Every morning my co-worker and I spend an hour or so with the young men who work in our preacher training program. In addition to reading and discussing the biblical text, we also spend time talking about preaching. Our discussions are open to any topic that impacts a preacher’s work for the Lord. These conversations cover a variety of subjects, from their questions about the text to preparing PowerPoint slides to maintaining a good relationship with their spouses.

It should come as no surprise that our discussions sometimes find their way to money issues. Conversations like these may not seem as relevant as a good talk about the indwelling of the Holy Spirit, but how a preacher handles his money will certainly impact his work. Money can present a problem for a variety of reasons. Sometimes preachers underestimate the support they need and find themselves struggling to make ends meet. Some are irresponsible in the way they handle the support they are given and are plagued with the burden of debt. Still others fail to act with integrity when faced with financial struggles and destroy their influence. In the end, whether it’s the loss of influence or simply the distracting concern of figuring out how to get the bills paid this month, it all impacts our labors for the Lord in a negative way.

It is God’s desire that all of His children experience peace (Galatians 5:22-23). But more than simply wanting this for us, God provides through His word the wisdom we need to achieve financial peace. In fact, God speaks in great detail about how we should manage the resources He has placed in our hands. To avoid being distracted from our work or damaging our influence with others, preachers need to take these instructions to heart and live them in their daily walk. To that end, let’s consider nine simple strategies that will help us manage our money wisely.

Resist the materialistic mindset

Avoiding financial turmoil begins with the mind. It is easy to fall into the trap of materialistic thinking. Some brother pulls up in a brand new car and suddenly we are dissatisfied with our own. We complain to our spouse about how old it is and how bad it looks. We begin to believe that it is unfair that other people have new cars and we do not. After all, we work just as hard as they do. We deserve one too. After a couple of weeks of pouting, we can find ourselves sitting in the finance office at the local Chevy dealer signing up for six years of payments that will take us to the brink of financial crisis. It is this kind of materialistic thinking that gets us into trouble.

When it comes to money and possessions, preachers must get their thinking straight. This is where we begin to win the battle for financial peace. God has a lot to say about our attitude toward money. Jesus said that life is not about money and possessions (Luke 12:13-21). Paul warned that if we let this mindset take over, it will destroy us (I Timothy 6:6-10). What does matter is that we have a relationship with God (Ecclesiastes 12:13-14). If we have this, we have what matters. Everything else is just detail. Sometimes we need to listen to our own sermons on this subject.

Know what you need

Some preachers (especially younger preachers) put themselves in a bind before they ever receive their first check. They agree to a salary without truly knowing how much they will need. This is especially a problem for men who leave secular jobs with large benefit packages. They calculate living expenses without taking into account things like the high cost of purchasing private health insurance, taxes, retirement, etc. When they begin their local work and the true cost of living begins to hit them, they immediately begin to fall behind and soon face financial crisis.

The solution to this problem is for preachers to know what they need before they agree to a salary. Younger preachers who are just getting started and older men who are leaving secular work need to spend some time talking over finances with men who have been preaching for a while. Draw on their experience to construct a list of expenses you may not be anticipating. Discuss the details of tax law for preachers so you take advantage of every deduction and avoid overpaying your taxes. It is also important to know something about the area in which you will be living (cost of housing, utilities, state income tax, etc.). The cost of living can vary from place to place by $10,000 a year or more. There are several Internet sites that can help you calculate the differences in cost of living. The point is this: before you agree to a salary, you need to have an accurate picture of what you will need to adequately provide for your family.

Don’t take a vow of poverty

Even after accurately calculating their cost of living, some preachers get into financial trouble because they settle for the minimum amount that is necessary to pay the bills. This becomes a problem when life fails to follow the budget. What happens when a child needs a prescription that far exceeds what we budgeted for medical expenses? What happens when the refrigerator goes out? What happens when the house needs a new roof? For those living on the minimum, circumstances like these can immediately throw them into financial crisis. If two or three things like this happen at one time, it can lead to financial disaster.

But there is another problem. Settling for the minimum leaves nothing for financial needs that are not part of the monthly bills. Responsible families should be setting aside money each month for savings. Parents need to be saving for college expenses for their children. Couples need to save for that time in life when they will not be able to work. Because these are not “bills” that have to be paid each month, they are often neglected. However, over time this neglect can be financially devastating.

