Read an Excerpt
Includes Family Budget Models
By Larry Burkett
Moody PublishersCopyright © 1998 Moody Bible Institute of Chicago
All rights reserved.
It is important for a Christian to be able to recognize financial bondage, but it is equally important to know how to achieve freedom. Financial freedom manifests itself in every aspect of the Christian's life—relief from worry and tension about overdue bills, a clear conscience before God and others, and the absolute assurance that God is in control of his or her finances.
That is not to say that a Christian's finances will be totally void of difficulties. Often God allows consequences of earlier actions to reinforce a lesson. But no matter what the circumstances, God promises peace.
When God manages our finances, we have nothing to worry about. He is the master of the universe. It is His wisdom that we seek. Human beings are subject to making mistakes at any moment. But as soon as we admit our errors and let God take control again, we are back under His guidance.
Once a Christian truly experiences financial freedom, he or she will never desire to move outside of God's will. Perfect peace is what is promised, and perfect peace is what God delivers.
I have never met a non-Christian who had true freedom from worry, anxiety, tension, harassment, or bitterness about money. Once an individual achieves financial freedom (meaning freedom from the bondage of debts, oppression, envy, covetousness, greed, and resentfulness), he or she stands out like a beacon at sea.
A PRINCIPLE UNDER SCRUTINY
THE CASE FOR PLANNING
Often Christians argue about whether it is biblical to plan. Those who argue against it misunderstand what God says about finances. They argue that God expects us to rely on Him for everything instead of planning. Others create plans so inflexible that they can no longer respond to God's leading. Clearly the answer lies somewhere in between.
God is an orderly provider. The physical world is not chaotic; it is orderly and well-planned. Atoms stay together because God so ordered them. Finances are just another aspect of the Christian's life that God wants to manage. If we are stewards and God is the owner, we must seek His wisdom. Therefore we must go to God's Word for our plans.
God calls each of us to be disciplined and to sacrifice to accomplish the kingdom's work. Discipline and sacrifice begin with finances, although it is possible to be financially disciplined and still not be an active part of God's work. But it is impossible to be financially undisciplined and be active in God's work. "He who is faithful in a very little thing is faithful also in much; and he who is unrighteous in a very little thing is unrighteous also in much. If therefore you have not been faithful in the use of unrighteous mammon, who will entrust the true riches to you?" (Luke 16:10-11).
Lack of self-discipline affects the spiritual life and manifests itself in inconsistent Bible study and prayer. Without exception, this creates a slackening of spiritual awareness. The place to start being a self-disciplined servant of the Lord is in the area of finances.
1. God wants us to be knowledgeable about the assets He has entrusted to us. "Know well the condition of your flocks, and pay attention to your herds" (Proverbs 27:23). For herds or flocks, substitute what you actually have.
2. We are to be an active part of God's plan, exercising our minds and abilities. "Commit your works to the Lord, and your plans will be established" (Proverbs 16:3). We are required to plan and commit.
3. Plan with the future in mind. "Which one of you, when he wants to build a tower, does not first sit down and calculate the cost, to see if he has enough to complete it?" (Luke 14:28). That means we should anticipate the unforeseen.
4. Christians should know God's provision for them and be content with it. "But godliness actually is a means of great gain, when accompanied by contentment" (1 Timothy 6:6). Accomplishing this requires both husband and wife working and planning together, literally being of "one mind."
WHERE TO START
For those of you who have never, or rarely, developed a financial plan for your family, here are a few basic guidelines. First, if you are married your plan must involve both husband and wife. At least one full day should be set aside to pray and plan your finances for the year. Second, don't try to do your planning at home, where there are innumerable distractions. Find a quiet place where you will not be disturbed. Third, bring all the information you'll need, including last year's bank ledger, budget book, income tax return, checkbook, and so on. Fourth, use a simple but complete family budget guide to help get you started. There are numerous workbooks that give step-by-step instructions for developing a plan to stay out of debt or to get out of debt: The Financial Workbook, Money Before Marriage, The Family Budget Workbook, The Financial Guide for the Single Parent (or if you have young people in your family there's Money Management for College Students and Money Matters for Teens).
