Money… it is as important in our life today as it was in Jesus’ day. Did you know that apart from speaking about the Kingdom of God, Jesus spoke of money more than any other single subject. Jesus knew the role it would play in our lives and he spoke often with warnings and rebukes. Perhaps this was because Jesus understood how money itself can and often does become something that can separate us from him.
Jesus said “No-one can serve two masters… you cannot serve both God and money.” Matthew 6:24. The Bible makes it exceedingly clear – we are to make God our first and foremost priority. Who is your master and whom do you serve, God or money?
Let’s assume that we have our heart in the right place and we want to wisely use God’s gift of money given to us. What do we do next? Do we just trust God & walk by faith in our earning and use of money?
The Bible says in Proverbs 16:9 “We should make plans …. counting on God to direct us.” To walk by faith does not mean that you stop thinking, taking advice and self correcting or becoming lazy and apathetic with our money management.
Acting foolishly, expecting God to bail you out when things go amiss, isn’t faith – it’s presumption. Wisdom says do all you can, then trust God to do what you cannot do. Faith, prayer and careful planning go hand in hand.
Biblical money management involves preparing a plan of future income and expenses over a period of time for a family or business situation – a budget.
Here is a simple process to prepare a household budget.
1. Summarise all income and expenses over a recent period of time eg 6 months or 12 months. This will involve analysis of transactions in your bank account and credit card statements, pay-slips, cash dockets and other records.
2. Determine how much of your income you want to give as offerings to God. This will be discussed in greater detail in a subsequent article.
3. Prepare a budget going forward of estimated income and expenses for a period of time. Usually this would be for a period of 12 months based on a financial year (July to June) or a calendar year (January to December). I recommend that the budget is prepared as totals for each category of income and expenses for the full 12 months and then split into monthly amounts. A spreadsheet or column exercise book with months listed across the top of the page and income and expense categories down the page is an excellent way to prepare the budget. There are also computer software packages that can be used.
Common income items are: salary, business drawings, interest, dividends, unemployment, pensions and asset sales.
Common expense items are: offerings to God (always the first item on the list), donations, living expenses such as groceries, home mortgage, rent, income tax, council & water rates, medical, education, electricity & gas, telephone, internet, insurance, motor vehicle, social, entertainment and holidays.
4. Compare total budgeted income and expense totals
- If the income is greater than expenses, decide on how to invest the savings. The subject of “Christian Investing” will be discussed in another article.
- If expenses are greater than income, investigate the following options
- Reduce expenses where possible. The subject of “Living with Less” and reducing expenses will be considered in a subsequent article.
- Increase income eg working overtime or taking up part time work.
- Seek counselling from an experienced financial counsellor.
5. Analyse and record actual income and expenses on a monthly or even daily basis.
6. Compare actual versus budget totals on a regular basis and obtain reasons for major fluctuations and adjust the budget for the rest of the year.
Here are some other useful tips in managing your finances.
The preparation and monitoring of a budget can be time consuming and a regular process. It requires prayerful consideration, a strong will and discipline. To make it more interesting, split your expenses into 4 categories
- Offerings to God and donations and gifts to others in need
- Payments for the essentials of running a family and household
- Special ways to refresh yourself and give yourself a treat eg entertainment, holidays, spiritual and bodily refreshment. It is important to thank God, reward yourself and to give you an incentive for managing your finances well.
- Allocating money to savings for special purposes such as motor vehicle purchases, investments and superannuation.
Remember, money is God’s gift to you. No matter how much you earn, use your money wisely to glorify God by proper planning and decision making. God blesses us, so that we can be His blessing to others. And remember to thank God continually for providing money for you to live.
Prepared by Mel Zerner
Christian Money Management 