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Did you know that the average American male earns well over one million dollars in his lifetime? That means that the average American male theoretically has the potential of becoming a millionaire in his lifetime. Unfortunately, after a lifetime of earning most Americans have little or nothing to show for their hard work. Their chances of becoming a millionaire or merely prospering financially are obliterated because of their spending habits; they spend every dollar that they make. Why does this happen? God says in Hosea 4:6, “My people are destroyed for lack of knowledge”. The average American male lacks basic money management skills needed to prosper financially. Over the past five years I have provided financial counseling to several people and the sad truth is that most of them experienced financial hardships because they lacked the basic skills necessary to make sound spending decisions. They were never properly taught how to handle their money. Basic money management skills are not taught in our public schools, in our homes, or even at most of our local churches. How did you learn what you know about money? Most people learn what they know about money from their parents, from what they observe, and by their experiences. If your parents demonstrated excessive spending habits, chances are you will demonstrate the same habits. Some people’s spending habits are influenced by how they define success. If they define success by what they are able to acquire, then they spend most of their earnings on purchases that symbolize success (i.e., expensive cars, expensive jewelry and clothing). Few preachers teach on the biblical principles of prosperity and those that do are often criticized and labeled by the religious community. Christians that do receive biblical teaching regarding money management usually lack the discipline and knowledge needed to make necessary changes to overcome financial hardships. It’s important for Christians to develop an understanding of money and the biblical principles concerning their finances. There are six basic keys to unlocking the door to financial prosperity: 1) Know the state of your flock. Before you begin your journey to financial prosperity you must first know where you stand. Begin by taking inventory of your current financial situation. This could be as simple as listing your expenditures into twelve monthly sections, within each section further subdivide it by your categories, i.e. giving, housing, transportation, insurance, clothing etc. The next step is to realistically forecast your future monthly income based on your salary, a second job, or income from a hobby. Your aim should be to balance your income against your expense. Treat one time or irregular expenses as monthly expenses and spread them out over the entire year. 2) Write the vision. Without goals or a plan it is impossible to take the necessary steps that lead to a prosperous financial future. Goals are important because they establish purpose and help keep you focused. Our goals must be reasonable and our plans and objectives must be obtainable. Therefore we need to come up with long and short-term goals and objectives. Long-term goals might center on retirement and educational needs, while your short-term goals might be to save for a home or wedding. When you understand your goals and objectives you will be in a better position to know if your current spending habits are going to get you to your expected end. 3) Consider your ways. The third key to financial prosperity is cash flow management. Purpose to live below your means. If you are spending all that you earn or more, make a commitment to cut back on your expenses. There are two ways to increase your cash flow, either increase your income or decrease your spending. Controlling your spending habits often requires making tough decisions that directly effects your lifestyle, like cutting out cable TV or your cell phone. You must have the mindset to do whatever it takes. List your areas of overspending and think of creative ways to eliminate waste. Prosperous men of God save first then live on what’s left over. 4) Owe no man. Eliminate debt or credit. If you are fresh out of college and managed to take on a lot of debt, you are not alone. Now that you have increased your cash flow, it’s time to pay off your debt. I suggest you list all your debt in order from the highest to the lowest. Focus on paying off your smallest debt first using the third key to free up extra cash flow. After you’ve paid off the first debt apply its payment to the next higher balance, then the next, until all debt is eliminated. Commit to using cash for your purchases or don’t buy. Because the reality of debt is that it spends your future income. Make the decision that you will remain debt-free, and not fall prey to the enticing messages that tempt you into the bondage of debt or cause you to spend beyond your means. Remember it’s far easier to stay out of debt than it is to get out of debt 5) Give back to God. This key represents your contributions to church, charity, and others. When you bring all your tithes into God’s storehouse, you experience the rewards of being obedient to God’s word. Giving back to God unlocks four promises found in Malachi: the promise of prosperity, the promise of plenty, the promise of protection, and the promise of personal witness. 6) The wise man saves. After you pay the first 10% to God now its time to pay yourself. The key to saving is to pay yourself first. Invest in your future. There are many vehicles that can be used for saving such as employer sponsored 401K, Mutual funds, or Individual Retirement Account (IRA). The first step however is to establish a short-term emergency savings. Emergency savings is three to six months worth of expenses set aside to cover short-term financial difficulties such as job loss, or injury. After you’ve saved for emergencies, you can begin to save for long term goals like retirement and for short-term goals like a home or a car. The most effective way to save is through automatic payroll deduction. The benefit of automatic deduction is that after three months, you never miss it. Over time, your money compounds with interest, over a lot of time, your investment will grow exponentially. The key is to start early, apply these principles and be prosperous. |
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