Five Ways NOT to Respond to Financial Setbacks

Financial setbacks occur. The car breaks down and needs an expensive repair. An unexpected medical expense comes up. The company downsizes and the family income is lost.

Jesus told us that in this world, we would have trouble (John 16:33) and James assumes that trials will come (James 1:2). In the New Testament era (and in many places in the world today), these troubles and trials often involved persecution. In the West today, they often surround money.

Scripture has much to say about how we manage our money. The Bible warns us against setting our hearts on money and trusting in wealth for security. It encourages us to be faithful, wise, and generous stewards of what God has provided. How we handle money is important.

And a significant part of handling money is responding to financial setbacks. Some of these happenings will be urgent (like an unexpected car repair); others will be longer term (like an investment that tanks). Some will be severe (like a job loss); others will be less so. Some will be of our own making; others will result from factors outside our control.

Regardless of the type, the urgency, and the extent of the downturn, God calls us to faithfulness in the midst of it. He offers us his peace and his provision. In this article, we’ll look at a few unhelpful ways we often tend to react to financial crisis. Then we’ll examine how a faithful steward responds.

Five Unhelpful Responses

Since financial difficulties will occur, we need to be prepared to respond to them as faithful stewards. And that’s not easy. We tend to fall into patterns of response based on negative thinking and false assumptions. These are the times when we’re tempted to focus our minds on earthly things rather than on things above (Colossians 3:1-2), and when we let obstacles obscure our ability to see God working.

Often, the ways we respond to financial downturn tend to be self-fulfilling and self-perpetuating. They keep us in a cycle of decline and prevent us making progress toward financial freedom and growing in our stewardship.

There are many harmful ways we can react to a financial setback, but here are some of the most common. (Some of these are adapted from Michael Hyatt’s “Best Year Ever” course.)

1. Black-and-White Thinking

We set a goal of retiring $5,000 of debt this year. But, due to an unexpected expense near the end of the year, we only ended up reducing debt by $3,000. We failed.

Black-and-white thinking leads us to regard ourselves as failures if we’re anything less than perfect. It blinds us to God’s provision and focuses on what we missed, creating a mindset of scarcity and a sense of hopelessness. It robs us of the joy of accomplishment by focusing instead on what we didn’t achieve. Black-and-white thinking leads to a state of perpetual defeat, because we never accomplish all that we hope to. It denies the possibility of gratitude to God for what he has provided, because it focuses on what we don’t have.

Black-and-white thinking also puts all the pressure on us. If the goal wasn’t achieved, it’s because we failed. As a result, this kind of thought process prevents us from seeing what God might be wanting to teach us or a new direction he might be leading us in. Black-and-white thinking reveals an ownership mindset as opposed to a stewardship outlook.

Black-and-white thinking takes no joy in the $3,000 of debt that we retired. It only frets over the other $2,000 we planned to retire but didn’t.

One way that this kind of thinking prevents us from growing in our stewardship is that it leads us to set easier goals rather than taking risks. We set goals we know we can make (I’ll retire $1,000 of debt this year) rather than ones that will challenge us to grow (I’ll retire $5,000 of debt this year). Black-and-white thinking attributes “success” to the one who meets their goal of retiring $1,000 of debt but “failure” to the one who retired only $3,000 of their $5,000 goal. But which one really made more progress?

2. personalizing

The market takes an unexpected downturn, and a couple of our key investments lose a significant amount of money. We may not be able to afford to foot the bill for our kids’ college education, and it’s all our fault.

Personalizing happens when we blame ourselves for occurrences that are beyond our control. This could be anything from a pandemic to an unplanned medical expense. Personalizing takes black-and-white thinking one step further – it’s not just that we missed the goal, but we’re the ones to blame.

Personalizing leads to a false sense of guilt that can paralyze decision-making and prevent us from taking actions we need to take. It puts the focus on us and, like black-and-white thinking, can blind us to ways in which God might be working.

