We learned about biblical financial stewardship years ago when we took the Crown Small Group Study.  This created a desire to manage our finances in a way that’s pleasing to God.  While our financial situation is far from perfect and sometimes probably not very pleasing, we’re doing our best to learn to manage our money wisely.  Here are a few things we are trying to do to grow as faithful financial stewards  and mange money God’s way -

True Financial Freedom – We want to be financially free to serve and give.  We believe God’s purpose for money is to use it as a resource to grow his ministry and help others follow Christ.  Therefore we want to make sure we’re always working to become debt free and that we don’t have too much debt or leverage in our lives.  As an example, we’re  trying to minimize car payments by driving used cars and trying to drive them for several years after they’ve been paid off.  In addition, we’re trying to make sure we don’t exceed a mortgage (including taxes and insurance) of 25% of take home pay.  This hasn’t always been the case and we found it challenging when our home exceeded 25%.  Doing these practical things have provided more freedom and we’ve found we have more money for  important priorities such as giving and saving.

Manage our Money as One – We manage our money together as husband and wife.  We definitely know we’re on this journey together and want to help each other grow as stewards and in our relationship with God.  Therefore, we have one checking and one savings account which all the money goes into and we manage them together.  We do allow for each other to have our own spending money, but this is tracked in the budget.  We believe we became one in marriage and our finances should be one too!

Communicate about Money -  We try to communicate about money regularly by budgeting together and setting our financial goals together.  We’ve found that we tend to overspend when we don’t take a few minutes to talk about our budget regularly.  We try to set aside time each week for a “money meeting”.  We talk about all of our upcoming expenses and how we’re going to manage them.  Additionally, having a money meeting helps us avoid talking about money at the dinner table or during date night!

Financial Goals – The money meeting also provides and opportunity to set  and review financial goals together.  We talk about our financial goals such as saving and when called to give more in certain situations.  We definitely want to make sure we have enough cash saved to help us avoid emergencies that often present themselves.  Dave Ramsey calls this “Murphy.”  What can go wrong, will go wrong!  We remind each other of these goals to make sure we’re not forgetting them and getting off track throughout the year.  This provides good accountability for both of us.

Giving – We make sure we’re giving our first fruits to the Lord each month out of faith and love for Him.  We choose to tithe on our gross income because we believe this is God’s money and we’re giving it back to Him for His purposes.  Tithing is no longer a question for us and is something we our pleased to do as stewards.  Money may be tight one month because of unforeseen expenses, but we give no matter what.  We believe God will provide for us and meet our needs if we honor him first.

As it relates to giving, I will tell you this wasn’t always an easy decision for us.  It wasn’t until I started my training as a volunteer Money Map Coach with Crown that I became completely convicted about giving.  I felt God was laying on my heart that we could do more and give at least 10% of our income each month.  We had reasoned we couldn’t afford it because of a new house and other expenses families often experience.  It didn’t make sense from a budgeting standpoint either.  I remember we would’ve had to cut a lot of Christmas savings to reach this amount of giving each month.  My wife is the one who pushed me in this area while I had the reservations.  We figured that Christmas was about Christ and that if it meant we didn’t spend as much that year all would be fine.  Honoring God with our first fruits was more important so we made the decision and haven’t looked back.  And we were able to have a great Christmas that year!

Avoid Chasing after the Joneses – We try not to compare ourselves to others. It’s not easy to avoid this one, but we are learning to be more content with what we have.  Keeping up with the Joneses is not easy and it’s never ending.  We know we’ll never catch them.  The problem with entering into this race is that we know  it’ may cause us to go into debt or experience discontentment.  We are learning more and more to be content in what God has blessed us with and focus on managing money in a way pleasing to Him.  We’ve found focusing on our finances is much easier to manage then trying to follow what everyone else is doing around us that sometimes may not be pleasing to the Lord for our family.  After all, God should be the source of our contentment.