It is certainly true that preachers should adjust their standard of living in order to save for the future. We can settle for a smaller house or a cheaper car in order to set aside money for retirement and an emergency fund. But it is also reasonable to expect churches to consider such needs as they decide on a salary.

Don’t spend more than you make

Once a preacher is adequately supported, it becomes his responsibility to handle this money with wisdom. This brings us to the fundamental law of family finances: Income must exceed expenses. This seems obvious, and yet, it is a truth lost on most Americans. Roughly half of American families spend more money every year than they make.

Society has made it easy to live beyond our means. Credit card companies offer a quick and easy solution when we have too much month and too little money. When we have spent all of our income, we can still buy groceries, pay for gas and even eat out at a restaurant. All we have to do is swipe the credit card and defer payment for another time. Society has also removed the stigma of buying on credit. In past generations people believed that you were supposed to save for the things you wanted. Today, people think nothing of financing lunch at McDonalds. Credit card debt is just accepted as a normal part of family life.

The problem with pushing the consequences of our spending into next month is that, eventually, it catches up with us. As the debt rises, our ability to pay shrinks. Ultimately, we become enslaved (Proverbs 22:7). The only way to avoid this trap is to change the way we do business. We must learn to live within our means.

It is similar to trying to lose weight. If we want to take off a few pounds, then we cannot take in more calories than we burn. There is no way around this law. It doesn’t matter what excuses we make (“I deserve two desserts because this is a special occasion”). If we take in more calories than we burn, then we will not lose weight. The same law applies to finances. It doesn’t matter what excuses we make (“I need a new suit because I’m performing a wedding” or “We went out to eat so we could spend time with brethren”). If we spend more than we make, we will end up in debt and suffer all the grief that goes with it.

Work from a budget

The need for a budget actually grows out of the previous point – we cannot spend more than we make. If we are to be successful in our efforts to live within our means, then we must have a budget. Just as the wise man urged shepherds of his day to “know well” the condition of their flocks (Proverbs 27:23-27), so we too must “know well” what is happening with the financial resources committed to our trust.

A budget is simply a plan for properly allocating our money (Proverbs 21:5). This “plan” can come in many different forms. For some it will be a bunch of numbers scratched on a yellow pad. For others it’s three pages of an Excel spreadsheet. But no matter which method is used, a budget must have two basic components. It must include a list of all the income for the month and a list all of the expenses for the month. The key to budgeting is making sure that the income number is larger than the expense number. It’s not rocket science. However, it is the failure to do this simple exercise every month that leads to financial disaster for many families. We have to prepare a budget. We have to do this every month.

As we work to build a family budget, there are some things we can do that will help us to be successful.

First, the budget must be detailed. We need to record every dollar earned and every dollar spent. It is often the little holes in our budget that get us into trouble. To illustrate, the two dollars we spend every morning for coffee at Starbucks may seem insignificant. However, over the course of the year it becomes a $700 hole. We need to know where that money is going.

Second, husbands and wives must build the budget together. It will not work for one spouse to arbitrarily impose a budget on the other. A wife may have no idea what the family must spend on auto insurance or house maintenance. A husband may not know what his wife has to spend on groceries. This is why we must work together to figure out how the money is going to be spent.

Third, the budget must be honored. Once the budget is set, we have to live by it. To be specific, if we budgeted $100 for eating out this month, then we only spend $100. When that money is gone, we don’t eat out. If an unexpected expense arises, we adjust the budget. If our child needs a $100 prescription, then we spend less in other areas to make up the difference, perhaps by giving up a round of golf or spending less on groceries. A husband and wife must come together and make those adjustments. A budget is worthless if we do not stick to it.

Build an emergency fund

Sometimes an unexpected expense will far exceed what we can adjust for in the budget. Instead of a $100 prescription, your car may need a $3000 transmission. Cutting back on golf or groceries will not fix this problem. This is why we must be building an emergency fund.

Unexpected expenses will come up. In fact, these are such a regular part of life that it is probably inaccurate to describe them as unexpected. Every year cars break down, refrigerators die, and health insurance premiums increase. Every year we have birthdays, anniversaries, Valentine’s Day and Christmas. Sometimes these expected expenses are far more than small financial setbacks. In a given year 34% of American families will be hit with an unexpected expense that will seriously impact their finances. These typically come in the form of major medical expenses or car problems.

