The other day virtually every conversation I have had or heard has to do with money.
At lunch, a friend told me that I had to find a second job to pay for her son’s school fees.
Another told me, discouraged, about the yoyo payments on her car loan. The host of a radio program was talking about the debts of his listeners.
The couple behind me, at the checkout, and at the supermarket, were arguing about items in their shopping cart that they couldn’t afford.
After receiving our last electric bill, my husband and I had a long discussion about ways to reduce our energy use.
And this day was probably not out of the ordinary, for me as for the people that I knew. It is a fact that our finances influence many of our ideas, discussions, and actions on a daily basis.
We often wonder how we are going to be able to make ends meet, pay for some unforeseen expense, or retire. For some, amassing a fortune becomes an obsession and they become workaholics. I have known people whose moods changed based on stock prices or unpaid bills.
Our finances affect our way of life, our work schedules, our free time, etc.
No wonder then that the Bible – our Creator’s manual of life – has a lot to say about money.
6 Biblical Principles of Good Financial Management
We offer you 6 biblical financial principles, along with advice from several consultants.
1. Set a budget
The Bible does not use the word budget, but it does offer specific guidance on the importance of this kind of planning. In short, a budget is a black-and-white plan to control our income and expenses.
It is written: “Know well each of your sheep, take care of your flocks” (Proverbs 27:23). In modern parlance, we need to be aware of the use of our income, in order to determine if we need to make some adjustments in our spending.
“Budgeting helps us avoid impulse and unnecessary spending, live within our means, and prepare for future needs,” said Bill Gustafson – senior director of the Center for Financial Responsibility at Texas Tech University. If we don’t plan our finances carefully… we will end up going broke ”.
To establish your family budget, calculate what your various monthly needs are (such as shelter, food, transportation, recreation, clothing, health, etc.), and compare them to your monthly income. If your expenses exceed your income, you need to eliminate unnecessary purchases.
Once you have established your budget, either a ledger or a program designed for this purpose on your computer, in order to begin to identify your monthly expenses, “if you find yourself in a situation where you have no more available money. in a specific category, stop spending, advises Dr. Gustafson. It’ll take determination to do this, but it’s a necessary step if you want to be on top of your finances. (For more information in this area, read our article “The Bible, Your Budget, and You”).
2. Pay Tithing Faithfully
The priority in our income, before we do anything else, should be paying tithes from the Lord. God says, in Malachi 3:10, “Bring all the tithes into the storehouse, that there may be food in my house.”
Tithing is one-tenth of a person’s income (Deuteronomy 14:22) and is used to support the ministry and work of the Church. When we tithe, we are showing God that we put Him first in our lives.
God obviously does not need our money. In fact, everything we have belongs to Him (Exodus 19: 5). The real recipients of tithing are those among us who write the checks. In the last part of verse 10 of Malachi 3, God promises us, when we faithfully pay tithe: “Test me in this, saith the Lord of hosts, if I do not open the windows of heaven to you, and if I do not pour out the blessing without measure on you ”(Webster’s version).
These blessings can be either physical or spiritual. Financial management expert Dave Ramsey explains in his blog that tithing teaches us to be good stewards of the goods God has entrusted to us and to live without being selfish. It can lead to improved family finances, helping us to be better spouses, better friends, acquaintances, employees, and employers.
Tithing can also help us learn to trust God more and have a more intimate relationship with Him. Oftentimes, tithers can remember times when – at least on paper – it seemed like they couldn’t afford to pay it. Yet they did, and had enough – sometimes even more than enough – for their physical needs.
A friend said to me, “Paying tithing has helped me trust God, not just looking at the ‘facts’ from a human perspective, and it reminded me that we can count on God in all situations ”.
3. Avoid borrowing
The Bible warns us against indebtedness: It is written: “The rich rule over the poor, and he who borrows is a slave to him who lends” (Proverbs 22: 7). If we carry a heavy burden of debt, in short, we are the slaves of our creditors. We are no longer free to decide how to spend our pay, being obliged to repay these debts.