Raising Stewards – Finally, with two young children we realize it’s extremely important for us to raise little stewards.  We desire our children to understand God’s purpose for money and teach them this perspective.  We’re trying to help them learn to give and why it’s important to save.  These are not always easy things for our children to understand because they see advertisements and sometimes desire what their friends have.  They naturally want what the Joneses have, but it’s our job to teach them to be faithful stewards and find contentment in the Lord.

As I mentioned at the beginning of the post, we’re still learning a lot and our finances are far from perfect.  However, I hope you’ve found some of this helpful and this post serves as an encouragement to manage money as a faithful financial steward.

What are some things you’re doing to manage money God’s way?  Let me know in the comments.

We need to begin by being wise stewards.  Knowing the difference in a need and want.  Understanding that we need to provide for our families first then if we have extra left over for something special.  That we should be generous givers yet not to the point of harming our families.  That we need to plan ahead by saving for large purchases, and that we need to work to get ourselves out of debt.

We also need to walk by faith.  Sometimes this means not fully understanding what our Heavenly Father is up to and how He is going to provide.  Sometimes this means obeying and understanding later.  It is a constant walk of faith followed by obedience.  If I truly believe something, I will then live it out as reality.  Our Father is just that – our father.  He wants the best for us.  He wants to see us succeed and gives us everything we need to do so.  We do not always understand His ways since we are human and limited in our knowledge…this is where our faith comes in.

It is also being practical.  I need to know what I am spending each month, how I am spending it, and what I am getting in return.  We often refer to this as our spending plan!  And with that spending plan comes a way to track our spending such as a paper diary, software, or envelopes – whatever works best for you and your lifestyle.  I then make my decisions based on all the knowledge I have by understanding my finances practically as well doing my best to be wise in how I make decisions and at the same time trusting and walking by faith.  That can be quite the balance to keep, but if we realize that we are physical, mental, and spiritual beings, that will help us keep that balance in our lives.  So just as we have those three aspects, finances have all three as well – physical (the practical numbers), mental (wisdom), and spiritual (faith).  Therefore walk by wisdom, faith, and reality this day!

In your own words, define “Stewardship”?

“To me stewardship is realizing first that everything we have is God’s, and not our own. Once we realize that, I believe we need to focus on managing what we have been entrusted with by God, and using it for his glory, to fulfill his purposes on earth. That means that often we must focus on how we can help to meet others needs, not just our own selfish needs, and use our resources for purposes beyond our own. That’s not always easy to do, and it can’t be done without being in relationship with Christ. If we aren’t in relationship with Him, it is so much more easy to rationalize how we selfishly use our money, and forget the needs of others.” – BibleMoneyMatters.com

“Stewardship is acknowledging that you’re a manager of God’s property that He’s entrusted to you, knowing that He’ll want an account of your performance someday and that eventually all you manage will be passed on to another to do the same.” – FreeMoneyFinance.com

“Stewardship is managing someone else’s resources for them. As it relates to money, God is the owner of money and everything in this world. Money, homes, cars, etc. all belong to God and he has entrusted these things to us to manage them wisely according to His princples. My paycheck comes from God, but it’s up to me to manage 100% of that money for God. It doesn’t mean I can’t spend money on entertainment, but God provides principles to help me purpose the money towards giving, saving, spending, etc.” – OneMoneyDesign.com

“Stewardship is all about understanding that God owns everything – it all belongs to Him and it all comes from Him. Anything He has blessed us with here on Earth is to be used to honor Him. We must always think of our resources as God’s resources and seek His will above all else when trying to decide how to use those resources.” - ProvidentPlan.com

“Stewardship is the idea that everything we own and everything we are belongs to God. Therefore, our decisions should reflect serving His interests above our own.” – DollarsandDoctrine.com

“Stewardship is managing any resource on behalf of another. As Christians, we manage our time, talents, money, and relationships in the best interest of the Kingdom of God. As stewards, our personal welfare takes second place to the desires of our Master.” – MoneyHelpForChristians.com

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photo credit: Knight72

After listening to the message the second time, I think it is one of the most profound messages about money and marriage I’ve heard. It gets to the root of money problems and identifies the one true solution. I hope you’ll enjoy what I learned. You can listen to the actual message here.

