1)      Commit to a life of contentment / living within your means

Matthew 6:24 “No one can serve two masters. 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 both God and money” (NIV)

1 Timothy 6:6 “Godliness with contentment is great gain” (NIV)

Hebrews 13: 5 “Keep your lives free from the love of money and be content with what you have, because God has said, “Never will I leave you; never will I forsake you.” (NIV)

Need to draw line in the sand that borrowing will stop

2)  Pray / Enlist God’s help

Philippians 4:13 “I can do everything through Him who gives me strength.” (NIV)

Matthew 19: 26 “With God all things are possible” (NIV)

Matthew 7:7 “Ask and it will be given to you; seek and you will find; knock and the door will be opened to you” (NIV)

Matthew 6:33 “But seek first His kingdom and His righteousness, and all these things will be given to you as well”. (NIV)

3)  Set goals

What do you want to accomplish?

            Pay off debt?

            Save for retirement?

            Save for college?

            Other?

Make it personal

Make it a shared goal with your spouse (if applicable)

4)  Create a spending plan with your financial goals in mind

Must include giving back to God

Should include regular savings element

Needs to be balanced and have some room for unanticipated expenses

Amount may vary from month-to-month, especially if income is variable

Excellent model is the 10-10-80 plan from Mary Hunt

            Give the first 10% back to God

            Pay yourself /save the next 10%

            Live on the remaining 80%

If the 10-10-80 plan is too aggressive for current circumstances, start small and work your way toward this plan

Manage expenses / be a good steward.  We want God to say “well done, my good and faithful servant”

Keep score/ maintain good records to track how well you are doing vs. your spending plan.  Make adjustments as necessary

5)      Set up an emergency fund

Minimum of $2,000

Needs to be liquid; readily accessible

Should be in bank deposits, not in stocks or mutual funds

This is your buffer between unexpected expenses and taking on more debt.  If you don’t have the emergency fund, your spending plan is likely to fail

Use as little as possible / only in the case of an emergency - - a good sale at Macy’s or a big sporting event are not reasons to tap into the emergency fund

Proverbs 21: 20 “In the house of the wise are stores of choice food and oil, but a foolish man devours all he has.” (NIV)

6)      Pay off debts / Use the debt snowball

List debts from smallest to largest

Attack smallest debt first

Move on to next smallest debt after first debt is retired

Proverbs 22:7 “The rich rule over the poor, and the borrower is servant to the lender”

Proverbs 6:1-5 “My son if you have put up security for your neighbor, if you have struck hands in pledge for another, if you have been trapped by what you said, ensnared by the words of your mouth, then do this, my son, to free yourself, since you have fallen into your neighbor’s hands: Go and humble yourself; press your plea with your neighbor! 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.” (NIV)

Be intense; sell something or take extra job or overtime to accelerate the snowball

7)      Complete emergency fund

Good goal is 3-6 months of living expenses; make sure that you have enough to sleep well at night

Remember the types of savings and be sure to have some replacement savings

8)      Save for retirement

If company has 401(k) or similar plan, save enough there to get full company match.  If you do get a company match, you should do this  concurrently with paying off debts and completing your emergency fund

You can borrow for college but not for retirement, so it’s important that retirement savings comes before college savings

Important to start saving as early as you can so that compound interest can work for you as long as possible

9)      Save for college expenses

Use tax-advantaged saving vehicles as much as you can (such as a 529 plan or Coverdell/Education IRA)

10)  Invest to build wealth

Be on guard for high expense ratios

Diversification / don’t put too many eggs in one basket

Exchange-traded funds or index mutual funds offer instant diversification and low costs

Simpler investments are generally better for most people; if it’s complex, someone on Wall Street is probably making money at your expense

Don’t forget : Give Generously

Everything belongs to God; we are entrusted to be stewards of God’s resources

Tithing should not be the end goal.  Example is Rick Warren, who keeps 10% and gives back 90%

Ecclesiastes 5:10 “Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income. This too is meaningless.”(NIV)

1 Timothy 6:10 “For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.” (NIV)

Use your God-given talents for God’s service, as well as your financial resources