When I meet with engaged couples for pre-marital counseling, one area we always cover is money. The reality is that personal finances are a stressor for many people and households… and it never solves itself on its own. It’s always tempting to think, “when I make more, this will work itself out.” But that’s not true. Witness the number of people earning huge amounts, only to see their stress increase.
Whether you are newlyweds or married for 20 years, it’s worth coming back to the basics every once in a while. There are principles that always work – whether you are in your first job or making your tenth million! Simply put, we have to tackle 3 basics, in this order:
(1) Your Financial Mindset. What’s your general view of money. What is it? What do we use it for? Why? Here are a few key portions that every financial outlook has to account for:
- Money is a tool. Much or little, it’s just a tool. It’s not to be sought after, but neither is it to be avoided. It doesn’t really matter if you have oodles of it or barely any. What matters is how you use the tool.
- Settle who owns our money and stuff: us, God, or someone else. Now live in that reality. If it’s God (and it is!), we adopt a steward/manager mindset, not an owner mindset. That changes how we think about everything else.
- Settle if God is going to get the first-fruits or not. Is giving to the Lord and his Work primary or down the line? Is it non-negotiable or merely a good thing to do? This is global mindset stuff.
- Jesus in the Gospels calls us to a radical lifestyle because the Kingdom is here. The Proverbs call us to a prudent lifestyle of diligence to be prepared for unexpected hard times. The Epistles call us to a generous lifestyle because of God’s grace. These might seem paradoxical, but each of them is Scripture’s calling for us. Radically prudent generosity. Generously radical prudence. You get the idea.
- Here’s one that might sound controversial, but is really common sense: If you are married, live on one income. If both of you work, bank the second – using it for retirement, one-off items, generous gifts, or upping savings. Don’t work your monthly budget from both incomes. That way if one of you loses or gives up your job, you won’t also have to sell a car & move from your house, etc.
(2) Your Financial Goals. These are the things we do or aim to do that will enact our mindset. Since God owns this tool, and since he calls us to use it radically, prudently and generously, the question becomes: what are we aiming at, and how do we get there?
Goals like short-term an emergency fund. Life goals like regular, consistent and growing patterns in our giving. Fun goals like a vacation to Disney or cruise. Goals like “after 2019, no car loans ever again” “pay off our house 8 years early” “never carry a credit card balance” “give more on my raise than ever.”
Goals can be process-oriented (“getting on a bill-pay system”) or achievement oriented (“save $5,000 in emergency cushion”). Either way, we need them. We’ll never get anywhere if we don’t know where we are going.
(3) Your Financial Processes. How are we going to do life each month, and how are we going to progress toward the goals? This is where the nuts-and-bolts processes come in. What happens as each paycheck or bill comes in.
- Designate one person to administrate your family budget. This does not mean they are in control of it. It just means they are the executors of the plan. It takes time to keep up with things. The person who is not serving as the “administrator” must make sure they encourage the one who is.
- Know the conditions of your flocks, says Proverbs. Spend some time noting everything you spend. You’ll be surprised. But you will be armed with real data (not wishful thinking). Perhaps 3 months is enough to get a sense.
- Know your expenses and obligations. List them. Measure them against the income you can count on. Change things if there are more expenses than income. Don’t hedge on this one.
- Write your first check to the Lord’s Work, and your second check to your savings. Everything else will take care of itself.
- If things are tight, pay cash for things. Do it until your situation changes. Every study has shown that credit/debit cards do not hinder our spending as much as handing over greenbacks.
- If things are flush or relaxed, don’t assume they always will be. Prepare yourself for the rainy day, even while you enjoy the sun!
- Processes really do work. Trust a good process. Work a wise process. You don’t see the harvest the day after you plant the seed… but you know it’s coming.
- Know the difference between needs, wants and desires. (“I need a car, I want a new car, I desire a Porsche”). Until things are relaxed, say no to desires, yes to needs, and weigh your wants very carefully.
What else? What other keys do you know? Do you have a sense of being out of control or needing a little bit of help? Call a friend or stop by at church. We have folks who will walk with you (confidentially), and help you put into practice God’s mindset so that you can reach godly goals by a godly process.