Category Archives: Stewardship

Biblical Guiding Framework For Financial Freedom

God lays out important principles for managing finances in the Bible. He wants His people to be wise stewards of the resources He provides.

In this article we lay out a high level framework that  provides valuable insight for those who take time to genuinely understand and apply it. I have paired the elements of the framework with some of the scriptures that support them, but there are many other scriptures that could be added.

You can also check out our Resources section of the website for other organizations with a great depth of material on this subject.

1 – Earn Money: Develop a skill and work hard to generate income.

  • Colossians 3:23 – Work willingly at whatever you do, as though you were working for the Lord rather than for people.
  • Proverbs 6:9-11 – But you, lazybones, how long will you sleep? When will you wake up? 10 A little extra sleep, a little more slumber, a little folding of the hands to rest— 11 then poverty will pounce on you like a bandit; scarcity will attack you like an armed robber.

2 – Control Spending:  Set a budget that matches your income and stick to it in order to control spending. This budget should include short term “monthly expenses” but also saving ahead for long term expenses like a house, university education, future medical expenses, retirement, and contingency funds for the unknown.

  • Proverbs 6:6-8 – 6 Take a lesson from the ants, you lazybones. Learn from their ways and become wise! 7 Though they have no prince or governor or ruler to make them work, 8 they labor hard all summer, gathering food for the winter.

3 – Control Debt: Carefully consider any debt before committing.

  • Proverbs 22:7 – Just as the rich rule the poor, so the borrower is servant to the lender.
  • Romans 13:8 – Owe nothing to anyone—except for your obligation to love one another.

4 – Invest: Choose to invest your financial resources for growth. Don’t stuff your mattress with cash in hopes of avoiding risk.

  • Matthew 25:14-30 – Jesus teaches us through the parable of the talents. Click the link to read the scripture.
  • Ecclesiastes 11:1 – Send your grain across the seas, and in time, profits will flow back to you.

5 – Diversify Investments: Diversify investments to manage risks.

  • Ecclesiastes 11:2 – But divide your investments among many places, for you do not know what risks might lie ahead.

6 –Consider Carefully and Seek Wise Counsel: Whether choosing how you will earn income, how to control spending or debt, or how to invest to grow your finances you should carefully consider your strategy and seek wise counsel.

  • Proverbs 22:3 – A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences.
  • Proverbs 15:22 – Plans go wrong for lack of advice; many advisers bring success
  • Proverbs 14:15 – Only simpletons believe everything they’re told! The prudent carefully consider their steps.

7 – Steward Your Financial Strategy: Once you establish your financial strategy you must periodically review and analyze all elements to ensure you are following it and it is effective. This applies to earning income, spending, debt, and investment.

  • Matthew 25:14-30 – Jesus teaches us through the parable of the talents not only that we should invest, but that a good steward periodically checks on the effectiveness of his investments and makes adjustments according to their performance.

8 – Ethics: Following God’s instruction in how we manage our finances is more important than the actual dollars themselves.

  • Proverbs 22:1 – Choose a good reputation over great riches; being held in high esteem is better than silver or gold.
  • Proverbs 22:5 – Corrupt people walk a thorny, treacherous road; whoever values life will avoid it.
  • Ecclesiastes 12:13 – That’s the whole story. Here now is my final conclusion: Fear God and obey his commands, for this is everyone’s duty.

9 – Do Not Be Greedy: To those who love money, they will never have enough. Money is a tool to serve God and to support yourself and your family. The draw to “get rich quick” brings much risk.

  • 1 Timothy 6:10 –  For the love of money is the root of all kinds of evil. And some people, craving money, have wandered from the true faith and pierced themselves with many sorrows.
  • Ecclesiastes 5:10 – Those who love money will never have enough. How meaningless to think that wealth brings true happiness!

10 – Store Up Treasure in Heaven

  • Matthew 6:20 – Store your treasures in heaven, where moths and rust cannot destroy, and thieves do not break in and steal.
  • 2 Corinthians 9:7 –  You must each decide in your heart how much to give. And don’t give reluctantly or in response to pressure. “For God loves a person who gives cheerfully.”
  • Proverbs 22:9 – Blessed are those who are generous, because they feed the poor

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Victory Comes Through Wise Counsel

We are all at different experience levels and have different gifts in regards to many aspects of life that affect our finances. We have a certain perspective which contains some bias based on our prior experiences and personality. As an individual, we will not see and understand a situation as well as if we approach it from multiple perspectives including wise counsel from those we trust.

