By: Alex Cook
It’s that time of the year again, where many people reassess their goals, their plans – and their finances.
While many people find that the wheels fall off by the beginning of February, I still believe it’s a great time to stop, reassess and make some basic plans to get your finances on track. It’s an opportunity to spend time with God, seek his wisdom for our finances and how we should steward our time, talents and treasure in the year ahead.
“The earth is the Lord’s, and everything in it,
the world, and all who live in it.”
– Psalm 24:1
The starting point for our finances should be handing it all over to God. The Christian life is a surrendered life. We surrender it all to him, including our finances. Psalm 24:1 is an acknowledgement that everything that we have is really God’s. We’re his stewards and we need to commit to being faithful with what he has put in our hands, be it large or small. Commit yourself to the Lord in prayer.
Goals are about pointing you in the right direction. Your goals can include savings goals, debt goals, estate goals, giving goals and much more. The main issue is that you have a clear set of goals that you can actively move towards. You need a goal as well as an action plan to achieve it. Goals should be S.M.A.R.T. That is:
S = specific (e.g. I want to pay off my home loan)
M = measurable (e.g. my loan is $200,000)
A = achievable (e.g. I have enough income to pay it off in the set timeframe)
R = relevant (e.g. I want to get out of debt asap)
T = timebound (e.g. I want to pay off my debt within 10 years)
“Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it?”
One of the key determinants of our long-term financial success is how we behave with money, in particular how much we spend vs how much we set aside for the future. In short, to get ahead, you need to spend less than you earn. I like to call this living beneath your means. To do this you need a written spending plan, often called a budget where you estimate your expenses in the year ahead on a month-to-month basis.
Saving doesn’t come naturally to most people. As saving can be difficult, it should be automated. It will also prevent you forgetting to do it. Say for example your employer pays your income on 30th of every month. Set up a bank direct debit, to sweep 10% of your income out of your account into a high interest online account. Make your savings out of sight, out of mind, to avoid consuming it. Ideally in a different bank altogether.
The cost of insurance has risen significantly in the last few years. Use the new year as an opportunity to review your cover. Do you have too little? Too much? Or none at all. If you’ve got financial responsibilities (e.g. mortgage, kids), then there is a good chance you need life insurance, disablement cover, trauma cover and income protection. Don’t miss the opportunity
Good financial planning always allows for contingencies. What if you lose your job? Get sick? It is wise to have about six months living expenses set aside to give you a buffer if unforeseen circumstances arise. We live in a fallen world and we’re not as in control as we’d like to be. You can minimise the impact of life’s unknowns through a rainy day fund (and insurance).
“Do you not know that in a race all the runners run, but only one gets the prize? Run in such a way as to get the prize. Everyone who competes in the games goes into strict training. They do it to get a crown that will not last, but we do it to get a crown that will last forever.”
1 Corinthians 9:24-25
As we go into 2023 let me encourage you to run your race for the Lord. In our busy world, it is very easily be distracted by what’s going on around us, and what others are doing, rather than pursuing what is of lasting value. As Christians we’re called to fulfil the great commission, to go and make disciples of the nations. We’re also called to help the poor. There are so many ways we can use our finances to fund kingdom activities that yield eternal results. Wise stewardship involves sowing our finances into things that build God’s kingdom. There is also a promise from God that goes with that (see Matt 6:33), when we put God’s kingdom first, he’ll take care of us. Let’s start 2023, running the marathon for Jesus!
My prayer for you is that when you enter eternity you be rewarded for your stewardship and you will hear the words ‘well done, good and faithful servant’.
If you need help with your finances, don’t be afraid to reach out and ask for help. When it comes to money, there are some areas where a little bit of help can go a long way and get you on track. In fact, the bible instructs us to:
“Fools think their own way is right,
but the wise listen to others.”
Wishing you a blessed 2023!
Article supplied with thanks to Wealth with Purpose.
About the Author: Alex is a licensed financial planner and the founder of Wealth with Purpose a Stewardship Ministry that helps Christians handle their money God’s way.