When it comes to money management or personal finance, we can find it to be just as intimidating as trying to understand the book of Revelation…
But, also like the book of Revelation, if we learn to understand it, it can totally change our lives.
For a very long time, I had this odd relationship with money that had been shaped by people’s inaccurate interpretation of the Scriptures. I was one of those people that thought that rich, wealthy people were automatically greedy or sinful because people said that money was evil (which is actually a misquoting and misinterpretation of 1 Timothy 6:10).
Swinging the pendulum, I had friends who believed that God was like a genie who would make them rich if they prayed for money and wealth (again, this is a misunderstanding and misinterpretation of Scriptures such as Jeremiah 29:11). They equated spirituality with “financial blessings”.
Whether it’s believing that money is evil or that you can pray your way to wealth, either perspective is not actually based on an accurate understanding of the Scriptures. We have to remember to always go back to the Bible and allow it to be the standard of our lives. Therefore, we need to go back to the Bible and allow it to teach us how we should manage our money.
So here are 8 Biblical practicals on how to manage your money:
1. Set Financial Goals and Plans
The plans of the diligent lead to profit as surely as haste leads to poverty.
PROVERBS 21:5
If you look at the habits of successful people, you’ll find something in common with all them—they set goals and make plans.
Failing to set financial goals and plans is one of the first areas where people tend to drop the ball in their personal finances and money management.
As a young adult, my “financial goals” were incredibly vague and not well defined. I mean, how is, “Have enough money to pay my bills and go to concerts” a tangible financial goal…?
Thankfully, the Bible has a lot to say about making plans. We see through the Scriptures that making plans is a characteristic of someone who is diligent (Proverbs 21:5), and someone who has a very diligent character is also someone who has a very righteous character.
But we can’t just have all of these goals and plans and expect that everything will magically manifest—we actually have to back our goals and plans with action:
But the noble make noble plans, and by noble deeds they stand.
ISAIAH 32:8
For me, it wasn’t until I started setting SMART (Specific, Measurable, Achievable, Relevant, and Time bound) financial goals, and praying through them, that I was actually able to make progress with my finances.
For example, one year I wanted to pay off one of my student loans, which was about $30,000. I set monthly financial goals on how much I wanted to put towards the loan (e.g. $2,500 per month at least), and then I made plans for how I could manage the money I had in order to hit the monthly goals (e.g. I made lunches instead of buying them, stopped spending $5 a day at Starbucks, etc.).
By simply having an actual goal and tangible plans on how to achieve those goals, and praying through them, I was able to pay off that student loan!
So the first Biblical principle to managing money—set some financial goals and plans, and then start working towards them!
2. Make a Budget
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? For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, “This person began to build and wasn’t able to finish.”
LUKE 14:28-30
Similar to not setting financial goals or plans, failing to make a budget is another area that we can drop the ball in our personal finances.
Sometimes we think setting a budget means asking ourselves, “Do I have the money to pay for this?” Or “Do I have enough money in the bank?” That’s not a budget…
Writing down a budget may not be the most exciting thing to do, but it’s one of the best and most important ways to manage your money. We personally like to do a zero-based budget where our income minus our expenses equals zero (so we know where every last dollar goes each month).
In Luke 14:28-30, Jesus is talking about building a tower and estimating the cost to complete it. This Scripture is a parable about whether you have the faith to follow Jesus for the rest of your life—it is not a Scripture about money.
Even though this Scripture isn’t about money, we can still get an important lesson out of it in terms of our personal finances—count the cost. The person building the tower needs to sit down, set a budget, and see if the money is there to do everything they want to do in building the tower.
In the same way, we need to make sure that we actually do a written budget to properly manage our money and see where every dollar actually does.
3. Get an Honest Income
Lazy hands make for poverty, but diligent hands bring wealth.
PROVERBS 10:4
Upon reading Proverbs 10:4, it may seem like the Scripture is saying that poverty is caused by laziness. Obviously, this is far from true, as we know that poverty can result from a number of uncontrollable, external factors (socioeconomic class, war, prejudice, oppression, etc.). We also know that there are people who work multiple jobs yet are still in poverty.
When you look at the original Hebrew word for “lazy”, it actually means “negligent” or “remiss”. It could also mean “deceitful”…
In America, we live in a “get rich quick” culture. I often see YouTube ads of some young guy standing in front of a mansion with five luxury cars, telling me that I “could have all of this” if I just signed up for their course, invested in their class, etc. On Instagram, I see influencers post inspirational quotes about “manifesting” the life they want, and how their life was radically changed by selling some type of product.
The internet teaches us that there is an easy, quick way to make a lot of money. We’re taught that we can take shortcuts and do a little deceiving to get what we want…
Thankfully, that’s not what the Bible teaches—at all.
