Since My husband and I run a ministry teaching Biblical financial principles, many people think we have always been financial saints.
I am here to tell you that is W-R-O-N-G!
We’ve made every financial mistake that can be made. At one point, we lost $250,000 in long term savings and unearned income, plus we had two car loans, a nice big mortgage and $35,000 in credit card bills. If we recovered from that, you can reverse any financial challenges you are facing. We are passionate about this ministry because we want to help people avoid all the mistakes we made and the attitudes that got us into so much trouble.
Listed below, in no particular order, are all the mistakes we made. Avoid them and escape the financial pain we caused ourselves.
We were not generous givers, after all, if we have financial challenges, how can we possibly be generous, right?
Giving is a way to honor God and thank him for everything he has given to us. We always gave, even in the midst of financial turmoil, but our giving was stingy, minimal, and grudging.
Our experience is that once you start giving back to God with an open heart in thanksgiving for all he’s given to you, everything else falls into place in your financial life. I am not saying that once you give generously, God will bless you with financial wealth or that you should give to get. I am saying that giving to God from your first fruits puts your financial house in the proper order. Acts 20:35 says: “Keep in mind the words of the Lord Jesus, who himself said ‘It is more blessed to give than to receive.'”
We were spending more than we earned.
This is just bad math. When you spend more than you earn on a regular basis, it always catches up with you. This is not to say you can pay cash for everything you buy—mortgages and student loans are a practical reality for the vast majority of Americans. But those mortgage and student loan payments need to be part of a realistic budget. Even though people think a budget is restrictive, living within your means provides a vast amount of freedom.
We were not saving anything.
People can disagree over how much you save, where you put your savings and what you are saving for, but never saving anything is just as bad as spending more than you make. Savings provides a financial cushion from emergencies and it also allows you to reach long term goals such as buying a house or retiring. Proverbs 21:20 reads: “Precious treasure remains in the house of the wise but the fool consumes it.”
We were living in our dream house and couldn’t afford the mortgage.
In our Bible studies, we recommend that your housing expenses are no more than 30-40% of your total monthly budget. That includes the mortgage or rent payment, plus utilities and upkeep. If you have a monthly budget of $2,000 and spend half that on housing, you have $1,000 for everything else you need to buy during the month. That works out to about $30 a day for all the food, gas, clothes, transportation, insurance, medical expenses, child care, entertainment, gifts, etc. If you stretch yourself too thin on your housing costs, you will struggle to pay for the other monthly expenses.
We were missing out on the 401k match.
If your employer offers some kind of 401k, you are getting free money. It’s like having your employer give you a reward for doing something that you’re already supposed to be doing anyway. Not contributing to a retirement plan with an employer match is like getting a gift of cash and throwing it away.
We cashed in our 401K to cover daily living expenses.
If you are saving for retirement, it’s tempting to think the money in your 401k or IRA can be used for other expenses. Cashing out your retirement account early can provide quick cash but it comes with high penalties. In addition to losing your retirement savings, you will have to pay a penalty for early withdrawal as well as the income tax due on your retirement savings. The worst thing is you don’t just lose the money that’s withdrawn, you lose compound interest you would have gained if the money had stayed in the retirement account to grow over the years. Proverbs 21:5 warns us: “The plans of the diligent are sure of profit, but all rash haste leads certainly to poverty.”
We were trying to keep up with the neighbors.
Don’t let other people’s perceptions of what is “right” lead you astray. Some people think it’s a waste of money to eat out frequently, and others demand an annual beach vacation to maintain their sanity. Some people invest in stocks, some invest in bonds. The bottom line is that as long as you are honest about your personal financial goals and stick to a realistic and personalized plan, based on godly principles, what other people do and think and have simply isn’t important. Your life, and your finances, are unique. Read Romans 12:2: “Do not conform yourselves to the standards of this world, but let God transform you.” Unless you are as wealthy as Bill Gates, some people will always have more than you do. And that’s OK. If you are happy with what you already have then you will always have everything you need.
We spent money impulsively.
Buying whatever you want on a whim will waste tons of money. Use a wish list for any purchase that are not basic necessities. Write down what you want with a date next to it. Get three prices and wait 90 days. If you still want that item after 90 days and if you have the money saved, then buy it. BUT if you find something else you want, the whole process starts over. Cross off the first item and write down the second item … Get 3 prices and wait 90 days, then if you still want that item and if you have the money saved, then buy it. BUT if you find something else you want … This is a sure fire way to refrain from making impulse purchases.
It was easier to do nothing rather than face our problems.
If you aren’t sure what to do, the easiest course of action is to do nothing. It goes back to old saying–If you continue doing what you have been doing, you’ll continue to get the same results you’ve been getting. We continued to ignore our financial problems, so they continued to grow. We were happy to ignore our problems until they became overwhelming. Then we took a Bible study similar to the Navigating Your Finances God’s Way study and learned God’s ways of handling money and possessions. We encourage you to start a group and take the study or download the free eBook of Your Money Counts from the Compass Catholic website to learn more.
The bottom line is that we were very bad stewards of all the blessings God gave us. Once we learned God’s way of doing things we were able to dig out of a mountain of debt and start saving aggressively. Twenty years after first learning God’s principles we were able to leave our paying jobs and serve in Ministry as full time volunteers with no need for a salary.
It took a long time and it was a lot of hard work but it was also very rewarding. I would not trade one moment of what we experienced for anything! It deepened our faith life, saved our marriage, made us work as a team and gave us a mission in life.
I share this not to tell you how wonderful we are, but how awesome our God is!
If you are facing financial challenges, or if you want to pay off a debt or increase your savings, turn to God. 1 Corinthians 10:13: “No trial has come to you but what is human. God is faithful and will not let you be tried beyond your strength; but with the trial he will also provide a way out, so that you may be able to bear it.”