If you’ve ever gotten lost along with your significant other, you know that it’s no fun. “Where are we? Don’t you have directions? How are we going to get there? Are we going to make it on time?” Even if you have the answers to some of these questions, an argument is likely to flare up, often followed by either yelling or a cold silence. The stress provokes blaming anger all around. Of course, for all the arguing you know the truth deep down: You both got lost. You both didn’t bring directions or a map. And you are winging it, hoping that you will find the right place in time. You don’t have a plan.
The same thing happens when it comes to finances in a relationship. When our finances are a mess, it stresses our families and relationships. We are lost among the bills, credit card statements, rent, and the like. Soon we blame someone else for our being lost financially. But the truth is that we don’t have a financial road map. But it doesn’t have to be this way.
“The plans of the diligent lead to profit as surely as haste leads to poverty” (Proverbs 21:5).
This wisdom saying from the Bible reminds us about the importance of making and keeping a financial plan. Yet so often we don’t plan our financial life. We work and make money. We spend money on food and various other items. But we didn’t make a plan beforehand. In effect, we jumped in our car to go somewhere, stop for snacks and gas, but totally forgot the directions to a destination. We need a destination and plan for where we are going with our finances.
The first step, ironically, has nothing to do with money itself. It has to do with your goals as a family. No plan will work if family members are aiming at different goals. Everyone needs to be going in the same direction and aiming for the same target. Goals can include career goals, education goals for both you and any children, retirement planing, charity giving, and any other major hopes for the future. First and foremost, your goals should include how you and your family will live out your discipleship to God, including how you use your finances.
What do you want your life to look like, realistically? Where do you want to go? What obligations must be met along the way? What needs to happen financially in order to meet those goals? What factors are important in making any decisions about money and finances?
As you work together to set priorities as a family, remember to spend time in prayer and asking God to give you wisdom.
Once you know your obligations and goals, it is much easier to make a budget, and a budget is nothing more than a spending plan. Often monthly estimations are the most practical. Write down your expected income for each month. Write out your monthly expenses, beginning with the necessities such as giving to God through church and charities, a place to live, food on the table, and savings goals. Then add things which are most important first, followed by things that are less important. If you find at the end of the month you are spending more money than you are making, then you know what needs to be cut to achieve your goals.
An important follow-up to making a budget is making sure your family accurately tracks your spending. Save every receipt and write every dime spent in a budget journal. When this is done well, you and your family will have an accurate picture of what is happening with your money. Then smart choices can be made in order to reach the goals you’ve set.
There are a number of free online resources and apps for making a household budget and tracking household spending. I encourage you to look around. Your bank may have some tools to help in this area as well.
The best financial advice I ever received was the observation that either you are earning interest with your money or you are paying interest to someone else. When a person borrows money, they pay the money back with interest. They lose money. When a person wisely saves money, it has the opportunity to make interest.
There is some debate among financial gurus about how to get rid of debt and save money. What I will say for now is that they are all agree that minimizing and eliminating debt and saving money is key.
With your family’s plan along with diligent effort, your family will be heading in the right direction toward your goals. Sound like a good trip?
Rev. Deb Koster
Rev. Dr. Steven Koster
Rev. Kelly Vander Woude