Better Stewardship Through Better Planning
Most people think the best way to become financially free is to make more money. Although more money can help, how you manage money is a more accurate indicator of whether you will ever achieve true financial freedom.
First, let me define what I mean by financial freedom. There are many definitions of financial freedom but I like the definition below best.
Financial freedom is freedom from the bondage of mammon and everything that accompanies mammon – from materialism, debt, envy, greed, covetousness, idolatry, and the freedom to respond without hesitation to the promptings of the Holy Spirit; in short, to impact the Kingdom of God with the provisions and purposes that God has given you.
There's a lot of financial advice out there. Most of the advice focuses on growing your income/wealth through investments like real estate, investing in the Stock Market, or other types of investments. Very little advice is offered on better managing what you already have.
I used to believe that what I earned was not enough, that making and having more money was the answer to my money problems. However, as my income grew, so did my desire for more, better, and bigger things. No matter how much I made, it never seemed to be enough. Have you been there?
If you're ever going to achieve financial freedom, having a clear financial plan (a budget) is crucial. A plan that helps you spend strategically and accomplish financial goals is the best way to ensure long-term success and financial freedom. Making more money doesn't translate into financial freedom. Often making more money can lead to more significant financial mistakes, especially when there's no plan to manage that money.
The Ca$hflow game
A few years ago, I bought the game Ca$hflow developed by Robert and Kim Kiyosaki. It is an interesting board game designed to teach money management and investing skills. A player must use the surplus left over after all expenses are paid to buy investments like stocks and real estate. The goal is to purchase assets that produce passive income, referred to as cash flow. To win the game, you have to increase your cash flow by purchasing income-producing assets that will exceed your regular earned monthly income.
Each player draws a card to be assigned a profession. You can choose one of 12 available professions, such as a janitor, a pilot, or doctor. Each profession has different incomes and expenses. The first phase of the game is getting out of the rat race, which, interestingly enough, is defined as the cycle of getting paid, paying bills, and waiting for the next paycheck to arrive. Sounds a lot like living paycheck to paycheck to me.
At first glance, you may think that a higher income would be an advantage since it gives a player a better chance to win the game. However, that's not necessarily true. A player with a low income has just as much opportunity to win the game as a player with a high income. The key to winning is avoiding any increase in expenses so that more surplus is available to invest and increase passive income.
Through my coaching experience on personal finances, I've seen that most people do not have a surplus. Regardless of income, a majority spend all they make and often more than they make, evident by their growing debt. If life is similar to the Ca$hflow game, which it was designed to mimic, many people have no chance of winning (achieving financial freedom) since they don't have a surplus to invest.
More Money Isn't the Answer
Income is not the problem. Whether you make a lot or a little is somewhat irrelevant. What you do with that income determines whether you will ever become financially free. This is why budgeting is the #1 best thing you can do to become financially free. It's the foundation you need to build a solid financial house that will stand firm through every season.
I've experienced many ups and downs in my income. Over the past 32 years, my wife and I have experienced a significant reduction in income on five separate occasions. Twice my income was cut in half. Once we were both unemployed. Yet, in every season, God provided, and we were able to meet our family's needs and reach the financial goals we set to achieve.
How did we do it? Simple, we used a written budget to plan our spending, make adjustments when necessary, and stick to our goals. Yes, there were challenges along the way. Life is unpredictable, and many things are out of our control. Having a budget helped us make better decisions and stay focused on what we valued most.
One day while speaking to a crowd, Jesus asked two rhetorical questions of those in attendance. He said, "Who would build a tower and not count the cost to make sure he has enough to complete it? Who would go to war without first considering if he can defeat his opponent?" (Luke 14:28-33) The questions seem silly. After all, I can't imagine someone doing either of those things without considering the outcome. Yet, when it comes to finances, most people live their lives making and spending money with no plan and no consideration of how it will impact them in the future.
As Christians, we are called to be different, count the cost, and consider the outcome. This is especially true as it relates to the way we are to manage money. I can't think of a better way to improve your stewardship in 2022 than to start living on a budget. If you already have a budget, begin this year by reassessing your plan and asking God if there's anything you need to change or adjust.
For Further Reading:
Overcoming the Emotional Impulse to Spend
Giving Tuesday: An Opportunity to Experience the Blessing of Giving
Financial Success in the Kingdom of God
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