After spending the last few days discussing ways in which we can be an effective rich person (and yes, this is implying that we are rich) through the medium of generosity, I thought it may be wise to provide some insight on how to set-up a biblically-based budget. If you missed the last few posts, you can read them here: You’re Richer than You Think, How to Be an Effective Rich Person, and 10 Practical Steps to Be an Effective Rich Person.
May you be encouraged and to God be the glory!
“The prudent sees danger and hides himself, but the simple go on and suffer for it.” Proverbs 22:3
This statement made by King Solomon can easily be used to show the need to budget.
Just as a business plan is necessary for a strong and sustainable company, a budget is equally as necessary for the health and vitality of our finances. Without them, companies or individuals would almost be predisposed to make poor financial choices and experience strategic misdirection.
Yet, despite the benefits of “planning” a financial course of action, my heart used to cringe at the very sound of the word “budget.” Budgeting was overly restrictive to me and limited my spontaneity in spending funds just as my heart desired. Because I worked hard to generate an income, I felt entitled to spend it the way I wanted.
After years of living like this, I decided to submit my mind (and spirit) to the financial wisdom of Scripture (through the lessons of Crown Financial Ministries) and discovered major errors in my budgeting (or lack thereof). Dumbfounded yet inspired by this new-found instruction, I was eager to “now” include Jesus.
Remember the Word teaches us to seek after knowledge as God’s FULL intent is for us to prosper and to be successful. However, we do have the responsibility to do our part in applying His instruction.
“For I know the plans I have for you,” declares the Lord, “plans to prosper you and not to harm you, plans to give you hope and a future. Then you will call on me and come and pray to me, and I will listen to you. You will seek me and find me when you seek me with all your heart.” Jeremiah 29:11-13
“An intelligent heart acquires knowledge, and the ear of the wise seeks knowledge” Proverbs 18:15
“The beginning of wisdom is this: Get wisdom, and whatever you get, get insight.” Proverbs 4:7
1. So, what is a biblically-based budget?
A biblically-based budget is a structured financial plan that wisely guides an individual to manage (appropriately allocate) their God-given funds in effective ways using God’s word. Always remember that the purpose of this is for God to receive the glory for producing high-yielding fruit here on earth and in eternity. This means being rooted in scripture, covered in prayer, and constantly adapting to the different seasons in your life. The following scripture in Ecclesiastes confirms the value of wise financial planning:
“Wisdom is a shelter as money is a shelter, but the advantage of knowledge is this: that wisdom preserves the life of its possessor.” Ecclesiastes 7:12
2. What happens when a budget does not exist?
Chaos, poverty, and destruction are three words that immediately come to mind, along with the following scriptures and bullet points:
- Impulsive/recreational shopping
- Paying for services that are too expensive (desires outweighing true needs)
- Living beyond your means because of internal or external pressure
- Missing opportunities for investing in God’s Kingdom (spending lavishly on ourselves instead of giving to those in need)
- Sporadic or inconsistent tithing (missing out on blessings from the Lord)
- Saving negligently or inappropriately (by not saving, or saving so much to the point of hoarding)
- Accruing debt (enjoying it now and paying it off later)
“My people are destroyed for lack of knowledge; because you have rejected knowledge, I reject you from being a priest to me. And since you have forgotten the law of your God, I also will forget your children. The more they increased, the more they sinned against me; I will change their glory into shame.” Hosea 4:6-7
“How long, O simple ones, will you love being simple? How long will scoffers delight in their scoffing and fools hate knowledge?” Proverbs 1:22
3. What does a budget include according to God’s Word?
Plan to give a specific amount (10% of income) consistently every month rather than feeling “guilty” through compulsive giving. Once you have the dollar amount set, allow Him to guide you on where it is to go – directly to the church, a missionary, or however He leads you. This is your first “bill” to pay every paycheck.
- “Each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver.” 2 Corinthians 9:7
- “Bring the full tithe into the storehouse, that there may be food in my house. And thereby put me to the test, says the Lord of hosts, if I will not open the windows of heaven for you and pour down for you a blessing until there is no more need.” Malachi 3:10
- “One gives freely, yet grows all the richer; another withholds what he should give, and only suffers want.” Proverbs 11:24
- “Honor the Lord with your wealth and with the first fruits of all your produce; then your barns will be filled with plenty, and your vats will be bursting with wine” Proverbs 3:9-10
Debt is not okay. This is very straightforward, yet completely contradictory to what most Americans are taught to do in pursuing the “American Dream”. Indebtedness to a lender is a form of bondage. And because Jesus died to give us freedom, it is incredibly wise to approach a legal contract of purchase (A.K.A debt) with extreme caution. For many, this means a lifestyle change. And often this is exactly what the Lord desires. Paying off debt must be a top priority after paying God first.
- “The rich rules over the poor, and the borrower is the slave of the lender.” Proverbs 22:7
- “Owe no one anything, except to love each other, for the one who loves another has fulfilled the law.” Romans 13:8
Saving is not only wise but very biblical. And it requires intentionality. Pay God first, then pay yourself. Even if it’s little by little ($10 a month if that’s all you can afford), at least do that. One cannot afford not to put funds aside. The goal is to save 10% of your income; however many start off at 5% and then slowly build upwards.
- “Precious treasure and oil are in a wise man’s dwelling, but a foolish man devours it.” proverbs 21:20
- “For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it?” Luke 14:28
- “Wealth gained hastily will dwindle, but whoever gathers little by little will increase it” Proverbs 13:11
- “On the first day of every week, each of you is to put something aside and store it up, as he may prosper, so that there will be no collecting when I come” 1 Corinthians 16:11
Continue reading the second portion of this post Practical Resources for a Biblically-Based Budget. We have provided a sample budget and helpful worksheets to begin your journey towards honoring God with your wealth. I’ve also shared my personal testimony of paying off over $50,000 in debt (while I was on the mission field with a 15k salary). Now, I am enjoying life completely debt-free – praise be to God alone!
Photo provided by moneyaware.co.u