by Ron Dick, Financial Peace University – LifeGroup Leader
When most Christians think of applying scripture to their lives, rarely do they think of it in terms of their finances. After all, why bring God into the picture? Why mix faith and finances? What could an invisible God have to do with the very visible stack of unpaid bills on your table? How many of us think about God when we swipe our credit cards?
Probably the closest many of us get to mixing faith and finances is saying a prayer that the check we just wrote doesn’t bounce.
However, the Bible speaks to the topic of money and possessions quite a lot…2,350 verses to be exact. Also 15% of all Jesus spoke was about money, more than what He spoke about heaven and hell combined. In fact, there is far more in the Bible about managing money than about giving money. The obvious question to ask is, “Why is the topic of money so important to God?”
One reason is because money is an issue of the heart. Matthew 6:21 tells us “For where your treasure is, there your heart will be also.” If you want to find out what a person values most, look at his or her bank account. Consequently, how a person manages their money is a direct reflection of their relationship with God.
Jesus also offers us another reason why the topic of money is so important in Luke 16:13, “No servant can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money.” In other words, the number one competitor for our devotion to God is money or its byproduct, material possessions. Every day we have to make decisions as to whether we serve our stuff or we serve God. In just these two scriptures we see how we approach money shows our heart for God and the danger it could pose if we allow it to become an idol in our life.
In his letters to Timothy, Paul reinforces this danger. He writes, “For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs” (I Timothy 6:10) and “But understand this, that in the last days there will come times of difficulty. For people will be lovers of self, lovers of money, proud, arrogant, abusive, disobedient to their parents, ungrateful, unholy…” (2 Timothy 3:1-2) With warnings like these, how can we not bring God into our finances?
The sooner you can learn and put into practice Biblical financial principles, the quicker you can build a foundation for yourself and for your future. Recently a “Young Money” session was held at CVC for Sevenoseven young adults where some of the basic principles on debt, savings and money in relationships were taught.
Due to time constraints, specific questions could not be addressed, so we are answering them here:
WHEN SHOULD I GET A CREDIT CARD?
You can get a credit card when you are 18 years old and can show a steady income. It is difficult to get a credit card when you have no credit, so you may need to start by applying for a secured credit card which requires an upfront deposit. Having a credit card will help you build a credit score which is used to determine such things as the rate you’ll pay for insurance or consideration for employment. However, it is important to remember that the Bible discourages debt (Proverbs 22:7, Psalm 37:21, Proverbs 17:18, Deuteronomy 28:43-45) so we recommend that you us it once every few months and pay it off on time or early to build a good credit score and never carry a balance.
WHAT US THE SIMPLEST WAY TO FIGURE OUT COMPOUND INTEREST TO CALCULATE FUTURE RETIREMENT SAVINGS?
There are many good calculators on the internet which you can use. I like using the one provided by BankRate.com (www.bankrate.com/calculators/retirement/retirement-plan-calculator.aspx). A big factor in building a good retirement is starting early so I suggest saving as soon as you can. Taking a slow and steady approach is biblical (Proverbs 21:5).
IS IT WISE TO USE A CREDIT CARD TO INVEST OR PUT A DOWN PAYMENT ON PROPERTY?
It is never wise to go into debt to invest or make a down payment. When you have debt, it adds risk to the situation. Remember, the Bible discourages debt (Proverbs 22:7, Psalm 37:21, Proverbs 17:18, Deuteronomy 28:43-45).
CURRENTLY, WE HAVE LOTS OF STUDENT LOAN DEBT (AROUND $100K). WE JUST SOLD OUR HOME AND HAVE ABOUT $30K IN THE BANK.
WHICH OPTION IS BETTER?
- BUY A NEW HOME WITH THIS MONEY ON A 30-YEAR MORTGAGE (WE CAN’T AFFORD 15-YEAR PAYMENTS WITH OUR STUDENT LOAN PAYMENTS)
- USE THIS MONEY TO PAY OFF DEBT, COMMIT TO RENTING FOR A FEW YEARS, START SAVING FOR NEW DOWN PAYMENT AGAIN, AND BUY HOUSE WITH 15-YEAR MORTGAGE 5-ISH YEARS LATER.
If I were in your situation, I would choose option #2.
Adding a mortgage on top of an already large amount of debt adds a tremendous amount of risk. This means you would be less likely to weather a storm such as a job loss. I would set aside $1K-$2K as a small emergency fund, put the rest towards your debt and then live as inexpensively as possible while generating as much income as possible (i.e. – garage sales, extra jobs) to pay off debt. If you put all your focus and intensity towards getting out of debt, once the debt is eliminated you will be disciplined to quickly save up a large down payment for a home purchase. Luke 14:28-30 provides wisdom regarding taking on more than you can handle.
