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In some ways, our lives are defined by how we spend two commodities: time, and money. Where we spend our time and how we spend our money both shape and reveal the priorities of our hearts. 

Most of us will spend much of our adult lives trading time for money – that is, working for a paycheck. So what we do with that money is really how we spend our lives.

God cares about how we spend our money for several reasons. First, he is the one who gives us the ability to earn wealth (Deuteronomy 8:17-18), so everything we earn really comes from him. What we do with that money shows our level of gratitude for how God has provided.

Second, God knows that our hearts tend to follow our treasure (Matthew 6:21). So, where we spend our money is a predictor of where our hearts will be (as well as a reflection of where they already are!).

Third, God wants to be first in our lives. We have to choose between serving God and serving money (Matthew 6:24). But wealth is deceitful (Matthew 13:22) and can choke out the Word of God in our lives, making us unfruitful. So what we do with the wealth that God brings our way helps determine whether we are serving God or money.

Choose a path

The way we spend our money sets us up for success or failure in our walks with God as well as in our finances. The one who spends beyond his means not only enslaves himself to creditors, but limits his availability for God’s work and his available time for key relationships with family and others.

Jesus advised his hearers to choose the narrow path that leads to life, rather than the broad road that leads to destruction (Matthew 7:13-14). He was talking about salvation in this passage, but his words apply also to how we handle money. Allowing marketers and our culture to guide our spending will lead us to financial ruin, while following the narrower way of Biblical wisdom will lead us to success and to spiritual fruitfulness.

Following the narrow path, however, requires both intentionality and discipline. It takes no effort to float financially downstream with the cultural current. But swimming against that current requires constant work.

The Prudent

Spender

At the highest level, we do two things with money: earn it, and spend it. Spending in this sense includes everything we do with money – including lifestyle spending, giving, saving (which is really future spending), and debt retirement (past spending). In this article, we will focus on lifestyle spending. We’ll look at what God’s Word has to say about how we use the resources he provides, and we’ll learn some practices and tools to apply Biblical wisdom.

Cultural Myths

Not surprisingly, our culture views spending differently than God does.

Things Bring Happiness

The first myth is that things bring happiness. We’ve all felt the satisfaction of a purchase well-made, or of finally buying something we’ve saved a long time for. And we’ve felt the more fleeting pleasure of an impulse buy. But over the long run, things do not bring happiness. What was your favorite purchase last year? Do you feel about it now like you did then?

Possessions Define Us

The house we live in, the cars we drive, the clothes we wear, the schools our children attend – these are the important things, the things that determine whether we’re on the right track. Or so culture tells us. But God tells us something different. We’re defined not by what we own but rather by Who owns us. There is no more important identification in life than the identity of belonging to Christ.

The More We Have, the more we should spend

As we make more and more money across our careers, our lifestyles should reflect that. Bigger houses, more luxurious cars, more expensive vacations – these are the hallmarks of long-term success. But like the other myths, this one just tends to enslave us. In order to continue expanding our lifestyle, we work longer hours, neglecting our families and the community of God’s people. We fall prey to the deceitfulness of wealth.

Biblical Wisdom

The Prudent Spender is one who enjoys the fruits of their labor while guarding against materialism.

Prudent spenders exhibit several Biblical characteristics:

GRATITUDE

Prudent spenders recognize God as the source of all they have (James 1:17). They enjoy his provision but don’t become arrogant as a result of it (1 Timothy 6:17). Consequently, they’re not compelled to spend to impress others or to establish their own position.

CONTENTMENT

Prudent spenders are content with what God has provided. Like Paul, their level of contentment isn’t impacted by how much they have (Philippians 4:11-13). Instead, they are content regardless of the circumstances. As a result, they don’t need to acquire and spend more in order to enjoy life. Their contentment helps them to guard against greed (Colossians 3:5; Ephesians 5:3; Luke 12:15).

PATIENCE

Seeing God as their Provider, and being content with his provision, prudent spenders are patient when it comes to purchasing things they want or need. They’re not given to rashness or impulse buying; instead, they understand the importance of delayed gratification. They trust God to take care of their needs, rather than taking matters into their own hands like Sarah and Abraham did regarding the promise of a son (Genesis 16).

