Financial Freedom

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achieving financial freedom

Insights Into Achieving Financial Freedom

Steps to Financial Freedom

practical application
A Christian must transfer ownership of every possession to God. This means money, time, family, material possessions, education, even earning potential for the future. This is essential to experience the Spirit-filled life in the area of finances (Psalms 8:6 ).

A Christian must realize that there is absolutely no substitute for this step. If you believe that you are the owner of even a single possession, then the events affecting that possession are going to affect your attitude. God will not force His will on us. He will not put His perfect will into our lives unless we first surrender our will to Him.

If, however, we make a total transfer of everything to God, He will demonstrate His ability. It is important to understand and accept God’s conditions for His control (Deuteronomy 5:32-33 ). God will keep His promise to provide every need we have through physical, material, and spiritual means, according to His perfect plan.

It is simple to say, “I make total transfer of everything to God,” but not so simple to do. At first, anyone will experience some difficulty in consistently seeking God’s will in the area of material things because we are so accustomed to self-management and control. But financial freedom comes from knowing God is in control.

What a great relief it is to turn our burdens over to Him. Then, if something happens to the car, you can say, “Father, I gave this car to You; I’ve maintained it to the best of my ability, but I don’t own it. It belongs to You, so do with it whatever You would like.” Then look for the blessing that God has in store as a result of this attitude.
A Christian must get out of debt altogether. Let me define a scriptural debt. Debt exists with any of the following condition:

Payment is past due for money, goods, or services that are owed to other people.

The total value of unsecured liabilities exceeds total assets. In other words, if you had to cash-out at any time, there would be a negative balance on your account.

Anxiety is produced in the area of financial responsibility when the family’s basic needs are not being met.

Six steps to becoming free from debt
  1. Written plan
    A written plan is absolute necessity for everyone who is in financial bondage.Use a written plan of all expenditures and their order of importance. The order of importance is crucial because we have lost the point of reference between needs, wants, and desires. Let’s examine the difference between a need, a want, and a desire. Needs. These are the purchases necessary to provide your basic requirements such as food, clothing, a job, home, medical coverage, and others. “And if we have food and covering, with these we shall be content” (1 Timothy 6:8). Wants. Wants involve choices about the quality of goods to be used: dress clothes versus work clothes, steak versus hamburger, a new car versus a used car, etc. a point of reference for determining wants in a Christian’s life is given in 1 Peter 3:3-4: “And let not your adornment be merely external – braiding the hair, and wearing gold jewelry, or putting on dresses: but let it be the hidden person of the heart, with the imperishable quality of a gentle and quiet spirit, which is precious in the sight of God.” Desires. These are choices according to God’s plan which can be made only out of surplus funds after all other obligations have been met.We read in 1 John 2:15-16, “Do not love the world, nor the things of the world. If anyone loves the world, the love of the Father is not in him. For all that is in the world, the lust of the flesh and the lust of the eyes and the boastful pride of life, is not from the Father, but is from the world.”
  2. Living essentials
    A Christian in debt must stop any expenditure which is not absolutely essential for living (Proverbs 21:17). Look for services around the home that can be done without outside cost. Also begin to develop some home skills. By utilising individual skills, you can begin to cut down on some of the expenditures which are not really essential.What I’m expressing is an attitude of conservatism. Begin to eliminate expenditures which are not essential, remembering that many expenditures are assumed to be essential only because of our society. Fifty years ago almost all the labor supplied in the home was through family members – not professionals who charged for it. Christians who are in bondage must begin to assess what things they can do for themselves and stop the frivolities. Once a Christian has begun to do these things, whether in debt or not, it will become fun and will help stabilize the family life.
  3. Think before buying
    A Christian who is in debt (and even one who is not) should think before every purchase (Proverbs 24:3). Every purchase should be evaluated as follows:Is it a necessity? Have I assessed whether it is a need, a want, or a desire? Does the purchase reflect my Christian ethics? (For example, Playboy does not reflect Christian ethics.) Can I continue to take magazines, encyclopedias, or book and record subscriptions while I owe others? Is this the very best possible buy I can get, or am I purchasing only because I have this credit card? Is it a highly depreciable item? Am I buying something that will devaluate quickly? (Swimming pools, boats, sports cars all fall into this category). Does it require costly upkeep? (There are many items that fall within this category – mobile homes, swimming pools, color television sets.)
  4. Discontinue credit buying
    A Christian in debt should also begin buying on a cash basis only. Often someone in debt, with an asset that can be converted into cash, will ask, “Would it be better to sell this asset and pay off the debts?” This is a possible option, but it would only be valid if a person first learned new spending habits; otherwise it only treats the symptom rather than the problem.The principle to observe is this: If you are in debt from the misuse of credit, stop – totally stop – using it. One of the best things to do with credit cards when in debt is to cut them in two. Then mail the cards back to their respective companies and ask them to mail you no more. Include in your letter the plan for paying that credit card debt, and then commit yourself to buying solely on a cash basis. Once good habits have been developed and the bondage from the misuse of credit cards has been broken, then evaluate the feasibility of converting assets to pay off the debts. In that way you won’t simply be treating the symptom. Once someone has overextended his finances, it is necessary to sacrifice some of the wants and desires in life to get current; otherwise he will continue to borrow and only get deeper into bondage.
  5. Avoid leverage
    When in debt, avoid the use of what is called “leverage.” Leverage is the ability to control a large asset with a relatively small amount of invested capital.For example, if you bought a piece of property that cost R10,000 and required R1,000 down, that represents a nine to one lever. You have invested 10% of your money and borrowed 90%. Borrowing money to invest is not a scriptural principle. For when a Christian invests and borrows the money from a bank to do so, the repayment of the bank loan is dependent on the investment making a profit. But if a profit is not made and the investor can’t make the payments, he loses the investments and still owes the bank. The result? Financial bondage.
  6. Practice saving
    A Christian should practice saving money on a regular basis. This includes those who are in debt. Even if it is only R50 a month, develop a discipline of saving.This does not mean to store up a large amount of money while failing to pay your creditors, but one of the best habits that a young couple can develop is saving a small amount on a regular basis. Everyone in our society living above the poverty level has the capability to save money, but many fail to do so because they believe that the amount that they can save is so small it’s meaningless. Others believe that God frowns upon a Christian saving anything. Neither of these two reasons is scriptural. “There is precious treasure and oil in the dwelling of the wise, but a foolish man swallows it up” (Proverbs 21:20). The common attitude presented in the Bible is to save on a regular basis, and it is important that Christians develop good habits to replace bad habits. All told, to get out of debt, a Christian must utilize these points we’ve just discussed; there is no alternative under God’s plan for being debt free.
Anxiety is produced in the area of financial responsibility when the family’s basic needs are not being met.
Every Christian should establish the tithe as the minimum testimony to God’s ownership. How can anyone say that he has given God the total ownership mentioned earlier when he has never given testimony to that fact?

