed their life to working for the Lord. May God continue to bless each of you in everything you do for Him.
NOTICE Scattered throughout this edition of ON you will see several boxes like this one. In each of them is a piece of wisdom from a sage minister on some things they wish they had known about Money as younger ministers. We hope these are helpful to you all.
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- from The Editors, Jeff and Dale TheJenkinsInstitute@gmail.com
Ministers and Money by Dale Hubbert, dalehubbert@gmail.com
It is imperative in our society that we deal with money. Preachers are no exceptions. The ability to deal wisely and prudently with finances is important and can be a great blessing or a great burden along the journey of life. Managing money seems to come easier for some than others but for all it is a challenge that requires constant care and attention. Good financial management begins with the understanding that everything belongs to God (Psalm 24:1). Knowing the source of our financial blessings (James 1:17) and the accountability required of us (1 Corinthians 4:2) will help us immensely. God wants us to enjoy life and money helps us to do that. It is possible and expected that we handle money faithfully. We can and should be good stewards. There are some simple but challenging principles that will keep us on the right path. It is necessary to spend less than we make. It sounds simple but is not always easy. It has been said that when our outgo exceeds our income then our upkeep will be our downfall. Our income is not infinite reminding us to spend accordingly. It is within this concept that we are adept and distinguishing between needs and wants. Honest observation often reveals that a significant amount of what we spend falls into the wants category. If you are married it is important that you and your wife are on the same page financially. From each segment of money seek to save some, spend some, and share
some. Prepare a budget and strive to work within it. Make adaptations as changes come in life and income. Spend quality time together talking about and agreeing in the area of finances. As followers of Jesus we ought always to pay God first. Our monetary contribution to the Lord’s kingdom must always be liberal and cheerful first fruits from a heart of gratitude. Never take a position that will not allow you to care for yourself and your family while putting God first in your financial sacrifice. Set a good example in this grace for all the right reasons (Malachi 3:10). Pay yourself second. We need to put something back by way of savings. There are many reasons to save. Emergencies will arise. One day we may want and/or need to retire and we will need funds to live on. Try to establish an emergency fund that will cover at least three to six months of expenses. Have a financial plan for retirement. You are the person responsible for your retirement. Many congregations will help you but you need to take the initiative. Focus on investments versus expenses. Expenses are defined by purchases for things that will have no value going forward. Investments are financial decisions that will hopefully have greater value in days ahead. It is wise to seek professional counsel regarding investments. One quarter to one third of life is often spent in retirement. Wise investments will be greatly appreciated during that period of life. Wealth can be observed in four stages: acquire, grow, preserve, and transfer. As we acquire income we ought to seek to grow our resources. Insurance plays a vital role in finances. Life, health, disability, long term care, home, and auto insurance all have vital roles in monetary success. Having the right kind and right amount of insurance can protect and preserve what we have worked for as well as make provisions for our family at our death especially if we should die sooner than expected. We do not have to have large amounts of money to be happy (Psalm 37:16). God has promised to supply our needs (Phil 4:19). Learning to be content is a tremendous tool in money management (Hebrews 13:5). Jehovah will take care of us if we will do our part (Jeremiah 7:17). Control your debt don’t let your debt control you. Be very cautious with credit. It has become the downfall of many families.
Good habits are important when dealing with money. It has been said that finance is 80% behavior and 20% knowledge. It is often true that we do not plan to fail but we fail to plan. God has given all of us the ability and information to be good stewards of money. It takes works and attention. It can never be placed on auto pilot. To paraphrase and slightly adapt a familiar phrase from a well know financial guru – live like no one else so you and live AND GIVE like on one else.
