By
LEE JENKINS
Financial Advisor, Author & Teacher
1665 Words
11/19/08

We’ve heard about it, read about it, and seen it - a devastating economic famine is engulfing our land. Some people are calling the severe scarcity of credit, jobs, and dented 401 (k)’s an economic downturn, or a recession, but the truth is we are experiencing a modern-day famine.

What’s the world coming to when the government has to fork over a 700 billion dollar handout, I mean a bailout, to faltering financial conglomerates while distressed families are told it’s their fault for needing a helping hand? It ain’t right, and it definitely isn’t fair, but during this famine we’re going to see a lot of strange and unseemly things go down. We’ll see the crisis list expand beyond record foreclosures, a dying auto industry, climbing unemployment rates, and a stock market that sounds like a 1980’s TV commercial - “I’ve fallen and I can’t get up!”

One thing’s for sure - now is the time to call on God for help. Instead of freaking out, remember God is in control; He knows wassup. Don’t think for a minute that God was caught off guard (He never sleeps or slumbers) just because the famine surprised us. And don’t sleep on the fact that He also knows how we can survive and even thrive amidst rampant financial calamity.

God can bless you in the midst of a famine. Just because there is a recession doesn’t mean you have to succumb to it. As a matter of fact, God often uses adversity to bestow His greatest blessings!  

Want to know how? Look in The Good Book - Genesis 26:1-14 describes a time of famine when everybody was trying to “get out of dodge” because the jobs and the food were drying up.  But God told Isaac to hold tight. He promised the brother that if he stayed put, he’d be blessed in the midst of the famine! The story also says that Isaac didn’t just hang around chillin’, waiting for God to drop a bundle of cash in his lap. Under God’s direction, Isaac sowed into the festering land where no one was bearing fruit.

It takes a lot of faith to sow in a famine, but it was the first thing Isaac did after heeding God’s call. (Isaac’s sowing could have translated into starting a new business venture, planting new crops, or increasing his tithes and offerings.)  Now in that same year Isaac sowed, he reaped a 100-fold return! So when Isaac dropped $1000 dollars into the collection plate, or in his business, or in whatever his venture was, he reaped $100,000 in the same year! Wow!

Because Isaac obeyed God, the bible says an amazing thing happened – Isaac’s riches multiplied until he became a very wealthy man, even during the famine. It’s also astonishing to note that Isaac’s fortune accrued because God told him to do the opposite of what everyone else was doing, and he followed God’s counsel. Isaiah 55:8-9 says, “For My thoughts are not your thoughts, nor are your ways My ways,” declares the LORD. For as the heavens are higher than the earth, so are My ways higher than your ways And My thoughts than your thoughts.” So while other folks were panicking, selling everything, and walking around depressed, Isaac did the opposite. Billionaire investor Warren Buffet put it this way, “When others are greedy be fearful, and when others are fearful (as they are in this current economy) be greedy.” That kind of action requires faith in God and an unwavering belief that through Him all things are possible.

You’ve probably got tons of questions and I’d like to answer two important ones:
What should you know? and What can and should you do? regarding 1) the economy, 2) investments, 3) homes, 4) jobs, 5) spending, and 6) giving in order to survive and thrive in this present time of famine.

The Economy
What you need to know:

• Expert economists believe that the country’s economic growth (indicated by the Gross Domestic Product, GDP) will continue to shrink until early 2009.
• Unemployment will continue to rise, nationally; more folks will lose jobs.
• The federal government will keep interest rates low (in an effort to spur spending).

What you can and should do:

• Pay closer attention to your personal economy than you do to the U.S. economy. (You can’t control corporate and government spending, but you can control what you spend.)
• Pray for our new president, Barack Obama, and that God will give him and his advisors the economic wisdom to guide this country.
• Don’t believe the hype. Instead of allowing the media to control what you think, consult and follow God’s Word.

