Building a Solid Financial Foundation
Building a Solid Financial Foundation
By Dr. Gerald House
Working as a Christian Financial Planner has afforded me the privilege of assisting clients with their financial well-being. I am honored to use my God-given talents as an educator and counselor to help people embark on the path to financial freedom. I look forward to many more years of stewardship in this profession. Along the way, I have noticed that several of my beginning clients have not built a solid financial foundation that can facilitate a much easier transition into financial and estate planning. Today, I want to discuss how to construct a financial foundation using the same principles you would apply when building a house. Jesus utilized the analogy of constructing a home to impart his teachings.
Why do you call me, ‘Lord, Lord,’ and do not do what I say? As for everyone who comes to me and hears my words and puts them into practice, I will show you what they are like. They are like a man building a house, who dug down deep and laid the foundation on rock. When a flood came, the torrent struck that house but could not shake it, because it was well built. But the one who hears my words and does not put them into practice is like a man who built a house on the ground without a foundation. The moment the torrent struck that house, it collapsed and its destruction was complete (Luke 6:46-49, NIV).
First, you must clear and grade the site before laying out the batter boards to determine where the footings will be dug. This is akin to committing to changing your financial habits. Nothing gets done if you don’t buy into the idea of change. Just as you change the surrounding landscaping by clearing and grading the site where the house will be placed, the first step is the most crucial. Only then can you begin digging the footers that will support the home. The most significant change for Christians is the belief that God owns it all. We are called to be faithful stewards of His property. Deuteronomy 10:14 supports this concept.
To the Lord your God belong the heavens, even the highest heavens, the earth, and everything in it (Deuteronomy 10:14, NIV).
Second, after all parties have fully committed, the home layout begins. The batter boards are set, and the digging commences. The concrete is poured once the footers for the outer walls and piers are dug to specifications. This concrete will support the house's floors, walls, and roof structure. Turning back to our financial foundation, we must align our expenses, debt, giving, and emergency savings to protect us from life's unforeseen circumstances, just like a solid foundation shields us from the weather during a storm.
In a previous article, I discussed the five uses of money: living, giving, debt repayment, paying taxes, and growth. Our financial foundation consists of these uses of money. The first is for living expenses. This is where creating a budget and living within your means comes into play. In Luke 14:28, we find more biblical wisdom from Jesus.
Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it (Luke 14:28, NIV)?
Creating a budget involves more than just numbers; it visually represents our journey to becoming wise stewards of God’s provision. A workable budget demonstrates our commitment to God and serves as our roadmap for achieving our goals and values. The second purpose of money is to give back a portion of God’s provision for use in His Kingdom. We must recognize that God can multiply our gifts in ways beyond our understanding. Throughout the Bible, we observe how our generosity can support our church, assist those in need, and back other charitable efforts.
Remember this: Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously. Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver. And God is able to bless you abundantly, so that in all things at all times, having all that you need, you will abound in every good work (2 Corinthians 9:6-8, NIV).
The third use of money is debt, which is the aspect that many people struggle with the most. Debt can bind you to many years of hardship. Ron Blue tells us that debt mortgages our future, and I agree. The Bible confirms it:
The rich rule over the poor, and the borrower is slave to the lender (Proverbs 22:7, NIV).
Living within our means is the best defense against debt. We all strive for financial freedom; however, excessive debt obligations can rob us of time and happiness. It's advisable to avoid all debt, especially any that does not generate future income. Properly distinguishing between needs and wants is essential. God’s playbook is our best guide to understanding how debt impacts our well-being.
My son, if you have put up security for your neighbor, If you have shaken hands in pledge for a stranger, You have been trapped by what you said, ensnared by the words of your mouth. So do this, my son, to free yourself, Since you have fallen into your neighbor’s hands: Go to the point of exhaustion, and give your neighbor no rest! Allow no sleep to your eyes, No slumber to your eyelids. Free yourself, like a gazelle from the hand of the hunter, like a bird from the snare of the fowler (Proverbs 6:1-5, NIV).
Lastly, the fourth use of money is to grow your savings, which is God’s provision for setting aside a portion for emergencies and other unforeseen circumstances. We distinguish savings from investing, which will come once we progress further with our home construction. Allocating money for savings will help reduce the temptation to take on debt burdens.
Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest (Proverbs 6:6-8, NIV).
After Covid, I advise all my clients to save six months’ living expenses to cover unexpected financial needs. For a long time, we recommended setting aside 3-6 months of living expenses; however, pandemics like COVID have led us to aim for a six-month buffer.
Don’t let anyone fool you. Establishing a solid foundation, like building a house, is not easy. However, a robust financial foundation can significantly advance your goals and aspirations. A strong economic foundation is not something you can afford to cut corners on; it must be adhered to with precision.
Your faithful servant
