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Am I a good steward? Believers who care about honoring God with their lives and with their finances should be asking themselves this question regularly. We should be analyzing our financial habits and practices to determine if they reflect a pattern of Biblical stewardship.
Why this regular check-in? Jesus tells us that wealth is deceitful. In fact, the very deceitfulness of wealth can choke out the Word in us, making us spiritually unfruitful like the soil full of thorns (Matthew 13:22). As a result, we need to be on our guard so we’re not deceived by wealth and drawn away from full devotion to God.
Solomon, the wisest man who ever lived, grew cold in his walk with God over time – due in large part to the wealth he had amassed. Accumulation of wealth had become so important to Solomon that, though he had more than he could possibly need, he imposed a heavy burden on the people as he accumulated more and more. So much so that on his death, the people pled with his son Rehoboam to ease the burden on them. Rehoboam’s refusal led to the division of the kingdom (1 Kings 12). And it all started with Solomon’s accumulation of wealth. If the wisest man who ever lived could be deceived by wealth, how much more do we need to be on our guard?
Stewardship is more than giving
Unfortunately, many churches over time have equated the word “stewardship” with “giving”. They run “stewardship campaigns” to raise funds and pledges toward operational costs, building programs, or special projects. Because of this muddling of terms, many Christians think of the question of “Am I a good steward?” as nothing more than “Am I giving enough?” (whatever “enough” means).
But stewardship entails more than giving. Stewardship incorporates all that we do with the resources God puts in our care. That includes earning, saving, spending, and debt as well as giving. So measuring our stewardship is not a matter of simply knowing how much we put in the offering plate (whether real or virtual).
Indicators of stewardship
Stockholders evaluate their investments in businesses along the lines of three questions:
- Does the business earn more than it spends?
- Is the value of the business growing over time?
- Does the business return fair dividends on my investment?
Of course, God doesn’t estimate our value based on numbers! He values us at the inestimable price of the life of His Son. That said, there are some indicators that can tell us whether we’re on the right track in terms of stewardship, and they correspond roughly to the three questions above. These indicators are:
- Cash Flow
- Net Worth
- Generosity
Before we dive into an explanation of how each of these items helps measure our stewardship, a word of caution. Absolute numbers, such as income level or monthly giving, do not give a complete picture of our stewardship. Consider the widow at the temple (Mark 12:41-44). She gave a small amount compared to what others were putting in the treasury. And yet, Jesus singled her out for her level of generosity. Why? Because in relation to her overall finances, her giving reflected lavish generosity.
This isn’t to say that the numbers don’t matter. They do matter; they’re just not the whole story. And there are no numbers that tell us we’ve “accomplished” good stewardship. Stewardship is a journey, not a destination. Like other areas of discipleship, we ought to strive to continuously grow in Biblical stewardship.
Keeping Track
In order to answer the question of whether we are handling finances as good stewards, we need data. And that data comes from keeping track of our earning and spending.
Scripture encourages us in this:
Be sure you know the condition of your flocks,
Proverbs 27:23-24
give careful attention to your herds;
for riches do not endure forever,
and a crown is not secure for all generations.
As we look at the key indicators of cash flow, net worth, and generosity, the we need data to really know whether we’re growing in stewardship. Do we know how much we’re earning and spending? How much we’re saving? How much we’re giving? If we don’t, our assessment of our stewardship will just be a “finger in the wind” – more of a subjective feeling than an objective assessment.
If you don’t have good data at this point, you can start now.
- To help gauge cash flow, gather credit card and bank statements from the last 3 months. If you keep receipts, gather them as well. At this point, you’re not as concerned with where the money is going (other than separating out giving and saving/debt); you’re focused on how much is coming in and going out.
- To help measure net worth, start with balances from your bank and credit card statements, then gather any statements from investment accounts, etc. You may need to estimate the value of your house and car(s), along with any other key possessions.
- To estimate generosity, think about how much you give (to church and other organizations) on a monthly basis. If you’re not sure how much that is, your bank and credit card statements may help if you give from those accounts. Otherwise, your most recent tax return may have an annual amount for giving if you itemize deductions.