Proverbs 11:14

  14Where there is no guidance the people fall,
But in abundance of counselors there is victory.

I remember a great example where my family was walking from a van to the entrance of some entertainment we were going to on vacation. I was focused on the destination, where is the gate, where do I buy tickets, and “marching” quickly with purpose. Yes I was focused on my goals. My wife, however, also interested in our shared goal, had a very different perspective. As I promptly walked passed a beautiful flower display she gently tugged at my arm and showed it to me. I am glad she did. We were approaching the same situation and had the same goals, but very different perspectives while doing so. Together we had a better view then individually.

This same concept is true for controlling debt, controlling our spending, behaving according to the ethics and guidelines that God has lined out for us in the Bible, making decisions with regards to generating income, saving, investing and stewarding our finances. Seek wise counsel from people you can trust or from professionals. To seek counsel does not mean you must follow it. It simply provides more background and understanding and perspective to help you make wise decisions and achieve victory on your goals. Of course, we should be cautious as to who we trust and how we weigh the opinions and insight of others. To listen to the counsel of a fool is to join him in his folly.

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Use Well What God Has Given You

God gives to each of us different talents and resources in different amounts. We are all called to be faithful and good stewards of what He provides no matter how small or how big.  None of us are insignificant to God. He wants us to use what He gives us for His glory.

The parable of the talents Jesus shares in Matthew 25 can be applied directly to money, but also can be extrapolated to include how we wisely use (or foolishly squander) the personal abilities and time on this earth that God has given us. It reminds us both that we should be good stewards of our resources by checking on how effectively they are being invested / utilized and that God will hold us accountable for how we have used the resources (e.g. money, ability, time, etc.) He provided us in this life. Even those to whom He gives seemingly little, are still accountable to use it wisely. Further, they are to use it for His purposes, not their own.

Matthew 25:14-30

      14“For it is just like a man about to go on a journey, who called his own slaves and entrusted his possessions to them. 15“To one he gave five talents, to another, two, and to another, one, each according to his own ability; and he went on his journey. 16“Immediately the one who had received the five talents went and traded with them, and gained five more talents. 17“In the same manner the one who had received the two talents gained two more. 18“But he who received the one talent went away, and dug a hole in the ground and hid his master’s money.

      19“Now after a long time the master of those slaves came and settled accounts with them. 20“The one who had received the five talents came up and brought five more talents, saying, ‘Master, you entrusted five talents to me. See, I have gained five more talents.’ 21“His master said to him, ‘Well done, good and faithful slave. You were faithful with a few things, I will put you in charge of many things; enter into the joy of your master.’

      22“Also the one who had received the two talents came up and said, ‘Master, you entrusted two talents to me. See, I have gained two more talents.’ 23“His master said to him, ‘Well done, good and faithful slave. You were faithful with a few things, I will put you in charge of many things; enter into the joy of your master.’

      24“And the one also who had received the one talent came up and said, ‘Master, I knew you to be a hard man, reaping where you did not sow and gathering where you scattered no seed. 25‘And I was afraid, and went away and hid your talent in the ground. See, you have what is yours.’

      26“But his master answered and said to him, ‘You wicked, lazy slave, you knew that I reap where I did not sow and gather where I scattered no seed. 27‘Then you ought to have put my money in the bank, and on my arrival I would have received my money back with interest. 28‘Therefore take away the talent from him, and give it to the one who has the ten talents.’

      29“For to everyone who has, more shall be given, and he will have an abundance; but from the one who does not have, even what he does have shall be taken away. 30“Throw out the worthless slave into the outer darkness; in that place there will be weeping and gnashing of teeth.

God wants us to effectively use what He provides for His kingdom, whether it is financial resources or personal talents and gifts He has given us. This applies directly to every aspect of your personal financial strategy and to all areas of your life, even those not directly linked to financial matters.

  • Develop your skills/abilities and work hard to generate income.
  • Control spending and debt.
  • Invest wisely to grow your financial resources, considering concepts like diversification and seeking wise advice.
  • Steward your financial performance / progress in all areas, including reflection on both success and failure.
  • Remember that how we pursue our results matters to God. Honor His instruction with your actions for what is right and acceptable. (e.g. ethics)
  • Avoid the trap of greed… taking foolish risks to try to get rich quickly or never having enough money to stop pursuing more, even at detriment to other aspects of your life.
  • Give and give generously and cheerfully to others in the name of Jesus Christ and in ways that honor God.

