From Rick Thomas at Counseling Solutions, here.
Part of a Christian’s calling is to take care of the Father’s money. It is one of the many privileges the He gives to His children. Though the world is all His, as well as everything in it, He entrusts us with the stewardship of His world.
The earth is the LORD’s and the fullness thereof, the world and those who dwell therein, for he has founded it upon the seas and established it upon the rivers. – Psalm 24:1-2 (ESV)
Part of our stewardship involves money. The money we have is a gift from the Father, to be used for His glory.
So, whether you eat or drink, or whatever you do, do all to the glory of God. – 1 Corinthians 10:31 (ESV)
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Money takes wisdom
Stewarding money is not only a privilege, but it requires lots of responsibility from us and there are many temptations and snares to avoid. Our culture is persuasive and consistent with their arguments about how we should spend money.
Unfortunately, because of the seductive nature of sin in our hearts and the encroachments of our culture, many Christians have struggled to bring the money they have under the Lordship of Christ. This, of course, is symptomatic of a deeper issue.
Mishandling money is an external manifestation that points to a root problem. The selfish use of money is a worship disorder of the heart. This is imperative intel you must know when helping someone overcome fiscal irresponsibility.
While it’s important to address the external problem of financial selfishness, it’s essential the root of the problem is addressed and changed. Without renewing the heart the problem will not go away (Ephesians 4:23). Changing behaviors is never enough.
However, that does not mean you should not deal with the behavior. Jesus was clear, if your hand is offensive, it should be cut off (Matthew 5:30). Behavioral sins are amputated while heart sins are mortified–made dead. The former speaks to external sins, while the latter speaks to heart sins.
This article is not dealing so much with heart issues. I have addressed those with scores of articles on myMember Site. Today I want to speak practically about how to steward God’s money. My experience in counseling is that most singles or couples, regardless of age, do not have a practical understanding of how toamputate fiscal irresponsibility.
A financial mind map
Last week I had the privilege to work with a couple on the financial issues in their marriage. They were a normal couple, meaning, they made money and spent money, but did not see their responsibility of stewarding money for the glory of God.
As we talked, they noted how no one had ever carefully walked beside them, to envision them in practical ways of stewarding the Father’s money. The following is a Mind Map, which I created to give them a basic plan for financial responsibility.
Note I said “a” way as opposed to “the” way. Many of you financial gurus will look at this and say, “What about this?” or “You left out that.” You’re probably right. This is not an exhaustive look at fiscal responsibility. The reason for that is because there is not a one-size-fits-all financial plan for everybody.
This is “a” way, not “the” way. The article ”a” is important. My hope is to give a vision and a roadmap you can tweak and implement according to your season of life, size of family, monetary situation, and your age.
Though your plan may not be exactly like this plan, the big ideas in this Mind Map are universal. Let’s take a look.
The first big idea is your money is not your money. If you don’t start here, then you cannot end with God’s glory in mind. Your beginning will determine your ending.
If you fully believe every cent you have is God’s and it’s your job to steward every cent, then your heart is properly adjusted to your role as God’s Money Manager. One of your job descriptions is “Money Manger for God.”
From this point of departure you’re ready to follow your King in this area of financial maturity. The next step, as noted by the number 2 in the yellow box is that you are a follower of the King, doing His work on earth.
Though I said earlier this is “a” way and not “the” way, I take that back on these first two steps. Numbers 1 & 2 are “the” only way for the Christian to think and behave. It is not a suggestive way.
Make a budget
If your heart is adjusted and you have completely submitted all your possessions–including your money to the Father, then the rest of this is “a” way you can implement into your life. And I assure you this does work. This is how Lucia and I have been doing money for the past 20 years.
The budget is your roadmap. I cannot over-emphasize this. If you don’t have a map, you really do not know where you are going. I have been doing financial counseling for many years and I’ve never met a person who did not have a budget who knew where all his money went.
Nearly every time he would say, “Oh, I got a pretty good handle on our money. I know where it goes.” This is always a lie. He never knows and his response is nothing more than an attempt to soft-pedal his irresponsibility.
At this point I challenge him to make a budget. It’s a simple thing to do, but it will take diligence. I appeal to him to begin charting every cent he spends and every cent that comes in for one month.
You’d be amazed at some of the stories I hear after they do this. They are shocked at the amount of money they are spending on certain items. Most of the time it’s on eating out, though there could be anywhere from four to seven categories that shock them.
After a month’s worth of data, they are usually motivated as they see how much money is wasted and how much they could be saving. From this month’s worth of work, they begin developing categories or line items according to genres or groupings of expenses.
They will work from these line items for the rest of their lives. These line items become the categories from which they spend their money each week, each month. There could be as many as 50 line items, depending on how detailed they become.
