Cash Flow Discovery and Management that Honors God
This is the second article of a 9 part series on 9 Strategies for Biblical Wealth Management. Last week I told you about the first step; Discovering your purpose for Biblical Wealth Management. In order to do this you must: identify what you value most in life; explore your meaningful purpose; design a compelling vision and mission statement and create goals. I hope you have begun to seek out what your purpose for Biblical Wealth Management is.
As a reminder, I would like to mention the 9 Strategies for Biblical Wealth Management before we dive into the second step.
1. Discovering Your purpose for Biblical Wealth Management
2. Cash Flow Discovery and Management that honors God
3. Wise Risk Management
4. Estate Planning that incorporates caring for your loved ones and others
5. Investing and Asset Allocation that uses Biblical principles
6. Setting up a Retirement Income Strategy that will last throughout you and your spouse’s lifetime
7. Wise Tax Planning Strategies that are legal and ethical
8. Philanthropic Planning and Giving that creates a lasting legacy
9. Seeking Non-Proprietary, Fee-Based Biblical council.
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Now, let’s look at the second step in this process; Cash Flow Discovery AND Management that Honors God.
In order to really tackle this step, I believe we need to first look at how we obtain wealth. In my many years of experience in the financial industry, I have seen individuals obtain wealth in at least one of seven ways:
#1 Through an inheritance.
#2. By owning a very successful business.
#3. By accumulating wealth over many years of saving and investing.
#4. By having a career that pays a large enough salary that it’s almost impossible to spend it all ( i.e. athlete, entertainer, surgeon, etc.).
#5. By winning a lottery or a lawsuit.
#6. Through a good investment decision, made in some type of equity such as a stock, a great piece of real estate, etc.
#7. By working for a company which gave their employees company stock as it grew and then went public, making some individuals very wealthy.
In looking at the above list, there are only a couple of ways an individual obtains wealth through good budgeting or wise financial planning. What I have seen is this; if you do not know how to manage your cash flow before acquiring wealth, you will not know how to manage your cash flow after acquiring wealth. In fact, it appears that wealth quickly obtained by an individual who does not know how to adequately handle their cash flow will also quickly disappear. Look at most winners of large settlements, lottery winners and successful athletes, who become injured. Often they are worse off financially than before. Proverbs 13:11 says, “Dishonest money dwindles away, but he who gathers money little by little makes it grow.” (NIV) This is why discovering where your money is being spent on a monthly, quarterly and annual basis is such an integral part of Wealth Management.
The very first thing you must do in “Cash Flow Discovery and Management that Honors God” is to look at everything you spend money on over a 2-3 month period I have been amazed that some individuals who make $300,000 to the excess of $2,000,000 or more a year have no idea how much they are spending every month and certainly don’t know what they are spending their money on. If their income were to stop suddenly they would not know what to do. I find the best way to discover the condition of your cash flow is by using a computer program of some sort where you enter your checks, cash and deposits and then allocate them to a certain account, such as clothing, tithes, entertainment, etc. After a period of time you should be able to get an idea of your spending habits. It will also help you to see if your spending is truly honoring God.
This is where the study and understanding of scripture comes in. In God’s Word, ownership and stewardship are mentioned many times.
“The earth is the Lord’s, and everything in it, the world and all who live in it…” Psalm 24:1(NIV)
“‘The silver is mine and the gold is mine,’ declares the Lord Almighty” Haggai 2:8(NIV)
“Yours, O Lord, is the greatness and the power and the glory and the majesty and the splendor, for everything in heaven and earth is yours. Yours, O Lord, is the kingdom; you are exalted as head over all. Wealth and honor come from you; you are the ruler of all things. In your hands are strength and power to exalt and give strength to all. Now, our God, we give you thanks, and praise your glorious name.”1 Chronicles 29:11-13(NIV)
If we really believe that God is our Father, are we dishonoring him when we are untrustworthy with what he is giving us? I believe the answer to this is a big YES. According to Psalm 24:1 your checkbook, checking account, savings account, the money in your wallet or purse, your debit card, your investments, your cars, your home, etc.; everything you have belongs to God. Therefore, we are to be wise stewards of what He gives to us.
“…From everyone who has been given much, much will be demanded; and from the one who has been entrusted with much, much more will be asked.” Luke 12:48(NIV)
“Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much.” Luke 16:1(NIV)
We must transfer ownership over to God. Basically, this is recognizing that everything you have belongs to Him and He has the right to decide where it all goes and how it will be spent. God has entrusted us with the wealth we have. In a sense we are stewards of His wealth. God blesses and provides for us, therefore we should thank Him and honor Him by taking good care of what He we have been given. We must understand that, regardless of how and to whom He chooses to distribute His resources, they are still, and always will be, His. If, through the process of tracking your spending, you discover that you have not been a good steward of the resources God has entrusted to you, I suggest you pray about it and then change your spending habits. Ask God where you should spend His money.
In conclusion, seek the counsel of godly men and women in the area of Cash Flow Discovery and Management that Honors God. In the Word of God it says, “Plans fail for lack of counsel, but with many advisers they succeed.” Proverbs 15:22(NIV)
“Listen to advice and accept instruction, and in the end you will be wise.” Proverbs 19:20 (NIV)
“The way of a fool seems right to him, but a wise man listens to advice.” Proverbs 12:15(NIV)
For additional in resources go to Crown Ministries, www.crown.org and Dave Ramsey’s, Financial Peace University.
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Bob Barber is president of the National Association of Christian Financial Consultants (NACFC).
