Smart money management is more important today than ever before. This is particularly true for us Christians, who strive to live by God’s principles of selflessly managing everything we have. Often, people assume that building wealth is only for the wealthy. But we are here to tell you that anyone (including those with an average income) can grow their savings substantially over time. The key is playing great financial defense. So, what does it mean to play great financial defense? This strategy focuses more on preventing your losses than increasing your income. In other words, this money management strategy is all about careful spending. It sets clear boundaries for your spending and ensures you never spend more than you earn.
Here’s a step-by-step guide to playing great financial defense:
Step 1: Create a monthly budget. Creating a monthly budget helps you see how much money you make, how much money goes towards your living expenses and essentials, and how much you can save each month. In Luke 14:28, Jesus teaches the importance of planning: “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?” Here’s how to create your monthly budget: Write down your total net monthly income (after taxes) from all sources. List all your expenses (rent or mortgage, insurance, utilities, and car payments). Subtract your monthly expenses from your net monthly income to determine how much money you have left over every month. If you notice you are spending as much as (or more than) you earn, look for ways to cut down on things that are not necessary— like eating at restaurants, shopping, or subscriptions, you don’t use much.
Step 2: Stay away from debt.
Debt is one of the biggest threats to your financial stability. The Bible warns us in Proverbs 22:7, “The rich rule over the poor, and the borrower is slave to the lender.” To play strong financial defense, pay with cash whenever you can. If you already have debt, pay it off as quickly as possible. Prioritize debts with the highest interest rates since they cost you more over time.
Step 3: Build an emergency fund. The only thing in life that is predictable is unpredictability. But during unforeseen life events like a sudden loss of a job or urgent car repairs, an emergency fund acts like a safety net to catch you. An emergency fund should ideally cover three to six months’ worth of living expenses. You also want to place your emergency fund in a separate savings account to avoid spending it on everyday needs.
Step 4: Plan for future growth through investment. Investing may sound complicated, but it does not have to be. Start with simple options like a 401(k) or an IRA, which offer tax advantages and sometimes matching employer contributions. As long as it is invested regularly, even a little money can grow substantially over the years due to compound interest.
Step 5: Be generous. Christians are expected to be generous and do charity. And what better way to help others than by managing our finances well? Acts 20:35 reminds us, “It is more blessed to give than to receive.” Budgeting for charity ensures you can give and help others without compromising your financial health.
Start building your wealth!
Building wealth with an average income by practicing great financial defense is not quick. It involves creating and sticking to good financial habits that reflect your Christian beliefs. Remember, the amount of money you earn is less important than how carefully you manage that money. So get your spending under control, avoid getting into debt, build an emergency fund, invest smarter, and be generous and giving.
