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Let Your Money Work For You

Let Your Money Work For You
All You Wanted to know about money

Monday, September 16, 2024

Financial Planning & Christian Life

 

… "The earth is the Lord’s and the fullness thereof," wrote King David in Psalm 24:1-2, "the world and those who dwell therein, for he has founded it upon the seas and established it upon the rivers."

Every spending decision is a spiritual decision. Ask yourself if your purchasing aligns with your values and what God would have you do with your money. After all, we are simply managers of His resources. To be intentional with our money, often means budgeting for future goals and expenses, as well as present needs. 

Only let your manner of life be worthy of the gospel of Christ…(Philippians 1:27).

Understanding that we are merely stewards of these resources and that God owns it all, can help us reorder our spending decisions, and challenge the amount of power that money has over us. Since we are not God — not sovereign, omnipotent, or omniscient — we don't know the future. We can only trust God to guide and sustain us - not the amount of money in our bank account/cash at home.

Christian life is gospel based, prayer saturated and faith oriented…… If any of you lacks wisdom, you should ask God, who gives generously to all without finding fault, and it will be given to you. – James 1:5 (NIV)

 

Diligence and Planning

Proverbs 21:5 states, “The plans of the diligent lead to profit as surely as haste leads to poverty.” This verse underscores the importance of diligence and careful planning in financial matters. Biblical wisdom encourages believers to approach their finances with a thoughtful and strategic mindset, emphasizing the value of setting goals and devising plans to achieve them. The principle of diligence teaches that success in financial matters is often the result of careful planning and disciplined execution.

Faithful Provision and Trust

The Bible assures believers of God’s faithful provision. Philippians 4:19 states, “And my God will meet all your needs according to the riches of his glory in Christ Jesus.” This principle encourages individuals to plan and budget with a sense of trust in God’s provision. While responsible planning is essential, it is equally important to recognize that ultimate security comes from trusting in God’s faithfulness. Planning and budgeting, when rooted in faith, reflect a reliance on God’s guidance and provision.

Stewardship and Accountability

The biblical concept of stewardship plays a pivotal role in planning and budgeting. In the Parable of the Talents (Matthew 25:14-30), individuals are entrusted with different amounts of resources, and they are held accountable for how they manage what they have been given. This principle emphasizes that every individual is a steward of the resources provided by God and should, therefore, plan and budget in a way that reflects faithful stewardship. It calls for a sense of responsibility and accountability in managing financial resources for God’s glory.

Spend Less Than You Earn

The wise store up choice food and olive oil, but fools gulp theirs down. (Proverbs 21:20)

Advisors often encourage clients to have a budget (or a “spending plan,” as we like to call it) for several reasons, including:

  • If you don’t know how you are currently spending your money, it can be hard to plan for the future. In order to identify where you want to make a change you need to first know where it’s all going. Not to mention, the largest expense in retirement is living expenses; planning for retirement without knowing how much you need to live can be nearly impossible.
  • Sometimes people who don't live on a budget can find themselves in debt without realizing it. Spending less means that you are able to avoid debt and take care of your other financial responsibilities first.
  • Online tools, apps, or even a yellow pad can make it easier to track your spending habits. This way you're not caught by surprise at the end of the month when your bills arrive. 
  • Using cash rather than credit cards, checks, or online payments can actually help you spend less. People often spend more money when using plastic; someone could buy $50 worth of groceries but still feel like they haven't spent anything because there's no receipt, money exchange, or money taken out of an account. Having a budget may help you identify certain areas where using cash is a good idea.

It also helps to practice living within one's means and not carrying high levels of debt from one month to the next. It’s a good idea to develop a spending plan based on income and expenses (and creating categories for where money should be allocated). The number of categories or complexity is up to you. It should be a spending plan that is meaningful for you and how you spend your money. Developing a budget may seem daunting initially but sticking with it over time will help develop good habits that will benefit you in the long run.

Spending decisions are spiritual decisions. When you build your spending plan, spend time in  prayer. Ask Him to give you wisdom about how to handle your finances throughout the month.

Before making any major purchases, prayerfully consider whether those purchases fit into God's plan for you and your family. 

As you build your spending plan, don’t forget about savings. Commit to putting a percentage of all new income into savings as soon as possible. Having savings set aside will provide peace of mind when emergencies arise or you want/need something unexpected. You'll never regret your choice if you save up for a purchase instead of buying something on credit just to have it right now.

Getting more bang for your buck is simply smart economics — whether it applies to food, clothes, cars, homes, or vacations. Spending wisely can create lasting abundance while taking care of both current and future expenses.

Avoid the Burden of Debt

The rich rule over the poor, and the borrower is slave to the lender. (Proverbs 22:7)

(Proverbs 22:7)

"The wicked borrow and do not repay, but the righteous give generously." (Psalm 37:21)

 

Taking on debt means making an assumption about the future - the assumption that you will be able to repay. 

Debt can be a very dangerous thing if you find yourself unable to pay. If you're tempted not to make that month’s payment - don't give in!  You won't be doing your future self any favors. Revisit your budget and figure out where else you can cut back.  If you are in a repayment phase, realize that it may be difficult at first, but make sure you keep up with the process until those debts are paid off. Then work on keeping them from coming back again.

The best way to avoid debt is to adopt a pay-yourself-first mentality when budgeting your finances. Save for your goals in advance; if you know you’re going to need a car in 2 years start saving now. If you budget for your needs such as gas and groceries before paying anything else then you will not likely be strapped for cash.