What I Wish I Had Learned in College About Ministry and Money by Jacob Hawk, JR, jdhawk87@gmail.com
I absolutely loved my college years at Harding University. I received a great education, made lifetime friends, grew in my studies, and most importantly (at least to me)—found my wonderful wife! I would recommend Harding University to any high school graduate, especially if they plan to major in Bible or pursue a life of ministry. When I left Harding, I was trained and excited for the future. As months passed after graduation, I realized the reality of mentors’ advice—much of ministry can’t be learned or taught from a classroom. Ministry is like learning to swim. We keep kicking and paddling to stay above the water until it eventually becomes natural. We can teach someone the etiquette of making a hospital visit, but we can’t teach them how to hold the hand and pray for a patient in the final moments of their life. We can teach someone how to outline a Bible class, but we can’t teach them how to answer hard questions when everyone is staring and the hair stands up on the back of the neck; but if there is one thing I could have been taught I really wasn’t, it would be the purpose of this article—how ministry and money coincide. The lessons I have learned have been post college years. Here are three things every minister should know, especially young ministers, about ministry and money. #1: Just because you go into ministry, that doesn’t mean you’ll be poor. We should stop telling our young people if they enter a life of ministry, they will not be financially secure. We have a hard enough time getting young men to commit to a life of preaching. Why do we make it harder for them by predicting a life of pennies? I live in Texas and preach for a large church; admittedly, Texas church
salaries aren’t the norm, but I didn’t begin preaching for a large, urban church. My first job was in a small, rural town, in the middle of nowhere. A church of about 90 members with an average giving of $2400 a week. We certainly weren’t wealthy, but we didn’t lack either. Honestly, I came out of school making more money than many of my friends who entered corporate America at entry level positions. In almost a decade of preaching, we’ve never wondered where our next meal would come from, when we could buy groceries, or how to pay our bills. No one should enter ministry for the money, and ministry won’t ever offer the highest salaries in town, but ministry doesn’t produce poverty. #2: It’s not about how much you make; it’s about how much you spend. Proper money management is vital, especially for ministers who don’t make competitive salaries. It’s important for our young people to learn materialism isn’t just a spiritual danger—it’s a fiscal danger, too. Faithful budgeting pays God first and “self” next. Purchasing new instead of used is almost always a poor financial choice. Living within your means is good and godly. It also relieves tremendous stress and provides great satisfaction. Someone who earns a $250,000 salary can have less in the bank or checking account than someone who earns a $25,000 salary. It’s all about where and how we spend our money. #3: It’s never too early to start planning for retirement In four years of undergraduate work and three years of graduate work, not a single word was said in the classroom about What I wish I’d Known About Money as A Young Preacher ministers investing or planning for Hugh Fulford retirement. I didn’t even know what an First, that in the sight of God my salary did not determine my true worth as a gospel preacher. Preachers are IRA was until I was 25. Very few human. They are not immune to the temptations and sins that characterize other humans. Preachers can be possessed churches offer 401k retirement matching of pride and vanity. They can have their own subtle (and not programs for their ministers. Therefore, so subtle) ways of “telegraphing” to others their “success” (how big their congregation is, how big the church ministers must begin investing and staff is, and how big their salary is), thereby massaging their planning as soon as they graduate, ego. As we mature we come to realize “what profit has he who has labored for the wind?” (Ecclesiastes 5:17). especially if they choose to opt out of It is not wrong for a preacher to move to a bigger church with a larger salary. But we must not let those things Social Security. When I was 25, I was determine our worth as a man of God or our value to the blessed by a deacon in our congregation kingdom of God. The words of Jesus, “Take heed and beware of covetousness, for one’s life does not consist in the who was also one of the best Financial abundance of the things he possesses (Luke 12:15), apply to Planners in the state. He began working preachers as well as to the rest of mankind and preachers need to heed those words! with me to develop a retirement program
that made sense. He showed me how even a couple of hundred dollars a month for 40-50 years, invested and diversified properly, would yield a very handsome retirement. We can’t ever retire from God, and we should never retire from a “life” of ministry. Our greatest goal shouldn’t be the lake house, vacation home, or country club; but there will come a day when the demands of the 50-60 hour work week are no longer doable. When it does, where will we be? What will we do? Hopefully we will be prepared. We can’t become a financial burden to the church, expecting them to provide for us because we didn’t plan accordingly. It’s never too early to start, but it can certainly be too late. Money and ministry are sticky topics. Some would even describe their relationship as “oil and water”, but Jesus had much to say about money. Money is a part of life. Money brings us closer to the Lord or drifts us further away. What will it do for you?
