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These days, a lot people live in constant sticker shock. I personally can't get over how many of the grocery items I buy have doubled in price in just the last few years. Or the price has remained the same, but the packaging is smaller with less product. Housing, too, has gotten more expensive, now priced out of many first-time homebuyers' income levels. And renters bemoan rising rates while their wages remain stagnant.
A 2023 Forbes Advisor survey revealed that 78 percent of Americans live paycheck to paycheck (with no money left after basic living expenses). A 2023 Federal Reserve Economic Wellness Report found that one fourth of Americans routinely spend more than they earn. Many use credit cards to get by and are getting deeper into debt.
Looking to the years ahead, many economists warn of the potential for hyperinflation (inflation at a rate of at least 50 percent per month), stagflation (a combination of slow economic growth with high inflation) or a recession (a period of economic decline, marked by shrinking GDP and high unemployment). The impact of each of these is devastating for the average person.
We need to carefully manage our household finances so we can be ready for potential economic upheavals. And the premier place for guidance is the Bible. There are literally hundreds of Bible passages about managing money. Much of what Scripture says on the topic can be distilled to the following six principles. Living by them will help prevent financial problems, solve any current money challenges, and relieve financial stress.
Proverbs 22:7 cautions us to avoid debt, equating it with bondage: "The rich rules over the poor, and the borrower is servant to the lender." If you're burdened with heavy debt, in essence you've become a slave to your creditors. You no longer have the freedom to decide how to spend your paycheck because you're obligated to meet your debts.
In uncertain economic times, there's the added concern that if we owe a lot of money to creditors, we may not be able to pay down the loans or the principal at a later time, as we might not have an income source or the needed funds in our checking accounts.
A big concern with credit cards is the typically high interest rates. According to the May 2024 Forbes Advisor's credit card rates report, the average credit card interest rate in the United States is 27.65 percent. That means for every $1,000 of debt, you will be paying $276.50 in interest annually. If you let the balance carry over month after month, you can easily end up paying far more than the original price of your purchases.
If you've built up a lot of outstanding revolving debt, paying off your credit cards should be your priority. "If you can, pay extra on the debts with the highest interest rates," advises Kerby Anderson in Making the Most of Your Money in Tough Times: "If all of them have comparable interest rates, you might instead pay extra on the one with the smallest balance. By paying that off first, you'll have a feeling of accomplishment and then free up some of your income to tackle your next debt" (2009, p. 61).
The goal, of course, should be to avoid getting into debt in the first place. Save up money before you buy nonessential, depreciating items like clothing, furniture, home décor, appliances, computers and new automobiles. Try to pay for these purchases with money on hand and not on credit. Only borrow for purchases that will likely increase or hold their value, such as a house or college tuition. Many financial advisors recommend only using credit cards if you're able to pay the full balance on the statement each month, so you don't have to pay any interest.
A key to staying out of debt is to economize. "Be willing to make sacrifices," urges Scott LaPierre in Your Finances God's Way. "Every cent counts. All the money we avoid spending puts us that much closer to being debt-free. This requires being frugal and intentional with purchases. We must often say no to things we want . . . If we expect to eliminate debt, we must live in a way that others might consider extreme. Our society is so indulgent that if we live 'normally,' we will never be debt-free" (2022, pp. 173-174).
Even with rising inflation and threats of recession, many people continue to buy what they don't really need and can't afford. We might deceive ourselves that our "wants" are really "needs," or reason that we must have certain nonessential items or live a certain lifestyle because our peers do. But that only gets us more in debt.
Writes Mahlon Hetrick in Your Money in Tough Times: "The world's way encourages us to be greedy, covetous and discontent, and to spend without discipline. The best way to prevent money problems is to adopt the following attitude: Use it up. Wear it out. Make it do. Or do without" (2012, pp. 14-15).
There are many ways to cut down on expenses. For starters, limit how often you go out to eat. Shop at rummage sales and thrift stores instead of department stores. Take steps to lower your utility usage. Check to see if you can find home and car insurance for less. Cancel streaming or subscription services you rarely use. Avoid hobbies and activities that cost a lot of money.
We can all learn to live with less. God tells us in 1 Timothy 6:8 and Hebrews 13:5 that we should be content with what we have. Jesus warned against coveting, saying that life is not about the abundance of one's possession (Luke 12:15). This is not to say we should never buy luxury items, but rather we shouldn't spend money we don't have or go in debt just so we can "keep up with the Joneses."
If you don't already follow a household budget, now is the time to create one. Simply put, a budget is a written plan to determine how your household income will be allocated. Budgeting is always important, but especially during uncertain economic times or when we're struggling financially.
While the term budget isn't in the Bible, having one certainly aligns with biblical teachings. Proverbs 27:23 says, "Be diligent to know the state of your flocks, and attend to your herds." Put in modern terms, this verse tells us we need to be aware of how we're using our money. Budgeting helps us avoid impulsive and unnecessary spending, live within our means and prepare for future needs. Not keeping track of where our money is going could cause us to get into debt or even lead to bankruptcy.