These character qualities lead prudent spenders to:

  • Disciplined and moderate lifestyles characterized by what is not spent as well as what is
  • Freedom from consumer debt
  • Generosity and wise saving

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How do I get there?

Know where your money goes

The first step toward making any change in our lives starts with acknowledging where we are. When it comes to spending, this means tracking and categorizing our spending so that we understand where the money is going. We can’t change what we don’t know, and we can’t manage what we don’t track.

Tracking our expenses means keeping a record of all we spend. Categorizing means describing our expenses in categories to help us keep track of where we’re spending our money. Tracking and categorizing expenses should be done daily, or at least multiple times a week.

Suppose you knew from your bank balances and credit card balances that you’re overspending your income by $500/month. What would you do about that? You’d probably start trying to cut back in areas like entertainment and household expenses. But what if your expenses in those areas are already pretty minimal?

Tracking and categorizing your expenses gives you the information you need to make adjustments when you need to make them. If you haven’t been doing this, you’re likely in for some surprises when you start! You’re probably spending money you weren’t aware you were spending – like on automatically renewed subscriptions, memberships, app fees, etc. And you’re probably spending more than you realized in other areas. Tracking and categorizing your spending will help you identify these areas and adjust your spending accordingly.

Tracking and categorizing may also reveal some hard truths. Maybe you’re “house-poor” or “car-poor” – making such large payments on these key assets that you don’t have enough left over for the rest of your lifestyle. You’ll need to either adjust your lifestyle or opt for less expensive transportation and housing (a big decision).

The Spending Record

The key tool for tracking and categorizing your expenses is the Spending Record. The Spending Record enables you to record each transaction in a way that categorizes the expense, so that you know where your money is going.

Spending records can be paper or electronic (spreadsheet or maybe even an app, program, or website). Deciding which version to use is really a matter of preference; the key is to choose a system that you’ll use daily.

Prioritize where your money goes

The Spending Record will help you understand where your money is going. But that’s just the first step. Prudent spenders not only know where their money is going; they prioritize it.

Once you understand how you’re spending your money, the next obvious question is, Are you spending it in a way that matches your priorities? Are you maximizing the benefits from your spending? This is not an exercise of judgment or fault-finding; it’s simply a matter of matching up your current spending with your priorities.

Prioritizing your spending can be broken down into three major steps.

1. Determine your non-negotiables

What’s most important to you? Think not in terms of dollar amounts (I need X dollars for housing) but rather in terms of life priorities. Do you need to live in a certain neighborhood because sending your children to a specific school is important? Is it a priority for one spouse to stay at home with the children, and if so, how does that impact your spending? Are both spouses career-minded?

Understanding these non-negotiables will start you down the path of prioritizing your spending. And inevitably, you’re going to come to some decision points. Because not everything can be a non-negotiable!

2. Manage Trade-offs

You can spend a dollar any way you want, but you can only spend it once. And you likely have more ways to spend your dollars than you have dollars to spend! This is where trade-offs come in.

Perhaps sending your children to a private school is an important priority for you, maybe even a non-negotiable. But in order to afford that, perhaps you need both spouses to work. If having one spouse at home was also a non-negotiable, you have some trade-offs to manage.

Trade-offs are basically a way of saying, “I’m willing to give X up to get Y”. We make trade-offs just about every day, usually without thinking about it. We really want to go out to that nice restaurant, but we choose a closer one that isn’t as nice because it takes less time to get there and costs less. We’re trading some of the enjoyment of the dinner for time and money.

Once you know your non-negotiables, you’re in a position to make trade-offs. In the example above, if private school and one spouse staying at home are both non-negotiables, then maybe less expensive vacations or even less expensive housing are the trade-offs you need to make in order to get the most important things on your list.

3. Create a Lifestyle Cap

For the Prudent Spender, one of the most important questions to answer is, “When is enough, enough?”  That is, what is the lifestyle that we’re looking to achieve and what does that lifestyle cost?

