Some people could be left in the middle of a forest at midnight and still know which way is north. Not me. I have very little sense of direction but I do quite well with a compass. In the world of finance, with pressures bombarding from all directions and advice (good and bad) from countless sources, it is difficult to discern which way is north. The bible is an absolute standard which gave solid financial advice thousands of years ago that will still be valid thousands of years from now. It is a compass which never deviates from true north.
This post shares some of those timeless Biblical principles:
- God owns it all.
“The earth is the Lord’s and all it contains, the world, and those who dwell." (Psalms 24:1)
Sometimes we get confused by the issue of ownership. We might have a deed with our name on it, but God created this world and he will still own it when we are long gone. This perspective will help us from getting overly tight fisted with our stuff. After all, it is not really our stuff.
- Saving money
“In the house of the wise are stores of choice food and oil, but a foolish man devours all he has."
Try substituting “emergency fund" or “retirement plan" for “stores of choice food and oil". The one who saves is wise. The fool lives paycheck to paycheck, spending all he has.
“Godliness actually is a means of great gain, when accompanied by contentment."
I Timothy 6:6-10
While we don’t normally think of contentment as a financial principle, it is a great one. Why? Because we need a defense mechanism against the constant barrage of advertisers who are trying to convince us that we will never be content unless we buy their stuff.
- Life after Debt
“The rich rules over the poor, and the borrower is slave to the lender." (Proverbs 22:7)
No surprise here. Virtually every finance writer expounds the virtues of the debt free life, but not all refer to debt as slavery. Still, the slavery metaphor is an apt one. The bumper sticker “I owe, I owe, so off to work I go" says it well. Those in debt are controlled by their payments. They are in debt bondage.
- Having a budget
“For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it (29) lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him, (30) saying, This man began to build and was not able to finish."
While this passage doesn’t clearly state “make a budget“, the vignette strongly implies it. After all, if the man who was intending to build the tower had developed a budget before he got started, he would have delayed his project until he had sufficient funds.
- Setting priorities
“If anyone does not provide for his relatives, and especially for his immediate family, he has denied the faith and is worse than an unbeliever."
I Timothy 5:8
We must prioritize. If there isn’t enough money to go around, some bills are not going to get paid. This bible passage emphasizes the importance of taking care of basics: providing for relatives and immediate family are highest priority. Many today refer to the four walls of basic economics: food, housing, clothing and transportation. All of these would be higher priority, for example, than making credit card payments.
“A faithful man will abound with blessings, but whoever hastens to be rich will not go unpunished". Proverbs 28:20
Get rich quick schemes will get you in trouble, but you will be blessed if you continue to faithfully be wise over a long period of time. Personal finance is a marathon, not a 100 yard dash.
“Tell them to use their money to do good. They should be rich in good works and generous to those in need, always being ready to share with others". 1 Timothy 6:18
Generosity is the pinnacle of all financial principles. If we follow every other financial principle and miss this one, our lives will become inward, selfish and meaningless. Generosity is an absolute necessity for true wealth.
It is due north on a financial compass.
Readers: What other biblical financial principles can you add to this list?