This is a short booklet outlining basic Bible principles on personal financial management. It was written for India, so the examples are Indian. But the principles apply in any culture.
- Seek first the kingdom, and God will provide what you need
- Be generous with what you have
- The love of money leads to destruction
- Be content with what you have
- Laziness leads to poverty
- Plan before you spend
- Save little by little
- Do not squander your money
- Beware of debts and loans.
- Do not be a guarantor
The Bible states clearly that your money is a gift from God.
The LORD sends poverty and wealth; he humbles and he exalts. (1 Samuel 2:7)
Whether you have a lot of money, or very little money, what money you have is a gift from God.
The amount of money you have is not a reflection of your righteousness. Jesus never sinned and yet was very poor, not even having a regular place to sleep at night (Luke 9:58). On the other hand, Abraham was counted as righteous and was a rich man (Genesis 13:2).
God gives some of his children wealth and some of his children poverty. We each must accept what financial resources God has given us and use them wisely. We don’t want to waste what God has given us. Nor do we want to be dissatisfied with what God has given us.
In this booklet, we discuss ten Bible principles on managing our personal finances. Each will be illustrated from the book of Proverbs and from a New Testament passage.
The first four principles concern our attitude to money; the fifth concerns our attitude to work; and the last five principles are practical advice about managing our money wisely.
|Ten commandments on money|
|1.||Seek first the kingdom, and God will provide what you need.||Proverbs 22:4; Matthew 6:33|
|2.||Be generous with what you have.||Proverbs 19:17; Luke 6:38|
|3.||The love of money leads to destruction.||Proverbs 28:20; 1 Timothy 6:10|
|4.||Be content with what you have.||Proverbs 23:4-5; Hebrews 13:5|
|5.||Laziness leads to poverty.||Proverbs 14:23; 2 Thessalonians 3:10-12|
|6.||Plan before you spend||Proverbs 24:27; Luke 14:28-30|
|7.||Save little by little.||Proverbs 21:20; 1 Corinthians 16:2|
|8.||Do not squander your money.||Proverbs 23:20-21; Luke 15:11-32|
|9.||Beware of debts and loans.||Proverbs 22:7; Romans 13:8|
|10.||Do not be a guarantor.||Proverbs 22:26-27|
Humility and the fear of the LORD bring wealth and honour and life. (Proverbs 22:4)
Seek first his kingdom and his righteousness, and all these things [food and clothing] will be given to you as well. (Matthew 6:33)
Many money problems arise because we do not realise that God will look after us if we have our priorities correct. He promises to bless the person who is humble, who fears him, who seeks the kingdom and who seeks after righteousness. God will ensure that faithful people like this will have what they need. If you seek to be rich in faith rather than money, then God will bless you.
We need to be careful to avoid spending a lot of time and energy pursuing wealth rather than pursuing righteousness. That means we should not spend such long hours at work that we have no time to share our faith with other people, or read our Bible or pray to God. We should not be spending such long hours studying for school exams that we cannot find time to attend meetings and Bible classes. God’s things come first. Study and work are important, but only after we have put the things of God first.
He who is kind to the poor lends to the LORD, and he will reward him for what he has done. (Proverbs 19:17)
Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you. (Luke 6:38)
It is amazing how richly God will bless us when we are prepared to give to him. He gives abundantly when we are generous to him.
Again, these are not promises that we will become rich through generosity. You cannot give all your money to other people and expect God will make you wealthy. But he will treat you in proportion to the way you treat other people.
Under the law of Moses, God commanded Israel to give one tenth (a tithe) of their income each year (Deuteronomy 14:22; Leviticus 27:30). Followers of Jesus have greater freedom and tithing is not commanded. However, giving generously to God is. There are no specific rules and how much you give is up to you.
Most people are naturally selfish and find it difficult to give money away. This makes it all the more challenging for believers. Giving dutifully is not enough, a believer should love being generous. Paul said,
Each man should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver. (2 Corinthians 9:7)
Giving to needy people allows us to express our thanks for the things God has given us. It gives back something of what God has provided for us.