If we haven’t wrestled with this question, then the natural tendency is to continue to expand our lifestyle as our income grows. And while there’s nothing inherently wrong with expanding our lifestyle, there may be other priorities God has in mind for the resources he sends our way. For example, do we continually need bigger houses, more luxurious cars, more expensive vacations, etc., just because our income increases? Culture would say, “Absolutely!” But is that being a prudent spender?

If we’ve created a lifestyle cap – a goal of income/spending at which we would say that we have enough – then we’re free, once we’ve attained that goal, to make some other key decisions. Perhaps we continue to earn more so that we can increase our giving. Or maybe we need to continue to earn in order to make up for some lost time in saving. Or maybe it’s time to consider dialing back on work and spending more time with family and in serving the community.

Without a lifestyle cap, we’ll tend to be enslaved to our natural desires for more.

“Whoever loves money never has enough; whoever loves wealth is never satisfied with their income. This too is meaningless.”

Ecclesiastes 5::10

Loving money isn’t just pursuing accumulation of it; it’s also giving ourselves over to the things that money can buy. Scripture tells us that living this way won’t bring satisfaction. God does provide things for our enjoyment (James 1:17; 1 Timothy 6:17), but pursuing these things in continually increasing measure is a path of bondage, not freedom.

Plan where your money goes

Once we know where our money is going and we’ve established a set of priorities for our lifestyle, we’re ready to put a plan in place. This is a plan for how we’ll use the resources that God entrusts to us, based on the priorities He’s given us. The plan needs to be anchored in our priorities and bounded by our actual spending.

Many consider budgeting to be a restrictive exercise. A budget, they say, tells me all the things I can’t do. They feel freer just spending when they want to spend. But is this really financial freedom?

Did you ever see any of the old cartoons where a character would run off of a cliff but not fall until he looked down?  As long as he didn’t realize he’d run out of real estate, he was fine. It was only when he looked down and realized there was nothing beneath him that he fell. Many people think of a budget this way. As long as I don’t know, I’m OK.

But if you’ve ever maxed out a credit card or overdrawn a bank account, you know that ignorance is not freedom. If you’ve ever wondered whether you were going to be able to pay all your bills in a month, you’ve experienced the bondage of worry that ignorance creates.

Planning your spending actually creates freedom. Freedom from worry, because you know you’ll have enough money each month (having planned it in advance). Freedom to spend on the things you want and need, because you know that you’ve incorporated that spending into your plan.

The Spending Plan

The key tool for planning your spending is – wait for it – a Spending Plan. Starting with your monthly Gross Income (the top line on your pay stub), the Spending Plan accounts for all the money you make and all the ways you spend it. The more complete the plan, the greater the freedom.

Creating a realistic Spending Plan can’t be done in a vacuum. You can’t just assign amounts to each category of spending arbitrarily. If you did that, you’d have no way of knowing whether you can actually live by that plan.

Instead, create a Spending Plan by starting with your Spending Record. What have you actually spent over the last 2-3 months in each category? And how do those totals match up to your income? As you make your calculations, you’ll gain understanding of how your actual spending matches up with how you want to spend in light of your priorities. This puts you in a great place to make adjustments.

And you’ll need to make adjustments! Rarely does a Spending Plan balance the first time. Most of us, if we’re not keeping track, are spending more than we make without realizing it. And even if we’re not spending more than we make, we’re probably not spending according to our key priorities. The Spending Plan, together with the Spending Record, can help our actual spending align with our priorities.

Finally, the Spending Plan is not set in stone. It exists to serve us as faithful stewards, not the other way around. If life circumstances or priorities change, the Spending Plan should be updated to reflect these changes.

Recognize obstacles

As you create your Spending Plan and track your spending against that plan, recognize that there will be some obstacles to overcome. We’ve already seen one of those obstacles – competing priorities. You need the additional income from a promotion in order to afford private school for your children; but that promotion means more travel and time away from the family. Or you want to raise your children at home rather than in day care; but you need the income from both spouses working to pay off college loans. There will always be competing priorities.

But there are also other obstacles to be aware of:

Medicating emotions

Some of our purchasing is just a way of medicating our emotions. We feel insignificant, so we purchase some new clothes and feel better about ourselves – for a short time. We’re sad or lonely, so we buy something to make ourselves feel better. Or we’re happy, so we buy something to celebrate.

