Frugality vs. Stewardship: What’s the Difference?

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That's faithful.com slash sparrows. Many people would consider frugality to be a Christian virtue, but is it really? Hi, I'm Rob West. We often equate frugality with stewardship, but they're not exactly the same thing. Today we'll explain why. 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. Now, just so you know what I mean by frugal, I'm talking about being careful with your resources. Someone who's frugal saves their money, spends less than they earn, and is economical in their financial choices. Maybe that's you, or maybe you're married to someone who's a conscientious penny pincher. Being frugal can demonstrate virtues like self-control and patience. And of course, we've all heard Benjamin Franklin's quote, a penny saved is a penny earned. Here at faith and finance, we do recommend saving for the future, paying down your debts and avoiding overspending. So is there a difference between just being frugal and the financial stewardship we talk about so often?

I'd say there is. You see, frugality alone doesn't lead to true peace. From a biblical perspective, we aren't the owners of our money and possessions.

God is. As Psalm 24 reminds us, the earth is the Lord's and everything in it. Recognizing Christ's lordship over our finances shifts the focus from mere numbers to the condition of our hearts. Here's what Jesus said about this in Matthew 6. So being extra careful with your money may help you lay up treasures on earth, but the eternal rewards Jesus speaks of come from a different approach. They come when you surrender your needs and desires to God, embracing your role as a steward of his blessings.

It's all about perspective. Frugality can be a tool for faithful stewardship, or if pursued for its own sake, it can lead to selfishness, greed, and pride. So how can you tell if you've gone from solid stewardship to frugal foolishness?

Well, here are some signs. Do you spend hours being frugal every week? Maybe you're into clipping coupons, driving around to get the best gas prices, or searching the internet for deals on necessities. In other words, has frugality become an obsession? Do you go without things you need just to save money?

Maybe you're like the person who sleeps on the floor just to avoid spending money on a bed. Another red flag is hoarding, stocking up on items just because they're a good deal, leaving closets overflowing with toothpaste or toilet paper, or holding onto things indefinitely just in case. This mindset can signal a deeper issue, a struggle to fully trust in God's provision. Do you compromise your safety in the name of frugality?

Choosing to eat expired foods or use prescriptions past their expiration, all for the sake of saving a few dollars, can actually put you and your family in danger. If you think about frugality as a competition or feel pressured to do it, you may have the wrong attitude. And if spending any money at all stresses you out, that's an indication that you're missing out on God's peace. A final sign that you might be taking frugality too far is if you resent having to give or share anything, even if it's just a potluck supper or a church fundraiser. The fact is, God calls us to be generous. If penny-pinching kills your generosity, well, you're missing out on God's blessings. Hebrews 13 16 reminds us, Do not neglect to do good and to share what you have, for such sacrifices are pleasing to God.

As with every kind of behavior, there's always an underlying mindset that triggers our actions. I've found that in most cases, overdoing it on frugality springs from a lack of balance. It's okay to clip coupons, for example, if you just don't spend 10 hours a week doing it.

Your time is valuable too. Prioritizing the health and well-being of yourself and your family matters more than squeezing a few extra dollars out of your budget. While there's nothing wrong with spending wisely, money isn't the ultimate goal.

Acts of generosity, for example, bring a joy that far surpasses any financial gain. So if you find that your frugality is looking more like foolishness, well, it's time to restore the balance. Jesus has the answer for you. Seek first God's kingdom and his righteousness and all these things, things you really need, will be added to you. Basically speaking, when you put God first, trusting in his provision, you'll find the true peace isn't found in penny pinching, but in faithful stewardship and reliance on him. Stewardship goes beyond mere frugality.

Its greater purpose is to advance God's kingdom on earth until Christ returns. All right, your calls are next. The number 800-525-7000.

That's 800-525-7000. I'm Rob West and this is Faith and Finance. We'll be right back. . Financial fear is real, but so is God's promise to provide. At Faithfy, we know the daily stress of money can overwhelm your heart, but Jesus reminds us to look at the birds of the air. They don't worry, and yet our Heavenly Father feeds them. And look at the sparrows, a 21-day devotional. You'll find peace by focusing on God's faithfulness as you discover how to overcome financial anxiety with faith. Visit faithfy.com slash sparrows and begin your journey with Look at the Sparrows today! Investments involve risk.