Cash Flow
Cash Flow is the difference between what we make and what we spend. In business, it’s documented as an income statement. Generally, positive cash flow indicates good stewardship, while negative cash flow signifies poor stewardship.
Cash flow can be calculated by taking gross income and subtracting from that everything we spend. This includes taxes and other payroll deductions, monthly bills, daily expenses, etc. Include giving and savings in the overall spending number; although these will be considered separately later, they’re an important aspect of cash flow.
If you keep good records, you’ll have a pretty good idea whether your cash flow is positive or negative. But if not, you can still get an indication by looking at your account balances month to month. Are your bank balances going up? Credit card balances going down? Then you likely have positive cash flow. If your balances remain about the same each month, then you likely have neutral cash flow. And if your bank balances are decreasing and/or credit card balances are increasing, you probably have negative cash flow.
Why is cash flow important?
Cash flow is the best point-in-time indicator of how we’re doing financially. Cash flow gives us an at-a-glance view of whether our current situation is improving or getting worse, and whether or not our lifestyle is sustainable.
A negative cash flow means that we’re sending out more money than we’re taking in. Depending on our level of savings, that may be sustainable over the short term to meet a specific need. But a negative cash flow over the longer term tends to lead to accumulation of debt. This debt incurs interest, and repaying the debt worsens a cash flow that was already negative. The situation continues to spiral downward until changes are made.
On the other hand, positive cash flow indicates that we’re living within our means and enables us to save and give increasingly over time. As a result, positive cash flow actually helps drive the other two indicators of good stewardship. To sum it up, stewardship begins with cash flow.
Scripture reflects the wisdom of not consuming everything we earn:
“The wise store up choice food and olive oil,
Proverbs 21:20
but fools gulp theirs down.”
Positive cash flow provides margin in our finances. We’ve all had unexpected expenses come up – something breaks down, or an unanticipated medical expense arises. If we have negative cash flow – or even neutral cash flow – we don’t have any margin to absorb these expenses, and they will often result in debt. But positive cash flow enables us to handle these expenses with a minimum of financial impact.
What does “good” cash flow look like?
Good cash flow has two primary characteristics: It’s sustainable, and it’s balanced.
Cash flow that’s either positive (money left over each month) or neutral (spending matching income each month) is sustainable. Although the usages of that cash flow will likely vary over time, the overall relationship of spending to income works over the long run. Negative cash flow is not sustainable over the long run. As a result, good cash flow needs to be either positive or neutral.
In addition to being sustainable, good cash flow is balanced. Many stewardship leaders would suggest that a good benchmark for cash flow is to spend no more than 80% of our gross income (and remember, that spending includes taxes and other payroll deductions). In fact, many tout the “10-10-80” plan, where 10% of our gross income is used for giving, 10% for savings, and the remaining 80% for all living expenses.
We’ll discuss giving/generosity shortly, but a few further words here on saving and living expenses.
As we’ll see in the discussion on Net Worth, debt reduction should be categorized under “saving” rather than under “living expenses”, because debt reduction has the same impact on our Net Worth that saving has. This categorization has a nuance, however. Most of our debt reduction payments include both principal and interest. Only the principal repayment can accurately be categorized as savings, because only this part of the payment reduces the debt. The amount of the payment given to interest should be considered a living expense.
So, for example, if I make a $100 payment on a credit card and my interest charge for the month was $90, then in reality I’ve only retired $10 worth of debt. The $90 interest expense is a lifestyle expense, not part of debt retirement. While this adds a little complexity to our understanding of cash flow, the distinction is important – especially in situations where there is significant interest expense.
In summary then, the two best measures of whether we’re achieving “good” cash flow are:
- Cash flow is positive (or at least neutral) month-to-month.
- Our spending reflects the 10-10-80 plan.
A Word of Caution
The ideal situation for cash flow is one where we’re nearly neutral or just a bit on the positive side. If we have a significant amount of cash “left over” at the end of each month, this means that we’re not sufficiently planning what to do with that cash. This is probably a good indication that there are opportunities to increase our giving or saving. As a reminder, “saving” is money we’re setting aside formally and intentionally, not just the “left overs”.
