When we talk about budgeting with our clients, We like to remind them that, while their spreadsheets or budget apps may seem complex, there are really only five uses of money. These categories help to simplify the budgeting process, and when divided appropriately, help to guide our spending and saving wisely. These five uses are:
- Live. Balancing provision and protection
- Give. Giving breaks the power of money.
- Owe Debt. Debt always mortgages the future.
- Owe Taxes. Taxes are symptomatic of God's provision.
- Grow. Growing Margin is the only way to meet long term goals.
The “Live” wedge of the pie is very often the largest slice for most people – it can account for 50%-70% of your budget. We all have limited financial resources, but unlimited spending alternatives. A worldly view of lifestyle spending will pressure us to spend all we make (and then some through the use of debt) and to be discontent with what we have. A biblical view will allow us to view our lifestyle spending through an eternal lens, as Jesus tells us:
“Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal.But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal.For where your treasure is, there your heart will be also." – Matthew 6:19-21
As we have already discussed, wisdom and guidance on money and lifestyle spending can be found all throughout scripture. God speaks on proper Christian lifestyle through Timothy. Here we see the instruction that good stewards provide for their families.
“Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever.” – 1 Timothy 5:8
An important question to ask ourselves: “When do I cross the line from provision to protection?” Larry Burkett has said “It is my responsibility to provide. It’s God’s responsibility to protect.” We often will come back to the topic of contentment. Timothy speaks on the importance of being content with our lifestyle.
“But godliness with contentment is great gain. For we brought nothing into the world, and we can take nothing out of it. But if we have food and clothing, we will be content with that.” – 1 Timothy 6:6-8
The second slice of the pie, the "Give" slice, is a very important part of planning a budget because of the deep changes it can make in our lives. Giving breaks the power of money in our lives, and can lead us further on a path of contentment. Throughout my time as a Kingdom Advisor, I have heard many stories of individuals and families who are radically generous with the resources God has blessed them with. Why would someone ever give away so much of their own hard-earned wealth!? Well, no one ever would, unless they knew that their wealth, and every other good thing in their life, did not truly belong to them, but rather belongs to and comes from God. If God owns it, I have no fear of loss! In His Sermon on the Mount, Jesus told us to not worry about the future, or fret over all the different things that could go wrong.
“Therefore I tell you, do not be anxious about your life, what you will eat or what you will drink, nor about your body, what you will put on. Is not life more than food, and the body more than clothing? Look at the birds of the air: they neither sow nor reap nor gather into barns, and yet your heavenly Father feeds them. Are you not of more value than they? And which of you by being anxious can add a single hour to his span of life?” – Matthew 6:25-27
A Christian investor who follows the advice of a Certified Kingdom Advisor® will also have a perspective that leads them to contentment. Contentment is one of the key components to being able to give wealth away for Kingdom purposes: If I am satisfied with what I have in life, I am not constantly chasing after the next bump up in lifestyle (bigger house, newer car, nicer vacation) and I can freely and generously give more away. I look forward to diving deeper into the topics of generosity, stewardship, and contentment in later blog posts.
The next two slices of the pie fall into the “Owe” category. Owing taxes is simply a fact of life. While the topic of taxes can be confusing and frustrating, getting a handle on your tax situation is vitally important to the financial health of your family and is a crucial consideration when it comes to your stewardship of God’s resources. The sentiments of frustration and confusion over taxes are common, especially when we view taxes through a worldly lens. I’d like to tackle the complaint of complexity first. I agree that the tax code in our country is complex, even as a financial professional with years of experience, I know that my expertise when it comes to taxes barely scratches the surface! For this reason, I highly recommend for all of my clients to find a CPA that they trust and feel comfortable with and work with this expert as they complete their taxes. The concept of seeking professional advice is a biblical one, too.
“O Lord, my heart is not proud, nor my eyes haughty; nor do I involve myself in great matters, or in things too difficult for me.” – Psalm 131:1
There is no shame in seeking wise counsel in areas where we don’t have the expertise. A tax professional can help to highlight areas within your taxes that are unclear to you, and could help you avoid many frustrating nights in front of your computer trying to do it all yourself! The sentiment of anger over how much taxes we pay to our government is also a common one, but not neccisarily a biblical one. It is part of my job as an advisor to help my clients put financial frustrations into proper perspective. I hope I can shed some light here on what the Bible says about taxes, and that in turn, the hearts and attitudes of our clients can change to reflect the truth in which God would have them trust.