Talking to my Church Leaders About Money by Jerrie W. Barber, jerrie@barberclippings.com * http:// www.newshepherdsorientation.com
Brian Oldfield is credited with the statement, “No man is entirely worthless, he can always serve as a bad example.” I’ll begin by telling you how I did it wrong. First Church The church where I did my first work had never had a full-time preacher. We didn’t talk much about money. The elders said they thought I’d need $100.00 a week. I said I would take it. We lived on a budget and made it. After nine months, I asked to be off a week for vacation. Gail asked me how we’d make our car payment. I told her, “It’s in the budget.” Her reply, “They won’t pay us for the week we’re gone.” My response, “Everybody knows you get a week or two off a year for vacation.” Gail was right. When I returned with no check for the week, I asked the elders what their policy was about a preacher taking a week off for vacation. Would there be any pay? They
said they’d never had a preacher and they didn’t have a policy. One elder said, “He didn’t do nothing. Don’t give him nothing.” They agreed. I learned it’s good to talk about things like that. Second Church When I moved to the next church, we agreed on vacation with pay, weeks off for gospel meetings, and time and reimbursement for lectureship expenses. I had a larger salary. It was good. My first conflict about money came when the elders offered my first raise. I was so afraid of talking about money I refused it. I was afraid people would think I was preaching for money. The elders were kind and understanding. A few months later, they asked me if I would help them. I was glad to do that. What was it? They said people were asking if they had given me a raise. They hadn’t because I refused it. They said it would be helpful to them if I would accept a few more dollars each week. I wanted to please and reluctantly I accepted more money. In 1971, when our second baby was born without insurance, the elders approached me again. They told me my raise for the year was to join Farm Bureau and take out Blue Cross-Blue Shield insurance and the church would pay it. That was our first insurance. About seven years after moving there, I was feeling a pinch in finances. I was scared; I dreaded it; but I asked for a raise. I “What I Wish I had Known approached the elders by showing them our budget. I About Money When I Was A listed each category and how much we’d been Younger Preacher” by Jay Lockhart, spending and what we thought we needed to spend. I First, I would have operated on a told them I needed the amount in each category or budget and saved 10% of my earnings almost no exception. That would advice on how to buy those items for less. They gave with have provided for emergencies and me a raise. That was my first mature conversation with would have made a big difference when I later had three children in elders about money. I was blessed with kind men who college at the same time. treated me well. As I was leaving that congregation, someone asked, “Are we paying Jerrie every Sunday he’s running all over the country and trying to find a job?” The treasurer said they were. Next question, “What about it Jerrie?”. My answer, “When I came here eight years ago, the elders and I agreed I’d be paid up to ninety days to
relocate if they asked me to leave or if I resigned.” Only one of the three elders who made the agreement was still alive. Someone asked him, “What about it brother?” He answered, “It seems like we talked about that, but I don’t remember what we said.” That’s the first time I thought it would have been good to have written agreements. Since then, my philosophy on written agreements is, “The only people who don’t need written agreements are people who are never going to die and who will never forget anything.” Others need to write it, sign it, file it, back it up to Dropbox, copy it to an external hard drive, and put it in the Cloud on Carbonite. The treasurer had been at the congregation since it began. After some discussion, he said, “Brethren, we’ve had this ninety-day agreement with every preacher. We paid them when they were relocating, and we’ll pay Jerrie.” The person asking the question was satisfied, ending the discussion. That was close and embarrassing. Third Church This was my first written agreement: 1. The salary shall be $450.00 per week. (52 weeks per year) 2. All social security shall be paid by the church. (actually a church cannot pay a preacher’s Social Security, but they can give him money to pay it. He pays it, counting it as additional income. It would be ready for January 15, April 15, June 15, and September 15 quarterly estimated payments to the IRS.) 3. All medical insurance shall be paid by the church. 4. Cost of living adjustment will be made each year. 5. Salary adjustments will be considered each year. At the end of the first year I received a cost of living adjustment but no merit raise. We were baptizing a person each week. The contribution was up $1,000.00 a week. I talked to one of the elders: “I know I don’t deserve a merit raise. If I had, you would have given it to me. Please tell me what I need to do to receive a merit raise.” Soon he told me the elders discussed it and thought I should have a merit raise. That was helpful. My experience is written agreements don’t solve all problems. People forget. Each party must hold the other party responsible. The next decade my finances went smoothly with few discussions about money.
Remaining Full-Time Works The time to talk about money is before the church pays the preacher any money. A contract settles conflict before it starts: specify vacation time, days off, time off for gospel meetings, workshops, summer series, and lectureships. When someone questions or forgets, read the agreements. Everyone’s memory will be the same after referring to the written word. A preacher should ask for what he wants and needs. Different churches have different policies and personalities. I always enjoyed a Christmas bonus. Gail and I used the money to take a short get-away between Christmas and January 1. Some churches had given a gift at Christmas. I moved to a church where Santa Clause didn’t come. One year as we talked about the upcoming agreements, the elders told me my raise. I thanked them, then asked for a decrease of $10.00 a week. They agreed. I asked them to give me a check for $520.00 the Sunday before Christmas. We were all happy. Money is a powerful subject. It’s a good way to assess how we’ll get along on other issues. It’s important to discuss when considering working with a church. Continue to grow in your ability to discuss this topic, as well as other important issues, in your relationship with elders and others.
Feel free to contact me if you would like to discuss this further.