DIVIDE DUTIES TO MATCH SKILLS
There should be only one bookkeeper in your home, and it should be the person with the best abilities in that area and the one with the most time available. Usually, the wife makes a better bookkeeper, simply because of her attention to detail and time available. However, any plan should be developed by both husband and wife, and they should set aside a specific time at least every other week to jointly discuss progress and problems. If the wife is the bookkeeper, it should not be because the husband refuses to accept his responsibilities to be a leader in the home.
SET GIVING GOALS
But before the budget is established, I counsel Christian couples to establish their giving goals. Why? Because giving should not be motivated by what's left over or what we can "afford" but rather by God's conviction. God's Word tells us to stretch our faith in the area of giving. Usually if a couple can reach an early agreement in this area, the rest of the planning goes easily. The book titled Giving and Tithing is one resource that may help you decide how and where to do your giving. Since most couples are virtual opposites, one usually wants to give too much and the other too little. The key is to reach a reasonable compromise when stepping beyond what's safe and truly trusting in God in a material way. "For I testify that according to their ability, and beyond their ability they gave of their own accord" (2 Corinthians 8:3).
PREPARE A PRELIMINARY BUDGET
Once you have determined how much you are to give and the amount of taxes you must pay, you will know your "Net Spendable Income": the amount per month that you can spend—but not necessarily what you should spend. Each couple must decide before the Lord what portion is theirs to spend each month. For those with sizable Net Spendable Incomes, this question is just as important as how much to give.
The next step in your planning process is to agree on a preliminary budget. It is preliminary because if you have never lived on a budget before you will initially overlook some areas of spending. This is particularly true of irregular expenses, such as maintenance. The best way to start is to review each budget category (Housing, Food, Auto, and so on) and establish what this year's budget will be. A reasonably good guide is to total last year's expenses in each category and then divide the total by twelve. In most cases you will need to add a percentage for inflation.
To establish your budget spending plan, it will be necessary to go through each category of your budget in this manner. In our budget workbook we use twelve categories: Tithe, Taxes, Housing, Food, Auto, Insurance, Debts, Entertainment/Recreation, Clothing, Savings, Medical/Dental, and Miscellaneous.
Once you have determined what you should be spending on each category every month, the next step is to monitor your monthly spending. Each budget category should have an account sheet on which the budgeted amount is shown. As the money is spent, the balance is reduced, and at the end of the month you will know if you have stuck to your budget.
Two common difficulties often arise in doing financial planning: being too legalistic or being too lax. Trying to correct years of bad financial habits in one month leads to legalism. Both husband and wife must be willing to take equal reductions.
Laxness usually occurs when the budget is planned, filed away, and never monitored. The planning process may make you feel better, but no plan is of value until it is implemented.
HOW TO PLAN A FINANCIAL PROGRAM
DEVELOP A CHANGED ATTITUDE
First you must develop a changed attitude. Generate a plan according to God's conviction; then utilize it by applying God's principles to your life.
If you make plans that are inflexible, they will only hinder God's work, because you won't be able to live with them. Develop plans that guide your financial life but also provide for some recreation and personal enjoyment as well.
Do not make plans that are totally dependent on financial increases. God's wisdom can be manifested through a reduction, if necessary, to redirect our lives. We would all be happy to get involved in only profitable ventures, but sometimes God's will is accomplished by a loss instead.
Paul says in Philippians 4:12-13, "I know how to get along with humble means, and I also know how to live in prosperity; in any and every circumstance I have learned the secret of being filled and going hungry, both of having abundance and suffering need. I can do all things through Him who strengthens me." We should have the same perspective in planning.
1. Learn to practice patience and moderation in every financial decision.
2. Have a positive attitude.
3. Never get involved in financial decisions that require instant action; allow God to take His course. The difference between a profit and a loss may well be the attitude with which we approach financial investments.
4. Avoid get-rich-quick schemes, no matter how tempting.
5. Maintain your plans for as long as you have peace about them.
6. Do not be inflexible, but don't change your plans just because somebody tells you something different.
The majority of businesses that fail do so because they are under-managed or undercapitalized; they have inadequate planning. It is futile to operate a business without a cash-flow plan (income versus expenses) to allocate resources for paying bills.
God has exactly the same plan for a Christian's home, but unfortunately most of us ignore it. How can anyone manage a home without coordinating income and expenses?
SET REALISTIC GOALS
One purpose of planning is to set realistic financial goals as a measuring system to determine if you're on track. A basic goal would be to decide where you want to be financially in one year. If one of your goals is to be debt free, that's where your plan comes in. Can you realistically reach that goal in one year? If not, how about in two years or three years?
