Time, Taxes, and Insurance

Allow me to offer some thoughtful biblical anecdotes about freeing up your time for more important life choices. Additionally, I want to share my beliefs, from a biblical and practical perspective, about taxes and insurance. I hope you can come away with a fresh look at these boring topics.

Time

First, it is important to understand God wants us to be social. Man was not made to live in isolation. God made Adam and then Eve for companionship.

Then the Lord God said, It is not good that the man should be alone; I will make him a helper fit for him (Genesis 2:18)

God expressly wants us to collaborate by using specialization gifts. I may be a brilliant teacher but a mediocre electrician. Therefore, I should spend most of my time perfecting my unique teaching abilities. Rabbi Daniel Lapin in his book “Business Secrets from the Bible”, tells a story about how farmers, once they learned the lesson of specialization, discovered how much better their lives were when they collaborated instead of attempting to do everything themselves. Some farmers were better potato growers, and some raised better milk cows. By working together, each in their area of specialization, their lives were remarkably improved.

The greatest gift, in the story above, is how being social and working collaboratively, we can all live better lives. This is God’s purpose for us.

Though one may be overpowered, two can defend themselves. A cord of three strands is not quickly broken (Ecclesiastes 4:12).

Many times, in the quest to save money, we spend more. If my time is worth $300 per hour, why should I spend 2 hours cutting the grass when I can hire the neighbor’s kid down the street to cut it for $45? In this manner, I am freeing up my time to spend in my area of specialty, or perhaps leisure activities. I am also blessing others by spreading wealth for their needs and the needs of others. This is called “business”.

Sometimes, we need to hire specialists to ease the burden in our lives. I can prepare my taxes, but I don’t. I hire a CPA or tax specialist who focuses primarily on tax preparation because I am just an amateur, not a professional in taxation. Besides, I can certainly find a better use of my time. Just a thought.

Taxes

Render to Caesar the things that are Caesar’s and to God the things that are God’s (Mark 12:17)

We often forget what taxes are funding like roads, parks, and a strong military force to protect our freedom. I know when I was serving in the military; I was grateful for a paycheck that allowed me to provide for my family. Not all taxes are bad. Many of us believe that the government can do a better job managing our money. However, we have a great level of economic freedom compared to most other countries. Perhaps we should adopt an attitude of gratefulness for what we have — including the earnings that allow us to pay taxes. Ron Blue reminds us that “Paying income taxes recognizes God’s provision and honors authority”.

Another area we all can work on is our belief that receiving a large tax refund at the end of the year is a windfall from the government and a sign we are taking advantage of every tax deduction available — even if some deductions are questionable. First, there are no free tax deductions. Therefore, be careful not to evade the tax man — although taking legitimate tax deductions to avoid unnecessary taxes is acceptable. Tax evasion might result in being confined in a tiny jail cell, but tax avoidance results in lower taxes. Nevertheless, totally eliminating taxes is just unreasonable to assume.

He who is faithful in a very little thing is faithful also in much, and he who is unrighteous in a very little thing is unrighteous also in much (Luke 16:10).

Second, a large refund is a sign of poor planning. We should plan our tax obligation a year in advance. Integrating tax planning into our long-term planning affords us a better opportunity to be successful. Remember the difference between a professional and an amateur above? Adding a tax professional to your financial team is just smart planning. Your tax professional can help integrate tax planning strategies such as timing to change the year in which income is received or deductions are taken, shifting income to someone who is in a lower tax bracket, investing in real estate or other investments to reduce taxes, and using the tax law provisions such as itemizing your deductions, taking tax credits due, or using charitable gifts of appreciated assets like real estate to delay or eliminate paying long-term capital gains taxes.

Insurance

The purpose of life insurance is to transfer the risks we are not willing to take or can’t take to someone, or a company, willing to take the risks for us for a fee. This leads us to three questions we should always ask ourselves when planning for life insurance — how much do I need, for how long, and how much can I afford? Life insurance is NOT AN INVESTMENT! It is a tool to be used to bring us peace of mind that our loved ones will be provided for (There are some specialized insurance programs used for advanced estate or business planning we can explore at a later time).

Life insurance should also be a part of your financial plan. In fact, life insurance may be the underpinning foundation for every financial plan. Saving and investing to care for our needs and the needs of our family is a good thing. But if we do not live long enough to accumulate sufficient assets to care for our family needs, insurance becomes a viable option. However, there is a fine line between what is enough without taking away the provisions of God. God is the ultimate provider.

Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever (1 Timothy 5:8).

Be sure to hire professionals and not amateurs. Typically, insurance is “sold” rather than “bought” — there is a difference. We have a saying in our profession that if someone is wearing a suit — especially in Georgia or South Carolina in the summer — they are trying to sell you something. Avoid salespeople when you can. Many types of insurance products need to be considered. Your financial advisor can assist you in determining your insurance needs, or he may refer you to third-party professionals to assess your needs. Then only buy what you need.

I hope the information provided will assist you in making wise, godly decisions regarding your taxes and insurance. I am happy to provide any additional information or clarification if needed.

Your faithful Servant