What Elders Wish Ministers Knew About Money by Scott Latham, scottelatham@me.com
A proper perspective of money and its place in our lives is appropriate for all Christians, including ministers. Money has both the power to do good or evil, so understanding our responsibilities in managing and using money is an integral part of living a faithful Christian life. Worthy of consideration is the amount of positive influence we have on others when we properly manage our personal financial affairs. By definition, ministers will have less money than many. Yet living within his means, giving generously to the church and other good works, and satisfying personal obligations in a timely, respectful manner are indicators that he plans well and that his family supports his lifestyle and overall mission. Such influence cannot be bought; it speaks volumes about his view of what God expects of Christians. In the eyes of the world, good financial management portrays a minister as one who practices what he preaches, thus preaching an impactful sermon without ever saying a word. To the contrary, ministers are particularly vulnerable when irresponsible choices are made about money. This is true largely because of the amount of trust ministers are generally given by those both in the church and within society. Particularly in smaller communities, the church can be greatly harmed by ministers who fail to pay their debts or manage their own affairs wisely. When one’s reputation suffers accordingly, the effectiveness of the work of the local church can be hindered and the trust in the minister forever eroded. In today’s world of easy credit, falling victim to an overabundance of debt is also easier than ever before. Balancing one’s needs and wants with responsible reality is vital to a minister’s personal success. If his salary is too low to live within his means, then Elders need to know or perhaps a job change should be considered. Jack Meyer, Sr., in his book The Preacher and His Work, listed financial debt as one of the special pitfalls for ministers, especially young ministers, noting that peculiarly the public often is more willing to forgive such matters like marital affairs than
financial debt. Ministers should not think so much of spiritual matters that material matters are overlooked. Luke 14:28 highlights the need for financial discernment: “For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it?” Finally, ministers should be forward thinking when it comes to retirement planning, and Elders should stand ready to assist them. Far too many ministers live day to day without proper consideration for current needs much less long-term, future needs. As individuals who often “What I Wish I had Known About Money When I Was A sacrifice much in the way of personal time and Younger Preacher” by Jay Lockhart, commitment, ministers should be rewarded for their Except for big items, such as house effective works through financial rewards to insure their or automobiles, I would have waited until I could pay cash before buying needs are met in later years. Good planning, along with major items such as washers, dryers, responsible fiscal and work habits throughout their and refrigerators. If some emergency arose, I could have, working years, often helps bring about such beneficial hopefully, taken care of it with my opportunities. 10% savings account. Just as Christians should manage their own finances well, ministers and church leaders have the responsibility to be mindful about the use of the sacrificial gifts of others. Colossians 3:23 reminds us, “Whatever you do, work heartily, as for the Lord and not for men.” In the church, Elders are responsible for the oversight and distribution of the monies contributed by members, and there is no shortage of good works worthy of Christians’ support. So often, ministers can be invaluable in helping Elders make informed decisions about where money can best be used, lending their individual knowledge about specific programs and works underway within the church. Decisions on how and where to spend church treasury funds are often dictated by how much is actually available once obligations such as salaries, building costs and other ongoing expenses are funded. Thus, the planning and budgeting process, as well as how various works are weighted to assure as many needs are met as possible, is all key to using The Lord’s monies wisely. Ministers should also stay informed about weekly contributions and work to understand the varying trends that are sure to be seen over time. Ministers are in a particularly good position to positively influence the attitudes and dispositions of members toward giving, and the joy associated with Biblical generosity.
Naturally, avoiding the mismanagement of money, or even the appearance of it, is especially important to the work of the local church. Therefore, it is incumbent upon elders, ministers and others responsible for such tasks to go to great lengths to insure appropriate fiscal management on all fronts. Christians cannot and should not be motivated by money. The pursuit of money is among the greatest problems in society today. Hebrews 13:5 says, “Keep your life free from love of money, and be content with what you have, for he has said, ‘I will never leave you nor forsake you.’” The responsibility of using the money given for the work of the local church in a manner pleasing to The Lord is significant, so working together to accomplish the best outcomes possible should be the prayer of every leader in the local church. Preaching and teaching on the love of money and its place in the life of a Christian is important and is needed for both young and old. Understanding the proper place that money has in the life of a Christian can be rewarding, and can enable one to do good works bringing glory to God the Father.
