Money and possessions are referenced more than 800 times in the Bible; so, obviously, God has something to say about the subject! The financial principles in the Bible work like gravity. You may not be aware of financial freedom God's way, but his ways still work, even if we do not acknowledge their source.
According to Dave Ramsey, a popular financial expert, the number one issue couples fight about and avoid discussing is money—and the more debt they have, the more likely they are to have conflict in this area. Rachel Cruze, #1 New York Times best-selling author and personal finance expert says, “When a husband and wife can eliminate debt, a shift happens in their marriage. There’s a peace of mind they haven’t experienced before.” Financial freedom God's way starts with dealing strongly with debt. Scripture, “The wicked borrow and do not repay.” (Psalm [37:21]) It also warns us about presuming on the future. (James [4:13]-15) Do everything in your power to avoid getting into debt in the first place—especially if it’s consumer debt. Here are some practical tips you can follow that will help you succeed financially:
Sowing & Reaping
God loves it when we give cheerfully whatever we have determined in our hearts to give. Financial freedom God's way begin with voluntary, generous giving also results in great blessing for the giver. This is the principle of sowing and reaping. It is a universal principle that applies to us all, regardless of how rich or poor we think we are. II Corinthians 9:6-7 says, “Whoever sows sparingly will also reap sparingly, and whoever sows bountifully will also reap bountifully. Each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver.” It’s interesting that the richest people in the world are also the most generous! Yes, there is abundant evidence that giving makes people rich. Today’s researchers writing about it now. Here’s an example: Entrepreneur Magazine, October 17, 2007 states,
“While the link between giving and prosperity is not as mechanistic as returns on municipal bonds, there are some very earthbound explanations for it. Psychologists and neuroscientists have identified several ways that giving makes us more effective and successful. For example, new research from the University of Oregon finds that charity stimulates parts of the brain called the caudate nucleus and the nucleus accumbens, which are associated with meeting basic needs such as food and shelter-suggesting to the researchers that our brains know that giving is good for us. Experiments have also found that people are elevated by others into positions of leadership after they are witnessed behaving charitably. The financial advantages of giving aren't limited to individual givers. There is also evidence that donations push up income even more at the level of an entire nation's economy.”
Luke [6:38] says, “Give, and it will be given to you. Good measure, pressed down, shaken together, running over, will be put into your lap. For with the measure you use it will be measured back to you.” In other words, the more you give, the more God will give you to give! Whatever you do, ask the Holy Spirit, and if you are married—be sure to come to an agreement with your spouse, since you are one.
3 Phases of Giving
We’ve learned that there are 3 phases of giving:
- Tithing (the foundation phase)
- Impact giving (the accumulating wealth phase)
- Legacy giving (the strategic income phase)
Phase 1: Tithing
Some say God owns ten percent, so always give that; then the rest is yours. But, from what we see in Scripture, when we come to Christ we give him everything! The Master owns it all, one hundred percent--which includes our bodies, minds, talents, possessions, and our money. Throughout history, beginning with the book of Acts, we see believers led by the Spirit giving out of their want—not just ten percent, but everything they have to live on. Remember that Jesus came to fulfill the law, not to abolish it. As far as we see it, the principle of the tithe was not abolished in the New Testament. The tithe (10%) is a token. It’s our way of saying, “It all belongs to you God.” Here is our offering again that we give to you cheerfully, by faith.
Meg and I began tithing ten percent of our income to our local church when we were first married in 1983. (Back then, I was making a small salary as a Christian school teacher.) Over the years we have watched God work countless financial miracles for us as we raised our five children. Their expenses included private school tuition, ballet instruction, basketball, trips to Italy, family vacations, birthday parties, and, of course, weddings. We understood the principle of tithing, and so by faith we made a firm decision to tithe 10% of our income regardless of our circumstances. That wasn’t always easy, but it worked! God provided worked miracle after miracle for us and our children over the years. We always had everything we needed.
Phase 2: Impact Giving
After you’ve embraced the first phase of giving and the Holy Spirit has indicated that it’s time—move into the second phase—“Impact Giving”. With the coming of the Holy Spirit in the New Testament, we are given the power to go way beyond what Old Testament law requires—and to do that cheerfully. Everything in the New Covenant goes to a whole new level compared to the old: greater miracles, greater joy, greater self-control, greater lover, greater sacrifice, and greater giving. Since the Holy Spirit resides within us, we can do all of this as we keep in step with him. When the Spirit says pray, we pray; when the Spirit says worship, we worship; and when the Spirit says give, we give—not under compulsion, but with joy!
You might be wondering, “How do I know what to give to?” We give as the Holy Spirit leads us. Scripture teaches that we are to give to the one who shares the Word with us. Galatians 6:6 says, “Let the one who is taught the word share all good things with the one who teaches.” Second, we are to give to missions. Philippians [4:16]-18 says, “Even in Thessalonica you sent me help for my needs once and again. Not that I seek the gift, but I seek the fruit that increases to your credit. I have received full payment, and more. I am well supplied, having received from Epaphroditus the gifts you sent, a fragrant offering, a sacrifice acceptable and pleasing to God. Also, ask the Lord to show you how you can help the needy. Maybe sometimes the Holy Spirit will emphasize that you give of your time. (We’ll get to that in a coming episode.)
