According to the authors of one Reformed Catechism Christian piety includes "the lawful procuring and furthering the wealth and outwards estate of ourselves and others" (WSC, Q?A 74). But what we take in, a subject we considered in an earlier post, is only half of the personal finance equation. We also need to spend wisely.
Here are four principles for faithful spending:
1. Christians Are Stewards
Christians must manage money for the sake of God's kingdom, making their resources work for his glory (Luke 16:1-13). This is true because, "The earth is the Lord's and all it contains" (Ps. 24:1). We are his managers.
Handling money wisely is all about choices. Often these choices are guided by two important principles. First, we need to prioritize our spending. Stewards evaluate what is good, better, and best. Most people find it beneficial to prioritize spending with a budget. Good managers know how to cut the budget in one area to fund more important causes elsewhere. In most Christian families budgetary fat can be cut to fund needs. For example, typical entertainment expenses can go a long way toward paying Christian school expenses. Those who hold the biblical office of deacon can be a huge help in evaluating the budgets of their parishioners and offering suggestions for more prudent stewardship.
Second, we must delay our gratification. Because saving money takes time we have to make sacrifices in how we spend now. Most of us cannot live the way we want AND live the way God calls us to. Dave Ramsey's well known encouragement toward financial wellness is, "Live like no one else so that later you can live like no one else."
2. Christians Tithe and Give
A tithe is a tenth; in this case a tenth of one's income. It is the baseline standard for fiscal gratitude among God's people (Prov. 3:9; Mal. 3:8). Although the tithe is rooted in the Old Testament, it is unreasonable for us to suspect that this standard has been done away with in the period of greater grace in which we live today. Giving refers to charitable donations beyond the tithe. In both testaments believers gave through the God-ordained institution of the local church (Acts 6:1-4; 2 Cor. 9:5).
3. Debt Is Debilitating
Put simply, debt is the result of spending someone else's money as if it was your own. Such spending is never free. For those in debt, unexpected expenditures become crises and the walls of debt's pit become increasingly more difficult to scale.
The Bible warns of the dangers of debt. "The rich rules over the poor, and the borrower is the slave of the lender" (Prov. 22:7; ESV). This being the case, we are a nation of slaves. Americans carry an average of $44,000 in mortgages, credit cards, auto loans and other consumer debt. Half of American families have installment loans on purchased goods. Almost half carry a credit card balance averaging around $4,000. Over 73% of new cars are purchased on debt.
Dumping debt may not be easy. But the formula is as simple as ABCD: First, accumulate no new debt. Second, bring in additional income. Third, change your spending habits. Fourth, develop a plan to pay off your debt one creditor at a time.
4. Now Is the Time to Save and Invest
On average American families save somewhere between 0 and 3% of their income (Chinese households save between 25 and 50%). God says that the wise save. Conversely, "a foolish man devours all he has" (Prov. 21:20; NIV). Right now may seem a strange time to think about investing considering that interest rates are at an all time low. But even without interest, saving is God's financial plan for our lives. As proof, God tells us to look to the wisdom of the ant. "Ants are creatures of little strength, yet they store up their food in the summer" (Prov. 30:24; NIV).
Paul's simple outline for personal finance also helps us see the glory of the gospel. Christ's earning and spending is our hope. He earned more than we could ever earn so that he could buy more than we could ever buy. Through his active obedience Christ has earned the right to be our Savior (Heb. 5:8-9). "Though he was rich, yet for our sakes he became poor that you through his poverty might become rich" (2 Cor. 8:9). Our wise handling of personal finance is meaningful because of Christ's earning and spending.
Don't forget to read the earlier post on earning for God's glory, and if you would like to study the subject of economics further, please consider Dr. R.C. Sproul Jr.'s 12-part teaching series Economics for Everybody.