So the goal is not excessively positive cash flow – the goal is neutral cash flow with all of our income planned for and used intentionally.
Net Worth
Net worth is the difference between what we own and what we owe. In business, net worth is reflected on a balance sheet.
To calculate your net worth, take the sum of all your major assets (house, cars, savings accounts, etc.) and subtract the sum of all your debts (mortgage, credit cards, amounts owed on cars, education loans, etc.). If you have significant investments in collectibles, furniture, or other possessions, you can include these in your assets. To determine whether to include something and how to value it, ask yourself, “Could I sell this relatively quickly to meet a financial need and how much would I likely get for it?”
As a reminder, “net worth” is strictly a financial term. It has nothing to do with our worth in God’s sight, which is determined by the price paid on the cross for our salvation. God’s evaluation of us is not based on our financial status but on the righteousness of Christ.
Why is net worth important?
While cash flow is the best point-in-time indicator of how we’re managing our finances, net worth is the best longer-term measure. A given month can have unusual circumstances that significantly impact cash flow. But an increasing net worth is an indicator that we’re on the right track over time. While cash flow indicates how our stewardship is setting us up for success in the present, net worth indicates how we’re set up for the future.
In the parable of the talents (Matthew 25:14-30), the master entrusted various sums of money to three different servants before going on a long journey. When the master returned, two of the servants had doubled the capital entrusted to them. This is an example of increasing net worth. These servants worked with the resources the master gave them and brought back a return on his investment. They were commended by the master for their productive stewardship of what he had entrusted to them. The third servant, however, did nothing with the master’s resources and was condemned for his lack of stewardship.
What does “good” net worth look like?
Financial planners differ on targets of net worth (often based on age and income), but all agree that our net worth should be increasing over time. Individual needs vary so widely that it’s hard to pinpoint a “good” general net worth in terms of exact numbers.
We mentioned earlier that net worth sets us up for the future. While retirement is not a Biblical concept, most of us will reach an age where we’re no longer able to earn enough to meet all our expenses; in other words, we’ll have negative cash flow. So the question of whether we have “good” net worth is primarily a question of whether we have enough to meet our needs in those years. Obviously, the closer we get to those years, the less opportunity we have remaining to build net worth – so the greater our net worth needs to be.
In addition to building net worth for our later years, there may be other key large expenditures that require building up of net worth. These include college savings for children, or saving for children’s weddings if applicable. “Good” net worth for any individual should be determined with the help of a trusted financial planner who applies Biblical principles to finances.
As the calculation suggests, there are two key elements to building net worth: increasing savings, and decreasing debt. The good news is that many of the elements of improving cash flow also help to build net worth. Here are some guidelines for getting started.
Emergency Savings
Net worth starts with savings, and the first kind of savings we need is Emergency Savings. We discussed earlier how Emergency Savings can help protect us from going into debt when unexpected expenses arise; this helps both our cash flow and our net worth. Building Emergency Savings to 2% of annual gross income is the first step for both cash flow and net worth.
3-month net
The next step in savings is to build up a “safety net” for larger potential needs, such as a temporary job loss. A good rule of thumb is to have 3-6 months of net income to create your safety net. We use net income here instead of gross income because a job loss would also mean that the taxes from that job no longer apply.
To determine how much of a safety net you need, consider several factors. If you have a family and you are the only source of income, it’s probably wise to aim for 6 months. If you have two incomes, you may be able to get by with 3 months, since you’ll still have an income source if one job is lost. Do you have large living expenses? Shoot for the high end of the range.
Replacement savings
Nothing lasts forever! You’ve probably already had the experience of replacing appliances or automobiles whose useful life has come to an end. And, if you didn’t have savings to cover those replacements, you incurred debt to purchase them. Replacement savings allow you to replace these items without incurring additional debt. At the low end, plan to have enough to replace your most expensive appliance; at the high end, save enough to replace an automobile.
Long-term savings
In addition to short-term and medium-term savings, you should be saving for the long term. This includes retirement savings and possibly college tuition savings for children, etc. Again, there’s no one-size-fits-all number you should be aiming for. Generally, the starting point is to maximize your employer-matched retirement savings, since these bring an automatic return. Beyond that, consult with a financial planner to determine your specific needs.
