Make Your Money Work for You
By Jesse Pingenot in Student
A good man leaves an inheritance to his children’s children
but the sinner’s wealth is laid up for the righteous (Prov 13:22).
Know well the condition of your flocks
and give attention to your herds,
for riches do not last forever;
and does a crown endure to all generations? (Prov 27:23-24).
Our generation tends to be terrible with our money.
I, for one, was never taught how to manage money. I’ve never been taught how to make a budget, let alone live by one!
And it’s caused problems.
The simple fact is, if you don’t manage your money, you will struggle financially. It will always be a burden weighing you down.
If you don’t manage your money, it doesn’t matter how much you make. You will never be financially at peace. You will always run out.
Professional athletes are notorious for this. They make millions of dollars annually. Yet most of them are bankrupt within five years of retirement.
Shaq relates how he spent the first million dollars he ever made in about 30 minutes. It took the guidance and advice of his banker to teach him to manage his money, not just use it. Nobody had taught him that before.
Illiteracy in money is destroying our futures. Don’t let it destroy yours.
The Bible praises those who manage their wealth. God is very clear that you are not to serve money. And he is very clear that a wise and good person will make their money a resource—not just for them, but for future generations.
Forget having enough for retirement; are you going to leave anything for your children? So many retirement plans are basically “save a bunch of money, then spend it and hope you die before you run out.” So short-sighted! Doesn’t the Bible say, “Grandchildren are the crown of the aged, and the glory of children is their fathers?”
Providing for future generations builds glory for yourself and for God!
So manage your money. Don’t serve your money, but make it serve you as you serve the Lord!
No matter how bad your financial situation is right now, it can be turned around. It may be hard, but it’s doable.
In a year, you’re going to wish you started right now.
So start right now.
Step 1: Make a budget.
There are a number of guides online. But let’s start with the absolute basics:
First, figure up all your monthly expenses. Open Excel or some other spreadsheet software and put in all your monthly expense categories. What do you spend money on each month? Things like rent, utilities, internet and cable, Netflix, Amazon Prime, car insurance, gasoline, car maintenance (you might not do this every month. Figure up how much you spent in the last year and divide by 12 for a basic starting point, then add some just to be sure. Set that money aside each month), clothes, groceries, eating out, entertainment (going to the movies, bowling, whatever)—you get the idea.
What do you spend money on each month? And yes, you should include your tuition and books (again, like everything you don’t pay monthly, just figure up what you spent in the last year and divide by 12, then add some).
It might be useful to walk through your day. What do you use? What do you pay for? Go step-by-step. Come up with categories—housing (rent, utilities, internet), entertainment (movies, etc.), food (groceries and eating out and snacks; anything you eat), car (insurance, gas, maintenance, car payments), school (tuition, books, fees, etc.) and so on.
Guess high on all of these. It’s better to have extra money planned for than to not have money when you need it.
Then figure up how much you earn in a month.
If you take your expenses out of your earnings, what is left? Is anything left? Or is the number negative?
And a quick word on loans: I made the mistake of taking out loans to cover everything. I regret that now. And I have seen many people graduate with no school debt. It’s possible. It takes hard work—not just in employment, but also apply for every scholarship and grant you possibly can—but it’s doable. And you can get good grades at the same time. And you can be a student leader in Chi Alpha as well. I see students do this every year. It’s quite doable.
Maybe you will take out loans to cover school or to buy a new car or whatever. I’m certainly not going to critique you for it.
But don’t sell tomorrow so you don’t have to work hard today.
Do whatever you can to borrow as little as possible. Apply for scholarships. Apply for grants. Work a job or even two.
And keep your expenses low. You don’t have to eat out every day; groceries are much cheaper. You don’t have to buy coffee from Starbucks or Caribou every day. Even just buying a French press, kettle and Starbucks beans and making the coffee yourself will save you a bundle.
If your expenses are more than what you make, you need to cut back. Cut back what you can until you are making more than you spend.
And start saving now.
I didn’t find out until I was in my late 20s that, if you save $2000 per year ($170/month) from age 20 to age 30, you can stop adding to that savings at 30 and still have a lot for retirement! Talk about making your money work for you! Compound interest is awesome!
And think what would happen if you kept adding to that after age 30. Suddenly, giving your grandchildren an inheritance is much more feasible.
So cut your expenses and start saving. Now.
Step 2: Educate yourself.
Dave Ramsey is a really good resource for managing money. Look up his resources. And don’t stop there; keep looking for more info on money management! Educate yourself in how to do it! Find someone to teach you or teach yourself. Just get that education!
Step 3: Use Resources
Mint.com is a great resource to see how you’re managing your money. There are several others like it, but that’s the one I use. There’s also You Need a Budget, which will help you create a budget (obviously). Look up resources to help you manage your money.
Step 4: Follow Through
Start today. As I said before (and I heard from someone else; I can’t claim the words as my own): A year from now, you’ll wish you started today.
So glorify God with your finances. Don’t serve money; make money serve you as you serve God.
All views expressed on this blog are the author's own and do not necessarily reflect the view of Chi Alpha Campus Ministries, U.S.A., U.S. Missions, and The General Council of the Assemblies of God.