Some people have a container into which a proportion of their income is placed each time they are paid. Then there is always some money put aside for when God places a need on our path as he promised he would do (Ephesians 2:10).
There are many examples of generosity in the Bible from which we can learn. See, for example, Deuteronomy 15:7-10 and 2 Corinthians 8:1-2.
A faithful man will be richly blessed, but one eager to get rich will not go unpunished. (Proverbs 28:20)
For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs. (1 Timothy 6:9-10)
If you love money, it will be more difficult for you to be part of God’s kingdom. Jesus said
“it is hard for a rich man to enter the kingdom of heaven. It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God.” (Matthew 19:23-24)
A camel is much too large to go through the eye of a needle! Similarly, if you want to be rich, then you are putting a big barrier in your path towards God’s kingdom.
Wanting to be rich is greed. God hates greed so much that he equates it with idolatry-you “cannot serve both God and Money” (Matthew 6:24). Be aware of how much time and energy you are putting into earning more money. Is it getting in the way of your service to God?
Read Luke 12:15-21 for a story of a man whose greed for more and more wealth cost him his life!
Do not wear yourself out to get rich; have the wisdom to show restraint. Cast but a glance at riches, and they are gone, for they will surely sprout wings and fly off to the sky like an eagle. (Proverbs 23:4-5)
Keep your lives free from the love of money and be content with what you have, because God has said, “Never will I leave you; never will I forsake you.” (Hebrews 13:5)
Do you secretly believe you would be happier with a little more money? Beware of this trap. Many people fall into it, convincing themselves that they need more. It is so easy to be discontented with what God has given us, and to imagine life would be better and easier with more money and possessions. In fact, modern advertising continually encourages us to think like this. But it is not true. King Solomon wisely wrote that people are never content:
Whoever loves money never has money enough;
whoever loves wealth is never satisfied with his income.
This too is meaningless. (Ecclesiastes 5:10)
Instead, we must learn contentment whatever our circumstances. Paul wrote how he had experienced poverty and wealth and had learnt to be content in all circumstances
I have learned to be content whatever the circumstances. I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want. I can do everything through him who gives me strength. (Philippians 4:11-13)
All hard work brings a profit, but mere talk leads only to poverty. (Proverbs 14:23)
For even when we were with you, we gave you this rule: “If a man will not work, he shall not eat.” We hear that some among you are idle. They are not busy; they are busybodies. Such people we command and urge in the Lord Jesus Christ to settle down and earn the bread they eat. (2 Thessalonians 3:10-12)
Some people are poor because of their own laziness. They spend their time talking about what they are going to do, but never get around to doing it. All talk and no work can make you poor. We must use the time God has given us wisely, and work to earn a living.
Of course, many people do work hard and are still poor. There are many reasons for poverty, and laziness is just one of them. But this is one reason that is easy to overcome. God expects us to work hard, as if we are working for Jesus himself.
Whatever you do, work at it with all your heart, as working for the Lord, not for men. (Colossians 3:23)
Finish your outdoor work and get your fields ready; after that, build your house. (Proverbs 24:27)
Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it? For if he lays the foundation and is not able to finish it, everyone who sees it will ridicule him, saying, “This fellow began to build and was not able to finish.” (Luke 14:28-30)
These passages show that we must plan ahead. We should not spend all our time and money building a house, but overlook how we are going to eat when it is finished. We should not begin a costly project such as building a tower, without sensible financial planning to ensure we can finish the project.
Planning how we spend our money is an important part of managing it wisely. Remember, whatever money we have is a gift from God and we should be careful how we spend it.
A helpful tool for planning is a household budget. A budget is a broad plan for how our income will be spent. Some examples are given in the table on the following page.
Because every person’s needs and circumstances are different, it is necessary to work out your own budget-don’t just use one of the samples in this table.
A useful way to work out your own budget is to keep careful records of all your expenses for a few months. Write down how much you spend in each category. Then calculate the monthly average in each category. Using these figures as a starting point, you can modify the amounts until they reflect how you want to spend your money. For example, you may find you are spending too much on transport and not enough on giving to other people. Then you would need to plan for alternative means of transport so that you have enough money for the “Giving” category.