 

Build Financial Reserves and Liquidity

 

Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest. (Proverbs 6:6-8)

(Proverbs 6:6-8)

This principle supports saving for the future with a focus on liquidity and preventing financial hardships by building a rainy day fund. The Bible says in Proverbs 21:20, "There is treasure to be desired and oil in the dwelling of the wise; but a foolish man squanders his wealth." 

A good rule of thumb is to keep 3-6 months of living expenses in a savings or money market account. These are funds that you may quickly access if the washing machine breaks or you unexpectedly lose your job. For more long-term future expenses, consider investing 10-15% of your household income into retirement accounts. If you have children, you might consider creating and funding educational savings accounts.

We should save and invest so that if, and when, unexpected things happen, we are prepared — not so that we can be greedy or presume upon the future. The Bible says in I Timothy 6:17-19, "Command those who are rich in this present world not to be haughty, nor to trust in uncertain riches but in the living God, who gives us richly all things to enjoy. They are to do good, to be rich in good works, generous, and ready to share, thus storing up treasure for themselves as a good foundation for the future, so that they may take hold of that which is truly life." In Ecclesiastes 11:2 we are reminded of the importance of diversifying. Consider investing in way that reflects humility and across multiple asset types, companies, and countries.

 

Give Generously

But since you excel in everything—in faith, in speech, in knowledge, in complete earnestness and in the love we have kindled in you—see that you also excel in this grace of giving. (2 Corinthians 8:7)

 

Give generously. There is a difference between tithing, which often means giving a percentage of our income to the church and being generous with how we use our money. 

Are we holding too tightly to our money, when there are kingdom purposes or needs directly in front of us? Are we in a position to be generous towards those who are close to us? How do our friends and family see us using our money? 

Giving to mission-driven charities is a powerful way to make a difference in the world. Choose an organization that helps solve a problem you feel strongly about. Ask God to open your eyes and heart to a current need or charity. Research an organization's impact and stewardship reports. Then consider giving to the causes you believe in.

We may never stop trying to grow financially, but we should also realize that many people live on far less than we do. The U.S. Census Bureau estimates that 37 million Americans live in poverty, and around the world, one out of every ten people lives on less than $1.90 per day. As people of faith, we are called to use our resources to make a difference for people who are struggling or may have less then us.

Don't forget you can be generous with yourself as well. You are, after all, a person with a mind, spirit, and physical body that all need attention. Work hard and rest well so that you are healthy both physically and spiritually. What would happen if you didn't take time off? How would it affect your relationships? Would you lose sight of the fact that there's more to life than what you do every day? 

Think and Plan Long-Term

 

Be very careful, then, how you live—not as unwise but as wise, making the most of every opportunity, because the days are evil. Therefore do not be foolish, but understand what the Lord’s will is. (Ephesians 5:15-17)

(Proverbs 16:9)

Look at the life you want now and well into the future, recognize that it won't always be easy or straightforward (God may even choose to modify your desires at some point). Then determine and act on a plan that can help get you there.

The Bible provides ample guidance on how Christians should approach their finances:

  • Trust in the Lord with all your heart.
  • Lean not on your own understanding.
  • In all your ways acknowledge Him.
  • He will direct your paths. (Proverbs 3:5-6)

People with a lifetime commitment to Christ have the responsibility to be intentional with their money, but they also have the blessing of confidence in God's plan. While we need to give God the freedom to modify our own plans, it’s still a good idea to focus on short-term and long-term spending, savings, and investing. Keeping biblical stewardship in mind, it makes sense to focus on investments that will support you into retirement, but also beyond, enabling you to leave more behind for your spouse, descendants, and/or the kingdom of God.

Proverbs 13:22 says, "A good person leaves an inheritance for their children’s children, but a sinner’s wealth is stored up for the righteous." In Biblical times, inheritance didn't necessarily mean money. It often meant land, and it conveyed a sense of honor, provision, and family status.

As Christians, we want to leave behind more than a financial legacy. For most of us, the impact of what we do with our time and talents will far outweigh the impact of the estate our heirs will one day inherit.

In fact, good stewardship of money is just one small part of passing on a legacy to our children… and their children… and their children.

In Genesis 15, Abraham worried that his wealth would go to a servant instead of to his own child. Jacob famously snookered his brother Esau out of their inheritance. And Joseph's sons received Jacob's blessing at the end of his life. "In them," Jacob said, "let my name be carried on."

These men were not just concerned with safeguarding their property so their families could prosper. They also wanted to keep the knowledge of God alive for their descendants. 

Other women and men in the Bible also left a legacy of faith. Moses gave his leadership position to Joshua. Elijah let his mantle fall on Elisha. Sarah left a legacy of faith and commitment for her people. And Jesus left His ministry to His followers.

Legacy of faith. You are your child's most important influencer. They are watching you and imitating you. Even if you don't see it now, you probably will. Make sure your children and grandchildren observe the vibrant Christian faith that influences your everyday life.

Legacy of good character. Lead your life with honesty, passion, and gratitude. Treat people well. Encourage others. Thrive.

Legacy of hard work. No one achieves something spectacular without working hard at it. A combination of patience and discipline, hard work is the only way to the top.

Legacy of family memories. Your children and grandchildren will remember the quality time you spent with them. They'll talk about the games you played, the books you read together, and the stories you shared with them. These memories will help carry them through the tough times in life.

Finally, you can leave a financial legacy. Judicious use of assets and responsibility to manage it needs to be instilled in children from young age. Children learn from what you did in your lifetime. So try to leave sufficient to keep them going and make it known to them

 

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