Best of the Web: Should Christians Save Money For the Future?

I recently read a fantastic article by Thomas Overmiller on a question that does not only affect pastors, but all believers. Here is the full text of the article. Click here to read the original post.

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Should Christians Save Money For The Future?

By Thomas Overmiller

David, an acquaintance of mine and a blog and podcast follower, recently submitted this question:

I have considered low-risk, long-term investing and saving plans several times in the past, but have not taken steps to arrange anything. One reason for this is the many predictions of economic collapse. Naturally, these predictions trouble me. Usually, conversations I hear about this subject reference end-times predictions, which further discourages me from any long-term financial planning. I know there are important things to keep in mind concerning these subjects, and I would appreciate your input.

This question reminds me of something I have encountered in life, as David is also encountering. Many well-meaning Christians firmly believe that saving or investing money to meet future needs is a failure to believe God. But the opposite is true. The Bible clearly teaches the appropriateness, even the expectation, of a Christian saving and investing money to meet future needs. To do this is actually a step of obedience and faith in God.

To be sure, not every Christian has equal ability to do this to the same degree. Not every Christian is able to do this at all. But, every Christian should know what the Bible teaches and, if at all possible, take steps of faith today to set aside resources for tomorrow. God supplies some of your present resources to meet your future needs. This is how God provides. Responsible saving and investing is a biblical, responsible step of faith in God.

So in reply to David’s question, I provide a list of biblical principles for you to consider in your Bible study and personal finances.

1. The Bible warns against hoarding.

Hoarding is accumulating excessive material resources without a defined, responsible purpose. Jesus condemns the wealthy farmer who hoarded resources without a defined and appropriate goal in mind. The goal of any accumulation plan should never be wealth in general, or to become as wealthy as possible (Luke 12:16-21).

2. The Bible encourages saving.

Saving is accumulating appropriate material resources for a defined, responsible purpose. A wise person does this (Prov. 6:6-8, 21:20). As you work and God provides you with income, He expects you to pay your taxes, give to His work and meet your present needs. But there is more. He expects you to set some of this aside to prepare for upcoming needs, when income will not be adequate or available. It is biblical and wise to set aside resources today for things tomorrow, such as: an automobile, a university education, the down payment (or full payment) on a house and old age (that time in life when you cannot work as you do now).

3. The Bible warns against gambling or ‘get rich quick’ schemes.

The Bible does not expressly forbid gambling, but it provides a clear warning against quick income. The responsible way to accumulate resources is to set aside resources in manageable, steady deposits over time (Prov. 13:11).

4. The Bible recognizes the element of risk inherent in responsible long-term savings and investment, and does not forbid it.

Jesus uses standard financial investments as a key illustration of spiritual truth (Luke 19:11-26). He does this effectively, because the example of financial investment is a good example. By doing so, He underscores the wisdom of putting money to work in the economic market. Whether you put your money to work in a simple savings account or an aggressive stock market portfolio, you are putting your money to work. Jesus strongly rebukes the person who stores financial resources in a no-risk, no-return scenario. When you put your money to work in the economic market, there is wisdom in consulting or partnering with a trustworthy, reputable Christian investor, licensed and able to provide good advice (Prov. 15:22).

5. The Bible forbids trusting in accumulated wealth.

When you follow a principled savings and investment strategy, you are doing something biblical. However, beware of trusting in your accumulation to provide a sense of security (Prov. 23:4-5, 1 Tim. 6:17). Follow your strategy, but don’t trust in it. Trust in God byimplementing a strategy, and trust in God instead of your strategy. This is the biblical balance. No matter how much wealth you accumulate or lose, always keep a Luke 11:3 attitude: “Give us day by day our daily bread.”

6. The Bible forbids worrying about future financial provision.

The Bible instructs Christians not to worry about future needs and uncertainties. Does this contradict or cancel out biblical principles of responsible savings and investment? No. It teaches us to save and invest in a responsible manner, but to do so without obsessing over market trends and economic forecasts (Matt. 6:34). The economic market is volatile. A good strategy accounts for that; but even the best strategy is a risk. Great Depressions happen. And so, David writes:

One reason [for not implementing a savings and investment plan is the] many predictions of economic collapse. Naturally, these predictions trouble me. Usually, conversations I hear about this subject reference end-times predictions, which further discourages me from any long-term financial planning.

This noise – these popular crisis predictions and end-times forecasts – should not dissuade Christians from implementing responsible, faith-based, biblical savings and investment strategies, targeting reasonable upcoming needs and stages in life. We should take appropriate action with our finances, and leave the future in God’s hands. Rather than choosing not to save and invest, I should choose to save and invest in spite of these winds of doubt and worry. If something bad does happen, and my investments disappear, then I’ve lost nothing. I will continue to trust God, and He will meet my needs. Furthermore, my conscience will be clear because I know that I did what He expected. I saved and invested, and trusted in Him.

As God provides for you in the present, think ahead to the time in your life when you will not be able to work as you do now. Or think ahead to important upcoming goals. What will your financial needs be? Be realistic. As a Christian, avoid opulent dreams of a lavish retirement. Estimate your needs in a reasonable, content manner. Then set aside some funds in manageable, regular amounts, preparing ahead for that time. Do this as a step of faith, and do not trust in your savings and investment plan. Trust in God as you do it.