If we understand how our emotions affect our buying, we can begin to spend more intentionally and less impulsively. And we’re much more likely to stay within our Spending Plan.

Meeting expectations

Keeping up with others in our neighborhoods, our families, or our workplaces can also bust our Spending Plan. The expectations of others are never a good guideline for our spending. And even our own expectations can lead to unrealistic spending patterns. Who hasn’t moved out of their parents’ home and expected to relatively quickly live the same lifestyle that their parents have worked a lifetime to achieve? So we spend money we don’t have to create a lifestyle we can’t afford – all without realizing the trap we’re setting for ourselves.

A good spending plan can guide our expectations and reign in our tendency to try to meet others’ expectations. But if we’re not careful, these expectations can create spending patterns that bust our plan.

Multiplying possessions

Materialism is another key obstacle. Nearly all of us want more than we can afford. But when we allow those wants to push us over the edge in spending, we set ourselves on a path that leads to bondage. Bondage to possessions, bondage to creditors.

This is why giving is so important to the Prudent Spender. Giving puts our treasure in heaven, and our hearts follow that treasure. Giving shapes our hearts away from materialism and toward God. Giving is a way we choose to serve God rather than money.

Missing patterns

Marketing and sales experts have discovered a key secret to repeat income: create paradigms where you continually charge for something. Computer software now regularly operates on a subscription basis; instead of buying the software one time, we pay recurring fees to continue to use it. Buying services like Amazon Prime; entertainment services like streaming; gym memberships – the one thing they all have in common is that they produce recurring revenue for the sellers. And that means recurring expenses for us.

In some cases, these memberships and subscriptions can be valuable – who didn’t benefit from free delivery during Covid? But in many cases, with the fees being charged automatically, the memberships and subscriptions become part of our financial “current” – unseen, unnoticed, but affecting our overall financial picture – sometimes significantly. Paying attention to these recurring expenses, incorporating them into our Spending Plan, and ensuring that we receive value from them will help the financial current work for us, rather than against us.

Mindless Purchases

Another key that marketers have discovered is that they can increase sales by removing obstacles to purchasing. Create easy purchase processes, and you get more sales. So Amazon has their one-click buying. Apple Pay and others make it so you can just scan your phone to purchase. We become further and further removed from the money we’re actually spending (does anyone use cash any more?) and we give less thought to the purchase, because it’s so easy.

Easy purchasing can, of course, be a benefit – if that purchasing is intentional and fits within the Spending Plan. But it can also be a real plan buster.

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Are we there yet? Key measures of success

When it comes to spending, two key measures can help us determine if we’re on the right track to financial freedom. These measures are guidelines, not absolute rules; but the further we stray from the guidelines, the more difficult we find it to stay on track financially.

The 10-10-80 plan

The first measure is the 10-10-80 plan touted by many Christian financial experts as a good balance of spending priorities.  In this plan, 10% of our gross income goes to giving, 10% to saving (which includes debt reduction), and 80% to all other spending (including taxes and other non-saving payroll deductions).

Of course, not everyone will be able to immediately revise their spending to fit this guideline. Extreme consumer debt may reduce the amount we have for lifestyle spending or even for giving. A late start on retirement saving may require us to increase our saving beyond 10% of gross income in order to make up some of the deficit.

But setting the 10-10-80 plan as a target to reach can be a helpful step toward financial freedom.

The Housing ratio

Another key measure is the housing ratio – that is, the ratio of our housing expenses (including mortgage/rent, taxes, insurance, maintenance, utilities, etc.) to our gross income. The recommended ratio is 20% – that is, our total housing costs should be no more than 20% of our gross income.

In some places with high housing costs, this may not be a reachable goal. However, higher cost of living should mean higher incomes as well; if that’s not the case, then it’s possible that a given area may be just too expensive for us. If our housing costs exceed 20% of our gross income, then that means we’re making tradeoffs in other areas.

