What does the Bible say about money and figuring out your faith and finances? Actually, a lot. Money is one of the most mentioned topics in the Bible with approximately 2,350 versus discussing money and possessions. As Christians, we want to remain free in the blood of Christ, including in the use of our personal finances. Below are five action steps to help you align your faith and finances.
5 Steps to Align Your Faith and Finances
The most important component in aligning your faith with your finances, is an acknowledgement that your money is not your own (Deut. 8:17-18, 1 Chron. 29:11-12). Rather, your money is granted to you from God.
While on this earth, we are given the opportunity to steward both our talents and treasures for the glory of God. We do this to further his Kingdom.
Stewardship is the careful management of something entrusted to one’s care.
If we consider ourselves the entrusted shepherds of God’s gifts, then it becomes prudent as a Christian to consider giving the gifts of money and our talents to God first to further his Kingdom. This should be done prayerfully, intentionally, and with a joyful heart (2 Cor. 9:7, Col. 3:23-24). Many times, this is done through giving a tithe/offering at your local church.
2. Expenses and Lifestyle
We must consider the day-to-day management of our finances. This can be one of the most impactful efforts toward our financial future.
Consider if you are “living within your means.” This means that you spend less than you earn.
If you aren’t yet spending less than you earn, you can follow these three steps to help you get there.
Create a list of your monthly income, and then create a list of your monthly expenses.
There are several tools to assist with this including Mint.com and Excel. You can also use good old-fashioned paper and pen. Identify the expenses than can be lowered and consider additional income sources, if needed.
2) Pay Off Debt
If necessary, create a plan to pay off existing debt, especially if the debt is tied to anything other than a mortgage.
If you have consumer debt, like credit card debt, this is a key place to pause and reflect on your spending decisions. Ask yourself, at the time of purchase were you content with what you had (Heb. 13:5)? The Bible instructs us that the “borrower is slave to the lender” (Prov. 22:7). Going forward, equip yourself with those verses to arm yourself against making purchases in an attempt to buy false happiness. It will assist you in avoiding debt.
3) Establish an Emergency Savings
It is recommended that at least three to six months of monthly expenses are set aside in a separate savings account for emergencies. This can help you avoid going into consumer debt in the event of a rainy day. It also acknowledges that you are not always in control over every aspect of your life. These savings would be utilized to pay for large expenditures, such as repair of a car, unexpected illness, or temporary inability to work.
Okay, I’m there. Now what?
If you’ve mastered the above steps give yourself a pat on the back. You are doing a great job aligning your faith with your finances. Now you can consider increasing your savings, increasing your tithe, or even accelerating the payoff of debt.
3. Savings and Investments
The Bible speaks to saving and investing for your future. Several verses in Proverbs (Prov. 21:20, Prov. 13:22) point out its importance. The Bible even goes as far as mentioning that one should leave an inheritance to their “children’s children.”
That sounds overwhelming, where do I start?
First, understand compound interest. Saving early and often can significantly impact your savings. Delaying saving and investing can have the inverse effect and can negatively impact your financial future.
Next, start with something simple. If you are employed, consider contributing up to your employer-match in your 401(k) or 403(b) saving account. This is a discipline that is easy to keep because the money is directed straight to your retirement savings automatically and you will begin living without it before you have a chance to miss it.
Recognize that different account types (IRAs, Roth IRAs, 401(k)s, etc.) have different tax benefits so consult a financial professional to understand the impact and set the best strategy for you. Watch this video to learn about the levels of savings and investments to prioritize.
4. Risk Management
Risk management helps to protect us when the unexpected, uncontrollable happens.
Remember that God is in control. Man left the Garden of Eden long ago (Gen. 3), and we don’t have the luxury of life always going as planned. Financially speaking one can avoid risks, mitigate risks, or transfer risks. A common tool that is used to transfer risk is insurance.
There are several different types of insurance to consider.
- Life insurance if you have a spouse or dependents.
- Disability insurance if you have income.
- Property and casualty insurance to protect assets such as a home or vehicle.
- An umbrella policy may sometimes be considered to protect against litigation.
5. Get assistance. Engage a Professional.
It is expected that you will have financial questions as you navigate your personal finances. When your financial picture becomes complex, a financial advisor can review your investments, employer plan benefits, etc. and provide you with tailored advice.
Ensure that if you choose to work with a professional you are working with one who understands your commitments to your faith.
Work with a fiduciary (a trusted advisor who helps take care of your money) because they must act in your best interest first. Know whether or not the advisor takes commissions from you. Find an advisor that does not take commissions from you.
The following link provides a good resource for you to utilize when identifying a professional of whom you can trust: 10 Questions to Ask Your Financial Advisor | CFP - Let's Make a Plan (letsmakeaplan.org)
What’s Your Next Step?
Always start in the Bible when making financial decisions. Ask yourself “how will this financial decision further God’s kingdom?”
Recognize that aligning your faith and your finances is an ongoing, ever-changing process. Utilize the above steps to initiate change, and don’t be afraid to seek counsel from a financial professional who can guide you along your journey.
Amanda Legler is a Certified Financial Planner™ and works as a Financial Advisor at SYM Financial Advisors. It is her priority to hold a fiduciary standard of care with all clients by providing educated unbiased financial planning and investment advice. In her spare time, Amanda volunteers at Morning Dove Therapeutic Riding Center. Additionally, she enjoys spending time with her husband and children, as well as serving at Traders Point Christian Church in Indiana.
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Disclosure: The opinions expressed herein are those of SYM Financial Corporation (“SYM”) and are subject to change without notice. This material is not financial advice or an offer to sell any product. SYM reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. SYM is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about SYM including our investment strategies, fees, and objectives can be found in our ADV Part 2, which is available upon request.