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The Whole Armor of Personal Finance

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Some of my favorite bible verses are those packed full of encouragement and power.  In the following passage, the Apostle Paul is speaking to the church at Ephesus regarding the battles to be fought, and the weapons with which they should fight.  This text is incredibly uplifting and full of timeless wisdom.

Paul reminds the reader that the Christian battle is not one of flesh and blood, but of principalities, powers, the rulers of this world, and wickedness in high places.

It reminds me of our battle against debt, advertising, commercialism, and the war we fight to gain control over our personal finances.

The Scripture

Finally, my brethren, be strong in the Lord, and in the power of his might.  Put on the whole armour of God, that ye may be able to stand against the wiles of the devil.  For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places.  Wherefore take unto you the whole armour of God, that ye may be able to withstand in the evil day, and having done all, to stand.  Stand therefore, having your loins girt about with truth, and having on the breastplate of righteousness;  And your feet shod with the preparation of the gospel of peace;  Above all, taking the shield of faith, wherewith ye shall be able to quench all the fiery darts of the wicked.  And take the helmet of salvation, and the sword of the Spirit, which is the word of God:  Praying always with all prayer and supplication in the Spirit, and watching thereunto with all perseverance and supplication for all saints;”  – Ephesians 6:10-18

The whole armor of God

  1. Loins girt about with Truth
  2. Breastplate of Righteousness
  3. Feet shod with the preparation of The Gospel of Peace
  4. Shield of Faith
  5. Helmet of Salvation
  6. Sword of the Bible

The whole armor of Personal Finance

  1. Loins girt about with Wise Money Management
  2. Breastplate of Frugality
  3. Feet shod with the preparation of Sound Financial Counsel & Education
  4. Shield of Contentment
  5. Helmet of A Proper Money Mindset
  6. Sword of Cutting Expenses

Loins girt about with Wise Money Management

  • Budget to gain control & focus on Spending less than you earn
  • Emergency fund savings – while many say to get at least $1,000 saved for emergencies, I advise to continually fund your emergency fund and other high interest savings accounts by using the percentage approach.  I currently designate 25% of my available funds to my savings even though I am still in debt reduction mode.
  • Debt reduction – where I focus the remaining 75% of my available funds.  It is of the utmost importance to rid yourself of all your high interest consumer debt like credit cards, department store cards, auto loans, etc.  Once you pay off your high interest debt, I advise shifting the majority of your available funds to savings & investments.
  • Invest & continue to save – once you have paid off your high interest consumer debt, continue building your EF and invest the rest in your investment of choice.  Index Funds (through Charles Schwab or Vanguard) are solid, low-cost, choices that will meet market returns.
  • Pay off your mortgage & student loans – once you have your savings funded according to the needs of your individual situation, paint a big bulls-eye on your low interest debt and slash that baby down as quickly as possible.  I may catch flack for saying this, but I am a HUGE proponent of paying off the mortgage and living DEBT FREE.

Breastplate of Frugality

  • Creative mindset – get your creative juices flowing & be resourceful.  Before we do anything now, my wife & I run all our financial decisions through our protective frugal filter.
  • Stop eating out – If you have been following our Debt Free Adventure then you may well know that Mrs. Jabs & me were spending between $5,000 – $6,000 a year eating out at restaurants.  Looking back now, this is absolutely atrocious to me but before equipping ourselves with the breastplate of frugality we just didn’t concern ourselves with the costs.  If you must eat out use my Frugal Guide to Eating Out.
  • Homemade gifts & products – making more things at home including:  food, cleaning products, gifts, home decor, etc. will save you money and bring many other benefits along with it.  We make products such as homemade laundry detergent, toothpaste, deodorant, all-purpose cleaner, homemade dishwasher detergent, etc.  We also stopped buying cards & gifts and choose to make our own now – the results are more personalized, unique, and special than their store-bought counterparts.
  • Use Coupons – When we do buy things we always shop around and seek out coupons.  This is especially useful when shopping on the Internet, before I make any purchase I simply go to Google and type in “Coupon *product I’m buying*”
  • Ask for discounts – I tell my wife all the time, you never know until you ask!  Just a few weeks ago, when putting in my paver patio I saved over $300 by simply asking for a discount due to the volume of my purchase.
  • Decrease use of heat & AC – we used to keep our house at 70 in the winter and 74 in the summer.  Now we keep it at 64 in the winter and have actually been able to keep our A/C off every day this summer except for two!

