Money causes more fights in marriage, more stress in a life, and more bondage to the things of this world than just about anything else. Money can either enable us to invest into the Kingdom of God and give us an immense amount of freedom, or it can enslave us and keep us from doing the things that God has asked us to do. Jesus talked a lot about money, yet so many believers do not know how to handle money God’s way. Here are 5 keys to getting on the right path financially.
1. Give generously. It all starts with giving, and for the believer that means beginning with 10% of everything you bring in going to the local church. Scripture is clear: Give your first fruits to God and He will bless the remaining 90%. (Malachi 3:8-12) For those of you who are number-crunchers, I understand that giving to the church is hard for you because you do not see an immediate reward. I encourage you to read Matthew 6:19-21. Our real treasure is not on earth, friend, but in Heaven. Investing our money into the Kingdom of God will yield great dividends for eternity, long after anything we acquired on earth has passed away.
2. Pay what you owe. We have an obligation to pay people we have agreed to pay. This includes not only taxes to the government (Mark 12:17) but also debts that we owe. If you have the money to pay someone you owe, you have a legal and moral obligation to pay it. If you owe more than you can pay, set up arrangements with the debt holder to get it paid off. Not paying back people or companies who have loaned us money is stealing.
3. Stay away from the “D” word. Proverbs 22:7 says that the borrower is slave to the lender. When we are buried in debt payments we are unable to use our money for the Kingdom of God. There are many strategies that you can use to pay off debt (lowest amount first or highest interest rate first, among others). The bottom line is that you should start paying off your debts, fast! This also includes not going into even more debt. If you cannot pay cash for something, you cannot afford it, plain and simple. Consider this example:
You take your family on a much needed vacation, but you did not save up for it. You did, however, just get approved for a new credit card that gave you a 15% interest rate instead of the higher 22% rate. You decide that because your family is so in need of a break, you put the entire $3,000 trip on the card. If you pay the minimum $40/month payment that trip is going to take you 18 years, 6 months to pay off. Worse yet, you will end up paying $8,927.62 for that trip! That’s almost three times as much!
If the travel agent tried to sell you that same trip for almost $9,000 instead of $3,000 would you have still gone? That is exactly what happens when you use credit. Before you go into debt, think! Save up for expenses and pay cash.
4. Save an emergency fund. (Proverbs 21:20) I’m not talking about building bigger barns. At some point, enough is enough. At the same time, it just makes sense to set enough money aside to cover us in the event of an emergency. Aim for 4-6 months of expenses. Having an emergency fund means that when the unexpected car repair comes up or we experience a job loss, we will not have to go into debt. Remember, though, what constitutes an emergency. An emergency is an unexpected expense that you cannot avoid. A new wardrobe for the kids or Christmas presents for your niece are not emergencies.
5. Live on a budget. This is the only way to ensure that you are not spending more than you are taking in. Budgeting every dollar you bring in not only makes sure you stay out of debt but helps you to plan for exciting things like family vacations. When our family decided to live on a budget, we felt like we received a huge pay raise. Be sure that you budget every penny that you make and if you’re married, make sure that both spouses agree on the budget beforehand. I recommend Dave Ramsey’s budget form as a good place to get started.
We all have been given much. If you earn $30,000/year you are in the top 4% richest people on earth. The question now is, what will we do with what we have been given?