Debt
Debt decreases your net worth, as we saw earlier. This doesn’t mean that all debt is bad, just that it has an impact on net worth. Debt can be thought of in two broad categories: efficient debt, which strategically leverages debt for positive outcomes that are otherwise unreachable; and inefficient debt, which is most commonly consumer debt (credit cards, etc.).
All debt – whether efficient or inefficient – has two things in common:
- It presumes on the future, making assumptions about future circumstances that will allow us to repay (and ideally profit from) the debt; and
- It creates an obligation that must be repaid (hence the warning in Proverbs 22:7 that the borrower is slave to the lender).
Strategic debt puts us in a position for long-term gain. Mortgages, education loans, and business loans are strategic in this sense; each one creates the opportunity, under the right circumstances, for profit and for other positive results. Not all strategic debt is actually efficient, though; for example, a $100,000 education loan leading to a $30,000/year job is probably a bad investment from a strictly financial standpoint.
Inefficient debt is debt incurred on services or on depreciating assets. Sometimes, such debt is necessary in the absence of savings – such as an unexpected medical expense or a car payment on a vehicle needed to provide transportation to a job. But the debt is still inefficient, and should be retired as soon as possible.
Often, mortgages, education loans, and business loans can be efficient debt (although each of these can also be unwise depending on the amount and circumstances). Consumer debt, on the other hand, tends to be inefficient and should be eliminated as a priority. This is particularly true of credit cards but also includes medical debt, automotive debt, and any other debt on services or depreciating assets.
A word of caution
When it comes to net worth, more is not always better. The drive to constantly earn more and save more can indicate that we are relying on money rather than on God for security. Additionally, money set aside for the future cannot be used in the present for other good purposes, such as generosity or achieving other family goals.
In Luke 12, Jesus tells the parable of the Rich Fool. Having worked hard to save up all he needed for the future, he recognized that he didn’t have enough storage for all his wealth and so determined to build bigger barns. But God came to him and warned him that his life was at an end. All his wealth had come to naught. Note how Jesus ends the parable: “This is how it will be with whoever stores up things for themselves but is not rich toward God” (Luke 12:21).
The temptation to “build bigger barns” comes at a cost. Maybe it’s the cost of time with family, as the compulsion to earn drives us to more and more demanding careers. Or maybe it’s the cost of generosity, as saving up for ourselves takes the place of giving to God and to others.
We must all ask the question, “When is enough, enough?” and wrestle before God with the need to save up for the future while maintaining the tension with other important values.
Generosity
Simply put, generosity is giving. It’s giving to God and giving to others. We don’t mean by this the kind of culturally-expected giving that typically gets repaid – things like Christmas gifts and birthday presents. We mean giving in the sense of “giving away”. Giving can take many forms – it can be financial, or donation of time or of goods. For the purposes of our focus on financial stewardship, we’re going to narrow our discussion to financial giving.
Why is Generosity important?
Scripture has much to say about finances overall (over 2,000 verses!), and by far the single most common aspect of stewardship in scripture is Giving. There are likely a number of reasons for this, but the most important one is that giving is what keeps us from worshiping money instead of God.
“You shall have no other gods before me.”
“The most important [commandment],” answered Jesus, “is this: ‘Hear O Israel: The Lord our God, the Lord is one. Love the Lord your God with all your heart and with all your soul and with all your mind and with all your strength.’
Exodus 20:3; Mark 12:29-30
God’s command is clear: He is to be in first place. But money challenges God’s right to supremacy in our lives. This is why Jesus said, “No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money” (Matthew 6:24).
More than anything else in our lives, money vies for the top spot. This is why Paul equated greed with idolatry (Colossians 3:5). He warned Timothy, “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 6:10).
The writer to the Hebrews encourages us:
Keep your lives free from the love of money and be content with what you have, because God has said,
Hebrews 13:5
“Never will I leave you; never will I forsake you.”
