4 Principles of Wise Money Management

Growing up, I never learned much about managing money. My parents worked hard but lived paycheck to paycheck without a budget or financial plan.

When I got my first job, I emulated their spend-now-worry-later approach. I swiped my shiny new credit cards with abandon, not tracking expenses or thinking about the future.

Debt and constant financial stress became my normal.

That all changed when I began reading the Bible and discovered God’s principles for wise money management.

I realized my haphazard financial practices fell far short of biblical ideals like stewardship, prudence, and trusting God’s provision. As someone desiring to honor God in all areas of life – including finances – I knew something had to change.

Through Bible study, wise counsel from mentors, and commonsense money management tips from experts, I developed a simple yet effective financial plan rooted in four biblical principles:

1. Embrace Stewardship and Accountability

The parable of the talents (Matthew 25:14-30) revolutionized how I think about money.

Just as the master in the story expected his servants to invest and multiply the resources entrusted to them, God expects us to responsibly steward all resources, including finances.

I now see money as a tool God has given me to serve Him, not something I own. This motivates me to manage money wisely and use it generously to bless others.

As Dave Ramsey says:

“God doesn’t entrust us with money simply to meet our basic needs and enjoy a few pleasures along the way. He gives us money to use in serving Him.”

2. Value Simplicity

Proverbs 22:3 (ESV) teaches:

“The prudent sees danger and hides himself, but the simple go on and suffer for it.”

biblegateway.com

For years, I suffered financially because I ignored dangers and trusted overly complex investments I didn’t understand.

When I finally simplified my finances, everything changed. I created a basic budget, tracked spending, built an emergency fund, paid off debt, and automated saving for retirement. Boring? Yes. But boredom sure beats financial chaos!

“Personal finance is more personal than finance,” says Ramsey.

By sticking to simple, proven money management practices I understand and can implement consistently, I now have peace of mind instead of money stress.

3. Plan Diligently

Many Christians justify poor money management by misquoting scriptures about God’s provision. But Proverbs 21:5 (ESV) says:

“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.”

biblegateway.com

When I took planning seriously – creating a budget, tracking expenses, researching investments, automating payments – provision followed.

Planning helped me get out of debt, save for the future, and be outrageously generous because I knew exactly what was coming in and going out.

4. Avoid Debt

The Bible doesn’t explicitly prohibit debt, but it strongly warns against it.

Biblical financial experts like Dave Ramsey interpret scriptures like Proverbs 22:7 (“The borrower is the slave of the lender”) as arguing against debt.

For me, avoiding the slavery of debt meant:

• Paying cash for cars.
• Saving up to pay cash for appliances when old ones died.
• Renting extra rooms in my home to earn extra income to pay off student loans.
• Working overtime to pay off credit cards.

Was it fun? No. But the freedom I now experience makes every sacrifice worthwhile.

The Bible’s money management principles truly work. By embracing stewardship, simplicity, diligent planning, and debt avoidance, I now enjoy the financial peace I never thought possible.

If I can do it, so can you!

Key Takeaways:

• Manage money as a faithful steward, not an owner.
• Simplify finances dramatically.
• Diligently plan every expense.
• Avoid and eliminate debt.
• Find financial freedom by following biblical principles.

Frequently Asked Questions

Q. What are some practical first steps to start budgeting?

A. Start by listing all sources of monthly income. Next, categorize expenses using apps like Mint or EveryDollar. Finally, create a simple budget allocating every dollar of income to named expenses. Automate saving and bill payments.

Q. What percentage of income should go towards different budget categories?

A. Aim for:

• Housing: 25-35%
• Transportation: 10-15%
• Food: 10-15%
• Utilities: 5-10%
• Savings: 10-15%
• Debt repayment: 10-15%
• Miscellaneous: 5-10%

Q. How much should I have in an emergency fund?

A. Save at least $1,000 initially. Then grow your fund to equal 3-6 months worth of expenses. The exact target depends on your career stability and risk tolerance.

Q. How can I teach my kids about money?

A. Open savings accounts when they’re young. Give them an allowance and coach them to save, spend, and gift portions. When they’re teens, teach budgeting by giving them experience paying bills. Impart wisdom by modeling positive habits daily.

Q. Is getting rich important for Christians?

A. Biblically, the love of money and greed for riches can corrupt the soul. Most critical is trusting God, not wealth, for provision. But with the right motives, Christians can build wealth to generously fund Kingdom work. Seek contentment and proper priorities first.

I’m happy to address any other questions you may have! Please let me know if you would like me to elaborate on any part of this blog post.