For our family, this was missions. We were also continually giving to our church’s missions program and building projects. We weren’t giving very much, but the little we gave took faith for us—and we believe we were rewarded for that faith. The extra income began to flow from unexpected sources, such as song royalties. As a result of a single royalty payment Meg and I were able to take a missions trip to Kenya together in 1990 as part of a ministry team.
You might be wondering, “How do I know what to give to?” We give as the Holy Spirit leads us. Scripture teaches that we are to give to the one who shares the Word with us. Galatians 6:6 says, “Let the one who is taught the word share all good things with the one who teaches.” Second, we are to give to missions. Philippians [4:16]-18 says, “Even in Thessalonica you sent me help for my needs once and again. Not that I seek the gift, but I seek the fruit that increases to your credit. I have received full payment, and more. I am well supplied, having received from Epaphroditus the gifts you sent, a fragrant offering, a sacrifice acceptable and pleasing to God. Also, ask the Lord to show you how you can help the needy. Maybe sometimes the Holy Spirit will emphasize that you give of your time. (We’ll get to that in a coming episode.)
Phase 3: Legacy Giving (the strategic income phase)
Prayerfully consider big ways to give. Dream big! This is the phase Meg and I are in now as of the time of this writing. We want to leave legacy that includes an estate for our children to inherit, schools, books, courses, and other products that people will be benefiting from long after we are gone. Don’t put any limitations on what God can do through you. He wants you to dream big! He is the God of the impossible. Ask him how he wants to bless others through you—which includes, not only your family, but your church and community.
Guard Your Heart
In the end, we will not be taking money and possessions with us. Guard your most precious, eternal possession—your heart! God knows our propensities. He gives us commands in his Word that so that we don’t hurt ourselves! Here are some of the main principles from Scripture that we should follow as we pursue financial freedom God's way:
Principle #1: Give regularly and generously—not just because there is a need to give to, but because our hearts have a tendency of holding on to riches. Hoarding means saving money without having a specific need in mind. This is actually a form of idolatry—and idolatry is simply giving first place in our hearts to something other than God. Matthew [6:21] says, “For where your treasure is, there your heart will be also.” (See also 1 Timothy [6:17])
Principle #2: Give because you genuinely care about people, not for any selfish reason. Jesus said, “Thus, when you give to the needy, sound no trumpet before you, as the hypocrites do in the synagogues and in the streets, that they may be praised by others. Truly, I say to you, they have received their reward. But when you give to the needy, do not let your left hand know what your right hand is doing, so that your giving may be in secret. And your Father who sees in secret will reward you.” (Matthew 6:2-4)
Principle #3: Be content with what you have. The tenth commandment is, “Thou shalt not covet.” Coveting means taking delight in something in a wrong way. I Timothy [6:10] says, “The love of money is the root of all evil.” Notice that it’s not money itself that is evil, but the love of money. There is nothing wrong with having money and possessions, but when those things have you, then there is a big problem.
In your study guide, write down areas where you have been discontented, then confess that sin to God. Next, write down what you are grateful for and tell that to God.
Monthly Budget
Financial freedom God's way starts with being a good steward of the resources he has given us to use. It’s very important to know how much you are earning as well as how much is being spent every month—and to be able to see this information at a glance. If you earn income and spend without seeing where it’s going, you are headed for financial trouble, especially if you use a credit card.
Here are the steps to setting up a budget:
Step 1: Track your monthly income and expenses. If you are running a household, we recommend using computer software for this task. (We really like Quicken Home & Business, but if you're not running a business, Quicken Deluxe is just fine.) Categorize each income source and every expense, then periodically create a report that shows you income vs spending. In the end you need a list of how much you are spending in every category every month.
Step 2: Set up a budget spreadsheet that includes the average (or exact) monthly amounts for each expense category. (We have always used Excel for that, which is part of Microsoft Office 365.) If you are billed every two months, then divide that amount in half to calculate the monthly amount for that category. Be sure to set up your spreadsheet so that it shows you how much you are budgeting per month as well as how much you are actually spending in each category. The final column should show how much you are holding in your checking account to pay for each actual expense.
Note: If you need some help with this step, here's my own generic budget template that you can download for free. (You can use this to start your own budget in Excel or other spreadsheet software.)
Step 3: Set up your savings allocations in your spreadsheet. As the saying goes, “If you fail to plan, you plan to fail.” Decide ahead of time what your savings categories should be, then every month set aside funds for those future needs. This takes all the stress out of paying bills because when the bill arrives, you’ve already saved the money to pay it! Here are some examples of savings categories: auto repair/replacement, vacation, Christmas, taxes, emergency fund, license tabs, and gifts.