Will markets rise and fall? Yes. Will the economy collapse? Perhaps. But as a Christian, this should not prevent you from responsible savings and investment. What is the key? Just do it, and do it wisely. Don’t worry and obsess about financial trends. If you invest and the markets collapse, God will continue to meet your needs. Just do right. Save for the future in a responsible, biblical manner, and let God take care of you.

Thomas Overmiller serves as pastor for Faith Baptist Church in Corona, NY and blogs at Shepherd Thoughts. This article first appeared at Shepherd Thoughts, used here with permission.

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Pay Yourself Second!

An excerpt from How to Not Be a Broke Pastor: 

Have you ever heard the saying, “Pay yourself first”? The more reading I do in the realm of personal finance, the more I see it. However, as Christians, I think we need to tweak the saying just a bit.

A Biblical Adjustment

When it comes to the arena of general, personal finance, the slogan “Pay Yourself First” is a helpful guide for thinking about what to do with your money.

As a believer, I would just move it one step over to second place as I believe, wholeheartedly, that the first “payment” we make out of our income should be to the Lord.

I hate to say it, but I’ve known pastors who don’t give. That’s not an exaggeration for the sake of illustration. That’s the honest truth. And while there may be reasons for that, I just think that pastors need to model, to whatever extent they can in their given circumstances, what it looks like to be generous with the income God gives them. They need to learn to “pay” God first.

However, this isn’t a book about giving, and now that I have that out of the way, you should now understand the reason I titled this chapter what I did.

I believe that the Christian version of “Pay Yourself First” is “Pay Yourself Second.” What this means is that, after you give to God, the very next thing you should do with your money is to use it to prepare for your own financial future.

A Three-Fold Approach

In his book, Rich Dad Poor Dad, Robert Kiyosaki does an excellent job of showing how the rich make it their mission in life to use their income to build wealth before ever paying out any expenses.

In other words, when money comes into your bank account, the first thing you should do with it after giving to the Lord is to provide for yourself financially. For the average pastor, this will likely mean three things.

First, it will mean building an adequate emergency savings fund. This money will come out of the salary portion of your income. Every month, before you pay any bills, you should set aside money to cover emergency expenses. A good rule-of-thumb is that you should have between three and six months’ worth of living expenses in your emergency savings. It may take you a while to get there, but if you keep saving, you will arrive at that goal before you know it.

Second, you should open and begin funding either a traditional or Roth IRA out of the salary portion of your income. Again, this doesn’t have to be a super-large amount each month. It just needs to be something.

By the way, this is regardless of whether or not your church provides you with a retirement plan. No matter what, you need to be saving for a time when you will no longer be able to work, and IRAs are probably one of the best ways to do this for most pastors.

Third, out of your housing allowance, you should make an extra principal payment on your mortgage. You say, “But I need to use my housing allowance for repairs on my home.” Ok. I get that because I had to do the same. Sometimes, the most I could pay ahead on our mortgage in a given month was $25, but I tried to pay something . . . and you should too.

A Longer-Term Focus

Once you have built an adequate emergency savings, you should continue to pay yourself second by diverting whatever money you were putting into savings towards your retirement.

Along the way, as your income increases, you should make it a requirement that a certain portion of each pay increase is automatically set apart towards these goals.

For far too many people - pastors included – an increase in salary automatically means an increase in expenses (i.e. they begin spending whatever extra they get). My plea to you is that you not be like everyone else in this area.

If you receive an extra $1,000/year in salary, give to the Lord out of your increase as you are able, and then commit some amount towards these goals. If you do this each time you receive additional income, you’ll never even feel it in your monthly budget, but you will begin to see the benefits of this approach in your long-term planning.

Pay yourself second!

Stacy Potts is a pastor, author and consultant specializing in pastoral compensation and personal finance issues. He is the author of multiple personal finance books for pastors including How to Not Be a Broke Pastor and The Pastor's Guide to Wise Investing. He lives in Virginia Beach, VA, with his wife, Jamie, and their two children, Nathaniel and Hannah. Visit his website at www.brokepastor.com.

What advice would someone like Warren Buffett give to pastors?

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An excerpt from The Pastor's Guide to Wise Investing:

Almost everyone knows the name of Warren Buffett – maybe the greatest, most successful investor of our day. But very few people outside the world of professional investing know the name of his teacher, mentor, and friend – Benjamin Graham.

In 1950, when Buffett was just nineteen years old, he read Graham’s monumental work, The Intelligent Investor. Buffett said that, at the time, he thought it was the best book about investing ever written. Today, at eighty-six, he still believes the same thing.

Buffett writes:

To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. This book [The Intelligent Investor] precisely and clearly prescribes the proper framework. You must supply the emotional discipline.

Did you notice the two components Buffett says are needed to be a successful investor? He said that you need a “sound intellectual framework” and “the ability to keep emotions from corroding that framework.”

In fact, he went further and said that you do not need “a stratospheric IQ, unusual business insights, or inside information.” You just need a “sound intellectual framework” and “the ability to keep emotions from corroding that framework.”

This is striking to me.

As I listen to most people talk about investing, it seems that there is a common belief that the biggest enemy facing most investors is some lack of one of the three things Buffett says we do not need. Yet, almost no one ever talks about the two things he says we do need. Is it just me, or does this seem backwards?

To learn more about The Pastor's Guide to Wise Investing, click here.