Or maybe you think you don’t, but you actually do.
Money is a tricky part of life. Paging through the Bible, God obviously cared a lot about what his people did with money, how they thought about money, and what money did to them.
I think God’s concern continues today.
Our financial lives today seem very complicated. If you’re not an investment banker or venture capitalist, you can drown in terminology and concepts that don’t quite make sense to you—Stafford Loans, Perkins Loans, PLUS Loans, stocks, bonds, mutual funds, 401(k)s, 403(b)s, SEP IRAs, Roth IRAs, pensions, matching funds, 529 plans, Coverdell ESAs, 501(c)3 giving, tax deductions, withholding, debit cards, credit cards, rewards cards, annual fees, and the rest.
I have an MBA, and I’m still confused at times. But here’s the thing—the big stuff is not too hard to grasp.
In fact, the most important wisdom about dealing with money fits in six points . . .
1. Money is like fire.
My friend Donna explained this to me a few years ago. Fire is dangerous—it can burn up what is valuable to us and even kill us. Money is the same way. The love of it is a root of all kinds of evil (1 Timothy 6:10). It is not helpful to ignore how problematic it can be for our thinking, relationships, and souls.
2. You need to work to have it (and to keep it).
These days, there are all kinds of stories of people harnessing one good idea, one good song, one good video, one good design, or one good skill, earning a boatload of cash, and then being set for life. I love these stories—how some new thing explodes and we all wonder, How did we ever live without this? Why didn’t I think of this and earn a gajillion dollars? So we share such tales and dream away our days.
But these stories are attractive because they’re anomalies, contrary to how life normally works. Rather, if a person won’t work, they generally won’t get to eat, either (2 Thessalonians 3:10). So we had better get used to working.
I learned a lot about work from my year living in some pretty grinding poverty in El Porvenir, Nicaragua. There, my farmer friends knew the value of work, and you could see the effect of it (or the lack of it) in the various households.
3. Spend less than you earn.
Forgetting this single principle is why millions of North Americans are shipwrecked, in bankruptcy, or incredibly stressed by bills. When you can tuck away a bit each month, you start to get ahead. And since “the borrower is the slave of the lender” (Proverbs 22:7), you feel free as you escape debt. When you have a car repair or other emergency, you don’t freak out quite as much. And if you can find ways to spend a lot less than you earn, financial stress virtually disappears.
My wife and I are sort of simple livers by nature, and then our time with friends in hard places overseas taught us even more about this. For example, we don’t have a TV (or the big cable bill), we minimize our driving, we avoid the mall, and we eat lots of legumes and vegetables we grow. This means that as we’ve worked for a single salary for nonprofits overseas and in the U.S. for many years, we’ve been able to save a quarter or more of our take-home pay, even after giving away over 10 percent.
4. Simply invest what you save.
Before your eyes glaze over, know that the emphasis here is on simply. Find a mutual fund company offering index funds with very low expenses (e.g., Vanguard is as low as .05 percent; some managed funds cost 10 times that or even much more). The percentages seem small but will add up incredibly over the next couple decades.
These investments can be in stocks or bonds, and they allow you to actually own a tiny piece of lots of different businesses, whether big or small, in the U.S. or overseas. Some funds have social criteria for the companies they buy into. And some (401[k] or 403[b] accounts that are associated with the target date for the year you think you’ll retire [e.g., 2055]) automatically change the asset mix for your time horizon through the years. You can make this savings automatic by having it taken out of your paycheck on a monthly basis, before it even lands in your bank account.
Finally, be sure to save at least enough to get any matching funds from your employer if they offer such a program for retirement. It’s free money for making choices you probably should make anyway.
5. Talk to other people about money.
Seriously, who does this? I realized a couple months ago that I talk about pretty much everything with a couple of my closest friends . . . except money!
But given how much we read in the Bible about money, greed, and generosity, surely the Church should be a place where we can have some frank conversations. And what kind of community do we really have if we don’t talk about money—one of the most significant issues of our lives and of Scripture? (Please note: I’ve now given you an excuse to share this post with your small group and get a conversation going.)
6. Money is like fire.
Yes, this is the same as #1, but it’s the other side of the coin. Fire isn’t only dangerous, and thus worth dealing with carefully. Fire is also useful—we use it to cook and to heat our homes. Similarly, money can be put to use for great purposes. The money you save can grow through investments, typically doubling every eight years or so. So $100 saved and invested now will likely be $800 in 24 years. The model here is the first two servants in Matthew 25:14–30, who invest their master’s resources and earn more.
The utility of money is not just in delaying gratification and building up a huge amount of money to sit on, though; that’s one of the ways we love money and thus encounter its dangers. Rather, being smart about money allows us to join in God’s work by giving more money toward good and beautiful efforts both now and down the road.
These six points aren’t hard to grasp, but they go a long way toward decreasing our stress about money, managing its risks and dangers to our heads and hearts, and allowing us to participate more in the good works that God has prepared for us (Ephesians 2:10).