Click the following link for more information in our Guiding Framework.

Serve God with all that He has given you, whether big or small! We will one day have to give an account to Him for how we used all that He provided.

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Give to God What Is God’s

Consider you are an owner of a business. Do you care how your employees spend the company’s money? Do you want them to spend in a way that is consistent with your instructions when you gave them access to the money or just spend however they feel best, even if completely selfish and not furthering the business? Is it any different if we consider a family situation in similar fashion?

Of course we care! Whether we are running a company or leading a family, we have limited resources and it is important to use them wisely and consistent with our guiding values and purpose. Anyone who does not see this… just let someone have access to your checkbook and tell them to spend your money however they want… and you will quickly understand the point. You appreciate those who use the resources appropriately and correct those who do not.

Would it matter if they only wasted half of your money? What about 25%? We care about how they use all or any of the money. We gave instructions with the money and we want them followed, or next time we give the money to someone else.

So why do so many people have a problem with understanding that God (Yahweh in Hebrew) cares how we spend the money and other resources He provides to us?  Typically we struggle with this concept because we don’t want to submit to Him in regards to finances. We prefer to do things our own way. We may even be “generous” and set aside 10% of what He gave us and then tell Him we will manage the rest our way. This is not honoring God, but rather honoring ourselves. As a matter of fact, almost all of us give a higher percentage to someone who serves us food at a restaurant as a tip to thank them for serving us.

Give to God what is His. It all belongs to Him, so manage all your resources, time… talent… money, to further the kingdom of God.

Luke 20:21-25

 21They questioned Him, saying, “Teacher, we know that You speak and teach correctly, and You are not partial to any, but teach the way of God in truth. 22“Is it lawful for us to pay taxes to Caesar, or not?” 23But He detected their trickery and said to them, 24“Show Me a denarius. Whose likeness and inscription does it have?” They said, “Caesar’s.” 25And He said to them, “Then render to Caesar the things that are Caesar’s, and to God the things that are God’s.”

Proverbs 3:9-10

       9Honor the LORD from your wealth
And from the first of all your produce;

      10So your barns will be filled with plenty
And your vats will overflow with new wine.

Malachi 3:10

   8“Will a man rob God? Yet you are robbing Me! But you say, ‘How have we robbed You?’ In tithes and offerings. 9“You are cursed with a curse, for you are robbing Me, the whole nation of you! 10“Bring the whole tithe into the storehouse, so that there may be food in My house, and test Me now in this,” says the LORD of hosts, “if I will not open for you the windows of heaven and pour out for you a blessing until it overflows. 11“Then I will rebuke the devourer for you, so that it will not destroy the fruits of the ground; nor will your vine in the field cast its grapes,” says the LORD of hosts. 12“All the nations will call you blessed, for you shall be a delightful land,” says the LORD of hosts.

Have you submitted all your finances to be stewarded on behalf of God or are you holding some back for your own purposes? This does not mean writing a big check to give all your money to a church. Not at all. It means stewarding wisely all that you have and spending in such a way as to be responsible and further the kingdom of God. Obey His general commands regarding money as we find them in the Bible. Take time to learn to pray effectively and seek God’s specific instructions for you, if any, regarding money. Remind yourself it all belongs to Him and you are only the servant who is asked to take care of it and manage it on His behalf.

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Personal Financial Tools To Help Stewardship

Jesus teaches us in Matthew 25, through the parable of the talents, not only that we should invest, but that a good steward periodically checks on the effectiveness of his investments and makes adjustments according to their performance.

Matthew 25:14-30

Parable of the Talents

      14“For it is just like a man about to go on a journey, who called his own slaves and entrusted his possessions to them. 15“To one he gave five talents, to another, two, and to another, one, each according to his own ability; and he went on his journey. 16“Immediately the one who had received the five talents went and traded with them, and gained five more talents. 17“In the same manner the one who had received the two talents gained two more. 18“But he who received the one talent went away, and dug a hole in the ground and hid his master’s money.

      19“Now after a long time the master of those slaves came and settled accounts with them. 20“The one who had received the five talents came up and brought five more talents, saying, ‘Master, you entrusted five talents to me. See, I have gained five more talents.’ 21“His master said to him, ‘Well done, good and faithful slave. You were faithful with a few things, I will put you in charge of many things; enter into the joy of your master.’

      22“Also the one who had received the two talents came up and said, ‘Master, you entrusted two talents to me. See, I have gained two more talents.’ 23“His master said to him, ‘Well done, good and faithful slave. You were faithful with a few things, I will put you in charge of many things; enter into the joy of your master.’

