You can find a wealth of articles online that give you great advice on how to make responsible financial choices but financial prosperity begins with one key action and it comes straight from God.
The plans of the diligent lead to profit as surely as haste leads to poverty.” – Proverbs 21:5[/box]
Proverbs is one of those books of the Bible that everybody can understand. Do you have a little bit of trouble with Leviticus? That’s ok, a lot of people do but Proverbs is a simple, straightforward, and sometimes hard hitting book. It often contrasts the blessed and the fool. The blessed follows God’s rules while the fool lives his own way and it’s a life of defeat.
If you’re a fan of Dave Ramsey, you already know about planning. If you haven’t read his book, “the Total Money Makeover“, it’s absolutely a must-read. When I counsel others about financial matters, I encourage them to block out what I call “the noise of complexity”. There’s a lot of advice running around about financial matters but, at least for my taste, the advice is overcomplicated. Let me make it simple for you. I’ve never met anybody who is financially prosperous who doesn’t have a clear plan in place. Prosperous people don’t blindly spend money because every expenditure fits into the plan.
That plan is their budget. Yes, the dreaded B-word that everybody hates. Much like weight loss, most have tried and failed. Even the best budget often falls victim to habit. Most of us aren’t good with change and if the budget involves a cheaper cell phone, less dinner dates, and possibly a smaller house or cheaper car, those aren’t sacrifices we’re willing to make. We would rather live a financially defeated life than part with our stuff.
“Again I tell you, it is easier for a camel to go through the eye of a needle than for someone who is rich to enter the kingdom of God.” –Matthew 19:24
I want to challenge you for a second. Is Jesus talking about the richest of the rich? In America even the family in the grips of poverty is richer than 95 percent of the world. You might be struggling financially but this verse is about you if you aren’t willing to part with your stuff.
In America even the family in the grips of poverty is richer than 95 percent of the world.
But the good news about your budget is this: One of the big reasons that it failed is because you set it up wrong. All of this starts with your goals. Here are some goals to set:
- You should tithe 10 percent of your after tax earnings.
- Each working adult should contribute 15% of their yearly income to their retirement accounts. That seems like a lot but if you have an employee sponsored 401(k), you’re probably at least half way there.
- You should have an emergency fund that covers 4 to 6 months of living expenses. If you don’t, try to save at least $100 per month and increase it as you save more money thanks to your budget.
- If you have children, you should save for their college education. Do this through a 529 plan or other tax advantage education account.
- You should have health, life, and disability insurance to cover the future unknowns.
- You should be paying down any credit card debt.
Is that a lot of money to squeeze from your income? To be honest, yes it is and at the beginning, it’s probably impractical. Make your budget realistic. This month’s budget may reduce your Starbucks expenditure and maybe next months reduces it a little more. The following month might reduce your entertainment budget forcing you to watch an extra movie at home instead of at the theater. Keep squeezing out the wants to release more money for the needs.
Most Americans live beyond their means. They see cable TV and IPhones as a need rather than a want. Your stuff is what is causing your bank account balances to be low. You have to change your thinking and understand that there’s likely a lot in your life that you shouldn’t have. I know that’s difficult to hear but will you pray about before dismissing it?
First, remember that you tie God’s hands if you aren’t tithing. He wants to pour out blessings into your life but the first step is yours to take. Tithing is how you prove to God that you love Him more than you love your stuff. Until you do that, you aren’t going to see a lot of change. Second, craft a budget that is realistic yet uncomfortable. If you aren’t making hard choices and sacrifices, you aren’t getting anywhere. Finally, be patient. Your financial life isn’t going to turn around overnight. It will likely take at least a year and probably longer but understand that when you honor God by living a financial life that is in His will, He will bless you. That doesn’t mean you will get that BMW you’ve always wanted but it does mean that you’ll have what you need.