One biblical truth that we will return to time and time again is that God owns it all. It is crucial as Christians that we know this with our heads and believe this with our hearts: “The earth is the Lord’s and the fullness thereof, The world and those who dwell therein,” -Psalm 24:1. Adopting this mindset will have an impact on all areas of our financial lives, including the area of taxes. Paying income taxes recognizes God’s provision and honors authority. Scripture is clear that we are to pay our taxes with honesty, transparency, and integrity.
“And Jesus said to them, ‘Render to Caesar the things that are Caesar’s, and to God the things that are God’s.” – Mark 12:17a
“Render to all what is due them: tax to whom tax is due; custom to whom custom; fear to whom fear; honor to whom honor.” – Romans 13:7
Here, Jesus and Paul lay out the attitude we are to have when we pay our taxes. Taxes should not come as a surprise to us or cause frustration because we know they come due every year, we are commanded in scripture to honestly pay them, and we can do so with a joyful heart in recognition of God’s blessing and provision of a plentiful income.
The other section of the "Owe" wedge - "Owe Debt" - however, should give rise to some righteous anger and it should be our goal to shrink the size of this pie slice as we accomplish our financial goals. Our lifestyle will be the largest driver of our debt decisions, and debt payments often have a huge impact on our monthly budget. Americans today are buried under enormous amounts of debt, from student loans, medical bills, car payments, to credit cards, these recurring payments have simply become a way of life for so many in our country today. Scripture is clear about what our attitude should be about debt
“The rich rules over the poor, and the borrower is slave to the lender.” – Proverbs 22:7
Our culture views debt in a very different way than the Bible would have us. The world views debt as a way of life and tells us that our lifestyles should be our number one objective because “we deserve it.” Growth in credit card borrowing has continued to the point where 80% of Americans today have more debt than assets. That being said, there is a biblical truth we should start with here. First, Scripture does not say that borrowing is a sin, but that not repaying debt is.
"Do not be a man who strikes hands in pledge or puts up security for debts; if you lack means to pay, your very bed will be snatched from under you." -Proverbs 22: 26-27
From this biblical truth, we see that when we borrow, we run the risk of having everything taken away from us. So while it is not a sin, borrowing money is serious business. Debt is a big deal! I look forward to diving deeper into practical ways we can reduce debt in future blog posts.
The final wedge in the pie is the "Grow" slice. God’s word has more specificity in regards to the area of investing than almost any other financial topic. I have written a detailed blog post on the Biblical Perspective of Investing that you can read here. Very simply put, one accumulates wealth by spending less than they earn over a long time period. Some important questions to ask when building an investment plan are:
- Have I repaid all short -term (consumer) debt?
- Do I have adequate cash reserves?
- Am I diversified?
- Have I integrated my biblical convictions into my investment strategy?
- Am I investing unwisely due to an attitude of greed, pride, or fear?
The first practical step in getting your budget under control is taking a detailed look at your spending habits and making decisions on where to cut back or what to eliminate entirely. On a personal note, while I strive to study these biblical truths and learn to apply them to my own life and my own financial planning practice, I am in no way perfect. I struggle every day to live my own life according to God’s word. While I may know in my head that the Bible tells me to live below my means and avoid the use of debt, I am a human, and therefore tempted around every corner to upgrade my lifestyle or spend money selfishly. If I am not daily reading my Bible and spending time in reflection, asking the Holy Spirit to guide me, it is very easy to fall into a way of thinking about money the way the world does: to be fearful about the future, and self-serving with my wealth. But, praise God, I have a source of wisdom that never fails.
“For the Lord gives wisdom; from his mouth come knowledge and understanding.” – Proverbs 2:6
“But if any of you lacks wisdom, let him ask of God, who gives to all generously and without reproach.” - James 1:5
There may be areas of your lifestyle where you feel led to make some adjustments in order to become better stewards of God’s blessings. God's Word is timeless, transcendent, accurate, practical and relevant to all subjects, including on how we spend and use money. Prayerfully seek God’s direction regarding your lifestyle. As always, my father and I would be very happy to answer any questions you may have!