Don’t worry about money!
Got money worries? Who doesn’t?
Actually, many Christians don’t. They have learned and practiced biblical principles of money management and have virtually eliminated financial stress. They trust in the providence of God, and He provides the management principles they need to follow.
Some time ago, a young woman called my office while I was away speaking at a church meeting. My assistant told her that I was out and would be back in the office and available for counseling the following Monday. The woman was so stressed by her financial situation that she continued to call my office every day until I returned. In addition to her desperate calls, she also cried in my assistant’s ear each time she called. When I reached this young wife on the phone, she explained that she had just returned from the office of an attorney who told her she had only one solution, and that was to file for bankruptcy protection. But she said, “I don’t think that filing for bankruptcy is the right thing for a Christian to do, do you?”
“Not if you can avoid it,” I responded. Then I asked her, “What is the amount of your debt?”
She said, “We owe more than $300,000 dollars!”
This young family was just out of graduate school. What could I say to them? It popped into my mind that perhaps they had overindulged in their home purchase. So I asked, “How much of this debt is your home mortgage?” She told me that they didn’t own a home; they were renting. Their debt was in three categories: back taxes, student loans, and credit cards. Because of my biblical convictions, I asked if they had been tithing.
She said, “No. We can’t afford to.”
I responded, “You have called me as a Christian attorney, so I will ask you a Christian question. The question is: How can you expect God to bless your family when you are robbing Him?” You can write the end of the story –follow God's principles and be blessed or keep following your own way and have more stress.
This is the Old Testament syndrome of grief and sorrow due to living in a state of disharmony with God and His counsel. God told Judah, “‘You have sown much, and bring in little; you eat, but do not have enough; you drink, but you are not filled with drink; you clothe yourselves, but no one is warm; and he who earns wages, earns wages to put into a bag with holes’” (Haggai 1:6, NKJV).
Reasons for financial problems
In 15 years of financial counseling, I have found three primary reasons that get people into financial difficulty. I will list them in the order of greatest frequency. The first is ignorance. Many people, even college graduates, are financially illiterate. They simply have never been exposed to the biblical or even secular principles of money management. There is hope for these people. The bulk of this article will provide a simple outline of these principles and how to apply them.
The second reason for financial difficulty is greed and selfishness. In response to advertising and personal wants, some people simply live beyond their means. They are not willing to live in, drive, or wear what they can really afford. Many of these same people also feel that they are too poor to tithe. Consequently, they live their lives without God’s promised wisdom and blessing. (See Proverbs 3:5-10.) There is hope for these people also, but it requires a change of heart—the reception of a gift from God called contentment. Paul exhorts, “But godliness with contentment is great gain. For we brought nothing into this world, and it is certain we can carry nothing out. And having food and clothing, with these we shall be content. But those who desire to be rich fall into temptation and a snare, and into many foolish and harmful lusts which drown men in destruction and perdition” (1 Timothy 6:6-9, NKJV).
The third reason people find themselves in financial difficulty is because of some unfortunate tragedy. For example, they may have experienced a serious illness without adequate health insurance or left without a job for a variety of reasons. They may have been abandoned by a spendthrift marriage partner. A natural disaster may have wiped out their possessions. Or they may have been born and raised in abject poverty. There is hope for these people, too. Though their path is more difficult, their poverty can be overcome. Change may come from the support of Christian friends; the counsel and/or assistance of godly people; hard work coupled with a good education; and the blessing and providence of God. But enough about the problems. Let’s focus now on what you can do to experience financial freedom.
Seven biblical principles
This article will be of more benefit to readers if I provide some practical guidance on what to do to obtain peace and freedom in one’s finances. With this in mind, I will share seven biblical principles for money management followed by seven steps to assure financial success. First the biblical principles:
1. God is the owner of everything (Psalm 24:1; 50:12; 1 Chronicles 29:13, 14). As Christians, we understand that we brought nothing into this world, and we are not taking anything out. While we live on this Earth, we are simply managers of what God has entrusted to us. Faithfulness is all that matters.
2. God and His wisdom and counsel must take first place in our lives (Proverbs 3:5-9; Matthew 6:33). God can see our lives from the beginning to the end. He knows what is best for us and desires that we prosper. This is not the simplistic question, “What would Jesus do?” but rather we ask, “What is His counsel in this area of my life?”
3. Our purpose in life is to glorify God (Matthew 5:16; 1 Corinthians 10:31). Secular persons seek to prosper so they can spend and accumulate. Christians seek to prosper so they can provide for their own needs, the needs of others, and help advance the cause of God. They are God’s ambassadors.
4. Prosperity is having what we need when we need it (Philippians 4:19; Isaiah 26:3). God has not promised us that if we become Christians we will become wealthy by society’s standards. But He has promised that if we serve Him, He will provide for our needs, be with us wherever we go, and give us peace in our hearts.
5. Debt is bad (Proverbs 22:7; Romans 13:8, Psalm 37:21). Recognizing and following this single principle would do more than anything else to bring peace to our families and prosperity to the cause of God. Debt causes strife in families and stress in individual lives.
6. The tithe is the minimum testimony of our Christian commitment (Genesis 14:20; 28:20-22; Leviticus 27:30; Malachi 3:6-11). From the perspective of one who reads through the Bible each year to review the big picture, I can tell you that nowhere in the Bible does God suggest that less than a tenth is His. Failure to recognize and practice this principle cuts us off from God’s wisdom and blessing. (See Deuteronomy chapter 28.)
