How Biblical Principles Transform Your Budget

Hey everyone, Rob West here. You've heard me talk about faith and finances for years and a common question I get is, how can I align my faith values with my banking decisions? Well, we recommend our friends at Christian Community Credit Union who've been serving Christians for over 67 years. Visit JoinChristianCommunity.com to learn more. That's JoinChristianCommunity.com. Proverbs 4 26 says, give careful thought to the paths for your feet and be steadfast in all your ways.

Hi, I'm Rob West. That's a reminder to live intentionally, to make thoughtful, wise choices rather than drifting along. And that includes the way we manage our money. Today we'll explore how a biblically grounded approach to budgeting can help us put God's priorities first. And then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance, biblical wisdom for your financial journey. Well, our friend Matt Bell recently wrote a thought-provoking article contrasting the world's typical approach to budgeting with a perspective shaped by biblical values.

You'll find a link in today's show notes, but I'll share some highlights with you now. You know, if the culture could talk, it would give your budget a set of marching orders. It would say something like, make $80,000 a year, then move into this neighborhood. And drive that car, and wear these clothes, and eat in these restaurants, and take these vacations.

Then you can give. Well, that's what the world says. Spending always comes first. And when spending comes first, debt often comes next. The house payment, car notes, student loans, and credit cards. With what's left over, there's saving, investing, and dead last, giving.

No wonder so many feel overwhelmed. When spending is king, stress follows, savings dwindle, and contentment fades. But what if your budget wasn't just a spending plan, but a sacred trust?

Because it is. According to Deuteronomy 8-18, you shall remember the Lord your God, for it is He who gives you the power to get wealth. That verse is a powerful reminder that wealth, and even the ability to earn it, is a gift from God. Now imagine hearing God say, I am in debt. Now imagine hearing God say, I am entrusting you with $80,000 this year. Use it to reflect my love, meet needs, fund ministry, and invest in my kingdom. Save it wisely. Plan for the future I've prepared for you. And yes, enjoy what I've richly provided. That echoes 1 Timothy 6-17, which reminds us that God richly provides us with everything to enjoy.

So what does this look like? Well, with a biblical framework for your budget, you start with giving, then saving, then investing. Only after those priorities are in place do you decide how much house, how much car, or where the vacation fits. Debt, when used, is handled prayerfully and cautiously. Remember that with the cultural approach, spend first, manage debt, save if you can, give what's left over, that foundation doesn't hold up when the storms of life hit. But a biblically informed approach invites us to flip the script, reordering our financial priorities around God's kingdom. Rather than spending first, we're called to give first, then save, invest, spend wisely, and use debt carefully and sparingly.

This echoes something that my friend Paul David Tripp says about this subject. When it comes to our finances, God calls us to stop starting with ourselves and hoping there's money left over for him. Instead, the call is to willingly and joyfully accept that our money's primary purpose is to fund a kingdom of generosity in worship and service of him, and then trust that God will provide what we need.

It's a call to live wisely and intentionally, something Jesus underscored at the end of the Sermon on the Mount. He warned, If we structure our finances on the world's shifting priorities, we're building on unstable ground. But when we build our budget around God's truth, we're anchoring it to the rock. And if you're ready to start building that way, it helps to partner with organizations that share your values. That's why we're so grateful for Christian Community Credit Union, a longtime partner of this program. Christian Community Credit Union is more than a bank. It's a financial partner with a kingdom purpose.

Yes, they offer everything you'd expect for your financial journey, checking and savings accounts, mortgages, auto and church loans, and even investment services. But what truly sets CCCU apart is their mission. When you bank with CCCU, your money doesn't just sit idle. It goes to work for God's kingdom. Your deposits help fund ministries around the world. Your loan payments help build churches and support Christian schools.

Every transaction becomes a tool for transformation. So if you're seeking a financial institution that shares your faith and helps you steward God's resources with purpose, consider Christian Community Credit Union. You can learn more at joinchristiancommunity.com. The only thing you need to join is to be a Christian. Just head to joinchristiancommunity.com. All right, your calls are next. The number, 800-525-7000. I'm Rob West, and we'll be right back after this break.

Stick around. More information is available at oneassent.com and by clicking Analyze My Investments. Have you ever wondered where your money goes when you deposit it in a bank? Christian Community Credit Union believes in helping advance God's kingdom through everyday financial transactions. For over 67 years, they have provided values-aligned banking solutions to thousands of Christians and ministries. Consider Christian Community Credit Union as your banking institution by visiting joinchristiancommunity.com. Membership eligibility required. Each account is insured up to $250,000.