Most are completely unprepared for even a small financial setback, much less a big one. When the refrigerator dies or the transmission goes out, they are forced to pay with credit cards. If two or three of these hit at one time, they find themselves in the middle of a debt crisis (Proverbs 22:7).

To avoid this pitfall, families must learn to anticipate the unexpected and plan for it. One way to do this is to build an emergency fund. This is money we set aside in a savings account to pay for emergencies. Your grandmother called this “saving for a rainy day.” Experts suggest that you set aside 3-6 months of expenses in this fund. If you have $3,000 in bills every month, you should have no less than $9,000 put away in an emergency fund. This money should remain untouched. It is not extra savings to be spent on a new TV or vacation. It’s only for emergencies.

It may not be much fun to have several thousand dollars just sitting around in the bank. However, it dramatically reduces stress in our lives and gives us peace of mind. If the refrigerator dies, we don’t have to go into crisis. We draw from the emergency fund and pay for it.

Avoid the credit card trap

One sure way to avoid financial trouble is to minimize the use of credit cards. Purchasing with credit presents a number of problems.

Many do not realize that credit cards are more than simply a way to buy things. There is a whole mentality that goes with them. When we buy on credit, it’s as though we are not using real money. As a result, consumers typically spend 15% more when they purchase with plastic. We also tend to lose track of how much we are spending. We buy the things we need or want with little sense of how much is actually going out. When the bill comes at the end of the month, we suffer sticker shock because we had no idea of how much we spent. This does not happen when we operate on a cash system.

Finally, there is something fundamentally unhealthy about spending next month’s income thirty days in advance. It makes much more sense to spend September’s salary in September. We will serve ourselves well if we will strive to buy with cash. Dave Ramsey recommends the envelope system. At the beginning of the month, put cash into envelopes for different areas of spending based on the amount you budgeted (groceries, eating out, clothing, etc.). For example, if you budgeted $100 for eating out, put $100 in an envelope and label it “eating out.” When you go to a restaurant, pull out the envelope and pay with cash. When the envelope is empty, you don’t eat out any more that month.

There is some value in hanging on to a credit card. It simplifies hotel reservations and car rentals. But to avoid debt, it is best to use it only for these special circumstances. As much as possible, make purchase with cash, checks or check cards.

Buy health insurance

Finding affordable health insurance is one of the struggles preachers face. We typically wind up paying a lot for what seems like little coverage. As a result, some preachers decide to gamble and go without coverage. This decision can be financially devastating. Remember that 1/3 of all Americans suffer a major financial setback each year. For many this comes in the form of a health crisis. When we do not have health insurance, a medical crisis can be catastrophic, leaving in its wake hundreds of thousands of dollars in medical bills.

For this reason, it is vital that preachers find some kind of health insurance. For many this ends up being a major medical policy with high deductibles and little coverage for doctor visits and medications. It basically protects us from a serious medical crisis. The smaller monthly medical expenses will have to be built into our budgets. We cannot treat these as surprises. We must set aside money for them. The high deductibles can be covered by the money in our emergency fund.

It can be frustrating to pay a lot of money each month for insurance that seems to pay for nothing. But the risk is far too great to gamble that we will never have a serious problem with our health.

Save for the future

It may be that preachers never truly retire, but there will certainly come a time when age and health issues will force us to cut back or perhaps stop preaching altogether. There is also the need to make sure our wives will have what they need should we die before they do. Both of these concerns should provoke us to be saving now for these future expenses. Because preachers have no access to a company retirement plan, it is up to us to be disciplined during our working years to set aside money for that time when we cannot work.

The key to retirement savings is to start early and be consistent. This can be difficult during the early years of preaching, but even doing a little bit every month will make a big difference over the long haul. We cannot live for today and ignore tomorrow. We need to be responsible. We must anticipate the financial needs that will come with our declining years and prepare now to provide for ourselves.

Few things in life cause more stress than worries about money. For those who preach, such stress has an unavoidable impact on our work. In God’s word we find the wisdom we need to avoid these financial pitfalls. We must learn these truths and discipline ourselves to walk in them as we fight the daily battle to be financially responsible.

By David A. Banning

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