Table 1: Some example budgets. Notice that expenditure in different categories depends on your total income. Every person is different. You should work out your own budget that suits your needs and circumstances. The total expenditure (including saving) should add up to the total income.
Here are a few points to keep in mind when preparing a budget:
- Each person is different. Don’t worry if your budget is different from the examples given in the table. Work out something that will be appropriate for your needs and circumstances.
- Make sure some money is put in the “Saving” category. This is for unexpected needs, or for long-term goals. For example, you might wish to undertake a renovation of your house, or you might wish to purchase a bicycle. Large expenses such as these require planning and saving.
- Make sure some money is put in the “Giving” category. As we saw earlier, we are all expected to be generous, no matter how rich or poor we are. But each person in proportion to what God has given him.
- Your planned expenses must add up to your income. You can only spend what you earn.
You will never stick exactly to your budget because prices fluctuate and circumstances vary each day. But try to stick to it as closely as possible. It will give you more control over your money, it will help give you financial discipline, and you will avoid many of the financial difficulties that arise when you don’t use a budget.
In the house of the wise are stores of choice food and oil, but a foolish man devours all he has. (Proverbs 21:20)
On the first day of every week, each one of you should set aside a sum of money in keeping with his income, saving it up, so that when I come no collections will have to be made. (1 Corinthians 16:2)
An important part of planning is saving. It is not wise to use up everything we have, taking no thought for the future. When a large expense arises unexpectedly, we won’t be able to handle it.
Instead, put aside a little of your income every month. It might not be very much, but over time it will grow. As the Proverbs say
“he who gathers money little by little makes it grow. (Proverbs 13:11)
In the Corinthians quotation above, Paul was asking the believers in Corinth to save some money for the poor believers in Jerusalem. He suggested they put aside an amount of money each week to prevent any difficulties arising when the time came for the money to be handed over.
The same principle applies for any substantial future costs. Saving little by little will prevent hardship later.
Do not join those who drink too much wine or gorge themselves on meat, for drunkards and gluttons become poor, and drowsiness clothes them in rags. (Proverbs 23:20-21)
There was a man who had two sons. The younger one said to his father, “Father, give me my share of the estate.” So he divided his property between them. Not long after that, the younger son got together all he had, set off for a distant country and there squandered his wealth in wild living. After he had spent everything, there was a severe famine in that whole country, and he began to be in need. (Luke 15:11-14)
The Bible teaches us not to squander our money by spending extravagantly and wastefully. In the parable of the prodigal son, the son squandered a large amount of money in “wild living” and then had nothing to live on.
When we have expenses, we should ask “Is this a necessary and wise use of my money?” In particular, be careful of large expenses such as in establishing a business, in purchasing a vehicle or in organizing a wedding.
When establishing a business, it is usually better to start on a small scale and slowly build the business up. Often when people spend a large amount of money in establishing a business, they then find that the business does not generate enough money to pay for the expenses in setting it up.
If you wish to purchase a vehicle such as a bicycle, a motorbike or a car, first stop and consider whether it is necessary and whether you can really afford it. Are there alternative forms of transport that would be just as effective but cheaper? Will this expense make it difficult for you to pay for other things?
Weddings are a money-trap! Having a big and expensive wedding doesn’t make the marriage any better. There is often a lot of pressure from relatives and friends to have a big wedding, but consider what God thinks, not what your friends and relatives demand. Think carefully before spending a large amount of money on a single day. Consider having a simpler wedding which is much less expensive and extravagant.
Remember, our money is a gift from God. We don’t want to squander it.
The rich rule over the poor, and the borrower is servant to the lender. (Proverbs 22:7)
Let no debt remain outstanding, except the continuing debt to love one another. (Romans 13:8)
When large expenses arise, people often consider taking a loan with a bank, or some other financial institution, or a money lender. Be very careful before doing this. Many people have got into deep financial trouble through unnecessary and foolish loans.