This institution is not federally insured. Thanks for joining us today on Faith and Finance. We've got some lines open.

We're ready for you today. Whatever your financial question, you can call right now, 800-525-7000. Again, that number, 800-525-7000. We'd love to tackle whatever is on your mind today, so if you've got something you've been wrestling with in your financial life, you can go ahead and call right now, 800-525-7000. You know, periodically we hear from folks that write into us via email, and we try to tackle a few of these questions whenever we're able to. Let's do a couple of those right now.

This first one comes from Lori. She writes, I will be full retirement age in August. I'm still working, so my Social Security will be a surplus that I want to put toward my home. I still owe $82,000 on it, but I also know that it needs a lot of repairs. Does it make more sense to put this extra cash flow for repairs, paying down the mortgage, or a little bit of both? I would just say, Lori, first of all, if your home does need repairs, let's determine, first of all, are they imminent or are they more renovations? If they really are truly repairs, we probably want to go ahead and get those done just so we don't cause any damage to the home. So I would say this surplus income is a great opportunity for you to do that.

I would start there. Now, obviously the ability to fund any of that out of any other cash flow is great, but I would see all of the surplus that you have, including the Social Security, as a way to fund those repairs without taking on debt. So I think that's absolutely the priority use of that. I would say after that, let's make sure we've got a fully funded emergency fund. As you head into retirement, I'd love for you to have a good six months living expenses, if not a little bit more in that season of life. And then once those two goals are met, I would say the home repairs are fully funded and you're back up in kind of working order. You've got your fully funded emergency fund. Then let's take that money and put it toward the mortgage principal. That will, of course, reduce future interest costs and give you more cash in retirement once you can pay off that house and reclaim what is probably your largest expense. The second question that we've got here is from Makisha. Here's what Makisha writes. What's the difference between getting a debt consolidation loan or working with a debt counselor?

This is a great question and it's one that comes up a lot. Debt consolidation versus what I'll call debt management. So debt consolidation is a loan. It essentially is where you roll multiple debts into a single new loan, typically with a lower interest rate. Now, you're still fully responsible for repayment and you'll need good credit to qualify for favorable terms. It's also dangerous, though, because what I experience is that most folks who get a debt consolidation loan end up doing so to take the pressure off without actually changing the habits that led to the debt in the first place.

And so you've got to identify what was the root cause. Am I just treating a symptom, the debt, because of lifestyle spending beyond my means? Or am I truly resolving the situation? I've already handled the habits and now I'm just looking to eliminate the debt as quickly as possible with as little interest as possible. Typically, and this is just my experience, typically what I find is most people that get a consolidation loan haven't done the hard work to change the habits that led to the debt in the first place. So then they call me back six months later and say, all right, Rob, now I've got the consolidation loan and guess what? The credit card debt's back.

So I want to avoid that. Now, when it comes to debt management, that is my preferred way, without a doubt, for you to get this paid off once and for all. Keep in mind, when we do the debt consolidation, roll everything together, even if there's a lower interest rate, typically we have a longer payback period. So what that just simply means is if we have a lower rate but we pay back over a longer runway, we're probably going to end up paying the same amount anyway.

And that's one other reason I don't like it. With debt management, the debt stays right where it is. If you're with Capital One on a credit card, you're going to stay with Capital One.

You're at Citi, you're going to stay with Citi. But what happens is each of these credit card companies have a department they call credit counseling. And they all have an approved interest rate and it's always lower than the prevailing rate. Typically, keep in mind, the average interest rate right now is about 23%. Typically, credit counseling rates are between zero and 10%, often between zero and eight.

So a dramatic reduction, in many cases 50% less or more. And so that's great because that just means now I've got a larger percentage every month with the same payment going to principal reduction with that lower interest rate. The other key is you have accountability because you're paying through Christian credit counselors. Thirdly, they're going to help you do a budget.

That's great. That's just an added benefit. And then fourth, and this is a big one, don't miss this, what happens with credit counseling is you have a level monthly payment. See, if you've ever been paying back credit card debt, you've probably noticed that as the balance comes down, the minimum payment comes down because it's a percentage of the balance.