      24“And the one also who had received the one talent came up and said, ‘Master, I knew you to be a hard man, reaping where you did not sow and gathering where you scattered no seed. 25‘And I was afraid, and went away and hid your talent in the ground. See, you have what is yours.’

      26“But his master answered and said to him, ‘You wicked, lazy slave, you knew that I reap where I did not sow and gather where I scattered no seed. 27‘Then you ought to have put my money in the bank, and on my arrival I would have received my money back with interest. 28‘Therefore take away the talent from him, and give it to the one who has the ten talents.’

      29“For to everyone who has, more shall be given, and he will have an abundance; but from the one who does not have, even what he does have shall be taken away. 30“Throw out the worthless slave into the outer darkness; in that place there will be weeping and gnashing of teeth.

There are a growing number of personal financial tools available to help us manage and steward our finances ranging from debt and spending to investing. Consider common software tools like Quicken or online tools as recently reported in an article in US News & World Report article, 10 Personal Finance Tools You Should Use Now. There are also tools to help manage personal investment performance across multiple investment accounts like the one available for free online at Personal Capital.

We have no affiliation with any of these specific tools, nor any financial incentive to recommend any particular tool. Neither have we tested all of these tools personally. Rather, our intent is to highlight to those who may not realize it that there are a lot of useful tools available today that you can review and consider to help steward your personal financial plan. Naturally, you can also consider professional investment advice, for a fee, but even with that you will want to validate the guidance they are giving you.

For those who are familiar with Microsoft Office or similar tools, there is always a simple Excel spreadsheet you can make yourself, with complete privacy to develop and steward key elements to your financial plan. And for those that prefer to avoid computers… who are probably not reading my article right now… pencil, paper and calculator still work just fine so long as you have the discipline to apply it frequently enough.

The bottom line is that to be successful in executing our personal financial plan we must steward it. We must track data on performance and then review the data and make decisions on whether to stay the course or make a correction or change to our strategy.

We must be vigilant to avoid laziness or complacency in managing the money we have already gained.

Proverbs 6:6-11

      6Go to the ant, O sluggard,
Observe her ways and be wise,

      7Which, having no chief,
Officer or ruler,

      8Prepares her food in the summer
And gathers her provision in the harvest.

      9How long will you lie down, O sluggard?
When will you arise from your sleep?

      10“A little sleep, a little slumber,
A little folding of the hands to rest”—

      11Your poverty will come in like a vagabond
And your need like an armed man.

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Spend Less Than You Earn To Build Wealth

Spend less than you earn. I know this sounds very simple and elementary. It is just that. It is none the less the first and most fundamental step on your journey to build wealth. You can adjust the relationship by increasing earnings or decreasing spending… or both. But if you deny this fundamental law and spend more than you earn you are accumulating debt rather than wealth, no matter how much money you make.

Learn to be content with what you can afford and what you already have. Do not covet what others have or you will never be satisfied. There is always someone out there with more stuff than you.

To those who love money, they will never have enough. Use money  a tool to serve God and to support yourself and your family, not as a goal in and of itself.

  • 1 Timothy 6:9-10But those who want to get rich fall into temptation and a snare and many foolish and harmful desires which plunge men into ruin and destruction. 10 For the love of money is a root of all [a]sorts of evil, and some by longing for it have wandered away from the faith and pierced themselves with many griefs.
  • Ecclesiastes 5:1010 He who loves money will not be satisfied with money, nor he who loves abundance with its income. This too is [a]vanity.

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Remember that all you have belongs to God. Manage your money God’s way and use it for His glory rather than your own. Visit GrowGodsMoney.org .

 

How Does Yahweh Provide for Those in Full Time Service to Him?

There can be quite a debate about whether or not the tithe is still required and if it is, are we required to pay it to the church. There are arguments on both sides. We could have these debates, and if done based on scripture, they could be very meaningful discussions. If done on emotions or tradition of men, they have significantly less value.

Perhaps the greater question is not “am I required” to tithe or give money to those serving God, but rather “should I” in order to be pleasing to God. We can also explore the other side from the perspective of one who would be accepting such donations.

I am going to start by focusing on scripture from Paul in 2 Corinthians 11.

2 Corinthians 11:7-9

     7Or did I commit a sin in humbling myself so that you might be exalted, because I preached the gospel of God to you without charge? 8I robbed other churches by taking wages from them to serve you; 9and when I was present with you and was in need, I was not a burden to anyone; for when the brethren came from Macedonia they fully supplied my need, and in everything I kept myself from being a burden to you, and will continue to do so.

