Wisdom and Finance

April 18, 2010
Proverbs 21:5, 29; Luke 15:11-16

Last week, we heard how the American Dream contrasts with God’s vision, and how God’s vision brings joy that the American Dream never can. This week, as we continue our series Enough: Discovering Joy Through Simplicity and Generosity, we look at the biblical principles of money management and discover how they apply to our daily life. We will look at three things: 1) where our money goes, 2) our relationship with money and possessions, and 3) the discipline necessary to manage our money.

Have you ever asked at the end of the month, or the end of the week, “Where Did All Our Money Go?” I imagine most of us have – unless we have tree producing twenty-dollar bills year ‘round. So, why is it so many people ask that question? Could it be…

Many of us today are living as “prodigals.” Jesus described the prodigal son (Luke 15:11-16) as a young man with a habit of squandering his money. As the word prodigal means, he literally “wasted his money.” Many of us struggle with that habit as well. Wanting something today, we don’t think about what we are going to do tomorrow. Then when the “famine” comes, we have no money, and charge things on our credit cards. We go a little into debt, and then a little more, until we can’t see our way out.

The more we make, the more we waste. It seems the more financially secure we become the less we worry about spending money here and there. We waste a dollar on this or that, and we forget where it went. Money just seems to flow through our fingers. We are probably not as careful as we should be with our money and we waste it in a lot of ways, with the top two ways being our impulse buying and eating out.

A good thing for all of us to do, although it would be impossible to eliminate it altogether, would be to avoid impulse buying and to reduce our eating out. We’ve heard it before:
• Never go grocery shopping when you are hungry.
• Shop only for what you need.
• Make a list and stick to it; buy what you need and get out of the store!
• Wait twenty-four hours before buying anything on impulse.

It works! And concerning eating out, the issue is frequency. The average American eats out an average of four times a week. By eating out less frequently, we would have more money to save, to spend on something maybe more important, or to give away.

Clarifying Our Relationship With Money and Possessions We do not exist simply to consume as much as we can and get as much pleasure as we can while we are here on this earth. We have a higher purpose. We need to know and understand our life purpose—our vision or mission or calling—and then spend our money in ways that are consistent with this purpose or calling.

This will require us to be clear about our purpose and calling. Our society tells us we are here to consume—to make and spend as much money as possible. The Bible says we were created to care for God’s creation… to love God and to love our neighbors… to care for our families and those in need… to glorify God, seek justice, and do mercy. Our money and possessions should be devoted to helping us fulfill this calling of caring for our families and others and of serving Christ and the world through the church, missions, and everyday opportunities. We have a life purpose that is greater than our own self-interests, and how we spend our God-given resources reflects our understanding and commitment to this life purpose or mission.

This will also require us to set worthy goals. Being able to accomplish the greater purposes God has for our lives requires a little planning. Taking the time to set goals related to our lives and our finances is crucial if we are to become wise stewards of our God-given resources. We should think about our purpose and goals in life and then identify two short-term financial goals, two mid-range financial goals, and two long-term financial goals that are aimed at helping us to accomplish our broader life goals. At least one goal in each category should relate specifically to our faith. (To do this, use the insert “My Life and Financial Goals Worksheet” provided in today’s bulletin)

The Discipline of Managing Your Money is the final piece to our puzzle. It is not always easy and requires a way of doing things that are not a lot of fun.

Yet a budget and spending plan is necessary. First we set our goals and then must develop a plan to meet them. A budget is a spending plan that helps us meet those goals. Some people use an envelope system, or a number of different approaches, to help them manage their saving and spending to stay on budget. Many find it helpful to seek the advice of a financial advisor. For those in the midst of a financial crisis, a financial counselor can help to work out terms with creditors and develop a workable financial plan. Whatever approach you choose, the important thing is simply to have a plan. (Suggestion: Use the bulletin insert “My Life and Financial Goals Worksheet.”)

Six Financial Planning Principles The following financial planning principles can help us to manage our money with wisdom and faith:
1. Pay your tithe and offering first. Put God first in your living and your giving. Give your tithe and offering from the “top” of your paycheck, and then live on whatever remains.
2. Create a budget and track your expenses. Creating a budget is simply developing a plan for what you want your money to do. Tracking your expenses with a budget is like getting on the scales: It allows you to see how you are doing and motivates you to be more careful with your spending. (“Basic Budget Worksheet.”)
3. Simplify your lifestyle (live below your means). Because this discipline is critical to the success of any financial plan, next Sunday’s sermon will be devoted to this topic.
4. Establish an emergency fund. This is an account set aside specifically for emergencies separate from checking or long-term savings. Dave Ramsey recommends starting with $1,000 and building that to three months’ worth of income.
5. Pay off credit cards, use only cash/check/debit card for purchases, and use credit wisely. To begin paying off your credit card debt, either start with the card with the highest interest rate or pay down the smallest debt first. Then apply the payments from the first card to the next, and so on, until all are paid off. Cut up your cards as you pay them down. If you must use a credit card, pay off the debt monthly.
6. Practice long-term savings and investing habits. Saving money is the number-one wise money management principle everyone should practice. It should never be for the sake of hoarding – something frowned upon in the Bible as the practice of fools - but is meant to be purposeful, for things like: 1) emergencies, 2) specific wants and goals, and 3) retirement.

Proverbs 21:5 says, “Careful planning puts you ahead in the long run; rushing around without knowing where you are going puts you further behind.” Good advice for all of us.

I invite everyone to take time this week to begin some careful planning concerning your financial future, if it’s something you have not already done. Take the bulletin inserts home and fill them out. Start today toward discovering the joy that can be yours.

Join us next week for as we address head-on our human tendency to accumulate possessions and wealth and learn how to consciously change our ways.