Well, what's your likely response to that? Well, I'm just going to pay as little as possible because I don't see myself getting out of this debt anytime soon, so I might as well put that money to other good use. Well, that just extends the repayment period. But with credit counseling, you have a level monthly payment that fits into your budget. And because that payment doesn't come down with the balance, every month, it's a larger percentage of the overall debt that was owed, which is great. And you put those two things together, the fact that we've got a dramatically lower interest rate, and the fact that we've got a level monthly payment, all of that together results in, on average, you paying that debt back 80% faster. That's a game changer.

And so this is absolutely my preferred way. Now, keep in mind, there's many credit counseling agencies out there. They're all nonprofit, they have to be. But the one that we've worked with for a long, long time, and they've worked with literally thousands of our listeners, is Christian Credit Counselors. You'll find them on the web at christiancreditcounselors.org. So, Makisha, long answer to a short question, but I would stay away from debt consolidation. I would absolutely do debt management, or what's called credit counseling, and I would use Christian Credit Counselors. Now, let me take just a moment and mention one other option that I don't like, but folks will often use. And it's not debt consolidation, it's not debt management, it's a third option that's called debt settlement.

Now, here's what happens there. With debt settlement, you will find a company, and by the way, there's a lot of bad actors in this space, so this is just another reason to stay away from it. But with debt settlement, they will ask you to stop paying your creditors.

I know, it's crazy. They're going to tell you that, well, if you stop paying, they're going to get into collections, and that's going to create the environment where we can come in behind you and negotiate a reduced settlement. But guess what? Number one, you're not honoring your obligation, and I think as Christ followers we need to. Number two, you are putting yourself in a position where you're going to trash your credit because you're stopping payment. So you're going to get into collections, it could be charged off, there could be a judgment that's legal, a legal judgment against you, all of that's going to hit your credit report, just creates a real mess.

So that is not what you want to do. So, bottom line, these are the three kind of most common ways people pay back debt. Debt consolidation, debt settlement, and debt management, my preferred approach. Again, debt management and our friends at christiancreditcounselors.org can help. Thanks for writing to us, send your emails, askrobb at faithfi.com. 800-525-7000, we're going to take a quick break here in a second, but when we come back we've got some great questions lined up in our final segment, but I've got room for a couple more.

Again, whatever you're thinking about in your financial life, 800-525-7000. Hey, as we head into this break, let me just encourage you, if you find value in this program, maybe you listen regularly or you've been able to apply something in your financial life, and you'd like to support our work here at Faithfi because we're listener supported, we could use your support before June 30th at the end of our fiscal year when you go to faithfi.com and click Give. That's faithfi.com and click Give. Thanks in advance.

We'll be right back. We're grateful for support from Eventide Investments on the Faith and Finance Program. Eventide's approach to values-based investing is grounded in the belief that humankind was created in the image of God. With intrinsic dignity, value and worth, Eventide calls this investing that makes the world rejoice. More information is available at eventideinvestments.com.

That's eventideinvestments.com. Great to have you with us today on Faith and Finance. Hey, we still have a few lines open, although the calls are coming in quickly. If you have a financial question today, call right now, 800-525-7000. That's 800-525-7000. We'd love to hear from you today and see if we can assist you with whatever is on your mind financially. Let's go right back to the phones. Austin, Texas is where Lisa is.

Lisa, how can I help? I guess I just wanted general information about Universal Index Life Insurance. It kind of seems too good to be true. Like I've heard that you put money in and it always increases, but you never lose money out of there. Yeah. In case with the stocks and it sounds too good to be true.

Yeah. Well, keep in mind, it's everybody gets paid somehow. And here's how it works with regard to this particular product. So with a universal life policy, an index universal life, the financial product is tied to a broad market index.

So like the S&P 500, which would be the 500 largest companies in the US. And it allows you to participate in the market gains while protecting against the losses when the market declines. Now, you might say, how do they do that? How do they give you the upside but not the downside? Well, the way they do that is you don't get 100% of the upside. So, you know, when the market's up 23%, you might get the first 10% of that and they're going to keep the rest. And by keeping, you know, the upside for themselves beyond what's called the participation rate, which is the portion you get.

That's how they pay the bills. And so, you know, in exchange for that, they're going to give you downside protection. So if the index falls, let's say it's down 10%, you don't lose any principle, your account stays flat or it may earn a guaranteed minimum. But they're going to do that by not giving you 100% of the upside.