The 5 Minefields: We Need To Defuse Them

1. Meaning of money

Couples should ask themselves what the meaning of money is to them. Often times we enter into our marriage with different definitions. Perhaps its security or perhaps money is the freedom to buy something to make you happy. “If you don’t know what it means to your spouse, you will be talking in foreign languages”, as my pastor said. It’s important to have this discussion and get on the same page.

2. Gender differences

For most males, their need, when it comes to money, is to provide for their family. They like to carry this burden. For most females, their need is to make sure the family is provided for. The challenge, as mentioned, is when the husband might work longer to provide, but the wife thinks his work is his top priority over family. The husband sees it just the opposite. For some husbands, just because they are working hard, it doesn’t mean they love their jobs more than their families. Obviously, too much work can cause the relationship to suffer. My pastor said couples must seek the right balance to confront this issue.

3. Priorities

When we enter into marriage, we enter with different priorities for money too. There is always the question between couples on how they are going to spend their money. Should we buy, save, invest, give, etc. and in what order? Where will we give? On what will we spend our money? If priorities are different; you’re heading for trouble.

4. Debt

According to my pastor, 43% of American families spend more than they earn in any given year. The average family carries $8000 in credit card debt (without car and home loans). In his words, “American families are going down the tube!” Buying now and paying later is not a good plan.

No matter your stage of life there are probably many things you’ve learned in the last 10 years about money management which may have come at the expense of mistakes, from reading and research, or from the model behaviour of others around you.

So, pretending I could travel back in time 10 years ago there are a few money lessons I would definitely tell myself.  1o years ago would have put me in the stage of life of being single with no children.  I had just graduated graduate school and was a few years into my profession.

Ownership and Responsibility

10 years ago I thought I owned all my money.  I didn’t have God’s perspective on managing money, although, I naturally wanted to manage it well given my organization and business skills.  But, I still thought it was mine to do with it as I pleased and I was far from using it for God’s purposes.  This was definitely evident in the absence of my giving.  Since then I’ve learned through some key scripture the foundational principles of ownership and financial stewardship that help me live in God’s economy.

The earth is the Lord’s and everything in it (Psalms 24:1).

So then, men ought to regard us as servants of Christ and as those entrusted with the secret things of God. Now it is required that those who have been given a trust must prove faithful (1 Corinthians 4: 1-2).

Saving

I think savingfor emergencies and having extra cash on-hand is so important.  10 years ago I was blessed to be making an excellent salary for my age and experience, but I had absolutely no cash to show for it.  Saving requires alot of discipline because you have to be able to say no in order to put money aside.  I will tell you this becomes increasingly difficult to do when you get married and have a family.  The expenses increase and their are more reasons to spend money.  So, what are some savings tips I would have provided myself 10 years ago?

• Auto deposit a portion of your savings into a savings account directly from my paycheck
• Make sure your savings is a separate savings account
• Set specific and attainable savings goals with an eventual target of at least 6 months of emergency expenses
• Differentiate savings between emergencies, auto and other future needs and make sure there are clear categories for these in your monthly budget

Work/Making Money

I would also give myself a lesson on work and making money.  I think my attitude when I got out of school was to chase after the highest paying job.  I definitely had some interest in my field of software and technology, but I was mostly attracted to the salary and didn’t pay as as much attention as I should have to my God given passions and talents.

I’ve definitely learned I have passions and talents for my profession, but I think my hobbies outside of this work truly reflect what I love to do.  Today I believe in looking at these hobbies and figuring out ways to monetize them.  So, if your hobby is blogging on personal finance there is an opportunity to monetize that hobby by providing content and services to others.  The same could be true about many things.  I think Dan Miller’s book, No More Mondays by Dan Miller, helped me see the importance of this.  Therefore, I would buy this book for me 10 years ago and stress the need to read it and make sure you do the work you love.

Final Thoughts

There are many money lessons I would teach myself 10 years ago about money, but these three seem to be first to mind.  The first and most valuable lesson on ownership and responsibility truly drives all decisions financially.  If you do your best to manage money according to God’s truths, I believe you’ll thrive and prosper.