Principal loss is possible. Foresight Fund Services, LLC. So glad you're with us today on Faith and Finance, helping you live out of a biblical worldview as it relates to this program in the area of financial decision-making.

Yes, that's right. You and I are stewards of the King of Kings resources. We want to help you get that right each day. So what questions do you have in your financial life? You can call right now, 800-525-7000. Again, that's 800-525-7000. You can call right now. We have a few lines open.

Let's go to New Jersey. Pedro, you've been waiting patiently. Go ahead. How are you? God bless, Rob. Thank you. I am calling you and reason is because I've been trying to open the wrong IRA.

I get stuck in some of the questions they ask. I do not have a 401k. I don't have a pension, but I have that I pay my house off. My house is paid off for about 10 years.

Thank God for that. Emergency Fund, I do have that. I had opened the CDs listening to you, but I've been stuck on the Roth IRA and I don't know how to go about it. The questions they be asking me, it's like limited margin. We like to limit the margin. We like to add option trading features. And last one would like to enable this account for trading or think or swims. Okay. Okay.

Yeah, I'm not sure about the last one. You definitely don't want margin. So that would be a no. And you don't want options.

That would be a no. We're talking about just kind of plain vanilla investing here. And those are a little bit more sophisticated strategies. So what I would do is one of two options. One is you could open that Roth IRA without the margin and the options. Or you could use what's called a robo advisor, which is a very simple kind of turnkey way to invest that uses the the indexes. So you answer a series of questions, it decides what percent you want in bonds, what percent you want in stocks, what percent global and domestic, it makes all those decisions for you. And then it uses the market indexes to capture the broad moves of the stock in the bond market. But it's very low cost, and it's kind of all done for you. All you need to do is worry about making a monthly or a systematic investment.

And then it does the rest. And the one that I would look at is the Schwab intelligent portfolios, Schwab intelligent portfolios. So you could go to the Schwab intelligent portfolios website, open a Roth, deposit some money in and you'd be off to the races. That is perfect.

That is perfect. Now, one more question. I'm 56 years old. Did I go with the traditional or the Roth?

Yeah, it's a good question. Do you have any other retirement accounts at all? No, I don't. Okay, my wife do got to have a 401k, but not me. Okay, good.

Yeah. So if she's got the traditional 401k, then you've already got that pre tax bucket growing with her account at work. So for you, because I kind of look at these as as one, you know, one flash, I mean, you're going to have, you know, these assets that you're going to have access to in retirement are going to be for both you and her, I would do the Roth for you. And that way you have the after tax bucket growing. And then depending on the tax code, and what's going on with tax rates, you know, 15 years down the road, when you guys are thinking about starting to pull money out, then you could choose one or the other depending on which is the best for you. So I think with her having that 401k, I do the Roth for you. I think that'll be the best option. Pedro, thanks for your call today.

Let's see Manny is in Winter Haven, Florida. I know it. Well, go ahead, sir.

Yes, thank you for taking my call. I want to purchase a vehicle for my sister for a new car or either give her 20 or $30,000 to purchase the vehicle. Is this something that she has to report on her taxes? Or do I have to report this gift on my taxes? Neither of you do actually, and depending on how much you want to give, so you're able to give for 2025 $19,000 without, you know, having to report it as a gift.

And if you're married between the two of you, you and your wife could do 19, you know, times two to any one individual. So that'd be a total of 38,000. If you give above that amount, either 19,000 as an individual, or 38,000, then that just counts against what's called your lifetime exemption. And that lifetime exemption right now in 2025 is more than $13 million. So unless you have a pretty big estate, you're not gonna have to worry about that. Now you will have to report it on a gift tax form.

And it'll chip away at that 13.99 million per individual. But that's it, there will be no tax due on your part. And for her as being the one to receive the gift, there's no tax due there as well. So it really just comes down to can you stay under that 19,000 or 38,000 between a married couple or two individuals? And if not, then you just have to let the IRS know about it. But again, that won't generate any tax that just chips away at your lifetime exemption.