It is through sharing that we bring His power in finances into focus. In every case, God wants us to give the first part to Him, but He also wants us to pay our creditors. That requires establishing a plan and probably making sacrifices of wants and desires until all debts are current.

You cannot sacrifice God’s part – that is not your prerogative as a Christian. “Now this I say, he who sows sparingly shall also reap sparingly; and he who sows bountifully shall also reap bountifully” (2 Corinthians 9:6). So what is the key? If a sacrifice is necessary (and it almost always is), do not sacrifice God’s or your creditor’s share. Choose a portion of your own expenditures to sacrifice.
To obtain financial peace, recognize and accept that God’s provision is used to direct each of our lives. Often Christians lose sight of the fact that God’s will can be accomplished through a withholding of funds; we think that He can direct us only by abundance of money. But God does not choose for everyone to live in great abundance. As stated before, this does not imply poverty, but it may mean that God wants us to be more responsive to His day-by-day control.

Each Christian must learn to live on what God provides and not come under the pressure brought on by driving desires for wealth and material things. This necessitates planning life-styles around the provision that God has supplied – it can be done.
Every Christian, to achieve financial freedom, must avoid the indulgences of life.

The range in which God’s will can be found is between Luke 9:23, when Christ said, “If anyone wishes to come after Me, let him deny himself, and take up his cross daily, and follow Me,” and John 6:27, “Do not work for the food which perishes, but for the food which endures to eternal life, which the Son of Man shall give to you, for on Him the Father, even God, has set His seal.”

Does your lifestyle fit within this range? Are you willing to trust God and deny yourself some indulgences? As you do, He will supply you even more. Unfortunately, most of us are self-indulgers, rarely passing up a want or desire, much less a need. But, in light of the needs around us, it is important that Christians assess their standards of living. Most of us can reduce our expenditures substantially without a real reduction in living standard.
It is important to seek good Christian counseling whenever in doubt. “Without consultation, plans are frustrated, but with many counselors they succeed” (Proverbs 15:22). God admonishes us to seek counsel and not to rely solely on our own resources. In financial planning, many Christians become frustrated because they lack the necessary knowledge and then give up. God has supplied others with the ability to help in the area of finances. Seek them out.
The following material is provided as a practical guide to help you establish a family budget.
Steps to Making a Budget
In making and using a budget, there are several logical steps, each requiring individual effort. A sample form for budgeting is downloadable at the end of this section.
List Monthly Income
  • Salary
  • Rental Income
  • Interests
  • Dividends
  • Income tax refund
  • Other
NOTE: If you operate on a non-fixed monthly income, use a yearly average divided into months.
List Monthly Expenses
Fixed expenses
  • Tithe
  • Income tax (if taxes are deducted, ignore this item)
  • Housing expenses (payment/rent)
  • Transport (vehicle payments/public)
  • Insurance
  • Other
Variable expenses
  • Food
  • Outstanding debts
  • Utilities
  • Insurance (life, health, auto)
  • Entertainment, recreation
  • Clothing allowance
  • Medical/Dental
  • Miscellaneous
NOTE: In order to accurately determine variable expenses, it is suggested that both husband and wife keep an expense diary for 30 days. List every expenditure, even quarterly purchases.
Compare Income vs. Expenses
If total income exceeds total expenses, you have only to implement a method of budget control in your home. If, however, expenses exceed income (or more stringent controls in spending are desired), additional steps are necessary. In that case, an analysis of each budget area to reduce expenses is called for. These areas are outlined below.
Budget Busters
“Budget busters” are the large potential problem areas that can ruin a budget. Failure to control even one of these problems can result in financial disaster in the home. This area is evaluated by typical budget percentages for a R120,000 – R180,000 income. Naturally, these percentages are not absolute and will vary with income and geographical location.
  1. Housing (32% of the net income)
  2. Food (15% of net income)
  3. Automobiles (15% of net income)
  4. Debts (5% of net income)
  5. Insurance (5% of net income)
  6. Recreation/entertainment (7% of net income)
  7. Clothing (5% of net income)
  8. Medical/Dental expenses (5% of net income)
  9. Variable household expenses (6% of net income)

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