Finding financial balance is a common topic on our website and blog, and for good reason. I don't think anyone today would disagree that our country's financial system is completely off balance - and that applies to the personal finances of most of its citizens as well. How did we get to this point? There are probably a lot more reasons than I could list here, but just a few include:
* Unbalanced spending
* Unbalanced lending
* Unbalanced borrowing
* Unbalanced financial world view favoring short-term "gains" over long-term stability
* Generally poor management of available resources
Obviously there are many more as well, but these are probably the biggest issues that would apply to both governments and individuals.
So what is the solution? Our modern money paradigm is obviously not serving us as well as we would have hoped. From major stock market losses, to virtually non-existent savings, to literally trillions of dollars worth of debt on student loans, credit cards, and more, as a country and as individuals, most of us are moving backwards financially. Maybe it's time for a new (or rather very old) money paradigm. Maybe it's time to get back to basics.
* Unbalanced spending
* Unbalanced lending
* Unbalanced borrowing
* Unbalanced financial world view favoring short-term "gains" over long-term stability
* Generally poor management of available resources
Obviously there are many more as well, but these are probably the biggest issues that would apply to both governments and individuals.
So what is the solution? Our modern money paradigm is obviously not serving us as well as we would have hoped. From major stock market losses, to virtually non-existent savings, to literally trillions of dollars worth of debt on student loans, credit cards, and more, as a country and as individuals, most of us are moving backwards financially. Maybe it's time for a new (or rather very old) money paradigm. Maybe it's time to get back to basics.
My pastor a few weeks ago delivered a message on a related topic, and it really helped put the problems with our current financial approach into perspective for me - perhaps it will for you too. (Keep in mind this applies whether or not you are a Christian.)
As always, please know that my goal in interpreting Biblical principles is never to stronghand anyone in any way, but to share age-old wisdom and knowledge in a way that works and is easily applied in the modern world.
And for those of you who don't think that finances and religion or spirituality go together, remember our maxim that we live by here at New Holistic Living - "Everything is connected!" - or, as my pastor would say, "Everything is spiritual." On this website, we strive to address this disconnect, as well as many others, that are leaving people feeling empty, unfulfilled, dissatisfied, and generally un-whole. Just look around, and you can see the results of being disconnected - from our spiraling health (and skyrocketing healthcare costs), to our broken financial system, to our high divorce rate, and more. Whether people see it or not, everything IS connected, and as each piece tries to assume separateness, together they all fall down.
But I digress! On to the financial solution for what ails us!
First, let's take a look at our current financial paradigm - or our "Consumer Culture" - courtesy of Pastor Greg McNichols:
Here is the order of importance modern society gives to each piece of the financial puzzle:
1. Work
2. Spend
3. Borrow (Debt)
4. Save
5. Give
However, for most typical families in today's world, you can scratch off the last two - or at least add a caveat:
4. Save (only when forced to)
5. Give (only out of obligation)
Our average savings rate as a nation is now near to the lowest it's ever been. When people do save, it is usually because of some sort of forced savings plan, such as a government-sponsored retirement account. (Why would the government want you to save?? See our earlier post on deferred taxes for the real answer.)
And for many families, charitable giving has fallen by the wayside entirely, or is only done when we feel obligated to some cause, or are talked into it by someone else. How can we give to others, when we don't even have money to save for ourselves? When we spend more than we make, and are forever enslaved to our debtors? It's a vicious cycle indeed - and I will talk more about the perils of borrowing in a future post - I certainly have my own story and lessons to share on that topic!
So, with these facts in mind, we can revise the previous list as follows:
1. Work (a lot)
2. Spend (all we make and then some...)
3. Borrow (Debt) (for everything else we "need")
4. Rinse, repeat.
The second category discussed in the message was "Christian Consumer Culture."
Do Christians manage money better than non-Christians? Not really....
I won't cover this list here today, as the only real difference was that the "Give" category moved up the list of importance a bit. Savings remained almost absent, and borrowing still followed spending.
But now let's go back a bit - actually a few thousand years, and see what the Bible teaches us about money, and how following this ancient paradigm might improve our financial lives.
According to Biblical principles, the order of importance in your financial paradigm should be:
1. Work (diligently and with joy)
2. Give (generously)
3. Save
4. Spend (freely - whatever is left)
Debt is not a part of the financial paradigm in the Bible. Period. And there is a reason for that. Debt takes away your freedom. It cripples all other aspects of the financial picture - from saving and giving, all the way back to work (when you feel like you have to work yourself practically into the grave just to keep up with all of your debt payments). Debt is an insidious evil that prevents you from living a full, happy, and financially free life. Do whatever you need to do to avoid debt!
