At different points in our lives, we will face financial challenges. Some of these will be so severe as to reach crisis level. We might not know where the financial crisis will come from or how long it will last—but one will come, and we will have to deal with it. We can be ready!
Personal financial planning for a crisis is simply preparing to meet future uncertainties. The crisis could be caused by war; natural disasters like volcanic eruptions, bushfires and cyclones; famine; or disease, like COVID-19. It could be more personal, like sickness, loss of employment or family breakdown.
As human beings, we cannot see the future (see Ecclesiastes 8:7). Even listening to talking heads on TV or reading opinion pieces from various economists and journalists is unlikely to give us reliable insight. This should not stop us preparing to meet the uncertainties of the future for the sake of ourselves and our families.
Wise King Solomon stated, “A prudent person foresees danger and takes precaution while the simpleton goes blindly on and suffers the consequences” (Proverbs 22:3).
From past and present experiences, as Christians we also receive special wisdom from God about how to deal with crises. We know a financial crisis could be just around the corner; because of this we should develop a financial plan so we can better manage through the issue.
Genesis 1 declares that, in the beginning, God created the heavens and the earth. God also declares in Haggai 2:8 that silver and gold are His. The Bible clearly signifies God as Creator and Owner of everything on this planet and, as such, He holds the keys to everything. So, in all our planning we ought to put God first.
He knows what is ahead of us and encourages us not to worry about anything for tomorrow, but to seek the kingdom of God above all else and live righteously, and He will give us everything we need (see Matthew 6:31–33). Therefore, as the first step in your financial planning, prayerfully seek God. Let Him be your Financial Advisor, Manager of your budget, and Accountant and Auditor of all your financial transactions. He owns it all; we are managers for a temporary period. He has all ownership rights and we as stewards have only responsibilities.
Be honest with yourself
No-one can deny the fact that people suffer the consequences of decisions that are blindly made. Therefore, being honest with yourself is vital in every planning and decision-making process. Be honest in admitting how much of your current struggle is due to a lack of proper financial planning and management. Be honest in admitting the likelihood of future suffering and do not sugarcoat this or see it as less important.
Consider how a financial crisis will really affect your life and your family. Admit your weaknesses relating to your spending. Be honest with yourself if you lack knowledge and need assistance with your planning. Be honest with God and confess to Him if you have been unfaithful to Him in returning tithes and offerings and if you have not been consulting Him in all your spending and financial decision-making.
Admitting your weakness and repenting to God sets a proper foundation for your financial planning.
"Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty."
Our human tendency is to live it up during good times. The concept of sacrifice runs counter to this tendency.
We would rather spend in the present than set aside money for the future. But there is a good model in Christ’s sacrifice that every Christian should adopt into their financial planning. Jesus came into this world and sacrificed His life to set all people free from the burden of sin. He sacrificed for the future of His people so they will have life to enjoy for eternity.
Likewise, if we want to enjoy financial freedom in the future, sometimes we must sacrifice our lifestyle in the present. For example, if you are living a short distance from your office, you can sacrifice by not sitting in your comfortable vehicle to commute—instead take a walk every morning and afternoon. If you are someone who spends money every lunchtime on fast or processed food, you can look for cheaper—and healthier—alternatives. Or if you are someone who wants to gain a big name by making a splash at big parties with your family or tribe, you ought to sacrifice your position and limit your contributions—even though you might lose status in your tribe, as practised in some Pacific countries.
Jesus did not think of His position in heaven. Instead, He left His position to come and die as a sinner for the future of His people (see Philippians 2:5–8). He was even mocked on the cross, but He chose to remain focused on His mission to save humanity. His experience can be our experience, if we choose to sacrifice for our future.
A culture of saving
We find another good biblical example for our financial planning during the famine in Egypt. Led by Joseph and his God-given insight, Egypt was advised to save for the future (see Genesis 41:37–57). They sacrificed during the time of plenty to save themselves from a future financial crisis. Joseph instructed the Egyptians to save some of their produce from the land each year. They took to that task for seven years, setting grain aside in storage bins.
Joseph was not taking any chances and he never stopped collecting the grain. In fact, the Bible tells us Joseph piled up such a huge amount of grain that they couldn’t count it anymore and stopped keeping records (see Genesis 41:49). They had more than enough to meet the needs of the people during the time of famine. Joseph’s story can be our model to set apart 20 per cent of our income to meet future uncertainties.
When saving money, it is wise to save in an interest-bearing deposit or any banking institution that offers good monthly or quarterly interest. Avoid illegal fast interest and money-laundering schemes because hasty shortcuts are high risk and often illegal.
Your savings can be classified in two ways: long-term and short-term. Long-term savings are for long-term goals. Short-term savings are there to meet an unforeseen crisis or unbudgeted expenses.
Set up a budget
Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty (see Proverbs 21:5). This advice from King Solomon demonstrates that budgeting is a biblical concept. The person who sets up a good budget plan is better placed to enjoy profit and prosperity, while the person who does not have a budget plan to guide his or her expenses and is looking for shortcuts to get rich will likely become poor and suffer financial consequences in the future.
Further advice is found in Luke 14:28, which asks “If one of you wants to build a tower, what is the first thing you will do? Won’t you sit down and work out how much it will cost and if you have enough to pay for it?”
We have all seen people suffering financially, perhaps even been there ourselves—no money for school fees, impacted by natural disasters, suffering and dying from health-related crises with no money to meet hospital fees. Whatever the cause, families suffer because they don’t have extra money in their savings account. Some of these things could be alleviated by proper budget planning.
Setting up a budget and faithfully sticking to it will help you save money and hopefully survive any coming financial crisis.
The advice provided here is general in nature. For specific advice on your situation please contact a financial professional.
Thomas Ariku Motou is chief financial officer for the Eastern Highlands Simbu Mission, Papua New Guinea.
Some information taken from R Blue and J White (2008), Faith-based family finances; A Cook (2016), Simple steps: for the journey to financial freedom; J and A Witt (2009), Effective Stewardship.