3. De-personalizing

Suddenly, the car’s engine breaks down. The costly repair will add significantly to our credit card balance. Why do these things happen to us?

On the other end of the spectrum, there’s de-personalizing, or the “not my fault” syndrome. De-personalizing happens when we fail to take responsibility for our own decisions or actions, and instead place the blame for any negative consequences on others or on factors beyond our control.

Sometimes, engines break down due to a fault in the mechanics. But other times, they break down because we didn’t maintain them properly. Perhaps a relatively inexpensive oil change on a regular basis could have prevented the issue.

Or maybe using up all our savings on that nice vacation put us in a financial position where we had to put the car repair on a credit card.

But when we de-personalize, we deprive ourselves of the opportunity to learn and grow from a setback. After all, if it’s not our fault, then what do we need to learn or do differently?

De-personalizing, perhaps more than any other response, tends to be self-perpetuating. That’s because we don’t learn from our experiences (whether they’re mistakes or not!). We don’t get to the point of asking what we could have done differently. As the saying goes, “Those who don’t learn from history are doomed to repeat it.”

4. Catastrophizing

“My husband’s going in for heart surgery. He could be out of work for weeks, or even months. I can’t imagine that he’ll be able to keep his job. How will we pay our bills?”

Catastrophizing amplifies a bad situation by always assuming the worst, even with little evidence. So a heart surgery automatically becomes a multi-month disability resulting in job loss and financial crisis.

Like personalizing, catastrophizing can paralyze us from making important decisions and taking needed actions. Our imaginations carry us to a place of hopelessness and despair. We fail to see God in our circumstances because we can’t get past the desperation. We don’t reach out for help when we need it because the situation is impossible.

Catastrophizing leads to a scarcity mindset. In this mindset, we never have enough. Among other things, this outlook precludes generosity, which is a key element of faithful stewardship. It also takes faith out of the equation, because we don’t anticipate God’s provision.

5. Universalizing

We finally get our Emergency Savings fully funded and the refrigerator breaks down. Isn’t that always the way it works? We start to make a bit of progress and then we encounter a setback. So what’s the point of saving?

Universalizing takes an individual situation and assumes that it will always happen. This time, the refrigerator broke down. Next time, it will be the laptop we depend on for work; or it will be the stove; or a car accident. Something will always happen to set us back.

Like catastrophizing, universalizing leads to a sense of despair and hopelessness. We’ll never get ahead because something will always happen. We take the words, “In this world you will have trouble” and assume that’s the theme for our lives (forgetting the part about “Take heart, I have overcome the world”!).

So we settle. Instead of striving for faithful stewardship, we settle for financial maintenance mode. Instead of working to multiply resources for God’s kingdom, we settle for just getting by. After all, every time we start to make progress, we’ll just experience another setback.

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Two Paths

The overarching problem with all of these responses is that they take our eyes off of God. Whether we’re blaming ourselves (or others), or whether we’re assuming the worst, or whether we’re insisting on perfection: All of these responses focus on us and on our circumstances rather than on God. They indicate an owner’s mentality, rather than a steward’s mindset.

The Path of Ownership

Owners whose thoughts are guided by the negative perspectives above will tend to respond in one of two ways: They’ll give up, or they’ll grit their teeth and press on.  Neither of these responses is healthy or productive.

Giving Up

In one sense, it’s obvious why giving up isn’t a healthy response. We’ll never make progress toward financial freedom if we stop trying.

But more important is the spiritual aspect of this response. Giving up is a little like what the third servant did in the parable of the talents. This response assumes that we have the right not to maximize the resources God puts in our possession. As we see from the words of the master on his return, the servants don’t have that right (Matthew 25:14-30).

Gritting our teeth

Equally damaging is the path of gritting our teeth and pressing on in our own strength. Black-and-white thinking can lead to this response. We redouble our efforts to succeed in light of past “failure”. We put ever increasing pressure on ourselves to make our finances work.