Feet shod with the preparation of Sound Financial Counsel & Education

  • Adopt a financial mentor – when I truly began to get a hold on my finances at the beginning of this year I found myself in need of some solid financial advice from those who were already standing where I wanted to be.  I decided to adopt a few financial mentors and they continue to be an ENORMOUS blessing in my life.
  • Read personal finance blogs – they’re free and chocked full of sound money advice.  A few great ones to get you started are Frugal Dad, Bible Money Matters, Get Rich Slowly, Five Cent Nickel, and The Simple Dollar
  • Read personal finance books– if you are like JD Roth and you like the smell of books, or you simply love the feeling of a good book in your hands then get started with a few goodies.  I recommend:
    • The Total Money Makeover – by Dave Ramsey
    • Your Money or Your Life – by Vicki Robin
    • The Richest Man in Babylon – by George Clason
    • The Treasure Principle – by Randy Alcorn
    • 10,001 Ways To Live Large on a Small Budget – by the writers of WiseBread.com

Shield of Contentment

  • Simplify your life – break free from the culture of temptation that marketers have been driving at us for decades, and choose instead to return to a simpler life.  Ride your bike more, walk more, read more, turn off the TV.  All of these things may seem like sacrifices at first but after being exercised by them Mrs. Jabs & me have realized the true blessings of a simplified life.
  • Determine your needs – what do you need at a most basic level?  Water, food, shelter, and love – everything else is a bonus.
  • Determine your wants – our wants can be endless so it is incredibly important that we realize this and quickly determine what we can do to keep them in check.  What kind of food should we buy?  How big of a house?  What clothes should we wear?  These questions, like many others in this post, will be answered differently based on your income, debt, age, and relationship status so be sure to answer them specific to your position.
  • Find a balance – now that you have separated you wants from your needs, focus on finding that balance where you have what you need, are living below your means, but still comfortable.

Helmet of A Proper Money Mindset

  • Sacrifice now to benefit later – this is actually my entire financial philosophy in a nutshell.  The concept is simple and revolves around my view that it is better to scrimp & save now than it will be when you’re in our 60’s, 70’s, 80’s, & 90’s!
  • Embrace compounding interest – to motivate yourself, calculate how much interest you are paying to big banks and do whatever necessary to reverse that cycle and start paying yourself first.
  • Spend less than you earn & avoid debt – this isn’t rocket science and does not require explanation.
  • Save/invest increasingly – Grow your savings every year, even if you are currently paying debt.  Always pay yourself at least 25% of your extra money each month.
  • Give generously – it truly is more blessed to give than to receive.  Since implementing an automated charitable giving plan earlier this year, my wife & me have never had a better grasp on our finances.

Sword of Cutting Expenses

  • Turn off your TV – I mentioned it earlier in the post and I am purposely mentioning it again.  It is hard to impress upon you the many benefits of canceling your TV service.  I am much more productive in my side hustles, I spend more time with my wife, I accomplish more around house… especially in the way of my “honey do list”.
  • Reduce grocery costs – grow a garden, make more homemade food, stop eating out, buy in bulk, eat locally, preserve the harvest by freezing it and by canning it.
  • Reduce your consumption – I’ll say it again… turn down/off your furnace and turn down/off your air conditioning.  At first we thought this was uncomfortable but found we adapted to the temperature quickly.  Now that we no longer use our A/C we are always very cold when we go into a building that has it in use.
  • Carefully check your monthly bills for errors – I was able to save $160 over the course of two months because my utility company was over charging me.  I am not sure whether this was done on purpose, but regardless, by checking the bill and looking it over carefully I was able to save a lot of money.

I hope you were encouraged by this article, and that it helps to equip you with the whole armor of personal finance so you can protect yourself from the wiles of debt, advertising and commercialism.  Let us fight the good fight of faith and strive to win the daily battle to gain control over our personal finances!

Control Credit Card Debt

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For many Americans paying with credit cards is now commonplace. Once the monthly balance cannot be paid in full credit card debt creeps in like a homewrecker – and this is where many people find themselves today, in credit card debt.  In some cases, people are filing for bankruptcy due to their excessive credit card debt.  With so many different things dependent on a person’s credit score, this can be devastating to young families, leaving them without the means to make big-ticket purchases like replacing a refrigerator or stove.

Credit card debt in America

45% of Americans have credit card debt.  8.3% have a balance of over $9,000 on their card accounts.  The average credit card debt is $2,000.  Surprisingly, 23% of Americans do not even have a credit card.

Matt’s note: Betsy and I belong to that surprising 23%. 🙂

These statistics are compiled in part from the Federal Reserve’s Survey of Consumer Finances taken every three years.  The 2007 survey showed that revolving debt, which includes credit cards was $904 billion out the total consumer debt of $2.6 trillion.  This figure includes student loans, auto loans, mortgages, and other non-revolving debt.

The numbers may not mean much to you, but if you’re part of that 8.3% perhaps you should take notice.

8.3% may seem like a small number, but the average income for those people is only $48,600 per year.  That $9,000 along with other living expenses and non-revolving debt is usually a lot of money.  On top of the large debt amount are the interest rates credit card companies charge each month for the “privilege” of using their money.  The average credit card interest rate is 16.80%, so if you are paying only minimum payments each month a lot of your debt could be interest charges rather than the principle on the account.

So the general idea – and necessity for some people – is to be part of that 32% or even the 23% in some cases rather than the 8.3%.  This may not be easy to accomplish, given the rising cost of food, fuel, and other necessities, but it can be done.  You have to develop a plan and stick to it, resolving to control your credit card debt, or eliminate it altogether.

Build your debt reduction plan

The key to controlling your credit card debt is in controlling your spending overall.  Of course, American society does not make this easy since our economy relies on spending.  However, in this case, you can’t think of the Country’s economy, but rather your personal economy.  If you have the willpower, you can get a grip on your finances rather quickly.