To develop a household budget, make a list of all your monthly expenses (mortgage or rent, utilities, groceries, car payments, credit card bills, and so on), and compare that to your monthly income. If your expenses are more than your income, you will need to cut out unnecessary purchases. If you have outstanding loans and credit card balances, you will need to decide if you can pay more than the minimum payment each month and how much you can pay.
Once you've established your budget, use a ledger, spreadsheet or a budgeting app to start tracking your monthly expenses. Review this periodically. If you're able to pay off credit cards or if other circumstances change, your budget can be adjusted. If you get to the point where there's no more money left for the month in a particular category, stop spending. Don't allow yourself to go over budget, and be determined to live within your means.
Another way to prevent financial problems is to set aside money that can be used if you lose your job or your work hours are cut way back, you're injured in an accident and can't work for a period of time, or you have unforeseen expenses such as a major home or car repair.
The Bible encourages us to build up our reserves when times are good, so we can be ready for whatever the future might bring. In Proverbs 21:20, we're told, "Be sensible and store up precious treasures -- don't waste them like a fool" (Contemporary English Version). And Proverbs 27:12: "A prudent person foresees danger and takes precautions" (New Living Translation). Proverbs 6:6-8 describes the ant, which saves during times of plenty for possibly leaner times down the road. We, too, should save now for what might happen in the future.
A widely accepted rule of thumb is to keep enough money in your emergency fund to cover at least three to six months' worth of basic living expenses. That means enough to pay for housing costs, utilities, groceries, transportation costs, insurance premiums and other essentials for that time.
If you're strapped for cash, you might not be able to put much into savings all at once. In that case, you can build up your emergency fund gradually. Even just setting aside $100 a month will quickly add up to a useful nest egg.
Having cash reserves on hand reduces the need to rely on high-interest credit cards or costly personal loans should you have unplanned expenses or face lean financial periods -- and it keeps you from falling into debt.
You may be aware of the instruction in Malachi 3:10, which reads: "Bring all the tithes into the storehouse, that there may be food in My house." A tithe or tenth of earned income is supposed to go to God. (To learn more, read our free study guide What Does the Bible Teach About Tithing?).
However, when the bills start piling up and money is tight, tithing might get skipped. Some reason: "If we give 10 percent to the Church, we won't have any money for groceries. God understands, right?"
He certainly does. But God and His principles don't follow human "logic." God tells us to tithe, and we are to obey that command, in good times and bad, and even if it doesn't make sense from our limited human perspectives.
God knows that tithing benefits us, which is part of why He tells us to do it. He also knows our needs, and He promises to take care of us. The last part of Malachi 3:10 says that when we faithfully tithe, God will "open . . . the windows of heaven, and pour out . . . such blessing that there will not be room enough to receive it." The blessings can be spiritual or physical.
Spiritually, when we tithe, we start depending more on God and draw nearer to Him, and in turn He draws nearer to us (James 4:8). This leads to a closer relationship with God. Moreover, when we step out on faith and obey God by tithing, even when it's hard for us, we grow in godly character.
In terms of physical blessings, I've known people who were struggling financially but still tithed, and then out of the blue they were offered very lucrative side jobs, their property taxes were significantly lowered, they were given much-needed household items, or someone did a typically costly home repair for them at a greatly reduced rate.
If we stop tithing, we might miss out on the blessings God wants to give us. Of course, we shouldn't tithe just because we hope to get something in return. But we can rest assured, knowing we will be far better off tithing than if we don't.
We must always remember that God, not our bank accounts, is our true security. We're commanded in 1 Timothy 6:17 not to "trust in uncertain riches but in the living God." Proverbs 11:28 warns that "he who trusts in his riches will fall."
Our financial assets have only limited usefulness and could easily be wiped out in an instant, perhaps through theft or an economic downturn (compare Proverbs 23:5). Think about all the people during the Covid lockdowns who lost jobs, their businesses or company pensions failed, or their stock portfolios shrank. It could happen again.
In 2023, we saw numerous bank failures. Financial observers warn there could be more in the next year or two. Experts have also predicted a stock market crash within the next few years, bankruptcy of the U.S. Social Security system, more bankrupt corporate pensions, a real estate crash, or even a total collapse of the U.S. economy due to the massive federal debt, the diminishing role of the U.S. dollar in international trade and other factors. The world's financial systems are on very shaky ground.
Ezekiel 7:19 says economic times will become so severe right before Christ's return that people will be throwing away their gold and silver as worthless. That verse alone underscores how unreliable our financial assets ultimately are. Whatever does happen, only God can be counted on to be there for us.
Now, we must still do our part to wisely manage our household finances, as we've seen. That's a matter of practicing personal responsibility. But once we've done what's in our control, the rest is in God's hands. And Matthew 6:25-34 assures us that if we are truly seeking God and His righteousness, He will take care of us. Remembering this will provide us with the right focus and peace of mind as we face troubling economic times.
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