But looking at the items that made it onto the Biblical list, the first order of business of course is to work, and earn the money to support yourself and your family. But rather than working yourself to death, as so many of us in modern society seem to be doing, the Bible tells us to find enjoyment in our work, to take pride in what we accomplish, and to do what it takes to get the job done.
Once we have earned the money, the first thing we are to do with it is to give some back. This doesn't mean throwing a few bucks in the offering plate at church. Neither does it mean helping a family member out of a financial jam (although this is nice to do as well). We are to help "those who cannot help themselves," and of course, not just to throw money at a cause or individual, but to use it to help those in need to better their lot, so that hopefully, eventually, they won't need the help anymore.
Ideally, giving to those in need means helping them to find a way to join in the paradigm themselves - that is to work, and then to give back themselves to someone else in need, then save, and spend.
In this way, we all win. Humanity becomes more prosperous, more generous, more connected. (See how the "everything is connected" thing works?) (One example of this type of giving is Joe Vitale's Operation YES, devoted to working with the homeless to get them back in the workforce.)
The next step in the financial process is imperative - and it is imperative that you do it BEFORE Step #4! Otherwise, you will slowly end up right back in the "Consumer Culture" boat where we started. Having a solid foundation of savings should be done before you do anything else with your money (other than giving).
We all say we want to save. We all plan to do it...someday....after the car/boat/house is paid off, after the kids are done with college, after this, after that. Deep down, we all know that something is always going to come up that needs doing before we start saving.
The only solution is to start saving RIGHT NOW. Seriously. Get off the computer, go down to the bank, and open up a savings account. Deposit at least 10% of your income each month - as a start. As you get used to saving, you can gradually increase this, and build your financial stability over time. (Personally, I currently save about 50% of my income, although not into an account at the bank. But I started with 10% into a savings account, and I still save that 10% every month to have on hand if needed. At the end of each year, I put those accumulated funds into my personal retirement plan, which is discussed in the financial balance section of our FREE Holistic Living Report.)
And finally, contrary to popular belief, the Bible does say that it's okay to spend money! In fact, you should spend it freely and enjoy what it buys you - as long as you have followed the previous 3 steps FIRST....
So there you have it! Which paradigm do you think our country (and your family, and most people that you know) would be financially better off for following? The first or the last?
Do you think we might be on a better financial path as a country if our government first worked, then gave to support people in need, then saved money to build a solid financial foundation for our country, and only THEN spent any remaining money??
Do you think you or your family might feel more secure, more stable and able to weather financial difficulties if you did the same? Do you think you might even enjoy what you spent your money on more than you do now, when much of it is money that isn't yours anyway, but is borrowed from someone else?
I think so. In fact, I know so. I will share more of my financial story soon, and let you know how I got on this financial path, and changed my financial paradigm for good.
Until then....go open up that savings account! :-)
As always, please know that my goal in interpreting Biblical principles is never to stronghand anyone in any way, but to share age-old wisdom and knowledge in a way that works and is easily applied in the modern world.
And for those of you who don't think that finances and religion or spirituality go together, remember our maxim that we live by here at New Holistic Living - "Everything is connected!" - or, as my pastor would say, "Everything is spiritual." On this website, we strive to address this disconnect, as well as many others, that are leaving people feeling empty, unfulfilled, dissatisfied, and generally un-whole. Just look around, and you can see the results of being disconnected - from our spiraling health (and skyrocketing healthcare costs), to our broken financial system, to our high divorce rate, and more. Whether people see it or not, everything IS connected, and as each piece tries to assume separateness, together they all fall down.
But I digress! On to the financial solution for what ails us!
First, let's take a look at our current financial paradigm - or our "Consumer Culture" - courtesy of Pastor Greg McNichols:
Here is the order of importance modern society gives to each piece of the financial puzzle:
1. Work
2. Spend
3. Borrow (Debt)
4. Save
5. Give
However, for most typical families in today's world, you can scratch off the last two - or at least add a caveat:
4. Save (only when forced to)
5. Give (only out of obligation)
Our average savings rate as a nation is now near to the lowest it's ever been. When people do save, it is usually because of some sort of forced savings plan, such as a government-sponsored retirement account. (Why would the government want you to save?? See our earlier post on deferred taxes for the real answer.)