7. Everyone must give an account to God of his or her money management (Matthew 25:19-29; 2 Corinthians 5:10; Revelation 22:12). There is nothing more certain in Scripture than the fact that we must all face the judgment of God. When settling accounts with those who are faithful, God says, “‘Well done, good and faithful servant; you were faithful over a few things, I will make you ruler over many things. Enter into the joy of your lord’” (Matthew 25:21, NKJV).
Seven steps to success
Once we understand the biblical principles of management, we can simply apply them to our everyday lives. This can be done by making the following points part of our lifestyles:
- Get organized. Develop a budget. Have a plan.
- Spend less than you earn. Determine to live within your means.
- Save a little every pay period. Start with only $50 toward an emergency fund.
- Avoid debt like a disease. Interest is one expense we can live without.
- Be a diligent worker (Proverbs 22:29).
- Be faithful to God. He has given us so many promises (Deuteronomy 28:1-14). We cannot afford to live without God’s blessing.
- Remember that the Earth in its current condition is not our real home. Our management here determines our eternal destiny.
A simple guideline budget
For most people, the idea of living with a budget is about as exciting as going on a diet. However, the following guideline budget is not hard to set up or follow and will soon have you living a lifestyle that brings real satisfaction. This budget will also help you to incorporate the success points listed above.
Start by totaling all your monthly income from every source. Or you can determine your annual income and divide by 12. This is the gross amount that you have to work with, but not the amount upon which your budget is made.
Next set aside your tithe and offerings. This would be 10 percent for the tithe plus whatever you want to systematically set aside for your offerings. For the sake of illustration, let’s make this amount a total of 15 percent.
I hate to mention it, but the next item is taxes. Try to determine the tax bracket that you are in and subtract that amount from your gross income after your tithe and offerings. Let’s just make that amount 25 percent. I call these two items “nondiscretionary” because if we are Christians, we will faithfully put God first and also be good citizens, contributing our taxes. So even before we begin the budget process, we have used 40 percent of our income.
The 60 percent remaining becomes our “net spendable income.” For budgeting purposes, this 60 percent of gross income becomes 100 percent of our budget money. In other words, after tithe, offerings, and taxes are removed, the balance of your income becomes the full amount of your available money for your budget. This guideline budget, as you adapt it to your own personal situation, is appropriate for both single and married individuals.
Most people find that there are ten major categories of spending in daily life. For those with children in school or who are students themselves, an 11th category must be added for educational expenses. With a guideline budget, we assign a percentage of the available budget money to each of the 10 categories as follows:
- Housing : 30%. This includes house mortgage or rent, insurance, taxes, and utilities.
- Food: 15%. This may include other items purchased at the grocery store.
- Auto: 17%. This includes car payments, gas and oil, insurance, and maintenance.
- Insurance: 5%. Basically, life and medical/health insurance.
- Debt reduction: 5%. Many families will need more in this item.
- Recreation: 5%. For example, vacations, eating out, sport activities, etc.
- Clothing: 5%. Purchase and cleaning of clothes.
- Savings: 10%. Save something, even if in debt, as it requires self-denial.
- Medical: 3% For items not covered by insurance.
- Miscellaneous: 5%. Gifts, barber, beauty, subscriptions, toiletry, cash.
The beauty of this guideline budget is that it can be adapted to individual situations. For example, if you need 35 percent for housing needs, you can do it. But you must take the extra percentage points from one or more other categories. You only have 100 percent to spend, or you go in debt. In addition, if you add the 11th category for education expenses, you must also get the percentage needed from other categories. This is why students and parents with children in school must live very frugally to avoid running up huge debts.
It has been said that “He who rides a tiger cannot dismount.” From a financial perspective, that tiger is debt. Debt is the most highly advertised commodity that comes through the mail in many countries. I am speaking of the dozens of credit card offers sent to families in the mail each month.
Many young people ask about student loans. Here is my answer: All loans have to be paid back with interest. But student loans are not like running up a credit card by eating out and buying music CDs. If the education being sought will enhance earning power, then a student loan may be advisable as a last resort. But first, the student must work as much as possible, save as much as possible, get grants and scholarships; and then, if necessary, borrow only the minimum amount needed to pay tuition. The bottom line is that college graduates will earn almost twice as much in their lifetime as high school graduates. A person with a professional degree will earn twice as much as a college graduate (if they work in the public market). So education for a marketable profession is valuable. In addition, a well educated Christian is better able to serve God and humanity.
Financial planners generally encourage people to look at their lives in three segments. They are the accumulation years, the preservation years, and the distribution years. From a Christian perspective, we could refer to this triad as the learning years, the earning years, and the returning years. When we are young, we don’t want to concern ourselves with growing old; however, barring early terminal illness, fatal accident, or the second coming of Christ, we will all grow old and die. For most people, there comes a time in life when, because of physical or other limitations, they must cut back or terminate gainful employment. Financial provision and planning must be made for this period of time. If we can retire debt-free, with a home paid off and no other significant debts, this time of life will be much easier.
Finally, we all know that someday, either at death or the Second Coming, we will have to walk off and leave all our earthly possessions. We can’t take them with us (1 Timothy 6:7). But Jesus encouraged His followers to store up treasures in heaven (Matthew 6:20). We can do this by helping others and advancing the cause of God. It is true that we can’t take it with us, but we can send it on ahead! May we find the peace that passes understanding as we seek to follow the Great Shepherd and His invaluable principles.
G. Edward Reid—an ordained minister and licensed attorney—is the director of the Stewardship Department of the North American Division. He is the author of It’s Your Money, Isn’t It? (Review and Herald Publ. Assn., 1993) and six other books. His email address: Ed.Reid@nad.adventist.org.