Generosity is important because it breaks the hold that money has on us; it’s our way of saying, “God is more important in my life than money.” Jesus put it this way, “Where your treasure is, there your heart will be also” (Matthew 6:21). That feels strange to us – we naturally tend to think that we will put our treasure where our heart already is. But Jesus reversed this, telling us that our hearts tend to follow our treasure, not lead it. Generosity, then, is a way that we bring our hearts closer to God.
Contrast the examples of Zacchaeus and the rich young ruler. Zacchaeus, a wealthy tax collector, had amassed much of his wealth through collecting more than he was required to and pocketing the excess (see John the Baptist’s words to the tax collectors in Luke 3:12-13). But on encountering Jesus, his very first act was one of extreme generosity, not only making restitution (four times over!) for all he had over-collected, but giving half of everything he had to the poor (Luke 19:1-10). Jesus reflected that Zacchaeus’ generosity was evidence of his salvation (verses 9-10). Zacchaeus’ treasure was now in heaven.
On the other end of the spectrum is the rich young ruler, who came to Jesus wanting to know how to be saved (Matthew 19:16-22). After an initial response about the commandments, Jesus pinpointed the most significant obstacle in the man’s life – his love of money. “Give all that away; store your treasure in heaven and not on earth, and follow me.” What does Scripture say? “When the young man heard this, he went away sad, because he had great wealth.” Unlike Zacchaeus, this man valued his earthly treasure more than treasure in heaven.
Two rich men. One encountered Jesus and traded his love of money for love of God. The other encountered Jesus but retained his love of money. Two different responses, two different gods.
Generosity is what leads us to transfer allegiance from money to God (Matthew 6:24).
What does “good” generosity look like?
As with cash flow and net worth, there’s not an absolute number that describes “good” generosity. Nor is good generosity indicated by comparing our giving to the giving of others in our church or sphere of influence. But there are several Biblical characteristics of good generosity that help us to know if we’re on the right track.
Good generosity is top priority
Honor the LORD with your wealth,
Proverbs 3:9-10
with the firstfruits of all your crops;
then your barns will be filled to overflowing,
and your vats will brim over with new wine.
God wants first place in all of our lives, and this includes with our money. We can’t love him with all our heart, mind, soul, and strength if we’re not loving him with our money by making giving our first priority.
This doesn’t mean that giving must be the majority of our budget (but what if it could be!). Rather, it means that giving is the first thing we do with our income – whether that’s regular income like paychecks or windfall income like a bonus or an inheritance.
Good generosity is cheerful.
“Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously. Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.”
2 Corinthians 9:6-7
While our treasures tend to lead our hearts, it’s still possible to give out of obligation, grudgingly. But God looks for a different kind of giving. He wants us to realize that all we have – including even the ability to produce wealth (Deuteronomy 8:17-18) – comes from him. He is the source of every good and perfect gift (James 1:18) and he wants us to respond to him out of gratitude, not out of obligation. This is how Zacchaeus responded to Jesus.
Good generosity is systematic
Generosity should be systematic, not haphazard. This doesn’t mean that we never engage in spontaneous generosity (see below), but rather that our overall giving is regular and intentional. When writing to the Corinthians about the collection he was taking for the church in Jerusalem, Paul said, “On the first day of every week, each one of you should set aside a sum of money in keeping with your income, saving it up, so that when I come no collections will have to be made” (1 Corinthians 16:2).
If generosity is a priority for us, it will be intentional – something we’ve planned into our financial lives and made preparations for.
Good generosity is Proportional
Historically, the Biblical benchmark of generosity is the tithe – ten percent of our income. Some question whether this should be net income or gross income, but this question misses the point. It’s usually asked by people who either object to the concept of tithing altogether or are looking for the “minimum” they need to do to gain God’s favor.
When asked about how to please God, Jesus never responded with minimum standards. To the rich young ruler, he said, “sell everything”. To Peter’s question about forgiving someone who offended him he answered, “not seven times, but seventy times seven” (Matthew 18:21-22). His consistent answer – evidenced in his own life – was a challenge to live radically for God.