The first time I did this in the early 90’s, I had over 100 line items from my first month’s data collecting. I trimmed that list down to about forty groupings. For example, I had three line items for food: grocery, eating out, and snacks, which were my ice cream runs. I don’t do ice cream runs anymore.
I also ask them to make a line item for savings and the various debts they may have. I appeal to them to make sure they are working from 90% of their gross income. Though tithing is not taught in the New Testament, giving is.
Each one must give as he has made up his mind, not reluctantly or under compulsion, for God loves a cheerful giver. – 2 Corinthians 9:7 (ESV)
Our personal tithing goal is to give 90% of our income and to live off 10%. We’re a long way from that goal, but we hope to make it some day. Most people can give 10% of their gross and that’s a good start.
I also ask them not to make miscellaneous a line item. That’s a black hole where anything can be pushed into. This can be especially tempting if a person has been irresponsible with money.
From this point they begin cutting back on their expenses. This is the fun time. It has been a joy to see many couples through the years whittle away at their expenses, start reducing debt, and experience the freedom of saving, while giving more to God’s work.
The rich rules over the poor, and the borrower is the slave of the lender. – Proverbs 22:7 (ESV)
I recommend they continue to track their expenses with meticulous detail, at least for the first year. The reason is because no one month is the same. There are birthdays, Christmas, and other expenses which show up at different times in the calendar.
If you track an entire year, you will have the best idea of your expenses as well as your income. This will also allow you to create special categories where you can put aside a certain amount each month, which will level out those one time expenses like Christmas.
As mentioned, one of the line items is savings. The first line of defense and the first savings fund you develop is an emergency fund. We keep 10K in ours. I call this touchable money. We have used this fund regularly throughout our marriage. We have this fund to absorb spikes in our budget.
For example, the past nine months we had to buy a new range and a new dishwasher. Those things are not budgeted into our plan. However, our emergency fund absorbs these kinds of expenses. And whenever we tap into this fund for an emergency, we fill it back up, until it gets to 10K again.
Once the emergency fund is full, we continue to save, but we move the money to a new fund, which is ourcatastrophic fund, which is also 10K. We call this untouchable money. By the grace of God we never have had to dip into this reserve.
You can put your emergency and catastrophic funds in something like a CD that renews every 12 months, but each one renews 6 months apart, like every July and January.
If you put them on 12 month renewals, you get better interest accrual and if they renew six months apart you’re never more than 6 months from cashing one of them in.
Once your catastrophic fund is where you want it, you begin to focus more aggressively on stewarding yourfuture fund.
While you should be investing in your future fund all along, I think it is wise to create and emergency andcatastrophic fund to absorb the spikes of life. If those funds are in place, then your stewarding the future fundis rarely touched.
In this fund there are many things, which really depend on your needs. We have a 529 college fund and Roth IRAs, for example. I think life insurance and a Will are absolutes for everyone.
We have stipulated in our Will who gets our children should we both die while they are young. You really don’t want to leave that up for grabs.
I did not put debt in this Mind Map, though it is a line item in your budget. Here are a few recommendations on debt.
- Pay off your smallest debt first.
- Once you pay your smallest debt, take the money you were paying on that debt and roll it over to the money you were paying on your next smallest debt. Then pay it off.
- Once you pay off your second debt, take the money you were paying on your smallest debt and your second debt and add it to what you were paying on your third smallest debt. Then pay it off.
- While you’re paying down all your debt at the same time, if you pay off your small debt first, you will feel like you’re accomplishing something as you see the debts disappear.
- I think it is also wise to pay on the back-end of your mortgage too. You can find a mortgage calculator online where you can type in your monthly mortgage, interest rate, and what you want to pay extra each month. You’ll be shocked at the amount of money you’d save just by paying a little extra.
It would be wise to have a friend in your small group or local church to speak into how you do money. Humble people pursue accountability and they are blessed for it (James 4:6).
I have seen God do some amazing things in people’s lives as they have submitted their finances to Him, while opening their wallets to a loving friend who was willing to serve them this way.
Here are a few more Scriptures to serve you as you think about financial planning and management:
And my God will supply every need of yours according to his riches in glory in Christ Jesus. –Philippians 4:19 (ESV)
For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs. – 1 Timothy 6:10 (ESV)
In all things I have shown you that by working hard in this way we must help the weak and remember the words of the Lord Jesus, how he himself said, ‘It is more blessed to give than to receive.” – Acts 20:35 (ESV)
Therefore do not be anxious, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ For the Gentiles seek after all these things, and your heavenly Father knows that you need them all. – Matthew 6:31-32 (ESV)