Step 4: Maintain a “Watched Expenses” report for categories that can vary based on how much you spend. This will help you, and others in your household, avoid overspending. Examples may include: groceries, eating out, clothes, gifts, and sundries. This can easily be done using the same software you chose in step 1.
Maintaining Your Budget
Assuming you are using computer software similar to what is described above, you only need to do these five simple steps each week:
1. Categorize all income and expenses. (Download your banking transactions into your software, then categorize each one: groceries, electricity, etc.)
2. List actual expense amounts on your spreadsheet, then subtract them once when they are paid.
3. On your spreadsheet, list any actual income that is pending, then move it to the paid column after it arrives in your account.
4. Update your checking and savings balances.
5. Adjust your savings allocations as needed until your budget is balanced.
Managing Credit
Credit cards have their pros and cons. They are great for convenience, air miles, and other rewards; however, for those who do not pay their entire balance every month, they can be a nightmare! If you find that you are unable to pay off your entire credit card balance every month, destroy your credit cards and commit to using debit only. If you believe you can manage credit, keep the following tips in mind:
- Keep only one credit card that will give you airlines miles and other rewards. (If you travel a lot, having a card like this will save you a lot of money as long as you use it well.)
- To maximize your rewards, use the card to pay every possible expense; but only if there is money already in the checking account to pay it in full every month.
- Be sure to categorize each transaction for your credit card using software, just as you do for your other accounts.
- The secret to paying it in full every month is to keep the balance listed on your monthly spreadsheet as an expense.
Getting Out of Debt
As Dave Ramsey would say, “Use gazelle intensity!” Get out of debt as fast as you can, then take steps to ensure you don’t slip back into debt again. Financial freedom God's way means learning to live without debt. If you are currently deeply in debt now, we recommend that you take Dave Ramsey’s course, “Financial Peace University.” There are many local churches that host this seminar on a regular basis.
The first 3 “baby steps”
- Pay minimums on everything until you get $1,000 in your emergency savings.
- Pay off all personal debt except your home. You do this by paying the lowest debt balance first, and then directing all your energy towards paying off the next debt. (Dave calls this the “debt snowball”.)
- Once all your consumer debt is paid off, save 3-6 months of worth of expenses in your emergency fund. Keep this in a simple money market or bank account, but don’t use it for investing. These funds are for your protection should you lose your job or another major financial need comes up.
Break the Spending Habit
Remember—if you get out of debt, but continue to spend more than your budget allows, you will go right back into debt again. The secret to successfully breaking this cycle is a change of heart. Whatever is in the heart will always come out of the mouth and shortly be translated into action. If you find yourself always in debt and overspending, repent! Usually, the reason why we overspend is because we are not content. In Philippians 4:11-13 Paul says, “Not that I am speaking of being in need, for I have learned in whatever situation I am to be content. I know how to be brought low, and I know how to abound. In any and every circumstance, I have learned the secret of facing plenty and hunger, abundance and need. I can do all things through him who strengthens me.” When our hearts are not content with what we have, then our minds are busy looking for a better house, a better car, or just more of the latest stuff. Find financial freedom God's way; ask him to show you if you have been discontented and to forgive you. Refuse to buy on impulse! Once your heart is right your checking account will no longer be a bag with holes. You should start seeing more opportunities to give, to save, and to invest. Your present debt will be shrinking and eventually disappear—all because of a change of heart.
Before making a major purchase:
- Pray and ask God to show you what is in your heart. What is your motivation in buying that item?
- Wait at least 24 hours. Sleep will curb any tendency towards impulse buying and will also give you some time to more carefully consider your decision. Don’t let anyone slick talk you into making a major purchase immediately. They will say things like, “This offer is only good today, then it’s gone.” If that’s really the case, run away from that like the plague!
- Maintain a zero balance on all credit cards. We recommend that you don’t use a credit card for any purchase unless you have a history of successfully paying the balance to zero within 30 days from your savings. If this is does not describe you, then we recommend that you cut up your credit cards and use debit only. (Keep in mind that you don’t need credit cards in order to have a credit score. If you have any type of financing whatsoever—such as a car loan, a mortgage, or student loans, you probably already have a credit score.)
Recommended Course:
Since financial freedom God's way is such a huge topic, please do not conclude that we think we have the final word on the subject. We have have had moments where we learned what not to do through "the school of hard knocks", but we've also learned through the years how to follow financial strategies that actually work. Our favorite course, by far, on the the subject of personal finances is Financial Peace University. This course was a financial life-changer for us as we raised our five children. To this day, we have no consumer debt, no student loans, and no car loans--just our mortgage (which we are quickly retiring!) How is this possible? By listening to wise counsel! Proverbs [19:20] says, "Listen to advice and accept instruction, that you may gain wisdom in the future." If a church near you is not offering this course, we strongly recommend that you purchase it yourself and invite friends and family to watch it with you. Be sure to let us know what a difference it has made in your life! 