Proverbs 10:4 tells us that making an honest income through diligent, hard work is how we can obtain any type of wealth. Being negligent (i.e. sloppy or careless) or deceitful in how we make our money will hold us back financially (and spiritually, for that matter!).
In other words, whether your income is from your job, side hustles, or investments, the Bible teaches us that we should be honest in how we go about getting our money, and that we should work diligently.
4. Don’t Spend All You Have
In the house of the wise are stores of choice food and oil, but a foolish man devours all he has.
PROVERBS 21:20
I remember the very first paycheck I got. I was so excited and happy about how much I made and the fact that I didn’t have to ask my parents for money, that I ended up spending my entire paycheck on clothes, tech gadgets, and eating out…
When it comes to money, it’s very easy to fall into the I-want-to-enjoy-my-hard-worked-earnings mentality. That is, after all the hard work you’ve put in to make an income, you want to splurge a little and enjoy yourself.
There’s nothing wrong with treating yourself, but you definitely don’t want to go overboard to the point where you can’t pay your bills because you went all out on your birthday…
The Bible has a lot to say about being rash (Proverbs 20:25), and in Proverbs 21:20, it says that it is foolish to throw all of our money away. This is why having and sticking to a budget is so important—it can spare you from making rash decisions.
The Bible calls us to be wise with our money—and being wise means not devouring (spending) all that we have.
5. Save. Save. Save.
Dishonest money dwindles away, but he who gathers money little by little makes it grow.
PROVERBS 13:11
If we aren’t spending all that we have, that means we should be saving it.
Saving up money is an important part of money management, especially when it comes to saving up an emergency fund.
An emergency fund is meant to squash that anxious, pit-of-the-stomach feeling you get anytime a major, financial emergency pops up unexpectedly. It’s money that you have set aside for the sole purpose of “bailing yourself out” when times get rough.
Many financial gurus will recommend saving up 3 to 6 months of living expenses in your emergency fund, and putting it into a High Yield Savings Account or a Money Market Savings Account. It’s best to keep your emergency fund in a separate account from where you typically spend your money, because you don’t want to be tempted to spend your emergency fund. Also, Money Markets collect interest, so your money will be making money for you (it’s not that much interest that it collects, but at least it’s something)!
Saving money won’t happen over night though, and the Bible teaches us that we should save little by little in order to hit our savings goals. This is why it’s so important to set financial goals in the first place (see point 1)—so you can have something to aim towards!
6. Stay Away From Debt (and Get Out of It!)
The rich rule over the poor, and the borrower is slave to the lender.
PROVERBS 22:7
One of the biggest financial crises for young people today is student loans.
For the longest time, we were slaves to our student loan debt. We were burdened by monthly payments that took up most of our paychecks, and we felt like, no matter how much money we paid, every penny seemed to go to the interest of the loan instead of the principle. We were constantly on edge emotionally, and any decision we made was tainted by knowing we had this heavy debt looming over us.
Many people feel this way about debt, regardless of what type of debt it is. I think this is why the Bible says that the “borrower is slave to the lender”—because it just is what it is. It’s true.
If you have debt, fight to be debt free! Get a plan and be diligent about it. Being debt free gives you the ability to choose how you want to live your life and what to do with your money.
The Bible says that the only debt that should remain outstanding is the debt of love (Romans 13:8). So stay away from debt! If you can’t pay for something in full, then you can’t afford it.
7. Give
Be generous: Invest in acts of charity. Charity yields high returns.
ECCLESIASTES 11:1 (THE MESSAGE)
Compassion goes a long way, and that is exactly what the world needs during these turbulent and challenging time.
The Scriptures are filled with God’s heart of compassion towards people, especially those that are poor, needy, widows, orphans, etc.
According to Merriam-Webster’s definition, compassion is “sympathetic consciousness of others’ distress together with a desire to alleviate it”. This is exactly who Jesus was and who we need to strive to be. He was a man of great compassion (Matthew 9:36), and we need to be people of great compassion.
So whether it’s using your money to buy groceries for a neighbor that is sick and shut in, buying toys for a family in need during the holiday season, or raising your weekly tithes/contribution in order to help meet the needs of the church, successfully managing your money means that you have the ability to give back to others.
Don’t ever make money the reason you can’t extend compassion and be generous.
CONCLUSION
Just like other areas of our lives, the Bible is applicable to how we manage our money. Whether it’s budgeting, our income, saving, staying out of debt, or giving back generously to those in need, we’re able to effectively manage our money simply by following what the Bible says.
There’s a wealth (no pun intended) of Biblical Scriptures that are related to money that are not mentioned in this blog post. Do you have a favorite one? Feel free to share it in the comments below!