As the proverb above says, the borrower becomes the servant (or slave) of the lender. You are at the mercy of the money lender when you owe him money. Many people have lost all they own through foolish loans, and money lenders show no compassion.
One of the problems with loans is that you must also pay back interest on the loan. That is an amount of money you must pay on top of the loan to pay the lender for his services. In some cases, the interest payments can amount to a very large amount of money.
Here is an example. Suppose you borrow R20,000 from a money lender at an interest rate of 5% per month. That means that every month you must pay 5% of what is outstanding to the lender as a fee. If you wish to pay the loan back in 5 years, you will need to give him a monthly payment of R1057, so that over 5 years you will pay him 5×12×1057 = R63,400. More than three times what you originally borrowed! The additional R43,400 is the total of interest payments over the 5 years.
In such cases, it is often virtually impossible to ever repay the money lender and you are trapped in his power for your life and sometimes your children’s lives as well. In fact, the money lender does not want you to repay the money borrowed-he wants you to pay him 5% per month forever!
Bank loans are better, but even there the interest payments are large. The following table shows the repayments required for different interest rates on this particular loan, if you are to repay it in 5 years.
|12% per year||445||26,700|
|14% per year||465||27,900|
|16% per year||486||29,200|
|18% per year||508||30,500|
|5% per month||1,057||63,400|
|10% per month||2,007||120,400|
Repaying the loan over a longer period than 5 years results in even higher total repayments. Clearly you should avoid taking loans unless they are really necessary and you can afford to repay them.
If you are thinking of taking a loan, please take the following steps.
- Ask yourself, is the loan really necessary? Often a better approach is to save for the expense. Then you avoid paying any interest payments. Many people take loans because they are undisciplined and greedy; they want to have more and they can’t wait. Beware of this. Make sure you have a genuine need for the loan.
- Pray for wisdom and guidance. Whatever money you have is God’s gift, and you don’t want to waste it on unnecessary interest payments. Ask God to help you be wise in how you use the money he has given you.
- Have a sound financial plan for repaying the loan in the specified time. Don’t just think that somehow you will find the money when repayment time comes. Repayments must be part of your budget so the money is put aside and you don’t default on the loan. Do not proceed until you have a plan which is achievable.
- Seek professional financial advice from someone other than the money-lender. Show a financial adviser your plan and get an independent expert opinion on whether the loan is necessary and whether the repayment plan is realistic.
Do not be a man who strikes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you. (Proverbs 22:26-27)
Lenders will not give a loan to a person if they consider him unlikely to be able to afford the repayments. But if someone else will act as guarantor, then they will provide the loan. That means the guarantor agrees to repay the loan himself if the borrower is unable to do so. This is also described as “putting up security” or “providing surety”.
So a common scenario is for a poor relative to approach a richer relative and ask them to act as guarantor on a loan. The richer relative feels an obligation to help his poor brother or cousin, and so agrees to the arrangement.
However, the lenders are often correct and the poor person cannot repay. Then the guarantor is required to pay the loan back even if that means selling everything he has.
There are many proverbs which warn against doing this. Read Proverbs 6:1-5 for a description of the terrible trap this can be and how anyone in this situation must try desperately to get out of it.
Providing security for another person’s debts is foolish. It is a foolish use of the money God has given you, and it is not really helping the other person.
It can be difficult when a poor relative comes to you pleading for your help; but the more loving thing to do is to keep him and yourself free of financial ruin. Find alternative ways of assisting your poorer relatives which will give real, lasting help.
Please read again the ten Bible principles on managing money, and seek God’s help in putting them into practice. We must not serve God and money, but we can serve God with our money.
This booklet is published and printed by
Printland Publishers GPO Box 159 Hyderabad AP 500001 India
ISBN 81 7887 040 1 1st edition. November 2002
All Bible quotations, unless otherwise indicated, are taken from the Holy Bible: New International Version. NIV. Copyright © 1973, 1978, 1984 by International Bible Society. Used by permission of Zondervan Publishing House.
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