Controlling your debts means being careful in your credit purchases. “Borrow only for purchases that will increase or maintain their value, like a house or school fees,” advises Erica Sandberg, a consultant with a San Francisco financial management agency. Don’t take out loans at high interest rates, for things you can do without and are likely to depreciate quickly, like a new car, clothing, furniture, appliances or jewelry ”.
According to a Creditcards.com report for 2018, the average interest rate for a credit card in the United States is around 17%. In other words, we will pay 170 € interest, per year, for a debt of 1000 €. If we only pay the minimum required each month, we will end up paying much more than the original price of your purchase.
Erica Sandberg advises us to only use a credit card if we are able to pay it off when we receive the bank statement at the end of the month so that we do not have to pay interest. If we have a lot of revolving debt, pay it off quickly, starting with the card with the highest interest rate.
4. Save before you spend
Financial planners generally suggest that we save at least 10% of your income each month. Have three different accounts: a short-term savings account for big purchases (like new furniture or car repairs); a long-term savings account (for your retirement or your children’s school fees) and a relief fund (in the event of dismissal or unforeseen expense).
“Saving money before making a purchase is one of the wisest ways to avoid financial worries,” says Dr. Gustafson. By having money set aside for “big-ticket items” you won’t be tempted to use credit cards to buy them ”.
This is another financial biblical principle. It is written: “Precious treasures and oil are in the dwelling of the wise, but a foolish man swallows them up ”(Proverbs 21:20). Proverbs 6: 6-8 describes the ant that gathers during harvest for future needs. We too should be saving, and planning for future expenses.
5. Be generous
Everything we own – our money, our physical possessions, our jobs, and the means of obtaining money – comes from God (Ecclesiastes 5: 18-19). After providing for us, God wants us to share what we have received with others.
Paul quoted Jesus, who said, “There is more happiness in giving than in receiving” (Acts 20:35). We should give unconditionally – even when recipients cannot repay us (Luke 14: 12-14). Like making donations to charity; buy a gift for someone; invite someone to dinner or buy food for a homeless person.
While we need to be wise in what we give, we should not be stingy. As with tithing, God blesses us when we are generous (Luke 6:38; 2 Corinthians 9: 6).
There were times when – after giving – the funds in my checkbook were dangerously lacking, but I got some money from somewhere that I wasn’t expecting, or some other financial blessing that filled that hole.
When we want to share, God gives us the means to do so.
Obviously, we do not all have the same financial resources. We may experience financial difficulties. However, even in such a case, we can still give our time, our talents, and pass on to others certain non-monetary gifts that God has given us. God wants us to use what He has given us to bless others, not just provide for our own needs and satisfy our own desires.
6. Rely on God, not your finances
When it comes to finances, people often go from one extreme to the other. When our bank accounts, our retirement funds, and the value of our home increase, we can come to trust them. If we are made redundant, lose stock on the stock market, or have unforeseen expenses, we can be worried. None of these extremes is a biblical approach.
It is clear from the Bible that true serenity is only found in God (1 Timothy 6:17) and that relying on our wealth destroys us (Proverbs 11:28). Our wealth and possessions are temporary and can disappear in an instant as a result of a burglary, an accident, or a natural disaster.
If our finances are in bad shape, we need to remember that God is our refuge and that He cares about those who trust Him (Nahum 1: 7). We should not worry about our financial situation (Philippians 4: 6). We must do our part – not be a spendthrift – saving and investing in what has eternal value. The rest is in the hands of God. If we first seek the Kingdom of God, we can be sure that our Heavenly Father will provide for our physical needs (Matthew 6: 25-34).
By adhering to these financial principles, our finances will improve and we will have peace of mind in this area. There will probably be less tension over money and better relationships between our family members.
Most importantly, we will learn to trust God more, to develop a greater appreciation for His purpose for us, and to have a closer relationship with Him.
Above are good Biblical Principles of Good Financial Management to help your plan your finance well