How to Manage Your Finances Biblically
/“Money was a tool to be respected and carefully managed but not worshiped”
As a young kid, I grew up in a loving Catholic family with a dad that was a machinist and a mom that worked part-time in a doctor’s office. I was aware that money was tight but did not fully understand how much my family struggled early on until I got older. I remember occasionally having “breakfast for dinner” on Thursday nights, and later figured out that that was because waffles or pancakes were something that you could make with a couple of eggs, some oil, and some flower when the cupboards were bare and payday was on Friday. I also knew that there were things that my friends had that I wanted but would have to wait a long time to get (like REAL Levi’s jeans or Adidas shoes, instead of bargain brands). But don’t feel at all sorry for me! As a kid, I never missed a meal, I never had a day that my family did not pour love into me, and I got to do all the sports that I wanted. Life was good - it is just that my young parents, at the beginning of their working lives, didn’t make much money.
At 12 years old, it became very clear to me that both of my parents were exceptionally good at money management. This was because they worked hard, paid close attention to spending, and prioritized their needs well. By growing up in this lifestyle, I understood that money was a tool to be respected and carefully managed but not worshiped. I wanted to be like them. I never sought after having a giant house or other great spoils. I simply wanted to make the very best out of whatever I earned, so I could take really good care of my family, just as my parents had done.
In 1985, I married Anita, who is the most incredible lady in the world! And she was, and is, very like-minded in managing money. By the mid-1990s, we both had accepted the love of Christ and how He had died on the cross, was buried and rose again to give us a complete new birth. WOW! What a change! A whole new world and a whole new life! But, in the same amazing church where we were saved, who had the perfect word of God, great preaching, and fantastic ministry, we saw our friends making the same dumb mistakes with money that all of our lost friends were continually making.
“...it is the Lord who provides virtually everything that we have”
This started me on a quest – a quest for truth (from God’s Word) and a quest to use that truth to help others. Since there was no Dave Ramsey (or anything like that then) I did my Shepherds school dissertation on Biblical Finances. I went through almost every book in the Bible and marked and categorized every single verse that I found that had to do with finances. Ever since I have considered it a great honor and privilege to be allowed to help so many of our friends know how to manage their money by showing them God’s perfect way of doing so. What I enjoy the very most is teaching people from the C&YA age group, because they learn so easily and have so much time to get on track now, so they can succeed fantastically, by simply following God’s ways.
Psalm 24:1 The earth is the LORD'S, and the fulness thereof; the world, and they that dwell therein.
Every discussion about finances must start by acknowledging that it is the Lord who provides virtually everything that we have. We are nothing without Him and we can’t have, nor can we do anything without Him, especially financially (John 15:5).
The Bible also teaches that God looks at our finances as a test, as to whether He can trust us with the true riches once we get into our heavenly ministry (Luke 16:10-11). Please take a moment to ask yourself this: If you were to give yourself a grade right now, for how you have handled your finances over the last year, what grade would you give yourself? Wonderful… or not so good.
The biggest problem that most young adults have, is that they just let life happen, instead of taking hold of things in their life, such as managing their money. What this means is that if you are not actively managing your finances, then you are allowing your emotions and other people to determine your outcome. Think about it. How does that normally work out? But, if you are one of the few, who really manage their finances with a purpose and a plan, you will be rewarded, sometimes even greatly. Look at what Proverbs says about being a diligent steward (Pro 10:4; 12:24; 13:4; 21:5).
Proverbs 22:29 Seest thou a man diligent in his business? he shall stand before kings;…”
“Are you still just letting life happen?”
God intends that every man has a job and works productively to feed his family (1Tim 5:8; 2Th 3:10). And if you study it out, there is a great blessing to working. In Ecclesiastes 3:13, King Solomon tells us that “every man should eat and drink, and enjoy the good of all his labour, it is the gift of God.” But there are also many warnings about how work can become vanity if it is not performed as serving God with our main focus being on eternal rewards (1Cor 3:11-15). In counseling, we often see that when people get over-focused on the “blessings” instead of the “Blesser,” they oftentimes experience the “Blesser” removing all of their “blessings,” until they get refocused on Him. Please don’t make this mistake, as it is a VERY painful lesson to learn.
Proverbs 21:20 There is treasure to be desired and oil in the dwelling of the wise; but a foolish man spendeth it up.
Part of being wise with money is having a plan – a spending plan called a budget. You can download a good budget template here and start being very intentional with your money.