I do not claim this is authoritative for every situation, but rather very interesting to note. Paul accepted money when it was offered, but did not require it or pressure people to give to him just because he was preaching the gospel to them.  Those that gave to Paul arguable were not giving to the “church” as we think of it today. That would have been tithing to the Levites at this time. If they had only tithed to the Levites, Paul would not have received financial support. Neither would any of Jesus’ disciples or Jesus Himself in His earthly ministry.

It is probably worth highlighting at this time that Jesus accepted donations from supporters. We know from the biblical record of the money found in the mouth of a fish and the miracles of the loaves and fishes that Jesus could have simply made His own money. He set an example by accepting support from those that supported Him. That said, I have not found any scripture where He passed around a collection plate during His teaching and asked for money either. He did not appear to make it a focus of His ministry to ask for donations.

 Luke 8:1-3

1Soon afterward, [a]Jesus began going around from one city and village to another, proclaiming and preaching the kingdom of God. The twelve were with Him, 2and also some women who had been healed of evil spirits and sicknesses: Mary who was called Magdalene, from whom seven demons had gone out, 3and Joanna the wife of Chuza, Herod’s steward, and Susanna, and many others who were contributing to their support out of their private means.

If we look back to the Torah (first 5 books of the Bible), we can see how the LORD provided for the Levites. He did not give directly to them an inheritance as He did for other tribes. He instructed others to provide for them.

Numbers 35:1-5

Cities for the Levites

     1Now the LORD spoke to Moses in the plains of Moab by the Jordan opposite Jericho, saying, 2“Command the sons of Israel that they give to the Levites from the inheritance of their possession cities to live in; and you shall give to the Levites pasture lands around the cities. 3“The cities shall be theirs to live in; and their pasture lands shall be for their cattle and for their herds and for all their beasts.

      4“The pasture lands of the cities which you shall give to the Levites shall extend from the wall of the city outward a thousand cubits around. 5“You shall also measure outside the city on the east side two thousand cubits, and on the south side two thousand cubits, and on the west side two thousand cubits, and on the north side two thousand cubits, with the city in the center. This shall become theirs as pasture lands for the cities.

YHWH still wants His people to support those He calls into full time ministry. Some of us will serve Him in business roles (e.g. Daniel, Moses, Abraham, Jacob, many of the people were farmers, etc.). However, some will be missionaries and pastors and Biblical teachers and these may need the support of the community of believers as a means for God to provide for them.

I would encourage these individuals to also consider the example of Paul and work in such a way as not to be a burden to others. They can provide sometimes for their own needs or by modest in what they spend. One receiving donations from hard working people should not be flying in private jets unless they earned that money in another way aside from donations.

Keep in mind that Moses turned away donations that were made when they were in excess of what was required. It was not his goal to get personal wealth from donations from the people.

Exodus 36:3-7

 3They received from Moses every [g]contribution which the sons of Israel had brought to perform [h]the work [i]in the construction of the sanctuary. And they still continued bringing to him [j]voluntary offerings every morning. 4And all the [k]skillful people who were performing all the work of the sanctuary came, each from [l]the work which they were performing, 5and they said to [m]Moses, “The people are bringing much more than enough for the [n] construction work which the LORD commanded us to [o]perform.” 6So Moses issued a command, and circulated a [p]proclamation throughout the camp, saying, “No man or woman is to perform work any longer for the [q]contributions of the sanctuary.” So the people were restrained from bringing any more. 7For the [r]material they had was sufficient and more than enough for all the work, to perform it.

Do not let your own selfishness or greed stop you from making provision for those whom He calls to His service. Give joyfully. Give generously. However, I also encourage you to give wisely. Do not assume your job is to simply write a big check to the local church. That is not a very active way to steward what He has provided you. Remember, it all belongs to Him… He has just entrusted some of His things to us to manage and enjoy.

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Remember that all you have belongs to God. Manage your money God’s way and use it for His glory rather than your own. Visit GrowGodsMoney.org .

You Shall Take in Proportion to What They Received

Many people have many opinions, and strong ones, regarding who should pay taxes and how much and also in regards to appropriate or “required” giving levels to the church. YHWH gives us some insight into how He approaches the topic in regards to how He provides for the Levites. Recognize there is not a direct comparison between the Levites and government we experience today, but this may be interesting to explore some Biblical principles of how the LORD instructs to take money from the people for a common purpose.

