7 Steps for Money Management in a Christian Marriage
Money problems are one of the main reasons marriages fail and, in this session, we will provide you with:
- The core reasons for money problems;
- The biblical basis for managing our money; and
- 7 steps to resolve money problems:
- Identify the facts – Income and Expenses
- Prayer – Confession and Repentance
- Agree the Action Plan
- Establish a Budget
Topic 1 – The Core reasons for Money Problems
At its simplest, money problems occur because we spend more than we receive. This may occur because of activity within our control or outside our control or a combination of both.
Activity within our control:
- Spending too much on essentials (e.g. food, clothes etc.) and/or non-essentials (e.g. items for hobbies, multiple vacations, etc.);Losing income e.g. getting oneself fired from a job;
- Poor stewardship e.g. credit card debit, no budgeting etc.
- Irresponsible spending e.g. gambling.
- All of the above.
Activity outside our control:
- An unbudgeted expense e.g. an illness, accident etc.
- Being laid off at work
- Exceptional item e.g. a theft, flood etc.
- All of the above.
Topic 3 – 7 steps to resolve money problems
1. Identify the facts – Income, Expenses and Debt:
Get a clear picture of your financial position today. Write down:
- Income – All the regular income that is coming into your home.
- Expenses – Every monthly and other expense you can think of (this might include quarterly or annual payments).
- All that you owe.
2. Prayer – Confession and Repentance:
Pray with your spouse over your financial position. Thank God for all He has given you and acknowledge that He is your source of contentment and fulfillment. Confess if you have been a bad steward of your finances, repent, by acknowledging you are going to change your habits going forward and ask God to give you the wisdom and strength to properly manage your money in the future.
3. Agree an Action Plan:
Identify how you are going to manage your income and expenses going forward. Be realistic and very conservative. It’s often harder than you think!
In line with your confession and repentance, you may have to have a radical change in life style to properly manage your money.
Income – Identify anything you can do to increase your income e.g. ask for a raise at work, get a better job, additional work e.g. from home etc.
Expenses – This is probably where you will have the most impact. Separate the essentials (food, rent, utility bills etc.) from the non-essential (hobbies, excessive clothing, vacations etc.). Identify how you can make savings in both lists. Maybe you can cut out all of the non-essentials until you get on top of your finances?
Debt – Identify a plan to pay off all debt where you are paying high interest rate/s e.g. credit cards, pay day loans etc. Maybe you could do this by refinancing your mortgage (ideally at a lower interest rate), taking out a bank loan (at a lower interest rate) or from another source. If you can’t refinance, identify and agree how quickly you can pay off the debt from existing income and by reducing your expenses. Plan to get down to only one or two credit cards on which you pay off the full balance every month i.e. no interest payment.
The goal is for you to be managing your money and not your financial problems managing you!
Decide which one of you is going to manage the household finances (whoever is most proficient with numbers/managing money). Of course, whoever is not managing the household money should have access to see the numbers at any time.
4. Establish a Budget:
This is a very important step. Ideally, do this in an excel spreadsheet and list everything. In the top part of the spreadsheet list all your income and, underneath, your expenses. You are going to list everything you agreed in your plan – as much detail as possible.
The total of your expenses is your family budget. When you take your budget from your income figure you should have a surplus, in line with the plan you agreed in step 3.
Initially, I suggest you do this week by week. After you start to get in control of your finances you can do it on a monthly basis.
The rule is that you must not exceed your family budget. If one expense goes up, then you have to find savings in other expenses to keep within the budget. It’s wise to build a 5% or 10% contingency cushion in your budget – this is an amount allocated to exceptional items. If it’s not used, you will have the encouragement of doing better than your original plan!
5. Monitoring :
This is another critical step. You must record in your spreadsheet the actual income and expense for the week/month. Unless you’re on commission, your income will probably not change very much. However, your expenses need very careful monitoring. List everything against the budget number in the left-hand column – food, gas, electricity, etc. Credit/Debt cards – keep a very detailed record of how you have used your cards. You don’t want a surprise at the end of the month and, don’t forget interest charges. It may be prudent to stop using some or all of your cards for a while, to ensure you keep tight control of your spending.
Both be accountable for your part of the budget. Remember, you’re working as one – if one does well, you both do well. Encourage each other – make it fun. You are going to get on top of your finances. Your finances are going to serve you and they are no longer going to be your master.
Agree the review period e.g. every week, month etc. Have a celebration and thank and praise God as you start to get on top of your finances.
If you are not keeping to your plan, identify exactly why not and sit down together to discuss what went wrong and how you are going to change things going forward.
Make the whole process an adventure. You have a mission and, by God’s grace, you’re going to conquer an issue that destroys many marriages.
Recognize it’s going to take time, it will need some sacrifice but you are going to come out much stronger together.
Cover the whole process in prayer and treat each other with love and respect at all times.