Another important part of being diligent is having a savings plan. Do you have one? There are two types of savings:
The first type is called a simple savings plan. This is for things that you want to buy in the next five years, like a car or being able to have a down payment for a house. This should be kept in an interest-earning savings account. The second type of savings is investing. This is for long term needs, like retirement or college for your kids, where you will not need the money for many years to come. Here, whether investing on your own, or (usually much better) in your ROTH 401K at work, it is best to put your money in more volatile, but much higher return accounts, like stock mutual funds. The key to successful long-term investing is to start early because investments grow geometrically over time. This means that you earn interest, that interest then earns its own interest… over and over and over. This is called compounding interest. See what King Solomon, the richest man ever in the world, said about managing money well (Pro 14:24; 19:14; 22:4; 24:4). Are you aligned with God on spending, saving, and investing? Or are you still just letting life happen?
Malachi 3:8 Will a man rob God? Yet ye have robbed me. But ye say, Wherein have we robbed thee? In tithes and offerings. Ye are cursed with a curse: for ye have robbed me, even this whole nation.
Do you want to succeed financially or do you want to have your finances cursed? The choice is yours! God does not need our money, but He does demand that we put our priorities in Him first. Giving is to test our dedication and trust in Him. As we counsel people, it always shocks me that there are so many people that have literally trusted the Lord with their soul forever, but who just cannot make themselves trust Him to make their finances work if they give Him the first 10% of their income. Amazing contrast, isn’t it?
But when we look at the verse above, it shows us that the Bible says that people who rob God will be cursed. Is this what you want?
“Breaking biblical principles results in SUFFERING”
All Christians should give all of the first 10% of what they earn in gross pay, directly to whatever church they belong to. This is God's money. Then, if a person chooses, they can/should also give additionally to whatever ministry or missions that God lays on their hearts. The first 10%, tithing, is not to be designated but everything after that can be designated however you like. And God loves people who give to His causes cheerfully (2 Cor 9:7).
Proverbs 22:7 The rich ruleth over the poor, and the borrower is servant to the lender.
The one financially fatal error that I often see young adults make is to go deeply in debt early in life. Almost nothing can limit their future more. I once heard it said that if you want to be “perpetually in the lower class or lower middle class” go into debt with cars or student loans.
God’s instruction to not go into debt is a Biblical principle. Remember that Biblical principles are God's instructions to keep us out of trouble but are not sin. The result for breaking biblical principles is not punishment (like it is for sin) but breaking biblical principles results in SUFFERING for disobeying God.
At Midtown, we counsel many people that are truly suffering from their dumb decisions to go into debt. There are a few who go against God’s teaching on debt and escape relatively unharmed, but most suffer, and many we counsel suffer greatly as they have to pay $400/mo for decades to get back out of debt.
Another important consideration regarding debt is not just owing someone your future earnings, but it is us being in bondage to the lost world and making ourselves unavailable to God. A good question to always ask yourself if you are considering debt is: If God suddenly gave you the perfect ministry somewhere out in the world, like Malawi, where your needs would be fully met, but you would have no income, could you cash out completely of everything you have and leave the past behind? Or are you selfishly bound in debt and have made yourself unavailable to God? Philippians 4:19 says, “But my God shall supply all your need according to his riches in glory by Christ Jesus.” Do you believe Him or not? Your debt situation reveals what you think of God and His teaching. If God is not supplying a need that you want, does that make the Bible wrong? Or is God just testing your faith before giving you the blessing? Or, does He have a better direction, that you can’t see yet? It is shockingly sad that so many of Midtown’s young adults do not really trust God and instead are choosing to suffer in debt for decades. Note that not one verse in the Bible supports going into any debt that you can’t immediately get out of if so needed.
Matthew 25:21 His lord said unto him, Well done, thou good and faithful servant: thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord.
“Just move forward and obey God”
A Christian’s goal with finances should be to obey God completely and then live in full faith that He will keep His promises to supply our every need. We want to hear our Lord say “well done” at the Judgement Seat. I encourage you to do your very best to follow ALL of God's teaching on finances and in turn, things should turn out very well for you. Also, don’t beat yourself up if you make a few mistakes along the way. We all do! Just move forward and obey God.
Anita and I started young and poor but always trusted God. The single most important thing that we did financially was we never, ever went into debt for anything except our house (which, if needed, we could have sold at any time). When we were young and Anita had to quit her job to be with our daughter Haley, we needed every penny of that “interest money” to make ends meet. As we got older and were blessed with higher incomes, we invested all of that money that our peers continually waste on interest, and are now exceedingly blessed. Trust God – it may not appear the easy way, but it works!
Larry Smith is a teaching elder at Midtown Baptist Temple. He and his wife Anita have taught on biblical finances for many years, helping people break free from debt and focus their attention on eternal things.