What is Biblical Financial Planning? (Oct 2024)
Does your current financial management reflect biblical principles? If not, what principles drive your decisions, and are they aligned with God’s word? If you work with financial professionals, what values influence their advice?
Before you entrust a professional with your financial well-being, clearly understanding what they do and why can help you decide if we’re the right match for your family’s financial needs.
What Financial Planning Means
You will find many different business models in the financial services community. Every firm may have their own way to define financial planning. The definition of financial planning for our team is “The continuous predetermined allocation of limited financial resources to unlimited changing alternatives.” That’s a comprehensive definition, but it’s also a bit of a mouthful. Let’s break it down.
Continuous
Financial planning goes beyond investment decisions or one-time budget creation. A financial plan is an ongoing, adaptable, ever-changing road map for your money. It must be flexible to account for life’s twists and turns but thoughtful and consistent enough to keep you on the path toward your goals.
Predetermined
Planning by its very nature is a type of predetermination. You’ve decided the outcome you want in advance and are working toward it. Wise financial planning understands that the bounty we desire tomorrow comes from the seeds we plant today.
Limited Financial Resources
Some people are blessed with greater abundance than others, but none of us have infinite resources. There will always be a limit to your income, assets, and time. Recognizing that limit, respecting it, and planning around it allows you to make the wisest possible choices with what you have available.
Unlimited Changing Alternatives
Your financial resources are limited, but the options for spending, saving, retirement planning, and investing are boundless. This is one area where financial planning becomes more art than science, as no two advisors will give the same advice. That’s why choosing a partner whose values align with yours is so important.
Where Does the Bible Come In?
For where your treasure is, there your heart will be also. – Matthew 6:21
The Bible contains more than 2,000 references to money and finance. It’s an ancient and authoritative source of timeless wisdom that’s just as relevant today as thousands of years ago. What becomes clear when you follow the Bible’s advice on money is that financial matters are first and foremost matters of the heart.
When your financial decisions are grounded in your values, you develop a healthier and more holistic relationship with your bottom line.
There are two major pillars to our biblical approach to finance:
- Stewardship. All wealth ultimately belongs to God, and He has entrusted each of us to manage it wisely and make the best use of the gifts we’ve been given. We believe that good financial stewardship means using money in ways that glorify God and help bless others.
- Contentment. If you measure success by a number, enough will never be enough. Instead, we believe in seeking contentment with what we have, letting our relationship with God dictate our decision-making rather than being dependent on materialistic consumerism for happiness.
These principles set us apart from many financial advisors. For our clients with similar values, this faith-forward philosophy is a breath of fresh air in a world that’s often more concerned with stock values than moral ones. However, the beauty of this approach is that the underlying principles work, even for families who don’t share our faith.
Building Strong Financial Habits
Of course, financial advice goes beyond philosophy. Growing from the core values of a biblical foundation, we guide our clients using the Six Keys of Financial Success:
1 – Spend less than you make: Proverbs 13:11
The cornerstone of financial planning is living within your means so you can accumulate wealth and savings.
2 – Be prudent about debt: Proverbs 22:7
When you owe someone money, you’re bound to them until that debt is repaid. This is a serious responsibility, and it should be undertaken carefully.
3 – Build liquidity: Proverbs 6:6-8
Building liquidity through cash savings is the number one risk-mitigating factor in any financial plan. This allows you to handle emergencies as they arise rather than taking on debt for the unexpected.
4 – Set long-term goals: Philippians 3:14
Tying your money to a purpose, such as saving for retirement or buying a home, gives meaning to your decisions.
5 – Act like a manager, not an owner: 1 Chronicles 29:11
When you acknowledge that your wealth is a gift, and managing it is your responsibility, you develop a healthier relationship with your finances.
6 – Give generously: 2 Corinthians 9:7
You can multiply your blessings when you build wealth to help others through generosity. Generosity fights the power of greed.
Believers are wise to seek the council of financial professionals who subscribe to values that align with biblical truths. It is never to early or too late to ask yourself and your trusted advisors: What values should drive my money decisions?
If you need help managing your investments this year and beyond, consider finding a Certified Kingdom Advisor® in your area. A CKA® can help you with setting goals, building an investment strategy, and sticking to your plan.