  • Put your credit cards away for one month.  Instead of pulling out the plastic to make purchases, use cold, hard cash.  This does not include a check.  It’s important for you to see where the money goes, and how fast it can disappear from your pocket.  The only exception to this rule is in paying bills that require a check, like your mortgage or the rent.  Write out the checks and deduct them from your bank account before you withdraw any money to spend.  In using cash instead of your credit card or checking account, you will have a better idea of your spending habits.
  • Free up more cash by reducing other expenses.  Take a closer look at some of the amenities you have.  You may consider changing your cell phone plan to a less expensive one, cancelling or changing your cable/satellite plan, and buying less expensive brands for groceries.  Conserving energy will also put a few more dollars in your pocket.  Take that money you are saving, and use it to pay off debt – especially those high interest credit cards.
  • Buy only what you need, not what you want.  Knowing the difference between your needs and your wants is important.  For example, you need food, but you don’t need dinner in an expensive restaurant.  Transportation is a need, but not in a $50,000 BMW.  Clothing for your children is a need, but not the $100 designer jeans for your 10-year-old that is still growing.

Impulse buying is the biggest culprit in creating credit card debt.  Those purchases are usually wants, not needs.  If there is something you need, then buy it.  But if it’s something you can do without, keep your money in your wallet.  If it is something that you really want, only buy it if you can pay cash for it without compromising your ability to save for retirement or pay off debt; but until you have no credit card debt you should avoid those purchases, no matter how much you want them.  If you stick with your plan, you can be a member of that 32% that does not contribute a single penny to the $904 billion in revolving debt, and you’ll have more money in your pocket to boot!

5 Biblical Financial Principles to Live By

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5 Biblical Financial Principles To Live ByHave you ever seen those late night shows that promise success if you follow “five simple principles”? Or, how about the thousands of books that promise to change your life in five easy steps. Unfortunately the majority of these principles are not founded on Biblical principles and are doomed to fail.

With our economy in the tank, people borrowing from their retirement, and so many mortgage defaults – you’d think we as a nation have given up on fundamentally sound financial principles. But maybe not. Maybe, just maybe, we have strayed from Biblical principles that made this country great in the first place.

I want to share with you five core financial principles that I have built my personal finances around. All five principles come straight out of the Bible. I really believe that if you follow these, God will bless you. Let’s get started:

1. God is not a fan of debt

No one likes debt, not even God. Want to see amazing things happen in your spiritual life? Get out of debt and watch things happen. The Bible is clear on the topic of debt. Check out Proverbs 22:7, “The rich rule over the poor, and the borrower is servant to the lender.” I don’t know about you, but this does not sound like a fun situation to be in. Don’t get into the habit of buying now and paying later. Not only will it get you into trouble but it’s flat out unbiblical.

2. Contentment is key

Contentment is huge for anyone’s personal financial life. The moment you start coveting, you get yourself into trouble. Take someone who purchase an older model BMW and can clearly afford it. They’re driving down the road one day and see a brand new model of their car. They covet, take out an even bigger loan and get the newer model. This is such an unhealthy way of living your life! I see this all too much in California. God was onto something when He said “You shall not covet your neighborís house; you shall not covet your neighbor’s wife, or male or female slave, or ox, or donkey, or anything that belongs to your neighbor.”

3. Start saving, it makes God smile

God loves it when His children save their money instead of squandering it. I love how Proverbs 21:20 puts it, “There is treasure to be desired and oil in the dwelling of the wise; but a foolish man spendeth it up.” Don’t get caught up in buying the latest gadgets or incessantly upgrading things unnecessarily. Start to think in terms of saving instead of spending. Above all, you need to start thinking about your money as God’s money. At the end of the day it’s all His anyway so spend wisely, and save often.

4. Create a budget and follow it

This seems like a simple concept, but the average person (myself included) can’t stand budgets. Once you get used to budgeting and setting limits on your spending, it becomes second nature and everything else takes of itself. Living life without a budget is stupid. It’s just not a wise use of the Lord’s resources. It sounds harsh, but I think God wants us to keep accurate records so we can see where we stand each month. Foolishly living without a budget is a lose-lose situation. If you are completely lost, check out Mint.com to help you get started.

5. Work hard, really hard

Believe it or not, work is a good and holy thing! It’s part of God’s amazing plan for our lives. Check out any work related verse in Proverbs and you’ll notice that people who work have bread on the table and those who choose to be lazy often live a life of poverty. It’s hard to keep this black and white during the current recession, but I’m a firm believer that if you are willing to work hard, there will always be a job for you. It just might not be your first pick! At the end of the day, working hard glorifies God.

Center your finances around these Biblical principles and you will save yourself from a world of hurt. Remember to give your best to God first, live within your means, and save your money. Part of this journey is trusting in God with everything, including your finances. Once you get a taste of the joy that is to come, you will never go back to your old ways.

Jon Elder paid his way through college and enjoys living a debt free life.  Read more about his passion for conquering finances, learning to live a frugal lifestyle, and glorifying God with financial decisions on his website Free Money Wisdom.