And for many families, charitable giving has fallen by the wayside entirely, or is only done when we feel obligated to some cause, or are talked into it by someone else. How can we give to others, when we don't even have money to save for ourselves? When we spend more than we make, and are forever enslaved to our debtors? It's a vicious cycle indeed - and I will talk more about the perils of borrowing in a future post - I certainly have my own story and lessons to share on that topic!
So, with these facts in mind, we can revise the previous list as follows:
1. Work (a lot)
2. Spend (all we make and then some...)
3. Borrow (Debt) (for everything else we "need")
4. Rinse, repeat.
The second category discussed in the message was "Christian Consumer Culture."
Do Christians manage money better than non-Christians? Not really....
I won't cover this list here today, as the only real difference was that the "Give" category moved up the list of importance a bit. Savings remained almost absent, and borrowing still followed spending.
But now let's go back a bit - actually a few thousand years, and see what the Bible teaches us about money, and how following this ancient paradigm might improve our financial lives.
According to Biblical principles, the order of importance in your financial paradigm should be:
1. Work (diligently and with joy)
2. Give (generously)
3. Save
4. Spend (freely - whatever is left)
Debt is not a part of the financial paradigm in the Bible. Period. And there is a reason for that. Debt takes away your freedom. It cripples all other aspects of the financial picture - from saving and giving, all the way back to work (when you feel like you have to work yourself practically into the grave just to keep up with all of your debt payments). Debt is an insidious evil that prevents you from living a full, happy, and financially free life. Do whatever you need to do to avoid debt!
But looking at the items that made it onto the Biblical list, the first order of business of course is to work, and earn the money to support yourself and your family. But rather than working yourself to death, as so many of us in modern society seem to be doing, the Bible tells us to find enjoyment in our work, to take pride in what we accomplish, and to do what it takes to get the job done.
Once we have earned the money, the first thing we are to do with it is to give some back. This doesn't mean throwing a few bucks in the offering plate at church. Neither does it mean helping a family member out of a financial jam (although this is nice to do as well). We are to help "those who cannot help themselves," and of course, not just to throw money at a cause or individual, but to use it to help those in need to better their lot, so that hopefully, eventually, they won't need the help anymore.
Ideally, giving to those in need means helping them to find a way to join in the paradigm themselves - that is to work, and then to give back themselves to someone else in need, then save, and spend.
In this way, we all win. Humanity becomes more prosperous, more generous, more connected. (See how the "everything is connected" thing works?) (One example of this type of giving is Joe Vitale's Operation YES, devoted to working with the homeless to get them back in the workforce.)
The next step in the financial process is imperative - and it is imperative that you do it BEFORE Step #4! Otherwise, you will slowly end up right back in the "Consumer Culture" boat where we started. Having a solid foundation of savings should be done before you do anything else with your money (other than giving).
We all say we want to save. We all plan to do it...someday....after the car/boat/house is paid off, after the kids are done with college, after this, after that. Deep down, we all know that something is always going to come up that needs doing before we start saving.
The only solution is to start saving RIGHT NOW. Seriously. Get off the computer, go down to the bank, and open up a savings account. Deposit at least 10% of your income each month - as a start. As you get used to saving, you can gradually increase this, and build your financial stability over time. (Personally, I currently save about 50% of my income, although not into an account at the bank. But I started with 10% into a savings account, and I still save that 10% every month to have on hand if needed. At the end of each year, I put those accumulated funds into my personal retirement plan, which is discussed in the financial balance section of our FREE Holistic Living Report.)
And finally, contrary to popular belief, the Bible does say that it's okay to spend money! In fact, you should spend it freely and enjoy what it buys you - as long as you have followed the previous 3 steps FIRST....
So there you have it! Which paradigm do you think our country (and your family, and most people that you know) would be financially better off for following? The first or the last?
Do you think we might be on a better financial path as a country if our government first worked, then gave to support people in need, then saved money to build a solid financial foundation for our country, and only THEN spent any remaining money??
Do you think you or your family might feel more secure, more stable and able to weather financial difficulties if you did the same? Do you think you might even enjoy what you spent your money on more than you do now, when much of it is money that isn't yours anyway, but is borrowed from someone else?
I think so. In fact, I know so. I will share more of my financial story soon, and let you know how I got on this financial path, and changed my financial paradigm for good.
Until then....go open up that savings account! :-)
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