The Biblical Principles of Finance

The Word of God is truly amazing in that it deals with every aspect of our lives.  This is also true for the topic of personal finance.  In fact, there are over 2,300 scriptures that deal with money and possessions.  The Bible outlines many principles that can help us to make better decisions regarding our finances.  Following these principles will not turn the “straight and narrow way” that we walk on into “easy street”.  However, they can help you avoid some of the pitfalls that so many people seem to find.  We all know of people that have become “crippled” by falling in one of many financial “potholes”.  This can be a very painful experience and can often take years to recover from.  However, by following the financial guidelines of the Bible you can circumvent many of the problems that others face.  In fact, you will put yourself in a position to be able to receive additional blessings from the Lord.

     1. Obey the Lord if you want His favor!  It all begins with realizing that everything comes from Him.  “But mine eyes are unto thee, O God the Lord: in thee is my trust; leave not my soul destitute.” (Psalms 141:8)

      2. You can’t afford not to tithe!  It’s sad that less than 4% of Christians nationally even tithe.  Yet many of these same individuals believe in a “prosperity gospel”.  Although tithing was not listed as one of the Ten Commandments and there is no specific punishment for not doing so, you are definitely missing out on the blessings of the Lord if you’re not tithing.  These blessings may not always be financial, but there are greater blessings than just being blessed financially.  It’s hard to put a price on having your family in church, a great marriage, seeing your children filled with the Holy Ghost, etc.

      3. Don’t go any deeper into debt!  The Washington Post reported in January 2004 that the average American household has $9,000 in credit card debt.  If you find yourself in a hole, the first step to getting out is to stop digging.  Many times it’s easy to not realize how much your actually charging on your credit cards each month.  If this is the case, it might be a good idea for you to simply put your credit cards away and only pay cash for the items you buy.  This way you will maintain better control over how much your spending and if you can’t pay cash for something then you just don’t buy it.  You’ll never get out of debt if you keep charging everything.

      4. Put aside a cash reserve for emergency use only!  This should be at least $1,000, but could be more as your financial situation allows.  This should not be used as your vacation fund, your going out-to-eat fund, or any other non-emergency use.  In fact, you should forget that you even have it and only draw on it if you experience a bona-fide emergency.

      5. Get out of short-term debt!  Just making the minimum payment each month won’t accomplish this.  Once you’ve stopped creating more credit card debt (#3 above), it’s time to start getting rid of the debt that you’ve already incurred.  There are several ways you could go about doing this.  The one most recommended by financial advisors is to pay off the debt that has the highest interest rate.  You could also begin by paying off your smallest debt and working your way up.  Regardless of where you start, it all has to be paid back.

      6. Put aside enough money to sustain you for six months in case a catastrophe should happen!  Although no one can accurately predict the future, it’s always a good idea to be prepared.  “A prudent man forseeth the evil and hideth himself” (Prov. ).  You never know when you might lose your job, or when the economy will go through the next major recession.  In this world that we live, nothing is certain.  So having the financial resources to get you through such a crisis will save you a lot of heartache and worry.

     7. Have supplies on hand in case of emergency!  Solomon advocated being prepared for the evil that might come.  Proverbs 22:3.  Hopefully, the evil will never come, but it’s always good to be prepared.  The Bible does talk about perilous times that will come in the last days.  Even in 20^th century American there have been times when different items have had to be rationed out due to shortages.  No doubt there will be similar circumstances that will occur in the future.  

     8. Pay off your car!  In our current society, too many people simply buy a new car every three to four years.  Many of them don’t even buy a vehicle, but simply lease it during that time span.  If you can afford to do this then there is nothing wrong with it.  However, for most of us getting a new car every couple of years is a luxury that we can’t really afford.  Some people might be surprised to find out that cars don’t just stop running after three years.  In fact, most vehicles will last for well over 100,000 miles.  The average person drives their vehicle about 12,000 miles per year.  So if you pay off your car in four years, you can continue driving that vehicle for several more years.  If you would continue to set aside that money that was formerly going towards your car payment, then when your ready to get another vehicle, you could probably pay cash for it.

Another tip for saving money when you buy a car is to buy a used vehicle.  This doesn’t mean you need to drive an old rusted-out car that you’re scared to even start.  Contrary, go ahead an find a new vehicle that you like.  Then look to see if you can find that same vehicle listed for sale as a used vehicle.  Often times that same vehicle is available with only a few thousand miles on it, but priced several thousand dollars lower.  So you still get the same vehicle you wanted, but you pay much less for it.

      9. Invest Wisely!  Once you’ve accomplished the points above, you’re in a very enviable financial position.  You’re out of debt (except for possibly a mortgage), you’ve set aside enough savings to get you through any emergency/disaster, you’re able to pay all your monthly bills, and yet you still have money left over.  Just holding onto this money or finding new ways to spend it is not very wise.  In fact, Jesus condemned the servant who simply hid the one talent that he had instead of investing it to create additional gain.  Matthew 25:14-30.  So now it’s time to start letting your money make you more money.  This could be in the form of capital gains, dividends, interest, etc.

Investing doesn’t just include the stock market either.  Solomon said, “Give a portion to seven, and also to eight; for thou knowest not what evil shall be upon the earth.”  Ecclesiastes 11:2.  A wise financial steward will also diversify their holdings to minimize their risk.  There have been times when the stock market has performed very poorly, but real estate or bonds have done quite well.  Spreading your investments between stocks, bonds, precious metals, real estate, etc., can help you maximize your returns while reducing your risk. 

      10. Pay off your house!  Most people today don’t ever plan on owning a home outright.  As their financial situation improves they simply upgrade to a nicer house which, of course, comes with a bigger mortgage.  However, Paul does say “owe no many anything.”  Romans 13:8.  Since a mortgage is also a debt, this is also something that you need to work at eliminating.  This is also important since your mortgage is usually your biggest monthly expense.  A person without credit card debt, without a car payment, and without a house payment would definitely be considered as blessed of the Lord.  You would no longer be forced to always be working just to pay your bills.  Maybe most important is that you could be free of much of the financial stress and worry that so many people experience.

In conclusion, the answers to all of life’s problems are in the Bible.  This includes answers to the financial problems that plague so many people.  By simply following the Biblical principles laid out in the Bible you can help avoid many of these problems.  If you have not been applying these principles to your life, then you need to start as soon as possible.  If you are already following these principles, then you have probably already seen how the Lord blesses those that trust in him.  These blessings aren’t just one-time occurrences either, but they last a lifetime.  By following God’s principles on finance you can enjoy a much better quality if life than you can by doing things your own way.