What do you guys at TheJenkinsInstitute do? For staters…
…more to come
The Most Uncomfortable Conversation – Money Matters When Preachers Move by Jason Moon, jasonmoonmail@gmail.com
Life is full of uncomfortable conversations. But those conversations still need to happen. Many times these conversations fall into the realm of “being spiritual.” Examples include responding to false teaching, rebuking sin or reaching out to a sinful brother. But this article is about another uncomfortable c o nve r s a t i o n t h a t n e e d s t o h a p p e n . Th i s conversation falls more in the realm of “being smart.” During the process of interviewing for a new preaching position, the minister who is smart will ask the right questions regarding personal financial matters. Just to be clear, all the ministers I know do not preach for the money. They are men of God who have chosen to give their time and dedicate their talents to the spread of the Gospel and the church of our Lord. Yet, on a practical level, the Bible teaches a “laborer is worthy of his hire” (Lk. 10:7, 1 Tim. 5:18). To be certain, the conversation about money must happen, but there are more questions and possibilities that need to factor into the conversation than just the annual salary the minister will be paid for his services. In this article, we will break down these questions into five areas: SALARY CONSIDERATIONS 1. What will the annual compensation be? This should be based on the minister’s talent, experience and needs. What you currently make shouldn’t be the standard. What the former minister was paid shouldn’t be the standard. 2. What’s the cost of living for the area? This is something to take into consideration especially when moving into larger metro areas. Some
internet research will help you determine if the place where you are thinking about moving is more expensive or less expensive. 3. Are annual increases and bonuses to be expected? MOVING 1. Will the church pay for my moving expenses? The cost of moving your household items even a short distance can approach several thousand dollars. If storing furniture is needed this too can be very expensive. A long distance move could easily approach twenty thousand dollars. 2. Will the church provide an apartment while my current house sells? It would be almost impossible for most preachers to pay for their current house payment and rent or buy a new house while still owning the other. Having a six month commitment from the new church to help with payments is a reasonable agreement. On a practical level, delaying buying a house for several months allows you to live in the area and determine the location that best fits your family. 3. What about a moving bonus? Some churches are willing to provide a financial sum to help on a down payment to get started in a new work. A one-time bonus of ten to twenty thousand is a reasonable amount. HOUSING 1. Will the church provide a housing allowance (for tax purposes)? This is typically part of the annual salary for those who own their own house, but it needs to be specified in order to take advantage of tax benefits. The church and minister need to sign an agreement and it should be kept on file by a church administrator. 2. In the case of a church owned house (parsonage), who pays for utilities/ upkeep on the house? Who pays for repairs? Who decides/pays when improvements need to be made? BENEFITS 1. Do you provide health insurance? This is a growing concern for all Americans. More and more churches are taking this into consideration for their ministers. If health insurance is not offered, the amount to buy personal health insurance must be factored into the annual salary. A church
provided family health plan may save a minister twenty thousand dollars annually. 2. Do you provide matching funds for retirement? Every minister needs a retirement fund. Start small, but start if you haven’t already. Moving may just provide the opportunity to get started. It is not unreasonable to have the church agree to matching 3-5% of your annual salary to be invested in a retirement fund. If a church agrees to match retirement funds, it’s poor stewardship to fail to take advantage of it. 3. Do you reimburse for business travel and professional development? Visiting hospitals and attending seminars and lectureships can be expensive. It’s reasonable to expect the church to reimburse for these expenses. 4. What about paid vacation time, sick days, weeks for meeting/seminars? SUPPLEMENTAL MATTERS 1. Do you provide a computer for the office? Software and upgrades? 2. Do you provide a mobile phone and plan? 3. Do you provide a supplement for ordering books? Money matters, even to preachers. We don’t preach for the money, but it takes money to preach and provide for our families. Be smart when negotiating financial terms. And while we should expect the best from our brethren, it’s wise to get these agreements in writing.
Ministers & Keeping Appropriate Financial Records by Russ Crosswhite, grcross@nexband.com
Jesus said to “Render therefore to Caesar the things that are Caesar’s, and to God the things that are God’s” (Matthew 22:21). This passage teaches the principle that we are to pay our taxes and the overall teaching of Christianity tells us to be honest in the payment of those taxes. I’m not an accountant so I would recommend that you consult one you trust for any tax advice. But I have been asked to make some practical suggestions that might help preachers know how to keep the appropriate records for tax purposes.
Each state has different tax laws so some of the things suggested might not apply but probably most will be applicable. If the state you live in allows you to have a housing allowance, you can get the church to designate as certain amount of your income as a housing allowance. You can count things such as house payment, utilities, and other expenses for upkeep on the home and for general living. Check with an accountant for all the specific things you can count towards this allowance. You will need to come up with an estimated amount that you and the church agree on, put it in writing and then you and the elders or some of the men of the church sign it for verification. You can change it every year (has to be designated by January 1 of each year) or you can word the allowance agreement in such a way that it will stay the same every year unless you change it. If you change it you will need to make up a new allowance agreement. The benefit of a housing allowance is that you do not have to pay income tax on the amount allowed but you do have to pay social security taxes on that amount. But this will save you money in taxes. You cannot count anything above your designated amount and you can only count the amount your actually spend toward housing allowance. You will also need to keep a receipt of everything you spend toward housing allowance.