Good generosity is opportunistic and sometimes lavish
Beyond being both systematic and proportional, good generosity is also opportunistic. The generous giver looks for opportunities to meet specific needs or honor God in special ways. Several examples include:
- The Israelites’ excessive giving toward the building of the tabernacle (Exodus 36:3-7)
- David’s provision of materials for the temple (1 Chronicles 22:14)
- Mary’s anointing Jesus with expensive perfume (John 12:3)
- The early disciples selling property and possessions to provide for the needs of others (Acts 2:44-45; 4:32-37)
Good generosity is not just for the rich
1 Kings 17 tells the story of a widow in Zarephath who trusted God enough to use the last of her flour to bake a cake for Elijah. God rewarded her generosity with a supply of oil and flour that didn’t run out until the famine was over. Not every instance of generosity will result in such an immediate and visible reward, of course. But this shows God’s heart toward those who, not having much themselves, put God first.
Similarly, Jesus praised the widow who put in only two small coins in the temple treasury (Mark 12:44). And Paul commended the Macedonian church for giving out of their poverty (2 Corinthians 8:1-5).
This should encourage anyone who is not in a position to give large amounts – the heart of generosity is what God recognizes more than the amount given. And it shows that generosity is not just for the rich or for those with positive cash flows and great net worth – generosity is for all of us.
A word of caution
As important as generosity is, there are a couple of traps to watch out for.
Giving ostentatiously. Jesus condemned the Pharisees for proclaiming their giving so that others would know how generous they were (Matthew 6:1-4). This doesn’t mean that all giving needs to be anonymous – just that we’re not to draw attention to it.
This includes even our own attention! Jesus said to keep our – it’s possible to fall into pride over our giving and lose sight of the spiritual growth God is trying to build into us. Jesus condemned the Pharisees (again!) for this: “Woe to you, teachers of the law and Pharisees, you hypocrites! You give a tenth of your spices—mint, dill and cumin. But you have neglected the more important matters of the law—justice, mercy and faithfulness. You should have practiced the latter, without neglecting the former.” (Matthew 23:23)
Giving unconsciously. Scripture emphasizes not just the act of giving, but the worship and joy surrounding the act. Review again some of the passages mentioned above – we see joy in the giving of the Macedonian churches, in the giving toward the building of the tabernacle, and many other places. Paul says about the Macedonian churches: “They gave themselves first of all to the Lord, and then by the will of God also to us.” (2 Corinthians 8:5)
While the advent of automated giving online provides an opportunity to prioritize giving systematically, it also tends to obscure the worship and joy that should surround the act of giving. Back in the “offering plate era”, an act of intentional giving could remind us that all we have comes from God, and we’re merely giving back to him what was already his. But when amounts simply disappear from our bank accounts at set times, it’s easy to let giving become a formality without any thought of joy or worship.
To guard against this, consider giving in a context of prayer and service. If you get an email notification when a gift is sent or processed, let that email be a prayer reminder. Consider other ways you might participate with your church or other charities where you give – this will make your acts of giving less a formality, more of a spiritual commitment.
The Stewardship Journey
By now you’re probably realizing a key truth about stewardship –
Like other areas of discipleship, stewardship is not a destination, but a journey.
As a result, the question we should be asking ourselves is not so much, “Am I a good steward?” as it is, “Am I continually growing in stewardship?“
This question needs to be answered in both qualitative and quantitative ways. Elsewhere, we’ve described the key qualitative traits of a faithful steward: They are diligent earners, prudent spenders, generous givers, wise savers, and cautious debtors. In this article, we’ve focused on the quantitative measures – cash flow, net worth, and generosity. Let’s recap some key milestones here. We’ll pose them as questions to help you evaluate where you are on the stewardship journey.
Cash flow
- Is my cash flow neutral or slightly positive month-by-month?
- How close am I to following the 10-10-80 plan for spending?
Net worth
- How close am I to having retired all my consumer debt (credit cards, etc.)?
- Is my net worth growing over time?
- Do I know what my goal is for net worth to provide for the later years, and am I on track to meet that goal?
Generosity
- How close am I to the Biblical benchmark of a tithe for giving?
- Am I looking for opportunities to increase giving?
- Am I seeking God’s glory through giving, prayer, and serving?
Looking to grow or help your congregation grow in the area of Biblical stewardship?