So, what about you?  What lessons would you have taught yourself about money 10 years ago?  Have you ever considered teaching others these lessons?

Now it is required that those who have been given a trust must prove faithful. 1 Corinthians 4:2 (NIV)

Helping others

Final thoughts

The important thing to keep in mind is we should be good stewards of even the smallest of resources.  If we go back to scripture, God is the owner of all things.

Yours, O LORD, is the greatness and the power and the glory and the majesty and the splendor, for everything in heaven and earth is yours. Yours, O LORD, is the kingdom; you are exalted as head over all. 1 Chronicles 29:11 (NIV)

So, even in the smallest examples, it’s up to us to be wise managers of these resources.  Doing so, fulfills our responsibilities, but also sets an example for others to follow.

Can you think of other uncommon examples financial stewardship?  If so, please share them with us in the comments.

Foundation of financial stability

But why do you call Me ‘Lord, Lord,’ and do not do the things which I say? Whoever comes to Me, and hears My sayings and does them, I will show you whom he is like: 4He is like a man building a house, who dug deep and laid the foundation on the rock. And when the flood arose, the stream beat vehemently against that house, and could not shake it, for it was founded on the rock. Luke 6:46-48

The strongest structure will not stand on a weak foundation.  A structural example of this is the Leaning Tower of Pisa. Although intended to stand vertically, the tower began to lean soon after its construction because it was built on a poorly laid foundation.  Our financial foundation are the principals of biblical stewardship and giving.  Once this foundation is laid, you have the potential to build wide (diversity) and high (wealth, profit and increase).

The pillars promote a balanced and diversified approach to financial stability.  Conventional wisdom dictates you should not put all your eggs in one basket. Using the pillars as an example, it may be tempting to build the savings pillar without any regards to insurance.  A medical problem could wipe out months, even years of savings.  The Bible also supports diversification:

Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth. Ecc 11:2

Let’s take a closer look at some of the building blocks that make up the 3 pillars.  In the diagram, I placed savings in the middle because it is the load bearing beam.  If you are beginning to build, I recommend starting here.

Savings

Sure you could save money like grandma used to by stuffing it under a mattress, but there is absolutely no security in that!  Find a bank or credit union that is backed by the FDIC or NCUA respectively to insure your money.  Build an emergency fund large enough to match your situation and comfort level.  The personal finance experts cannot agree on the amount.  Some advocate 3 months of expenses, and others advocate as much as 9 months.  Consider the following factors and set a goal/amount that works for you.

• Risk tolerance
• Stability of income stream(s)
• Number of income streams
• Number of dependents
• Other assets

Savings should be secure, low/no risk and accessible when needed.  Traditional savings accounts at a brick and mortal bank or an online high yield savings accounts are appropriate for an emergency savings stash.  As your savings accumulates, check to see if you are eligible for a money market account. Money market accounts work like regular bank accounts except they have higher interest, a minimum balance, and a low limit on the number of withdrawals allowed per month.  This is an excellent fit for an emergency fund as interest will accumulate.

Another building block in the savings pillar is the certificate of deposit (CD).  CDs have a fixed term and typically a fixed-rate.  There are withdrawal penalties, so this is something that should not be considered for an emergency fund.  Generally, the larger the principal deposit and term length, the higher the interest rate.  CDs attract conservative savers and investors because of their low risk.  However, the return is low for the amount of time your money is held up.  The CD laddering strategy attempts to alleviate this.  The idea is to start several CDs at the same time at varying lengths (example: 1yr, 2yr, and 3yr).  As the CD matures, it would be reinvested at the 3-yr term (highest interest rate).  Eventually, all the CDs will be invested at the 3-yr term, however one would mature every year.  Giving you a bit of flexibility.

Insurance

Insurance is like bitter pill.  We take it because we know it’s good for us, but no one really wants to.  However, having insurance is the responsible thing to do, and in some cases it is required by law.  There is insurance for everything under the sun!  The key is to make sure you have enough of the right kind of insurance.