And then they use some sophisticated strategies to protect themselves, you know, things like options and, you know, various other things that are somewhat sophisticated to kind of limit their risk. Now, here's the problem with that is, you know, when you look at the average stock market returns and you see that, okay, the S&P 500 has done, you know, an average of 9% over the last 70 years per year. Well, when you dig into that number, what you will find is that in large part, the way that the stock market was able to average those annual returns is because there was some years where the market was up dramatically. And that helps to offset the down years and the flat years. And that's how you get those nice returns. The problem is with these products, because you're only getting participation in a portion of the upside, maybe it's 80% and you're giving up the rest. Well, you're not going to get those average annual returns because you're going to miss out on those dramatic up years.

And, you know, the last two years are a great example of this, even though this year has been a challenge the last two years, the market's been up more than 20% per year the last two years. Well, Indexed Universal Life products haven't gotten that because they didn't participate in 100%. Does that make sense? I think it does.

I think it does. So essentially to just kind of boil it down, they're going to tie your returns to a market index and you're going to have a participation rate, which means you get to participate in only a portion of the upside. And when the market's up more than that, they're going to keep it and pay their bills and make their profit. And when the market's down, they're going to limit their risk through options trading and other tools. So at the end of the day, if you're looking for peace of mind and safety, well, this could be an option for you. But for me, I'd rather you get the full upside and limit your risk through diversification and the right investment strategy and not be dependent upon some of the complexities of an insurance product where you can't get access to all of your money because you have penalties and things like that. But if safety and peace of mind is really at the top of the list and your priorities, well, then products like this could be helpful.

I would go through an advisor, though, who can show you several different indexed annuities because they're not all created equal rather than just going to one life insurance salesperson who's going to sell you one product and one product only, if that makes sense. Yes, it does. Great information.

You've answered my question. Thank you so much. You're welcome, Lisa. Listen, there are a bunch of CKAs there in Austin, and if you want to find one to talk through this, just go to faithfi.com.

Let's go to Cleveland. Hi, Forrest. How can I help? Hi, I have a colleague, and thank you for taking my call. I have a colleague who's just graduated from college, working for our company. He's got something like $12,000 in debt, and I'm trying to figure out the best way to advise him on how to deal with his debt. Like I said, he's got $12,000 in debt from school, which isn't terrible. He's already saved up like $10,000. He's living at home.

He has no expenses. I think he should just pay this loan off now before it starts gaining much in the way of interest. Right now, he's thinking that he wants to just, say, put $1,000 down and then just start paying it off over time. I need advice on how to advise him on what really the best method would be for him to save the most money and get out of debt as fast as possible.

I would agree with you. I'll assume that it's the typical federal student loan interest rate of somewhere around 7%, which is pretty common. It could be somewhere between 5% and 7%, which is typical over the past decade.

It's probably got the standard 10-year replacement. He has the ability now to cover a substantial portion of this debt with the deferment ending. Once that deferment ends, the interest will accrue, if not already. So I would say first priority is to make sure he has a good emergency fund in place of, let's say, somewhere between three and six months expenses. And then if he has a retirement plan at work, maybe he started a job that offers a 401k and they do some matching, I would take advantage of that as well because that's free money. And then if he has any high interest credit card debt, that would be a priority to me. But beyond that, I would say absolutely go for paying this off just as quickly as he can.

Maybe the only other exception to that would be if he qualified for the student loan forgiveness program, he could wait that out, but most people don't. And if he doesn't, I say beyond high interest debt and an emergency fund and matching plans, let's get it paid off. Well, folks, that's why we do what we do here on the program each day. This is important stuff, not because I have a lot of brilliant ideas, but because God's Word does. And you and I have been tasked with a really important job, responsibility, and that is to manage or steward the King of Kings resources. Let's get that right. Let's do that together. And we gather together each day on this program to do that because we know it doesn't belong to us.

It belongs to him. And our goal is faithfulness, long obedience in the same direction in every area of life. But also, certainly that includes this area of money management. Hey, if you'd like to support our work here, it'd be a real blessing if you became a FaithFi partner. Those are those that come alongside us every month.

Thirty five dollars or more. It's huge. If you've found benefit in this ministry and this program, becoming a partner would be a real blessing to us. FaithFi.com, click give. We'll send you pre-release copies of studies and devotionals and our new quarterly publication, Faithful Steward. Thanks to Devin, Sandy and Jim and everybody here at FaithFi. We'll see you tomorrow. Faith and Finance is provided by FaithFi and listeners like you.