This again reflects an outlook of ownership rather than stewardship. If we saw the resources in our possession as God’s, we’d know that the outcomes are really his responsibility. But when we grit our teeth and just try harder, we leave God out of the picture. We’re thinking as owners, not as stewards.

The Path of Faithful Stewardship

The ownership path – whether characterized by giving up or by gritting our teeth – is a path that focuses on self. By contrast, the stewardship path centers on God. This path affects both what we do and how we think and feel about our finances.

An Open Heart: Prayer

Faithful stewards recognize that all that we have comes from God. So if something is getting in the way of maximizing those resources for God’s glory, then (to put it bluntly), it’s primarily God’s problem! That doesn’t mean that we have no responsibility – but the starting place is prayer.

1. Prayer for wisdom in the decisions we face (James 1:5)
2. Prayer of confession for mistakes or poor stewardship decisions (if applicable)
3. Prayer for God’s provision
4. Prayer for our own growth in our walks with God (Hebrews 12:7)

Jesus said that our hearts follow our treasures. So prayer for God to take over our finances and for him to be glorified there leads naturally to hearts that follow after God and to growth in discipleship.

An Open Mind: Learning

The negative thought patterns we discussed earlier all result from assumptions regarding our situation. As a result, these thought patterns short-circuit our appetite and our ability to learn from our situations. Instead, we need to approach financial setbacks with open minds, prayerfully asking questions such as:

• Is this setback wholly or partially a result of decisions we’ve made or actions we’ve taken (or failed to take)?
• Is there something God is trying to teach us regarding money and/or regarding our walks with him?
• What adjustments do we need to make going forward?
  • Adjustments in our priorities and goals?
  • Adjustments in our financial habits?
  • Adjustments in our decisions?

An Open Spirit: growing

Often, we grow more through difficult times and setbacks than we do through times of prosperity. And often, it’s the setbacks that point us back to God when we’ve been focusing on ourselves (for repeated examples, see the book of Judges!). Job would argue that it can be easier to see God when all the trappings of prosperity are stripped away (Job 42:1-6).

In our lives, we’ll experience setbacks in many realms. But financial setbacks in particular give us an opportunity for growth in some specific areas:

• Faith: In God to provide (2 Kings 4:1-7; Genesis 21:15-19)
• Gratitude: for God’s good and perfect gifts (James 1:17); for the ability to produce wealth (Deuteronomy 8:17-18); for his presence and provision even in the midst of difficulty (Philippians 4:6-7)
• Contentment: with what God has provided (Hebrews 13:5-6; Luke 3:14); whether in plenty or in want (Philippians 4:10-13)
• Perseverance: in following God (Hebrews 10:36; 12:1-2; Romans 5:3-5; 2 Peter 1:6; James 1:3-4)
• Generosity: in giving, even in difficult times (2 Corinthians 8:1-5; 1 Kings 17:7-16; Mark 12:41-44)

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Three Final Keys

Handling financial setbacks isn’t easy. If it were, they wouldn’t provide opportunities for growth! But if our hearts, our minds, and our spirits are open to God’s work in our lives, financial pressures can stretch and grow us in ways that would never happen otherwise.

Here are a few final keys to dealing with financial setbacks:

• Maintain a steward’s mindset. When we realize that all that we have belongs to God, it takes the pressure off of us. Not all the pressure, to be sure. But much of what we put ourselves through when we experience a setback stems from an ownership mindset.
• Get back to basics. In times of difficulty, it’s more important than ever to understand our real priorities and non-negotiables. Praying over these can lead us to recognize some trade-offs we can make to help navigate hard financial times.
• Prepare! A setback is coming. Maybe sooner, maybe later. Maybe minor, maybe more significant. But we can prepare for it with a balanced Spending Plan, sufficient savings, and most of all, faith in our Father.

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