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Three Essential Steps to Maximizing Your Money
by Catherine Eagan
There is a distinct difference between what is necessary to effectively steward (money, finances, possessions), for the kingdom of God and managing to go to the wealthy place. Every Christian, whether they make $15,000 or $1,000,000 is called to dominate money and finances. Dominating money and finances means that an individual controls the money they have, instead of letting money, or the lack of it, control them.
There are key principles that one must utilize to not only go to the wealthy place, but to maximize your money and thereby build generational wealth.
Step 1: Plan and Prepare
Planning and preparation time is never lost time. (Proverbs 16:3, Luke 14:28-30, Habakkuk 2:2, 1 Corinthians 14:40)
Proverbs 16:3
3 Roll your works upon the Lord (commit and trust them wholly to Him; He will cause your thoughts to become agreeable to His will, and) so shall your plans be established and succeed. (AMP)
Luke 14:28-30
28 For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it—
29 lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him,
30 saying, ‘This man began to build and was not able to finish.’ (NKJ)
Habakkuk 2:2
2 Then the Lord answered me and said: “Write the vision and make it plain on tablets, that he may run who reads it. (NKJ)
1 Corinthians 14:40
40 Let all things be done decently and in order. (NKJ)
Step 2: Live below your income
The key to financial increase is to live below your income.
a. Live on 70% of your income The average family spends significantly more than it earns each year.
b. Set aside 10% for the tithe.(Malachi 3:10)
c. Set aside 20% for savings. You should save. (Proverbs 6:6-8, Genesis 41:34-36)
Short Term Savings:
The goal is to have six months of living expenses saved.
This is considered an emergency fund and should not be tapped unless absolutely necessary. It should remain relatively liquid.
Long Term Savings:
We must save to provide a godly inheritance for our children and
grandchildren. (Proverbs 19:14a, Proverbs 13:22a)
Note: This is a goal. It may take time to achieve. Start setting aside something now.
Step 3: Budget
Develop a plan for spending money.
The Purpose of a Budget is to:
• Control spending.
• Provide an opportunity to pray about income and spending decisions.
• Use as a management tool to make wise spending decisions and/or expense reductions.
It must be tailor-made to fit your finances.
It can be handwritten or computerized.
How to Budget
• Review prior years’ income and expenses.
• Determine how money is currently being spent (by category).
• Compute your net wage and/or income.
• Analyze in the form of a spreadsheet.
• Evaluate spending practices.
• Determine if the budget is on target with actual performance month to month, expense to expense.
• Establish new goals and objectives for income and spending, as necessary.
Record Keeping is important and you must:
• Be organized.
• Keep good records.
• Maintain an accurate filing system.
• Be able to quickly locate necessary documents.
• Keep all receipts & checks for tax purposes (all receipts and business records should be kept for a period of 7 years as back up for your tax returns).
• Keep records safe. All important records/documents should be kept in a fire-proof container, with a professional (i.e. lawyer, accountant) and/or in a safe deposit box.
• Set aside appropriate time to review and reconcile your monthly statements.
1. Bank statements
2. Credit card statements
3. Investment report statements
4. Insurance statements, etc.
Setting Benchmarks: A guideline to spending
• Set expense benchmarks.
• You must live below your income in order to increase.
• Invest primarily in appreciating assets.
• Don’t be house rich and cash poor.
• Don’t be car rich and house poor.
• Learn to get the best buy – How to maximize your money.
• Use cash or checks, and avoid using credit cards.
• Relate spending to the time required to earn it.
• Understand the value of money in comparison to time.
Example: ($40 dinner at a restaurant or $40 weekly hairstyle is worth ½ days wages for a person making $12 per hour)
• Don’t buy anything on sale that you would not buy at full price.
• Make sure you absolutely love it and it fits within your budget before purchasing it.
• You must use wisdom in even the small spending ventures. (Luke 16:10)
• Better to have a few quality items than many poorly-made items
• Use discounts and coupons
• Buy in quantity, if possible
• Look at the price before you look at the product
• Make sure you understand and calculate the full price (including hidden costs)
Examples:
1. Car (insurance, title fees, taxes, car washes, maintenance, interest payments)
2. House (insurance, maintenance (inside/outside), taxes, landscaping, interest payments)
3. Appliances (maintenance agreements, interest payments, replacement fees, restocking fees on returns)
4. Clothing (dry cleaning, special care requirements)
• Research product and price prior to negotiating.
1. Check consumer guide for strengths and weaknesses of the product.
2. Comparative price shop on the Internet.
5. Get counsel from previous owners and repairmen.
6. Always negotiate price, unless otherwise directed by the Holy Ghost. (Psalm 84:11, Psalm 112:1-7)
Remember that effectively maximizing your money is essential to going to the wealthy place. The Word of God teaches us that “he who is faithful over little, shall be made ruler over much. (Matthew 25:23).” Making sound financial decisions puts you in position to receive supernatural financial abundance.
Copyright © 2006 by Catherine Eagan. All Rights Reserved.
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Contact Min. Eagan: info@eaganbooks.com
Visit her website: eaganbooks.com
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