A financial plan for a young couple trying to buy their first home will be totally different from that of a retired couple living on a fixed income. A plan that will work for someone on a regular salary will not function for an athlete whose income may be terminated in the next year. Each plan must be matched to each family. Athletes often use the uncertainty of their income as an excuse for not planning. But that uncertainty is exactly the reason they need to plan even more carefully than the average family. They must learn to live off less than they make and store the surplus during the good years in preparation for the lean years. "Go to the ant, O sluggard, observe her ways and be wise" (Proverbs 6:6).
Every plan must include short-range goals and long-range goals.
Short-range plans are those that affect today, and they require our immediate attention. Short-range plans are basically day-by-day occurrences. For example, a housewife must have a short-range plan for buying groceries. It will include how much she buys, how often she buys, and the type of groceries necessary. If she does no planning at all, she has to rush down to the store to buy more groceries before every meal. Likewise, there must be some plan for paying bills. Otherwise, when the paycheck comes, it seems like a windfall. The natural reaction is to spend all the money and ignore the bills that are not due immediately. Later there is no money to meet the obligations. Obviously that isn't an adequate plan.
Short-range plans in a business include such things as what raw materials must be ordered to manufacture the product. If a business did no planning at all, every day the assembly line would have to shut down while someone rushed out to purchase necessary materials. Businesses make goals and develop plans to accomplish them.
Thus, everyone has short-range plans or goals. Some are carefully considered; others are haphazard. If your short-range goal is to make money, you should review it, because that is not a Christian objective. Having money as a goal means that you are depending on yourself, not God. The mere ability to make money does not enrich you spiritually (Proverbs 2:4-5). Every Christian who has ever had money as a goal can testify that it does not satisfy, but if your goals are directed by God they will enrich you spiritually and financially. What short-range goals does God desire for you? How can you develop plans to accomplish them?
MAKE YOUR GOALS PERSONAL
Establish your goals in relation to what God asks you to do, not what your neighbor asks you to do. It is easy to get caught up in the frenzy of someone else's schemes. We see others who apparently are doing well get talked into risky ventures.
Unfortunately many people who actually like their profession or business feel frustrated because somebody else is making more money in a speculative venture. So they get involved in programs they know little or nothing about. The usual result is costly financial lessons. There are limitless ways to lose money; one of the best is through bad advice, coupled with envy.
STRIVE FOR EXCELLENCE
God wants us to excel at whatever we do to the best of our ability. Often we rationalize that it is God's plan for us to be second best. So we hang back, never achieving our potential, because we fear that others will think we are egotistical.
Christians can excel at whatever they do without egotism. Paul excelled without being egotistical; Simon Peter excelled and remained a humble man. They knew their Source of power, knew what God had asked them to do, and accepted nothing less than excellence. Excellence should be one of our short-range goals.
First Peter 4:11 says, "Whoever speaks, let him speak, as it were, the utterances of God; whoever serves, let him do so as by the strength which God supplies; so that in all things God may be glorified through Jesus Christ." We are to use our abilities for God's glory. For example, it is important that wives and mothers excel at what they do. Usually the mother becomes the teacher of habits in the home, and her attitudes are generally reflected by her children. If she excels at what she does and keeps the home well-organized, she can be a great asset to home financial planning.
HONOR GOD IN YOUR WORK
Every Christian should assess the following issues.
Does my business always exemplify the Christian life?
Does every one of my daily actions witness for Christ?
Can I do my work and honor God?
Does the company I work for deal ethically with others?
Do I help others violate principles that I believe?
Am I providing a genuine service or simply satisfying my own ambitions?
We must each settle those issues if our work is to honor God. For instance, the insurance trade can be a great service. But often it is promoted on the basis of profit for the salespeople, rather than for the needs of the client. So individuals are sold too little insurance at too high a price or else they are sold too much. Few salespeople provide the quality or quantity of insurance that fit the exact needs of the buyer. It takes more time and effort to do that, but in the end not only will the salesperson prosper but the buyer will become a representative who refers more people to that salesperson.
Excerpted from Personal Finances by Larry Burkett. Copyright © 1998 Moody Bible Institute of Chicago. Excerpted by permission of Moody Publishers.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.