Congratulations! You have just graduated from high school, or college. Now it is time to get a job and earn your own money so that you do not have to depend on your parents anymore. Feels good doesn’t it? Soon you will be able to get that new cell phone, that hot car, that nice house. Well, I guarantee you it won’t be that easy and won’t feel as good as you thought. Many individuals spend their lives in debt and have to work constantly just to pay down these bills. Is that really the kind of life we want to live?
The Bible provides the keys to success in all aspects of life including our spiritual life, interpersonal relationships, and yes, financial management! In this article we will seek to extract some of the main principles set out by the Word of God pertaining to financial stewardship.
The first principle is “Seek first His kingdom and His righteousness and all these things will be given to you as well” [Matthew 6:33 NIV]. This is the very first step. No financial goal should take precedence over the purpose for our life, which is to honor God and enter His kingdom. It is also a promise of God that once we do this, we need not worry about what we will eat or drink or wear, because all these things will be given to us.
The second principle is that of giving our tithes and offerings. The Lord admonishes us to “test Him in this” [Malachi 3:10 NIV] that He will open the floodgates of heaven and pour out so much blessings we will not have room for it, if we pay our full tithes. Apart from tithing being a command from God, the Lord will bless you richly if you give with a cheerful heart (2 Corinthians 9:6-15).
The third principle is to manage our money. Budgeting is the basic financial skill that requires the most discipline. We must properly manage the money that we get otherwise it will leave. Whether it is an allowance or a paycheck we must make a solid plan of how every dollar will be used and stick to it! Credit card spending is another area we need to manage, and we must do so even more vigilantly. It is a very convenient way to spend money we do not have at the moment; however, if that payment cycle comes around and we still do not have the money, it will cost dearly in interest and penalties.
The fourth principle is to invest – the parable of the talents in Matthew 25:14-30 shows that God expects us to multiply what he has blessed us with or he will take it away and give it to someone who will multiply it. It is good to work hard for money but working should not be our only source of income. Ecclesiastes 11:6 says, “Sow your seed in the morning” meaning to invest “and at evening let not your hands be idle,” meaning we must work “for you do not know which will succeed.” Essentially, we must diversify our income streams, earning money from various sources.
The fifth principle is to understand the difference between assets and liabilities. An asset is anything that puts money into our pockets such as stocks, bonds, real estate rented to others, or a small business. In contrast, a liability is anything that takes money out of our pockets. These include loans, cars, or a house for which we are paying rent or mortgage with no equity. The financial rule of thumb is to accumulate assets and use the returns from those assets to purchase liabilities. You also need to be patient with taking on liabilities. We have a tendency to want to spend money on the latest gadgets, that newest cell phone, new clothes, and new cars. We want them now, but the truth may be that we do not need them right now. So we can wait, and when we do buy them we should try use the extra money generated by our assets.
The next principle is to use leverage. Any tool we can use to generate income at an accelerated rate with small effort on our part can be considered as leverage. If we take a loan to invest in a business, that would be money we do not have to work for initially. The strategy is to borrow and use this money to make a whole lot more; enough to pay back that loan and still make a significant profit. That is leverage. Advanced education and marketable skills are other forms of leverage. Proverbs 22:29 tells us that if we are skilled in our work we will serve before kings. If you are the most skillful chef around and you cook for a king, chances are you are making more money doing so than someone cooking in a school canteen.
Last but not least, we should not wear ourselves out to get rich (Proverbs 23:4). Devote our time to the Lord and His work. Try to let our money work for us as much as possible. We should spend time doing the things we love, with the people we love. There is really no point in being financially “well-off” if we are not living a fulfilling life in other areas.