How do you keep records? I keep things very simple. One suggestion is at the beginning of every year buy a box of envelopes and keep all you receipts and records in them. Designate each envelop for a separate expense. For example, have one for “housing allowance”, one for “preacher expenses”, one for “mileage”, one for “church contributions”, “taxes paid”, “interest income”, etc. Write up in the upper left hand corner the tax year. These are easy “What I Wish I had Known About Money to keep together and you can store them easily. When I Was A Younger Preacher” Also, use envelops for keeping your mileage and by Jay Lockhart, I would have secured the services of a financial other income such as funerals, weddings, gospel advisor to help me in the investment of my savings. A good advisor can help one get two, meetings, and other speaking appointments in three, or more times return on his investments over what a bank would pay. Seems like good which you are paid. Many times you will be paid stewardship to me. cash for a funeral or wedding but you still must count that as income. I keep a record book in my car to record mileage and also any extra income. For example, when I get in my car
after doing a funeral, I immediately record any money given me so I will not forget about it. It’s the right thing to do and the Lord will take care of you if you are honest about this. When I get ready to get my tax information together to take to my accountant all I have to do is get each envelop, count the receipts, and then write the total amount on the outside of the envelop. This works for me and I hope you can take something from this that will help you save time on doing your taxes and be able to do them honestly and correctly.  
TJI Survey on Ministers and Money
 
Tax Tips for Ministers by Dale Hubbert, dalehubbert@gmail.com
Income taxes for ministers is an important topic. There are a variety of reasons for devoting attention to this subject. As Christians we are to “render unto Caesar” that which belongs to him. We also seek to be good stewards of our money and prefer not to pay taxes that we do not owe. We want to set good examples for others. Taxes for preachers can be significant in amount and need to be budgeted properly. The first place to begin is to find a competent tax preparer who understands ministers and taxes. Ministers are often dual status employees with unique laws and circumstances that do not apply to other taxpayers. It is of importance to find someone knowledgeable and with experience regarding preacher’s taxes. It is also of merit to find someone who understands the autonomous nature of congregations of the Church of Christ. Various denominations have boards and hierarchy that dictates certain ways of handling tax issues as well as providing tax advantageous benefits. In the Church of Christ we have no such arrangement thereby leaving each congregation to work out the most effective arrangements with ministers that will work under the umbrella of current tax laws. It is certainly permissible to prepare your own taxes. I feel compelled to say that if you are a “do it yourselfer” you run the risk of missing out on tax deductions and credits as well as unintentionally being out of compliance with tax laws which could cost you severely down the road. Tax laws are constantly changing making it very challenging to keep up with all the latest information.
Are you a dual status employee? Do you know what that means? Are you an employee or self-employed? Does or should the church withhold and match your social security and Medicare taxes? Many preachers and leaders of congregations don’t know the answer to those questions. That is why competent guidance is paramount. Most ministers are dual status employees meaning they are employees for W2/income tax purposes and self-employed for social security purposes. Failure to understand and act accordingly can result in significant difficulties. Have you opted out of social security? Do you understand what the ramifications are for doing so? If you have been preaching regularly for more than two years it is unlikely you are able to do this. If you have read IRS Form 4361 you may well come to the conclusion you could not do this in good conscience any way. Opting out of social security is usually significantly cheaper in the outset but can have serious consequences down the road without proper planning. One of the best ways to maximize savings with income taxes is to construct and maintain a compensation agreement. This agreement with the congregation you are working with outlines the amount and nature of compensation. It can include housing allowance agreements, accountable reimbursement plans, retirement contributions, and other tax saving provisions. This is another reason you are blessed by a seasoned tax preparer who understands preacher’s taxes. The housing allowance remains one of the best advantages for ministers. Properly drafted it can reduce taxes significantly. The housing allowance excludes the amount spent for housing from federal and state taxes. The amount does have to be added back for social security purposes. Housing allowances do have limits and unused amounts must be added back as ordinary income. They also must be designated in
WHAT I WISH I HAD KNOWN ABOUT MONEY WHEN I WAS A YOUNGER PREACHER Hugh Fulford Second, that I needed to plan for emergencies and not have all of my income and budget stretched to the limit. Emergency medical situations arise, appliances break down and need to be repaired or replaced, cars have to be maintained and replaced. If one’s income is already “maxed out,” there is no room for these emergencies and they can create a lot of stress in the preacher’s life and the life of his family. Preachers need to have a “rainy day fund” as a part of their budget and they need to add to it on a regular basis.
