6 Steps Up the Financial Ladder: Step 2

So once you have completed Step 1: gathering the basic facts about your situation, you should move immediately to Step 2: the basics.

The basics are:

1. Earn what you can
2. Spend less than you earn
3. Give generously, regularly, and proportionally

Let's break the basics down:

1) Earn what you can. This essentially means that you should work hard, no matter what you are doing, as if you are working for the Lord Himself, because, in fact, you are. It also means that you should not neglect providing for your family's needs because it shows God's love.  If you are unable to provide for your family's needs with your current income, you must reduce your expenses or increase your income. 

2) Spend less than you earn. This means exactly what it says, that you should not spend more per year than you earn. You must consider what expenses you may have or are required to make, like taxes, insurance, or other necessities. For most people the problem is that we purchase too much stuff that:

• We don’t need – your wants are not needs
• We can’t afford – credit doesn’t count
• We didn’t do adequate research – alternatives, really meet needs, used options
• Is too expensive – research, find alternatives
• Is low quality – if quality is necessary

3) Give generously, regularly, and proportionally.  I know that God does not want or need your money but what he does want is your heart.  Giving reflects our gratitude for what God has done for us and puts our heart in a healthy place where we don't cling to our money and possessions for security or identity.  Those are places reserved for God.

6 Steps up the Financial Ladder: Step 1

Do you ever wonder how you'll ever get ahead financially?  Do you ever wonder why some people seem to be 'blessed' or lucky?  Has it ever bothered you that you just don't seem to 'have what it takes' to get ahead financially?  Are you always trying to find the 'big change' that will transform your finances? 

Stop wondering, I plan to take you through the 6 steps up the financial ladder.

Many people will be able to quickly complete 4, 5, or even all 6, but many people may struggle with Steps 2 and 3. It is important to be diligent and complete the steps in order and not take short cuts. It is also important to remember that you may never reach step 5 or 6 but it is worth trying.

Step 1 is the obtain the vital facts about your finances.

Make a list of all the things you own: Home, Car, Accounts, Investments, Pensions, Collectibles
Make a list of what you owe: mortgage, credit card, loans, line of credit, personal obligations
Make a list of your annual income: paycheques, government benefits, dividends, interest, royalties
Make a list of your annual expenses: home, car, fuel, food, debts, insurance, interest, fees,

You should review monthly or quarterly for cash flow, perhaps quarterly or annually for net worth

Be as accurate as possible within reason. Be accurate enough to enable you to make good choices.



Have you ever asked the question: “Where does all the money go?”  

You should be able to answer that question quickly and accurately.
To track your cash flow you need to itemize and categorize all expenses. I included taxes and payroll deductions but you don’t have to.

I use an automated tracking program available for free through my bank. It categorizes my spending automatically and only needs minor maintenance. I review this monthly. It takes about 30 minutes of my time on a monthly basis.

You can use mint.ca or just use your bank account and credit card statements with MS Excel or similar.

It is difficult to make decisions about spending without these basic facts so I recommend putting a system in place that is easy to use and presents the information in a useable format.


Making note of your assets and liabilities will likely take less than 10 minutes.

Should be updated annually or after any major changes. 



Good luck completing Step 1.  Next is Step 2.

Annual Budget - Charitable Giving

Paul wrote to the Corinthian church, "The point is this: whoever sows sparingly will also reap sparingly, and whoever sows bountifully will also reap bountifully. Each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver." 2 Corinthians 9:6-7

Many followers of Christ choose to give generously to charitable works, including us.  We feel strongly that we ought to give around 20% of our net income (around 10% of gross income) to worthwhile causes, including our local church and a few other worthwhile causes.  In the past, we have given to special projects, like water well drilling in Africa or microfinance in the developing world, and we like to regularly support summer camps for kids, overseas work in the developing world and various organizations here in Canada, especially our local church. 

We have found that choosing to give our first and best toward charitable work keeps our attitudes around finances humble and focused on our Lord.

Do you give?  Why or why not?