Probably one of the most popular insurance decisions will be whole or term life insurance.  Term insurance is the cheaper of the two.  It provides coverage for a predetermined amount of time (eg. 30 years).  Whole, or permanent life insurance is open ended, providing coverage as long as you pay the premiums.   They also accumulate a cash value.  Generally speaking, there are better mechanisms than a permanent policy.  If you are disciplined in your investments, you may not need to rely on a life insurance product to save for you.  To see where you line up, use bank rate’s insurance calculator.

If you are going to operate a motor vehicle, car insurance is a requirement in every state.  The amount of minimum coverage varies from state to state.  A 2006 report from the Insurance Research Council estimates more than 14% of drivers are uninsured.  The penalties are hefty and not worth jeopardizing your financial stability.  Don’t do it!

Selecting the amount and type of insurance is a delicate balance between cost and peace of mind.  Not enough insurance and you may find yourself unsettled and in dire straits should a need arise.  Consequently, if you spend too much on insurance, you may not have enough to save or build the third pillar…

Investments

Unlike savings, where your money is stored in a safe, accessible manner; investments involve risk with greater potential for gain over extended periods of time.  The primary focus of investing is increasing your net worth and achieve long term financial goals.  The amount and types of investments you choose will vary according to your risk tolerance.  The market fluctuates and your portfolio graph may look like the latest thrill roller coaster.  However, over long periods of time (10 years or more), the market traditionally increases between 8-10%.

Popular investments include

• 401 (k) retirement plans – Many employers will match a portion of your contribution
• Individual Retirement Accounts
• 529 College Savings Plan – Each state’s plan is different.  Shop around!  You don’t have to select the plan in your state of residence
• Mutual funds & Exchange Trade Funds

Of course there are plenty of other entities not listed here.  This is not meant to be an all inclusive list.  When you start with a strong foundation and these 3 pillars, you are on your way to building financial stability.

What does your blueprint for building financial stability look like?  Do you use the three pillars listed?  Could you include more pillars?  Less?

The Bible has a lot to say about money and among many areas of Biblical finance we find guidance for investing.  Christians who want to exercise wise financial stewardship in managing their personal finances can learn from important principles of steady plodding, avoiding risky investments, diversification and always knowing the status of your investments.

Definition of investing

But first, what is investing?  People sometimes confuse savings and investing.  Wikipedia provides us this definition of investing:

Investment is the commitment of money or capital to purchase financial instruments or other assets in order to gain profitable returns in form of interest, income or appreciation of the value of the instrument.

The most common example of investing might be in investing money into the stock market by purchasing company stock or mutual funds.  Obviously, investing for retirement typically involves such purchases.  Investing in real estate is another common example which might include the purchase of a house, or rental property.

Definition of saving

Saving, on the other hand, is different than investing.  Wikipedia also provides us a pretty good definition of savings:

In terms of personal finance, saving specifies low-risk preservation of money, as in a deposit account, versus investment, wherein risk is higher.

So, a good example of saving includes saving money for emergencies in a savings account.  Saving would also include putting money aside for future purchases such as a car, or Christmas presents.

As I mentioned, the Bible clearly gives us some principles to follow when we commit money or capital to the investment of financial instruments or assets.

Consistent, steady plodding and avoiding risky investments

Steady plodding brings prosperity, hasty speculation brings poverty (Proverbs 21: 5 TLB)

Savings, as mentioned above, is always a lower risk preservation of money.

Investing typically requires a commitment to growth over a longer period of time.  The rewards can be in the form of appreciation of the asset and building of future wealth.  It doesn’t include hasty, risky, or get rich quick schemes that often promise to make you rich over night.

The man who speculates is soon back to where he began – with nothing (Ecclesiastes 5: 13-15 TLB)

Rather, scripture tells us we have to make commitment through steady plodding, or consistent monthly investing that will take time to grow and earn a significant return.

Starting early is important, but it is never too late to start investing for the future.  An easy way to get started is to invest in a company retirement plan such as a 401(k).  If you can still make progress on your Money Map journey, invest at least any minimum amount required to receive the company match.

Diversify investments

When it comes to investing, diversification is often an important subject of the conversation.  The Bible provides us a diversification principle too.

Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on earth (Ecclesiastes 11:2).

It’s important to remember that no investment is a guaranteed return.  Home values can decrease, the stock market can experience losses and other investments can lose their value.

That’s why it’s important to avoid putting your eggs all in one basket, as they say.  As you work with a financial advisor or investing professional, they will help you diversify your investments across different financial instruments based on your investing objectives and timeline.

Know the status of your assets

It may be easy to work with a trusted financial advisor and turn over all of your investing decisions and the management of your portfolio. However, that’s generally not a good idea.  Why?  While you may be working with a trusted financial advisor, scripture tells us we still need to know the condition of our assets or investments at all times.

Be sure you know the condition of your flocks, give careful attention to your herds; for riches do not endure forever, and a crown is not secure for all generations (Proverbs 27:23-24).

It’s a good idea to meet with a financial advisor a few times of year (maybe more depending on your life stage and goals) to review your investment performance, his or her investment strategy and discuss any changes to your goals or objectives.

Final thoughts on investing principles in the Bible

To wrap up, we need to use the Bible has our investing handbook.  While it won’t tell us which stocks to choose or how much we should invest, there are plenty of qualified personal finance advisors who can help you make those specific decisions.

Remember, the Bible provides principles for managing money.  If you invest and follow these Biblical financial principles you can be certain you’re managing your resources wisely and investing in the far greater reward which is your relationship with God.

What do you think about these Biblical principles for investing?

I think we’ve all said or thought that at one time or another. For many of us it’s about money and the decisions we’ve made managing it.  In the recent economic crisis we might often hear people say, “if only I would have known to build emergency savings as a top priority when I finished school, I might not be accumulating so much debt today because of my job loss”.

Sure, sometimes it’s not about money.  Sometimes, we talk about family and relationships and the lack of time spent with them, wishing things could be different today.

Put God First

I heard a pastor once speak about his visits to a local hospital to encourage people with terminal illnesses.  It’s interesting to know that no one he spoke or prayed with talked about their career accomplishments, cars, or other possessions in their final days.  Instead, he said they always talk about their faith in God, family and relationships as the most important areas in their lives.

Most Christians would agree that faith in God and our relationship with Him is the top priority in life.  Putting God first positions us to have a blessed marriage and other relationships because they are based on His solid foundation.

And so by putting God first, we can better understand the importance of living our lives from a Heaven backwards perspective (sometimes referred to as living with an eternal perspective).  Of course it’s not easy to consistently live with this perspective on life, but it’s what we have to strive for as Christians to keep our priorities straight.

Money Decisions from a Heaven Backwards Perspective

Imagine if all of the sudden peoples’ decisions with money management were from a Heaven backwards perspective. People would certainly make different choices with how they make, spend, save and give it. They could begin to see money as a delicate blessing which we are all to manage wisely for prosperity as well as for the good of others.

Managing money from heaven backwards requires doing a few things that might cause some to raise a brow or advise against, but essential to live from this perspective.

Manage Money from Heaven Backwards Checklist

Consider the below manage money from Heaven backwards checklist to see what perspective you’re using to manage your money:

• Do you recognize God as the owner of all things and that you are the manager of what has been entrusted to your care?
• Do you spend wisely by having a spending plan every month?
• Do you strive to live debt free? This includes spending money based on what one can afford (according to your plan) versus the amount of credit which may be available.
• Do you give of your first fruits by tithing? Ultimately, it’s God’s money and through this action, you are trusting in God with your financial prosperity, i.e., there is no more reason to “get rich” because God is in control.
• Do you give back to others by sharing success stories and helping people know what it means to manage money from Heaven backwards?

How many of these did did you answer with yes?  If only a few, you might consider seeking accountability or counsel from other Christian brothers or sisters.  A Money Map Coach or Christian financial counselor can help you identify specific action steps in each of these areas.

Many may define financial freedom as becoming debt free or getting into a position to where there is no more dependence on income from a job. However, the act of managing money from Heaven backwards is financial freedom.

What do you think about managing money from a Heaven backwards perspective?

This is an article I originally posted at Bible Money Matters.