top 5 financial tips for youth leaders, The

Group, Nov/Dec 2003 by Merriman, Steve

Need a few more bucks burning a hole in your pocket? How about a few thousand more? Our clergy financial expert offers insider advice that will really impact your family's bottom line, now and in the future. Plus: Our biennial salary survey.

Because God called you to ministry, and you accepted that call, you should simply endure the financial struggles that come with that calling, right? Keep quiet about it, and keep your chin up, bucko.

A normal reaction, but not biblical. In 1 Timothy 5:18, Paul counters with this: "For the Scripture says, 'Do not muzzle the ox while it is treading out the grain,' and 'The worker deserves his wages.'"

While it's true you won't get rich as a youth minister, there's nothing that says your life must be riddled with stress over finances. There's a lot you can do to build financial security and stability.

TIP ONE: Understand your total salary package.

First, let's do the basics. When you were hired, the church gave you a "total salary package." This is the church's cost of having a minister on staff. It includes salary but is always a greater amount than pay alone. For example, a $40,000 package typically results in yearly pay of roughly $27,000 because pay is just one component of the package.

The other components are church business expenses (costs that enable you to perform services in and for the church) and ministry benefits such as medical and retirement contributions. If you're presented with a total package dollar amount and expect that to be your actual pay, you'll be sorely disappointed.

In the corporate world, business owners clearly define the difference between "total package" and "pay." In the church, these elements are often combined and referred to simply as "pay," a practice that's misleading and can cause undue stress for everyone. It's important for you (and your church leaders) to understand the difference between the two.

It's been my experience that once church leaders understand this difference, they realize you need more money to live decently, and the result is often an immediate pay increase. It isn't as if your church leaders are trying to add to your financial concerns; they simply make the mistake many of us make and misinterpret the package's total value.

TIP TWO: Let your church pay for your job expenses.

You'll have to work to get used to considering your expenses as job-related, but if you can do this, you'll be way ahead of the game. Ministry isn't just worship, education, and administrative duties performed within the church facility. Youth ministers do much of their work outside church walls. That means your job requires out-of-pocket expenses.

For example, you entertain kids at your home. And kids eat. . . a lot. If there's food available, it probably doesn't last long. Someone paid for that food, and it probably was you. Keep the receipts and get reimbursed for this expense. If you buy CDs, books, or videos specifically for your ministry, your church should reimburse you. It's legitimate and necessary if you're to continue effective outreach.

Also, it's important for you to improve your ministry skills. And the cost for doing that should be reimbursed (a frequently overlooked expense). In the corporate world, employers often pay tuition and class fees for employees who are working to broaden their job-related knowledge base. Why shouldn't churches do the same? Anything you pay for that improves your skills-books, periodicals, newspapers. Internet service, seminars, or continuing education-should be reimbursed by the church.

If you incur entertainment expenses for the purpose of developing or nurturing your professional relationships, by all means request reimbursement. If your church's current reimbursement plan does not cover all your expenses, it's time to sit down with your church leaders and negotiate changes to the plan.

Also, many youth ministers make an expense-related decision that literally costs them hundreds, maybe thousands of dollars every year. If your church has agreed to reimburse your ministry-related expenses, but you decline and instead claim them as expenses on your tax return, you need to break this bad habit. Why? The Internal Revenue Service doesn't allow this practice. If your church has agreed to reimburse your job expenses, then any job expenses that you fail to submit for reimbursement are not deductible on your tax return.

TIP THREE: Plan for your retirement. . . now.

When you're young, retirement seems eons away. In reality, it takes a long time to prepare for your "golden years," so wise youth leaders start saving as soon as possible. At this point, the amount you're saving isn't as important as getting in the habit of saving-no matter how much. Because of compounding interest, less is more when you're younger. The $50 per month you save at 25 is the same as the $125 per month you'll save at 35, which is the same as the $345 per month you'll sock away when you're 45.

Many options for saving are available today, and I can't give you blanket advice that will fit every life situation. However, I advise youth ministers to consider saving in a Roth IRA.1 It's a powerful, flexible savings tool. Although the money you invest is post-tax, the glory of this IRA is that once the money is invested, you never pay taxes on it again! And when it comes time to withdraw the money, your adjusted gross income won't be affected because the money will not be reported as income.