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The bible is an incredibly useful source of guidance on personal finance matters. There are quite a number of stories and sayings from the Bible, written thousands of years ago that illustrates basic financial concepts that are as relevant as ever in the modern world.
Take a look below at some relevant financial concepts you can find in the bible as a guide;
1. Set Priorities
Proverbs 24:27 – Put your outdoor work in order and get your fields ready; after that, build your house.
Here, we see the bible pointing out that you need to set priorities with your money. Ensure you save enough to cover the basics – what you need to keep yourself and your family alive and able to work – before spending money on other comforts.
2. Make a Budget
Luke 14:28-30 – Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, “This person began to build and wasn’t able to finish.”
You are to determine how much money you need to set aside to cover all your financial needs not just in the immediate future, but over the long term. Hence, you make your “tower” – your personal finances – can be completed, from ground up.
3. Build an Emergency Fund
Genesis 41:34-36 – Let Pharaoh appoint commissioners over the land to take a fifth of the harvest of Egypt during the seven years of abundance. They should collect all the food of these good years that are coming and store up the grain under the authority of Pharaoh, to be kept in the cities for food. This food should be held in reserve for the country, to be used during the seven years of famine that will come upon Egypt, so that the country may not be ruined by the famine.
It always makes sense to save resources in good times so you have them to help you get through lean times. In this passage from Genesis, Joseph interprets a dream the Pharaoh has had about seven fat cows grazing by a river that get swallowed up by seven skinny cows. Joseph concludes that the seven fat cows in the dream represent seven years of prosperity for Egypt, which will be followed by seven years of famine. To plan ahead for this disaster, Joseph advises the Pharaoh to store up grain during the seven good years and use that stored grain to get the country through the seven hard years to follow.
Today, financial experts advice that one should set aside roughly six months’ worth of living expenses in an emergency fund as a safe investment, so the money is there to use whenever you happen to need it.
4. Avoid Debt
Proverbs 22:7 – The rich rule over the poor, and the borrower is slave to the lender.
5. Diversify Your Investments
Ecclesiastes 11:2 – Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.
As you know, It’s a basic principle of investing that the more you diversify, the more you reduce your risk. So it’s wise to put money into many different types of investments so that a single disaster can’t cost you everything you have.
6. Make a Financial Plan
Proverbs 21:5 – The plans of the diligent lead to profit as surely as haste leads to poverty.
Identify Your Goals. Evaluate Your Situation. List the Necessary Steps to Take.
By writing out your financial plan, and keeping tabs on it every few months to see whether you’re on track, will certainly help you know what you really want out of life and whether or not you are on the right path to get it.