Your Investments
What you need to know:

• Individual stocks, stock mutual funds, and certain types of corporate bonds or bond funds are taking a beating - losing twenty-five to forty percent of their value!  
• You probably didn’t do anything wrong; the brightest minds in the financial world are losing money.
• The market may bottom out in late 2008 and begin to rebound in the first half of 2009. Historically the markets show significant improvement within a year after a recession has ended.

What you can and should do:

• Stay calm and rational.
• Don’t try to time the market (get out then get back in when you think it’s going up). The pros can’t even do it successfully so it probably won’t work for you.
• Remember that the premise of investing is to buy low, sell high, and make a profit. While the markets are experiencing a financial famine, prices are low, making this a great time to buy, not sell (unless you have to for financial or emotional reasons).
• Rebalance your portfolio, if you are investing for the long term (10 years or more) you should still have a predominance of stock-related investments.

Your Home
What you need to know:

• Home prices aren’t going to go up any time soon. Even though home prices are already down twenty percent nationally, they will continue to fall until the recession ends.
• The chance of getting a mortgage in this climate is akin to getting out of a traffic ticket – it could happen, but it’s not easy. Lenders are demanding two things most people don’t have during a recession - pristine credit scores and ten to twenty percent down payments!

What you can and should do:

• Call your mortgage lender if you are behind on your payments and work out an arrangement (especially if you are 3 months or more behind).  They don’t want to have to take over your home because it costs them more money.
• Don’t try to sell your home now unless it’s an absolute necessity
• It’s a buyer’s market so now is a good time to buy a home (to live in or to use as rental property) since prices are low.

Your Job
What you need to know:

• The current unemployment rate of 6.1%, already the highest in five years, will likely grow to 7% or 8% by the end of 2009.  (The country hasn’t suffered rates that high in nearly 20 years.)
• The chance of losing your job is greater if you work in a manufacturing or service business tied directly to consumer spending, such as automobiles, construction, retail, financial services, travel, or restaurants. (If people aren’t spending money, then companies are making less money and look for ways to cut their costs, i.e. reducing payroll by downsizing.)
• If you have a job that generates revenue for your company, such as sales, you’re less likely to get canned (unless you’re underperforming).

What you can and should do:

• Make yourself a valuable asset on the job; become indispensible. Add educational credentials or job specific training; recommend ways to help the company save money or make more money.
• Get your hustle on!  Develop another source of income by starting a side business, providing consulting services or working extra jobs. Always have a Plan B.
• If you don’t have a job, but want one, consider taking a pay cut to get your foot in the door and pay the bills.

Your Spending
What you need to know:

• The price of food and other items will likely continue to increase.
• Trouble in the Middle East could boost the price of oil at any moment.
• Pay raises will probably get smaller or disappear completely. Instead of counting your chickens before they hatch, plan your finances based on the money you have, not the money you hope to see.

What you can and should do:

• Track your spending (try a free budgeting site like Mint.com).
• Put yourself and your household on a strict budget and stick to it.
• Become more frugal and eliminate frivolous spending.

Your Giving
What you need to know:

• Giving is down at most churches.
• Some well-established churches are laying off staff.
• Church ministries need money in order to fulfill their missions and serve the community.
• One of the biggest tests of your faith is how you spend money during difficult times.
• Where your treasure (money) is, there also is your heart. (Matthew 6:21) Is your treasure with God?

What you can and should do:

• Continue to honor God with your tithes and offerings. (Don’t short-change God just because times are tight.)
• Realize that God’s economy is greater than Man’s economy. (Remember Isaac sowed in a famine and became wealthy.)
• Rest in the fact that God wants to bless you, even in difficult financial times.

With Isaac as your role model, and God as your guide, it is possible to survive and thrive in the midst of famine.  While others are running for cover, devote yourself to action by consulting God’s Word, sowing in the land (finding alternative ways to generate income), and continuing to honor God through tithes and offerings.