advance. Housing allowances are available in many cases even when the house is owned by the church. Accountable reimbursement plans are another valuable tax planning tool. Properly drafted as a part of the compensation agreement they allow ministers to be reimbursed for certain expenses thus excluding them from federal, state, and selfemployment taxes. This can include reimbursement for mileage, entertainment, travel, books, professional development, and several other things. There are rules for how the reimbursement is to be handled to be in compliance with IRS guidelines. It is possible and recommended to work with the local congregation to set up a retirement plan for the preacher. This can be done by the funding of IRA’s and 403b plans as well as other options depending upon the level of involvement to which the minister and congregation are willing to engage. Working with the church regarding your retirement can both save taxes as well as prepare for your future. Remember that social security was never intended to provide full retirement needs. Your retirement accounts can be mobile with the minister 100% vested immediately. Financial advisors are helpful in this area. How and when do ministers pay taxes? Two options are normally available. If the church is unwilling to withhold taxes the minister can payments on a quarterly basis with coupons provided by the federal and state governments. The better option if feasible is to have the church withhold federal and state taxes out of your check. While by law the church cannot withhold and match social security taxes, it is acceptable to withhold a larger amount for federal taxes that will cover the selfemployment (social security) portion of taxes. Taxes for ministers are more complex than most. With proper planning and guidance it is possible to comply with the laws of our government while being the best stewards possible.
Money, Money, Money…Money! by Steve Bailey, s.bailey@cocbrownstreet.org
For those of you are old enough to know the title of this song and the artist who wrote it, you are old enough to know that you should have started saving for retirement a long, long time ago. But, but take heart… it is never too late to begin saving. Start today. In just a few words I would say start young with your first paycheck and “pay yourself” a certain percentage of your weekly pay. No one will magically do this
for you. You must do this for the future. Preachers know what James says about life being a vapor in James 4:14 but God also gives us wisdom to know that we must prepare for the future financially. Proverbs 30:25 “The ants are not a strong people, But they prepare their food in the summer” If ants know to save in the summer for the winter months that are ahead, we must be wise to the save for our retirement years to come. With that in mind, each preacher should meet with the deacon of finance, or elder of finance, and make a plan to begin reducing your pay by making a contribution to a saving plan for the future. One way to save for the future is to make contributions to a tax sheltered annuity so that upon retirement, you can begin to make monthly withdrawals for your “Golden Years.” HOW DO I BEGIN? Harding University in Searcy, Arkansas has agreed to be the gatekeeper or overseer of such a retirement program for ministers in the Church of Christ. The fund is called TIAA/CREF and as a minister you can participate in this program by making contributions deducted from your pay check and sent directly to Harding as they are the overseer of the fund and deposits are made to TIAA/CREF. This writer would encourage every young minister to invite your elders to “match” your contribution of 10% making a total of 20% toward your retirement. Just imagine as your increase your contribution and they increase the churches contribution annually, in just a few years your retirement nest egg will grow and grow. WHAT I WISH I HAD KNOWN ABOUT MONEY WHEN I WAS A YOUNGER PREACHER Hugh Fulford Third, that I had started earlier saving toward retirement. Fortunately, I was able to begin doing this at a fairly young age, but many preachers seem to not realize that retirement will someday come and that they need to be ready for it. Seek the advice of others to help you in this matter. Let a retirement fund be a regular part of your budget and contribute to it every week or every month, just like you meet your other financial commitments every week or every month.
Now, supposing that the elders will not participate along with you, your nest egg will still grow as you make larger contributions as your salary increases. This fund is also portable, meaning it can follow you if you should move to another work. This will also be a bargaining chip to discuss with the new eldership as salaries are discussed.
May God’s blessings be upon you and remember, every year that you wait to contribute, the less retirement you will have.
Tips for Preachers on Ministers with Your Money by Milton Sewell, msewell@fhu.edu
How a minister, or anyone else, manages each dollar he earns is a testimony to his character and success or failure. Ministers are held in such high esteem that financial pressures are placed upon them that sometimes become unrealistic. They either adapt or fail.