Oh, okay. One quick last question regarding annuities. What are the cons about the annuities? Yeah, just generally, are you talking about a variable annuity where it's tied to a stock market index? Are you talking about a guaranteed annuity where it's a guaranteed set rate of return? I go fixed.

Is that what they call it? Yeah, guaranteed fixed annuity. Sure. Yeah, the downside for a guaranteed fixed annuity would be number one limited growth potential. So if you put it in the stock market, you have a lot more upside potential than you would with, you know, an annuity product where it's guaranteed.

The second would be what's called the lack of liquidity. So if you want to withdraw the money before the surrender period ends, usually somewhere between five and 10 years, you face surrender charges, which can be usually between five and 10% of the withdrawal amount. Now, many contracts will allow you to get to up to 10% a year without penalties, but you got to read the fine print. They're tax deferred, but not tax free.

So while the earnings grow tax deferred, withdrawals are taxed as ordinary income, not capital gains, which could result in higher taxes. And then the the sometimes the fees can reduce the returns as well. The only risk really is the default of the insurance company.

You know, if it were to go under and become insolvent. Now, often state guarantee associations may offer limited protection, but not always the full amount. Now, what are the pros?

Because there's not all bad news. The pros are you're locking in hopefully a better rate of return than you could get in a CD or a savings account. So you've got a nice guaranteed rate of return, even though it's not potentially as high as you can have otherwise, you're transferring the risk to the insurance company. So as long as that insurance company is as a strong positioning, then you don't have to worry about the market, they're going to give you that guaranteed rate of return every year. So that's another benefit that you have as well. So that's typically why people will get these as they're saying, Listen, I'm willing to give up the upside, as long as I don't have to take the risk of the market. And that's where annuities can be, you know, productive, so long as you recognize those downside issues that I mentioned. Does that make sense?

Yes, thank you very much. I'm just thinking about it because the market has been so good, you know, pretty good just going up and I'm sure it's getting ready to crash sometime in the future. And I'd like to at least have some of my some of my eggs in another basket. Yeah, well, diversification is a biblical principle.

We'll find you find that in Ecclesiastes 11.2. I will tell you, though, despite the crash of 29 and 87 and 2001 and 2008, the market always moves to new highs it has every time. And I wouldn't bet against the US economy in terms of a place with a properly diversified portfolio to grow your wealth, even in your 60s and 70s.

Because if you're in good health, you need that money to last a couple of decades potentially or more. So something to think about, Manny. We'll be right back with much more. Stay with us. for our partners that help expand our outreach every month with their generosity. Has God provided financial answers for you through this ministry? Please consider becoming a monthly partner by visiting faithfind.com and clicking Give. If the heavy burden of debt is robbing you of freedom and peace of mind, Christian credit counselors can help. We're a nationwide nonprofit credit counseling organization that has helped over 300,000 individuals in the last 27 years get out of credit card debt 80% faster while honoring that debt in full. To learn how Christian credit counselors can help you, visit christiancreditcounselors.org. That's christiancreditcounselors.org or call 800-557-1985. Great to have you with us today on Faith and Finance.

I'm Rob West. Let me take an opportunity to remind you of the Faith Buy app. Now in the app, you will find, of course, the money management system where based on Larry Burkett's tried and true envelope system, you can manage your spending plan using our digital envelope system.

That's right, Julie and I use it every day and we always know where we stand in every one of our envelopes at any moment. Check it out. But secondly, you'll see our great content so you can listen to broadcast archives and read the articles. But the third piece that a lot of people don't realize is there in the app is our Faith Buy community. It's where a community of stewards come together to help each other out on their stewardship journey. They're asking questions and answering others questions. They might be related to using the Faith Buy app or they're just general questions about being a wise steward.

I saw one the other day about money and marriage, another one about retirement plans, another one about credit scores. So it's easy to jump into the community. You'll first create your Faith Buy account. That's free. Just go to faithbuy.com and then you're going to want to download the app.

It's the easiest way to access the community. You can do that in your app store. Just search for Faith Buy Faith and Finance or head to our website at faithbuy.com and just click app. Let's head back to the phones. We're going to go to Mississippi and welcome Rose.

