The Basic 4 Uses of Money

Shawn (00:00): Are you struggling to manage your finances and wondering where all your money goes each month? God’s word provides a simple, yet powerful framework that can revolutionize how you handle every dollar he’s entrusted to you. Today we’re breaking down the biblical 4 uses of money that will help you gain control and honor God with your resources. Let’s get some perspective. Welcome back to another episode of Christian Financial Perspectives. My name is Shawn Peters. I’m joined by my father-in-law and co-host Bob Barber. Bob today is, I think, an exciting episode on covering the four uses of money from a biblical perspective. There’s a book on this too, right? Bob (00:46): Well, there’s a small book that Kingdom Advisors produces, and this came out about three or four years ago. The first time I heard it, I was at one of the Kingdom Advisors conferences and it just made so much sense to break all the ways that we spend money down into four ways. Shawn (01:03): Yeah, love it. So what are the four ways? We’ll go and give you guys… Bob (01:09): They just roll off my tongue. It’s like live, give, owe, grow. And they got to add up to a hundred percent, by the way. If it doesn’t add up to a hundred percent, there’s a problem. Shawn (01:19): Yeah. Somebody is embezzling some funds or, Bob (01:22): Well, it’s not… Shawn (01:23): Maybe taking your money, right. Bob (01:26): It’s not that technically. The area that we see people go over in is in the owe area. Now we’re always going to owe because we’re going to owe taxes. I mean, that’s just something that’s given. It’s like I was talking to my brother the other day, it’s like, well, you really never own your house. You have the property tax. You’re renting from the government even when your house is paid for. Shawn (01:44): Well, we get into that later, but we also cover Matthew 22:21 when Jesus is reminding like, well, this is Caesar’s face on here. Bob (01:51): So pay to Caesar what is Caesar’s. But in the live area, when you think about it, it’s all of our basic expenses. I’m going to list these. I know we’ll have these up on the screen is our groceries, clothing, housing, utilities. That’s an electric water, gas, transportation, automobiles, medical, that would be your health insurance. And when you got to go see the dentist and then your insurances that provide coverage for all that, like your home, your auto, life, and disability, everything breaks down into these four. And that live, for some, is the majority of their money. It can be from 80% depending on what your income is all the way down, if your income is really high, it might just be 25% of your income because as you talk about… Shawn (02:43): Or if you’re very aggressive and maybe putting money into some of the other categories. Bob (02:47): Well, and the thing about live, give, pwe, grow – the owe part on taxes. For those that are making a lot of money, those taxes are contrary to what our politicians tell us that the wealthy don’t pay their fair share. I mean, taxes can take as much as 40 to 50% of the income, but for somebody that’s under a hundred thousand, that’s more like an effective rate of 10 to 20% versus 40 to 50%. So these areas, they all break down on a pie. Think of it like a piece of pie, and you got four pieces of it. So the live part is really all of your budgeting items that you would think about. And this is important that as Christian believers that we provide for our families and that we see that all these expenses are met. There’s a good scripture that goes with this. Shawn (03:36): There is, I was just about to segue into that. I Timothy 5:8, “But if anyone does not provide for his own family, especially for his own household, he has denied the faith and is worse than an unbeliever.” So I wish scripture would be more blunt sometimes on what God’s really trying to tell us. Bob (03:54): This has been really convicting to me as a godly husband, dad, and now grandpa, that I make sure my family is provided for first. As we look at these four pieces of pie, you’ll see that if one area is too much, another area has got to be less. So it’s about giving. And that needs to be part of the equation because you and I both have said this many times, giving it breaks the bondage of selfishness. Shawn (04:24): Amen. That’s true. And what percentage range would you say this usually is or should be? Bob (04:31): Between 10 and 20%. Shawn (04:33): Gotcha. Bob (04:33): Yeah. The 10% coming from scripture, Malachi 3:10, it says, “Bring the full 10th or the tithe, the full tithe into the storehouse so that there may be food in my house.” So one place in scripture, remember what it says, we can test God, nowhere else are we supposed to test him, but God says we can test him in this way. And then he goes on and says, “See if I will not open the flood gates of heaven and pour out so much blessing you won’t have enough room for it.” You won’t be able to measure it. Shawn (05:04): Well, it was 10 to 20%. But keep in mind, you’re more than welcome to give more than that. I know I’ve heard of some leaders in the faith, I can’t remember the specifics, but it was somebody from Focus on the Family, or maybe it was Billy Graham or something like that. But there were different people that what they did is they had a certain amount of income, but then when they were writing additional books or putting things out, and they effectively capped themselves to where, okay, this is how much I’m making. Anything from the proceeds of selling these books or these other things, like a hundred percent of it’s going to go back to the church or to ministry. And so for them, that number percentage for give kept getting bigger and bigger and bigger. Bob (05:48): It’s gotten up. I’ve heard people getting up as much as high as 80%. The thing is, in that case, you’ve learned how much is enough, and we teach that, that you’ve got to understand how much is enough. Shawn (06:03): Exactly. Okay, so couple scriptures here. Bob (06:06): Yeah, yeah. Shawn (06:07): 2 Corinthians 9:7, “Each person should do as he has decided, in his heart, not reluctantly or out of compulsion, since God loves the cheerful giver.” Bob (06:17): Giving needs to be done from the heart and it’s volunteer. No one’s putting an ax to your head to do this, but it does release the selfishness. And then we mentioned the Malachi 3:10, which is a very, very good scripture. And there’s others, there’s scriptures throughout that talk about this in Matthew where Jesus was talking about when you feed the hungry and the poor, whatever you do for the least of these, you’re doing for me. Shawn (06:40): Exactly. Okay. That’s right. Alright, so our third category or section, Owe. Bob (06:44): Yes, that’s a big part. Shawn (06:47): Including debt, taxes, income…debt and taxes. Bob (06:52): That can be a huge part. I mean, like I said, taxes can be as much as 40 or 50%, but the average person, the effective tax bracket, and what I mean by that is the first 20,000 or 30,000 you make is a 0%, but that can be around 10 to 12% for the average person. But nowadays, remember when I first started in the financial business back in 1984 when I was getting into finance, and a mortgage should be no more than 25 to 28% of your income. But I’ve heard it’s gotten as high as 30 or 40%. Shawn (07:25): You mean the payment that you’re making of your monthly income percent. Bob (07:30): That’s correct. Shawn (07:30): Percentage, exactly. Bob (07:30): Yeah. So when we say owe, it breaks down into two areas, taxes and debt. Now you think about it, if your debt is too high, it’s going to affect your living and it’s going to affect what you can give. Shawn (07:43): That’s right. That’s true. Bob (07:44): But when we think about debt, that’s your mortgages, that’s your auto loans, college debt for a lot of people. And personal debt like credit cards, which the interest rates are just ridiculous. Shawn (07:56): Yeah. Well, on the taxes you’re talking about taxes on income and what the average rates could be. But if you actually add up the, okay, what are you paying from payroll taxes and then plus income tax, plus sales tax plus property tax plus for money going to the next generation, all the estate tax and everything else, I’m surprised we haven’t revolted sooner. Right. I mean about, our founding fathers, what was it like 1%? Bob (08:21): Our founding fathers would’ve never thought of this, but taxes, it is what it is. And scripture tells us they tried to trap Jesus in this, and he said, well, should we pay taxes to an ungodly government? And they came to… Shawn (08:40): They gave him a coin, right? A coin. Whose picture? “Caesars, they said to him, then he said to them, therefore, give back to Caesar the things that are Caesars and to God, the things that are God’s.” Bob (08:52): That’s Matthew 22:21 if any of y’all want to look that up again. Under the owe part, the rich rule over the poor. This is from Proverbs 22:7, “The rich rule over the poor and the borrower is a slave to the lender.” So the higher up in debt, and I love this old country boy that told me that one time, you’ve heard me say it. I’ve never seen anybody hurt by being debt free. Most people I know that are in their sixties now, they don’t have any debt. If they do, it’s a small amount on a mortgage. Very, very small amount. And we have a mortgage that we took out a couple of years ago at 2%. So I’m having a hard time going and paying that off when I can make double that in a money market. Shawn (09:37): And that’s probably for a different episode. But then you’re kind of getting into the, sometimes it’s okay to have debt, but like you said, it doesn’t hurt you. Bob (09:46): And debt’s not sin. Shawn (09:48): To be debt free. Bob (09:49): But you’ve heard us always emphasize that if you’re going to have debt, have it on an appreciating asset, not a depreciating asset, then you have the interest you’re having to pay, plus the asset is depreciating, which is an automobile. Shawn (10:00): Exactly. Alright, so number four and last one for today is grow. And we’ve got this around 10 to 20% of income. Bob (10:10): That’s where I like to see people. And there’s so many great areas nowadays to grow that money, savings, investments, tax deferred retirement plans like an IRA 401k, 403B. Shawn (10:23): Depending on the employer plan that you have. Bob (10:26): Right? Yeah. And as you know, many of these 401Ks or TSP plans, they’re matching what you put in, so you’re making a hundred percent return from day one. Shawn (10:37): Exactly. Bob (10:37): If you’re putting in 3% of your salary and they’re putting in 3% or 6%. I heard many even say 7% or 8% they’re matching. Shawn (10:44): So there’s your pro tip for today’s episode. If you are not currently at least contributing the amount that your employer will match, start doing that yesterday because you’re leaving money on the table, whether that’s a 3% match or 6, 7, 8%, or sometimes it’ll be 100% of the first 3% and the 50% of the next year. Just make sure you max that out because you’re just leaving money on the table regardless of returns. Bob (11:14): And there are scriptural reasons for growing money. Proverbs 13:11 says, “Wealth obtained by fraud will dwindle, but whoever earns it through labor will multiply it.” And another version of that is, “Whoever saves little by little makes it grow.” Shawn (11:27): Right. And then 1 Corinthians 16:2, “On the first day of the week, each of you is to set something aside and save in keeping with how he is prospering so that no collections will need to be made when I come.” Bob (11:40): So there you have it. You know why I did this time of year? Shawn (11:44): You mean around Thanksgiving and Christmas? Bob (11:45): Yeah, exactly. The new year. Exactly. So as you’re spending money, think there’s only four ways live, give, owe, grow; live, give, owe, grow. And you get that in your head and you start realizing any area of there that I go over is going to hurt another area. Shawn (12:01): It means something else or multiple other areas. Bob (12:03): It has to add up to a hundred. Shawn (12:05): Exactly. Bob (12:05): Yeah. If it adds up to more than that, there’s a problem. Shawn (12:08): Yep. Yeah, there’s an accounting error. All right. Well that’s it for today. Thank you so much for joining us. If you have questions, feel free to reach out to us www.christianfinancialadvisors.com. You can also call or text us at 830-609-6986. Thank you so much for joining us and God bless. [DISCLOSURES] * Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors®, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors® believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.