Funds should be managed in a way that reflects your Christian beliefs. Don’t fall into the trap of comparing yourself to others in your congregation. There will be people of all different income levels with more or less disposable income than your own, and who are in a different stage of life than you and your family are. Comparing leads to envy and distorted vision. Rather, examine your own income, values, and needs. In general, a good rule of thumb for young families is to give at least 10 percent and save at least 10 per cent. Couples must agree to live within their income. So many arguments, stress, and even divorces could be avoided if each took the initiative to make careful decisions about the use of their money. Marital happiness, according to marriage counselors, is tied to how mature and realistic your personal financial management is implemented. Having started out as a school teacher where salaries were low, it was quite an adjustment to pay for a house, car, college loans, wedding rings, new baby, and
living expenses while having one bank account and two who were writing checks from that one account. We learned very quickly that budgeting how these funds would be spent and then living within that budget, called for self-discipline. Without that, contentment could turn into contention. I have observed people in all professions, including preachers and teachers, who spend selfishly and threaten, or destroy, their marriage and professional image. Some spend as if there is no shortage of funds. Sometimes they lose their jobs as a result, which compounds their problems. What seems to work is the following: 1. Agree on how much the Lord is going to receive from your financial resources, whether it be giving through the local church, mission efforts, Christian schools, children’s homes and other areas of the Lord’s work. This portion of our income should be the top priority if we are to love God with all our heart, soul, mind, and strength, and love our neighbor as ourselves (Mark 12:30, 31). 2. Determine how much you will invest in your future by saving for retirement, and saving toward goals such as children’s college tuition. 3. We must also take into account that emergencies do come up—roofs will leak, tires will wear out, appliances fail, illnesses occur, and there may be trips to the emergency room. 4. Make a list and plan for expenses that come once or twice a year—city and county taxes, or homeowner’s insurance, for instance, so these will not catch you off guard when they come due. 5. Make a list of regular expenditures: rent or house payment, car expenses, utilities, insurance, groceries, home maintenance, clothing, and more. Know what you must expect to spend on these daily living expenses. Only after being wise and realistic, can you know what non-essentials you can afford. Mindless spending can be your downfall. 6. Talk things over with your spouse. Pray about it. Encourage one another. Determine how you can make your budget work. Spend less than you earn. Downsize if you feel you have over-committed. It is far better to live frugally within your income and have peace, than to spend recklessly and
not be able to meet your obligations. “Better is a dry morsel and quietness with it than a house full of feasting with strife” (Proverbs 17:1). The effectiveness of a preacher can be ruined or enhanced by how he and his wife manage what God and the brethren provide. Avoid spending more than you make. Make every dollar work for you and your family. You are the steward and God holds each of us accountable. There are two recommendations I would add. First, read the book of Proverbs through once per month for at least a year. Note what Solomon says about money management. Underline or highlight those verses to emphasize them. Second, if possible, take a money management course, such as Dave Ramsey’s Financial Peace. Initiate a study on money management and stewardship in a series of lessons in your congregation where you can learn from discussions with others. Money is a tool to be used wisely, not for self-gratification. “For the love of money is a root of all sorts of evil, and some by longing for it have wandered away from the faith and pierced themselves with many griefs” (I Timothy 6:10). May God bless you as you continue to learn the wise use and management of the blessings God has given us.
Dale -vs- Dale Moving for Money We get calls now and then and the minister on the other end of the phone is so convoluted. He is making so little money he and his family could be on foodstamps but he didn’t get into preaching to make a lot of money. He loves the congregation he is with but things are so tight for he and his family he fears on mini disaster would be, well, disastrous. He doesn’t want to beg, nor does he want to give the church a bad name by not paying his bills. He feels, well, guilty either way he turns. Let’s solve this puppy in this month’s Point/Counterpoint. POINT: God said it long ago, “money is the root of all kinds of evil.” I wouldn’t give you a nickel for a guy who preaches for money. The guy driven by filthy lucre will compromise on God’s truth. He will give more ministry attention to the family that is “well heeled.” He needs to read James 2. On top of that, stop bellyaching, you agree to the amount they pay you when you moved there. You think you’re the only one who doesn’t get raises. For what reason should we think we should be
comfortable? Did God promise us fame and riches? Everybody wants an easy job, we need more Caleb’s who desire the challenging work…com’ on man! COUNTERPOINT: I preach for money. I was first paid to preach in 1978 and have always depended on the brethren. And while I do not have a biblical imperative to preach as a profession I do have a fiduciary responsibility to take care of my family. How dare anyone try to make me feel bad about being paid for the work I do. And if I don’t pay my bills then I will leave a bad reputation in town when I eventually limp away. When I have to think about making ends meet all the time, money becomes a noose around me heart. When I started preaching it certainly wasn’t about money and still isn’t. I didn’t take a vow of poverty just because I preach. Many of God’s most faithful servants were very wealthy, Abraham and David to start a list. No, I don’t preach because of money, but a laborer is worthy of his hire and there is no crime in moving and making more. Chew on that for a while!
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