Money management matters. If your client (or you) have dreams that you want to become reality, money will be a big part of making that happen. Before you set out on building your dreams it’s important to count the cost—and make sure you can finance it.
How you spend your time and how you spend your money are two sides of the same coin: they reflect your priorities and how you live out those priorities in the real world. They are also both important indicators of your character and your personal and spiritual development. As Jesus said, “For where your treasure is, there your heart will be also” (Matthew 6:21).
6 Steps to Effective Money Management
1. Keep a record of how you spend your money.
Money can be managed in much the same way time can. Start by tracking it. Have your client take a month-long inventory including what they make, what they save, what they give, what they spend, and what categories they spend it on (food, rent, entertainment, transportation, etc).
2. Assess that record for alignment with priorities.
Once you have a month-long record, examine it looking for themes and priorities. Where is the money going? To what degree is it going where they want it to be going? Are there adjustments you need to make to align their spending and giving with their priorities and values? If so, what needs to change?
3. Assess that record for effective accomplishment of goals
Now take a look at how the money is connected to their goals. For example, if the goal is to save for retirement, is a sufficient amount being set aside? What changes can be made to make the money go further?
As Christians, we intentionally foster a heart of generosity—a heart that reflects God’s heart. Everything belongs to God, and he has only entrusted us with it for a time. So an important principle is generous giving: give as God has blessed you, and give back to God first. Does the month-long record reflect generosity? What changes can you make that will allow you to live more generously?
“Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much. 11 So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches? Luke 16:10-11
4. Make adjustments where needed
It’s important for everyone to do a regular self-audit in the area of money, as it can quickly get out of hand if not intentionally addressed.
How people handle their money will necessarily look different at different stages of life as their circumstances and income change, so help people be aware of adjustments they will need to make over time.
5. Be intentional about how you spend your money
Here is where the rubber meets the road. It’s time to budget so that your finances align with priorities. Justify each line item by identifying how it helps you meet your goals. What can be cut out? If there is a need to increase income, what are your options?
It can be helpful to look at money through the lens of stewardship. Like time, money is given to us by God for a certain time to invest well: See the parable of the talents (Matthew 25:13-40).
6. Be accountable to someone else about how you spend your money
Consider taking the risk of letting a trusted friend or coach into their finances. It can be challenging—yet also of great benefit—to share their budget with someone else and ask for prayer and accountability to steward their money well.
Secrecy often breeds shame in the area of money, and many cultures play into that dynamic. Shrug off the shame by enlisting safe accountability.
Resources
Managing money is a critical area of personal development, especially for leaders. The Personal Development Leadership Skills Guide helps you address money management and other key areas of personal development for upcoming leaders. Each guide includes a written introduction, teaching points, scripture passages and reflection, and discussion questions for the areas of continuing in spiritual formation, managing time, managing money, engaging in life-long learning, and focusing personal ministry contribution.
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