Numbers 35:6-8

     6“The cities which you shall give to the Levites shall be the six cities of refuge, which you shall give for the manslayer to flee to; and in addition to them you shall give forty-two cities. 7“All the cities which you shall give to the Levites shall be forty-eight cities, together with their pasture lands. 8“As for the cities which you shall give from the possession of the sons of Israel, you shall take more from the larger and you shall take less from the smaller; each shall give some of his cities to the Levites in proportion to his possession which he inherits.”

Everyone pays something, even those with less. Those with more, pay more… in proportion to what they receive. This sure sounds something like a fixed percentage… e.g. everyone gives 10% or something like that. Also note that this was to provide for those in God’s service who would not otherwise “earn income” because they are devoted to Him. Nowhere in this scripture is YHWH telling anyone to give part of what they receive to others who should be able and willing to work their own inheritance. Also note that this is not a call to take 50% from those who have more and only 10% from those who have less. Everything is in proportion.

This is largely consistent with the concept of the tithe, which is presented elsewhere in the Biblical text. One can draw two focus areas from this…one is how we vote and get involved with government to manage taxes “fairly” and appropriately. This also ties into our attitude when we pay taxes. The other is how we willingly and joyfully choose to give to support those in God’s full time service. By providing for them income, they can work full time focused on serving the Lord in their calling. We can, however, also appreciate missionaries like Paul who worked to pay their own way and did not make themselves a burden on those they taught.  Also consider that the Levites are no longer here and there is not a Biblical command that necessarily automatically translates from the Levitical priesthood to the local churches of today. We must consider context and principles to understand how it applies.

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Remember that all you have belongs to God. Manage your money God’s way and use it for His glory rather than your own. Visit GrowGodsMoney.org .

A Small Leak Will Sink A Great Ship

Many of us are tempted to dismiss small expenses as irrelevant when it comes to budgeting we spend $5-10 or even more without really thinking of it as significant. At the end of a month we may be surprised to find out how much those small expenses add up.

As a simple example, if we eat out even for only $5/meal for breakfast and lunch each weekday that can add up quickly to over $200/month!

There is a quote I remember from Benjamin Franklin that paints a great picture that makes this easy to remember.

“Beware of small expenses. A small leak will sink a great ship.”

As a small leak that lets water in a boat can sink even a great ship, so too can small expenses sink a budget. While it is always a good idea to start cutting spending by looking at the largest purchases you make, it is also important to look in total at where you spend seemingly small amounts of money consistently and repeatedly.

I find it helpful to use software like Quicken to track these small expenses monthly and total them up to see what I am spending money on. It can be quite surprising at times. If that seems too much trouble for you, just take the time to review your credit card statements and add up the little expenses by category. This will help you see where you are spending your money and how simple changes in your habits may really help you patch the holes in your budget.

 

Cutting Spending? Start With The Big Expenses.

When you set out to reduce spending, focus on the bigger expenses first. Clipping coupons and switching to generic or lower cost brands can add up to significant savings and should be considered, but there are larger areas in which to begin.

Start by identifying your major expense categories and then estimate how much you are spending in each area.  Include items like housing or rent. Consider long term expenses like if you will own a car, what car you will purchase, how many and how often. Remember that owning a house, car or boat not only means the cost of that asset but also cost to maintain and use that asset (e.g. insurance, gasoline, utilities, etc.). It also includes the cost to borrow money to buy these assets if you get a loan instead of saving up first.

The concept is called a Pareto analysis. Organize your expense categories from largest to smallest and then focus your time  on reducing expense in the larger categories first. You also want to look in the smaller categories and look for any easy changes that can reduce cost by a significant amount. But don’t get so distracted by the smaller costs that you forget to really challenge yourself on your larger expenses.

You can save a lot of money by differentiating between want and need or by setting your budget first based on income and long term objectives and then seeing what you can afford to get… rather than looking at expensive homes and cars and selecting one that you would like to own… and forcing it into your budget.

A good way to help avoid major cost and buying significant purchases you really are not ready for is to not… that’s right… not go into debt to purchase them. Save up the money ahead and then buy them. Yes, you actually can do this for a house, car, boat, etc. But it takes discipline and long term planning. Saves a lot of money as a result. This goes for credit card debt as well, which can be quite significant for some families and all it does is let you buy something you either can’t afford or buy something before you can really afford it and thus pay more for it to get it sooner. Patience and contentment are indeed virtues.

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .