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.

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?

Annual Budget - 2014 in Review

Each year, we review our annual spending, saving, and giving to help us stay accountable to our objectives and to give us feedback on how we've been doing.  Additionally, the review gives us an opportunity to plan for the New Year.  Click on the image to enlarge.

What is your process?

His Stuff - He Made It

God Owns Everything, He is the Creator of the Universe

Psalm 24:1 - The earth is the Lord’s, and everything in it. The world and all its people belong to him.

Psalm 89:11 - The heavens are yours, and the earth is yours; everything in the world is yours—you created it all.

Genesis 1:1 - In the beginning God created the heavens and the earth.

John 1:1-3 - In the beginning the Word already existed. The Word was with God, and the Word was God. He existed in the beginning with God. God created everything through him, and nothing was created except through him.

Colossians 1:15-17 - Christ is the visible image of the invisible God. He existed before anything was created and is supreme over all creation, for through him God created everything in the heavenly realms and on earth. He made the things we can see and the things we can’t see—such as thrones, kingdoms, rulers, and authorities in the unseen world. Everything was created through him and for him. He existed before anything else,and he holds all creation together.

Proverbs 22:2 - The rich and poor have this in common: The Lord made them both.

The correct perspective on who owns everything is an essential starting point to being a wise manager. We need to think about how God would have us manage His stuff. This is different than how we would manage His stuff or how we would manage our own stuff. It isn't ours and it needs to be managed according to His will, not our own.

If a person gets his attitude toward money straight, it will help straighten out almost every other area in his life. - Billy Graham

Managing His Stuff, His Way - The Story of the Talents

In Matthew 25:14–30, Jesus told the story of the Talents. In this story, the master entrusts different amounts of wealth to three servants. To one servant, he places five talents of money in his care, to another, two talents, and to another, one talent.  For context, one talent was 75 pounds of gold or silver and would have been worth around 10-20 years of wages.  So each of these servants was entrusted a large amount of funds.  This is certainly consistent with what I've seen in life as different people are entrusted with different amounts of wealth and responsibliity.

 

 

When the master came back, he found that the servants with five and two talents had each doubled the master's funds. In contrast, the servant with one talent had buried it, making no effort to put his master’s money to work, and coming up with a bad excuse to boot!

It’s interesting to note that the praise God gave the servant who had five talents and earned five more was identical to the praise that he gave to the servant who had two talents and earned two more. That praise was, “Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master’s happiness!” (Matthew 25: 21, 23).

 

As for the servant who was entrusted with one talent, he was lazy, wicked, and unfaithful to God. In short, he was not a good manager.  Perhaps shockingly, he was punished severely for this poor managment and unfaithfulness.

 

Matthew 25:28-29 state, “Take the talent from him and give it to the one who has the ten talents. For everyone who has will be given more, and he will have an abundance. Whoever does not have, even what he has will be taken from him."

 

It’s important to understand what this means. The words “for everyone who has will be given more” means that everyone who has been a faithful manager, God will entrust with more. There is a compounding effect in play.  On the other hand, those have been unfaithful in their management of God's resources will lose even what they have been entrusted with. The servants who were entrusted with five talents and two talents demonstrated faithfulness to God and wise management, and thus God entrusted them with more. However, the third servant was not faithful, and therefore even that one talent was taken away from him.

We can say we are managing well for God when we:
(1) acknowledge in mind and heart that God owns everything - a critical first step
(2) act accordingly - that is, learn and implement God’s principles in managing what God has entrusted us, using our time, talent and treasure in accordance with God’s will, not our own will