“A man is never more on trial than in the moment of excessive good fortune.”
— Lew Wallace
Regardless of our exact station in life or size of our bank account, the Bible instructs us to be good stewards of what is entrusted to us.
Scripture teaches us that the God owns everything. There is not in this universe that he can’t claim as his own (Psalm 24:1). Therefore, the ways we make use of our time, talents, and treasures are extremely significant.
The ongoing journey of “being a good steward” starts at home. As we examine our personal finances and spending habits, we discover what is really meaningful to us (Matthew 6:21). Most of us would be hesitant to let someone comb through our bank accounts. But if we did, we might find ourselves embarrassed by what is uncovered.
We Need Accountability
According to the Wall Street Journal, nearly 70% of all consumers live paycheck to paycheck. Perhaps a more accurate barometer, Oprah stated that according to her online survey, 70% of respondents had no savings at all.
These are pretty staggering figures. I would imagine that a common thread exists — without a “system” to help keep us on track, it’s all too easy to spend what comes in each month as opposed to directing money towards priorities. Just as we need accountability in our spiritual lives, we need accountability with our finances.
Personal finance is 80% behavior and 20% knowledge. We need to instill good behavior and work habits as we handle our personal finances. The younger you start, the better.
Shooting From the Hip
It wasn’t until more recent years that my wife and I adopted our system. I am proud to say, however, that in addition to regular living expenses, we can now recite much we spend on “Eating Out” and “Fishing.” Feel free to fill in your blanks here. I am being a bit facetious and certainly not suggesting everyone should be able to duplicate this same feat, but I am trying to highlight that for a time, my wife and I “shot from the hip.”
We spent, saved, and gave in a more impulsive, sporadic manner and mostly kept track of “budgeting” in our heads. Further, because we had no set routine or system for discussing finances, communicating about money was more difficult. I’m suggesting today that if you find yourself, “shooting from the hip,” there are things you can do that will change your financial future and better equip you to be a good steward of your resources.
You Need a Budget
Many programs or budgeting systems exist, but we encourage you to choose a system to your liking, make it your own, and stick to it. With our experience and regardless of age, those that use a budgeting system or software make better progress than those without.
We’re also referring to something more than a running tally of expenses each month. An accountability factor is an essential ingredient. At the beginning of the month you “open” your household books, and at the end of the month you “close” them out, thus holding yourself accountable in the process and planning for the months ahead.
Tips for Monthly Budgeting
- Must be written or spreadsheet based.
- Give every dollar a “home.” As income is received into your bank account, designate each dollar to a particular category—giving, savings, future purchases, and fun money all count! Spend and save with a purpose!
- Agree with your spouse. Remember, budgeting should not be a form of control, but rather an avenue for discussing priorities as a team.
- Give it three months. Starting a new workout can hurt a little. It takes some time to adjust to a new financial routine.
- Revise your budget each month. We all go through various seasons in life, and our finances will fluctuate. Your budget system should be forward looking and adjusted for the month ahead.
Ask For Help
When it comes to money, it’s hard to ask for help. We have a hard time admitting that we don’t know what we’re doing. But admitting a weakness it the first step to recovery. But there are resources available. If you need coaching in this area, please give us a call. We have a new program designed to help anyone overwhelmed by finances take control once and for all.
Jonathan is Executive Vice President of Rivertree Financial Planning.