Your financial situation is a disaster? Here’s how you fix it

Dear Chuck,

Finances are a real headache for my husband and me. We have tried lots of programs but never stick with them. How can we get back on our feet again?

Financial Headaches

Dear Financial Headaches,

Financial headaches are far worse than the pain of getting on a plan. Anyone can learn to manage money wisely so long as they have a simple method.

Set realistic goals

Many people think they have goals — but really don’t. The key to successful goal-setting is to identify realistic long-term and short-term goals that are simple and measurable. One of the most noble characteristics of ants is the way they plan for the future by storing food in good times for use when times are bad. It’s an example we can all follow. The Proverbs 31 woman is an example of someone whose planning is key to good stewardship. We’re told she worked hard, spent wisely, and planned ahead.

God’s Word advises us to be planners for reasons beyond building a savings account or avoiding indulgence. When we plan, we experience more margin and freedom in our lives, which means we are freed to further God’s work here on Earth.

Rather than hoping to “get rich” or “live like no one else, so someday you can live like no one else,” be specific. For example: set aside a specific percentage of your income over the next six months to establish an emergency fund. Or apply a certain number of dollars to consumer debt with the goal of paying it off in a specific timeframe. Determine what you can set aside each month; then start paying yourself. Post your goals where you can see them and celebrate milestones!

Keep it simple

Road maps are extremely useful because they show where you are, where you want to go, and the path to get there. If you don’t like the term “budget,” you can call your plan a “financial road map” so you know where you are financially. You do not know how much you can save, apply to debt, or invest if you don’t know your current and upcoming expenses. Here are some simple steps:

• Record spending for 30 days.
• Identify categories where money goes.
• Does your income match your expenses?
• Develop a roadmap (budget) for monthly spending.
• Identify short-term and long-term goals.

Short-term goals involve your current lifestyle: debt reduction, saving, giving, investing, etc.

Long-term goals are accomplished over a number of years: funding education, saving for retirement, giving an inheritance, etc.

Control spending

Learn to faithfully handle the money God has put under your authority (Luke 16:11). Acknowledge that everything is His; then establish self-discipline and put all assets and spending under His control. Determine how much you need to spend in each category of your road map (budget), and stick to it. Settle the question of how much is enough, or you’ll never be satisfied with your lifestyle. Be thankful for what you have and learn to be content (Philippians 4:10–12).

Debt management

The Bible doesn’t prohibit borrowing, but it does establish specific limits. If we follow God’s principles, we must not take on debt that we have no reasonable expectation of repaying. Spouses need to discuss with one another, and singles need to talk with a trusted adviser about their debt tolerance levels. Know what the Bible says about debt. If your current debt level exceeds your comfort level, pray about finding ways to reduce it. These articles may help:

Saving

One important short-term goal is deciding how much to save. Initially, the amount is not as important as your diligence in saving. Every dollar saved today is a dollar available for tomorrow’s needs.

Set specific guidelines for your family. With discipline, savings can give freedom and peace of mind when you encounter inevitable emergencies. Savings allow you to pay credit card balances at the end of the month and take advantage of sales.

Try to maintain a minimum of three months’ income in an emergency savings account. If you have fluctuating incomes, the amount should be six months. Save something every month because over time, it adds up. Aim to allocate 5% of your income, after paying taxes and tithes, to savings. If you can do more, great! You may have lots of catching up to do — don’t be discouraged. Just start!

Giving

Perhaps the most important short-term goal for Christians is how much to give to God’s work. If giving habits aren’t established as a result of spiritual conviction, giving often declines when more money becomes available. Setting goals will help control impulsive or emotional overreaction. Unless giving to the Lord is planned, money may not be available once all other bills are paid.

Planning is necessary and scriptural. But don’t ever lose the spontaneity that comes with serving God. If He reveals a need, even though you may already have given your planned amount, give as He prompts you. As Luke 6:38 says, “Give, and it will be given to you. Good measure, pressed down, shaken together, running over, will be put into your lap. For with the measure you use it will be measured back to you.”

Call it what you want: a financial plan, budget, or financial road map. It takes time, but it is a necessary ingredient to faithful stewardship. It shows that you know where you are, where God wants you to go, and the steps for getting there. Review it on a regular basis, adjust as needed, and celebrate when goals are achieved!

My prayer is that your headaches go away permanently!

Here are some more resources:

If credit card debt is adding to your financial headaches, consider reaching out to Christian Credit Counselors, a trusted partner of Crown. They are a valuable resource to help get you on the road to financial freedom.