Unfortunately, many believers make these tradeoffs in the areas of giving and saving – but the Prudent Spender knows that these areas need to remain priorities. Prudent spenders find ways to make tradeoffs within lifestyle spending in order to afford high housing costs – maybe less expensive vacations, lower-cost vehicles, both spouses working, etc.

At the extreme end, it’s possible to be “house-poor” – that is, spending so much on housing that it’s simply not possible to make a Spending Plan work given the level of income. Since housing is our largest single expense area, it can be difficult to make enough tradeoffs to fit our lifestyle spending within the 80% guideline if our housing costs are high. If that’s the case, the two best options are to increase income or move to less expensive housing.

Growing disciples are prudent spenders

Are you looking to grow your heart for God? (What believer isn’t?) Then managing God’s resources as a prudent spender is a key step. Jesus said that we can’t serve both God and money; we have to choose. And when we choose to put our treasure in heaven, our hearts follow (Matthew 6:19-24).

Prudent spenders accomplish God’s purposes for their lives financially. They’ve devoted themselves to God with regard to their finances. So they live moderate lifestyles compared to their means; they plan how they will use the resources God has entrusted to them; and they measure themselves against that plan. They know when they’re on track, when they’re off track, and when they need to change tracks.

Prudent spenders live in gratitude for what God has provided. Because they’re grateful to God, they’re not continually wanting more and more. They wrestle with the question, “When is enough, enough” and they discern God’s answer. They avoid greed because they’re content with God’s provision. This saves them from materialism, from trying to meet others’ expectations, and from an endlessly expanding lifestyle.

Prudent spenders understand the importance of giving and saving as part of their overall financial stewardship. As a result, they limit their lifestyle spending to prioritize these other key areas. They have a “target lifestyle” in mind that sets an upper bound on their lifestyle spending over time.

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Getting there: Steps to becoming a Prudent Spender

If you sense a need to grow as a prudent spender, you’re not alone!  Most of us are in the same boat. Here are some steps to get you started.

1. Pray

Confess any bad decisions, materialism, or simply inattentiveness to stewardship. Acknowledge God’s grace and forgiveness. Ask him to mold your heart as a faithful steward, especially in the area of spending. Pray for guidance in getting started and in key decisions that you’ll need to make. And pray all through the process, with thanksgiving (Philippians 4:6-7). Thank God even for the things he hasn’t done yet, but will do as you commit yourself to him in stewardship.

2. Track

Start a Spending Record today! Don’t wait. Begin tracking and categorizing your expenses. If you have records over the past month or two, categorize those as well but if not, don’t worry. Just get started. While you’re at it, pray for wisdom as to the categories you should set up and for discipline to maintain the habit of daily tracking and categorizing.

3. Prioritize

Determine your non-negotiables – the key aspects of your lifestyle that you’re willing to sacrifice other areas for. Prioritize these and list other key priorities. Ask God to reveal to you his priorities for the resources he entrusts to you.

4. Plan

Create a Spending Plan based on your current spending and your non-negotiables and other priorities. It’s OK if you don’t have sufficient records to be as accurate as you’d like. Start somewhere. Remember that if your spending exceeds your income, you’re going to need to make some adjustments right away. Try to fit lifestyle spending into 80% of gross income; this will set you on the right path. Pray for God’s direction and his provision, thanking him for what he has already provided and what he will yet do.

5. Adjuist

This will be an ongoing process. You’ll need to adjust in a few ways:

  • If your spending exceeds your total income, you’ll need to immediately reduce expenses or increase income so that they balance.
  • If your spending exceeds the recommended 80% of gross income, you’ll need to make some trade-offs to bring lifestyle spending as close to the guideline as you can.
  • If your actual spending isn’t matching your plan, you’ll need to adjust your spending accordingly or make further tradeoffs in your plan in order to effectively guide your spending.
  • Pray over your adjustments and ask God to direct your thinking in ways that will honor him in your stewardship.
Stewardship for a Lifetime

Determining priorities and creating a Spending Plan is not a one-time exercise. Stewardship – like the other areas of discipleship – is a lifetime journey, not a destination. Prayer, tracking and categorizing, and adjusting your plan ongoingly are the keys to staying on the path of the Faithful Steward.

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