Go ahead. I'm calling in regards to property that my mother purchased with an uncle in Oklahoma. I'm from Omaha, Nebraska. I recently found it was sent to me some papers, some information in regards to the sale of that property. The money was distributed to some family members that I'm aware of their names that's on the paper, but there's some names that I know that aren't family members. This seems like something went terribly wrong with the honesty of the sale of the property. It had Acaya Wood on it. It was about 10 acres. I'm wondering under the circumstances, do I have a way or means to look into this to see if the property was stolen?

I mean, the funds that came from the sale of the property was stolen from me and my brother who passed away in 2016. You understand what I'm saying? I sure do. Yeah. So what you would typically want to do in a situation like this, I mean, where there's an improper distribution based on a will, do you know whether there was a valid will in place?

I sure don't. Okay. So you'd probably want to contact an attorney, Rose, just to help you navigate this. They can petition the court and talk to the executor of the state, the estate who would be the person. If there's a valid will, if the deceased had a will, the court then appoints a person named in the will as executor. And they have several important responsibilities, including distributing the deceased's assets according to the terms of the will.

And the executor should always take great care in doing that, as an improper distribution is often a cause for a legal dispute. And so if you have a question about how that went down, I would contact an attorney who can petition the court and then get the details on the probate process. Who was the executor? Was there a valid will in place? And this property that was liquidated should have been distributed in accordance with that will. If there was no will, then that person is considered to be intestate.

And again, the probate court then would distribute according to state law. Okay. Yes, sir.

I thought there was something that was just not done right here. Yeah. So I think it's worth looking into. And if you don't have an attorney that you know, perhaps you reach out to your church and ask for a referral, or you could connect with a certified kingdom advisor at Rose in your area and ask for a referral as well, just go to faithfind.com, click find a professional. But I hope you get this sorted out.

I know this can be a little concerning, but I'm sure there's an answer here that you can get to the bottom of if you follow the right channels. We appreciate your call today. May the Lord bless you.

Miami, Florida is where we'll finish today. Alex, go ahead. I wanted to know, when would you consider it a good investment for you to upgrade or remodel your house, your home? If you have to take roughly 25%, it would cost 25% of your, your investment, your retirement investment to do that. Would you invest that money in your home? Yeah, it would increase the value for home.

Sure. Well, I think there's two considerations there. The first is it's less about the percentage and it's well, it's, it's more about the starting value, right? So if you had over accumulated and you've got more than you think you'll need to sustain you for the rest of your life, then it's not a big deal to take 25% of that and put it toward improvements. If you don't feel like you've saved enough, putting 25% into your home, even though it's going to improve the value, you typically, depending on what the renovation is, you're only going to get back somewhere between, you know, 40 and 80% of what you put into it typically. And so, you know, you're going to lose money on that equation. And, you know, it can't generate an income, because it's your primary residence, whereas that money still in your retirement accounts invested not only has the ability to appreciate instead of depreciating by putting it into your house, because you don't get the full value back out, but it can't earn an income like it can when it's in stocks and bonds, dividends or interest. And so I think for that reason, it really comes down to how much do you have in the way of assets and how well prepared are you? Because if you're right on the edge, I would say no, it's probably not the season to just, you know, take 25% put in the house, you'd probably be a little more judicious about how much you pull out and when just to make sure you keep this money growing for you earning income, and helping you to cover your lifestyle expenses alongside Social Security or whatever else you have. Does that make sense?

It definitely does. Thank you very much. Okay, God bless you, Alex. I would say just in closing, perhaps put together that retirement budget, maybe you've already got it, I would look at what a guaranteed income sources you have, Social Security, whatever else, and whatever is left, you have to solve for with your assets through a withdrawal rate. And if you have to take more than 4% to solve that, then you're probably not quite there in terms of what you at least need on paper to be able to fund your lifestyle.

If you're well beyond that, and you can, you know, you don't need to take anything every month or you're taking less than 4%, you probably got a little bit of cushion there, and maybe you can put that into the house. I hope that helps. God bless you. 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 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, $35 or more. 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. We'll see you next time. Bye-bye. Faith and Finance is provided by Faithfi and listeners like you.