How do you balance all of the demands of your financial life? Giving, savings, spending, investing, insurance, college planning, estate planning, on and on… It starts with prudent financial planning: creating a proper balance of giving to God’s kingdom, setting aside for financial emergencies, and proper long-term savings. The bigger issue is often knowing where the end goals lie. The question becomes: how much is enough? There comes a point when enough savings have been generated and deciding what to do with the surplus is the next logical choice. There is always a debate between saving and hoarding money.
For many Christians, savings represents the future. Short-term consumption is often delayed for future enjoyment. As Proverbs 21:20 says, “In the house of the wise are stores of choice food and oil, but a foolish man devours all he has”. Self-indulgence, poor planning, and abusing money are foreign languages. Instead a focus on minimizing debt, gifting to various ministries, and growing wealth are top priorities for faith-based millionaires.
Trusting in God to be faithful is rarely enough if we disobey his words. How can we expect God to bail us out for our financial mistakes: overspending, over-consuming, under-saving, and mismanagement to name a few? I’m not saying God won’t help us out, but we cannot expect it just by having faith. Short-sightedness can often lead to poverty.
Most people do not have sufficient emergency savings. A major expense or disaster will spell financial ruin. Why is this so prevalent in such an affluent society? WE OVERSPEND! That is the bottom line. Every dollar we spend really has two costs attached to it.
- The cost of spending: it decreases your wealth.
- The cost of opportunities lost: you lose the opportunity to have your money make more money
Picture this: You have $0 in your bank account. You work and earn $1. You can either spend or save that dollar. If you spend the dollar you are back at zero. If you invest the dollar and earn 12%, that dollar doubles about every six years. So what is the real cost of you spending a dollar? Most people see it as one dollar. In reality, it is the $1 plus the loss of the investment opportunity. This is the ultimate cost.
How do you pull it all together?
It begins with creating a biblical financial plan. There are ten important elements to a faith-based financial plan.
Ten Key Areas of Faith-Based Financial Planning
1: Ownership. God Owns 100% of everything.
Haggai 2:8 “The silver is mine and the gold is mine,” declares the Lord.
Psalm 24:1 “The earth is the Lord’s, and everything in it, the world and all who live in it.”
2: Integrity. Business, Personal, and Finances
Colossians 3:22-24 “Slaves obey your earthly masters in everything; and do it not only when their eye is on you and to win their favor, but with sincerity of heart and reverence for the Lord”
1 Timothy 6:20 “Timothy, guard what has been entrusted to your care.”
Proverbs 13:6 “Righteousness guards the man of integrity, but wickedness overthrows the sinner.”
3: Generosity: How do you get more so you can give more?
Leviticus 27:30 “A tithe (10%) of everything from the land whether grain from the soil or fruit from the trees belongs to the Lord; it is holy to the Lord.”
2 Corinthians 9:7 “Each man should give what he has decided to give, not reluctantly or under compulsion, for God loves a cheerful giver.”
4: Planning: Creating your roadmap – where are you heading?
Proverbs 6:6&8 – “Go to the ant you sluggard; consider its ways and be wise! .. it stores its provisions in summer and gathers its food at harvest.”
Proverbs 21:20 – “In the house of the wise are stores of choice food and oil, but a foolish man devours all he has.”
5: Budgeting: Getting your money to work for you instead of you working for your money
Proverbs 25:28 “Like a city whose walls are broken down is a man who lacks self control.”
Galatians 5:22-24 “But the fruit of the Spirit is … self-control… Those who belong to Christ Jesus have crucified the sinful nature with its passions and desires.”
6: Borrowing: Getting and staying out of debt
Proverbs 22:7 “The rich rule over the poor, and the borrower is servant to the lender”
Romans 13:8 “Let no debt remain outstanding.”
7: Saving for a rainy day: Creating and maintaining emergency funds and funding your future
Proverbs 28:19 “He who works his land will have abundant food, but the one who chases fantasies will have his fill of poverty.”
Proverbs 21:20 “… a foolish man devours all he has.”
8: Investing with a Purpose: Using your blessings to bless others while owning investments you are proud to own.
Proverbs 13:11 – Dishonest money dwindles away, but he who gathers money little by little makes it grow.
Ecclesiastes 11:2 “Give portions to seven, yes to eight, for you do not know what disaster may come upon the land.”
9: Protecting All God Places in Your Care: Prudent insurance strategies
1 Timothy 5:8 “if anyone does not provide for his relatives, and especially for his immediate family, he has denied the faith and is worse than an unbeliever”
Ecclesiastes 5:13 “wealth lost through some misfortune so that when he has a son there is nothing left for him…”
10: Legacy Planning – How will you be remembered?
Proverbs 13:22 “A good man leaves an inheritance to his children’s children, And the wealth of the sinner is stored up for the righteous.”
Proverbs 17:2 “A servant who acts wisely will rule over a son who acts shamefully, And will share in the inheritance among brothers.”