16 July 2014
Financial Authority: Part 1 - No Personal Financial Ignorance
Posted in Spiritual
Operating in the financial place that is outlined for Christians in the Holy Bible will require that we first put to an end all instances of personal financial ignorance.
No disrespect is intended here. Let’s break it down.
Ignorance is having a lack of knowledge or information. Ignorance is in no way related to intellectual capacity as is often implied in our conversations. Ignorance is being unaware, unfamiliar, inexperienced and unenlightened. Ignorance can exist because of isolation, limited exposure or more deliberate measures. For this reason I believe that in today’s overabundance of information, being ignorant is a choice.
Personal financial ignorance can be described as being uninformed of the details of your own personal financial situation. Is that possible? Sadly I must say that it is possible. This is a clear measure of financial immaturity that I’m praying will be resolved for all Money reVerse followers starting with this blogpost!Let's go to the verses… Know the state of your flock
Be diligent to know the state of your flocks, And attend to your herds; For riches are not forever, Nor does a crown endure to all generations. When the hay is removed, and the tender grass shows itself, And the herbs of the mountains are gathered in, The lambs will provide your clothing, And the goats the price of a field; You shall have enough goats’ milk for your food, For the food of your household, And the nourishment of your maidservants.
Proverbs 27:23-27 NKJV
These scriptures, located in the Bible book of Proverbs, served as instruction to those in biblical times to be aware of what’s going on with their flocks and herds. Let me paraphrase these passages:
Having riches at one point in your life does not mean that you will have them forever. If you don’t consistently take care of the money that you have, is it very possible that your future generations will not benefit from it. (As noted throughout the Christian Holy Bible, the family lineage and importance of making plans for future generations is very important.) If you take care of what you have, you can have enough assets to cover your needs and/or be sold for lot of money. Guess what? By being consistent and particular to carefully manage your financial resources, you can take care of everyone in your household along with the hired help that you’ve engaged! All of this if you will be relentless about knowing what’s going on with the money you have today.
In biblical times an individual’s wealth was determined primarily by their cattle inventory. Here’s an example of how one rich man, Job, was described.
There was a man in the land of Uz, whose name was Job; and that man was blameless and upright, and one who feared God and shunned evil. And seven sons and three daughters were born to him. Also, his possessions were seven thousand sheep, three thousand camels, five hundred yoke of oxen, five hundred female donkeys, and a very large household, so that this man was the greatest of all the people of the East.
Job 1:1-3 NKJV
The modern-day adoption of the instruction of being diligent to know the state of your flock is to be diligent to understand your personal finances. To take this further, to know the state of your finances is to know the details of your personal fiscal matters at a particular point in time.
To know the state of our financial matters we should be able to speak intelligently as we answer at a minimum the following 7 questions about ourselves:
- How much money am I expecting to earn this year? How is this compared to what I expected to earn last year? How am I tracking to this goal at this point in time?
- How does my monthly income compare to my monthly expenditures? Am I living in deficit or surplus? (When income and expenditures are equal we are living “on the money”. This rarely happens but it is possible...)
- How am I handling the monthly deficit or surplus identified in question #2?
- How much debt do I have? How does this compare to my income (debt to income ratio = debt / income). How does this debt to income ratio compare to my debt to income ratio this time last year?
- How much savings do I have? How does this compare to my savings this time last year?
- What is the value of my personal assets (real estate, automobiles, stocks, stock derivatives, bonds, mutual funds, investments, collectibles, business valuation if sole proprietor or partnership)
- What is my financial credibility rating (credit score)? How does this compare to my credibility this time last year?
Answers to these questions will give you the state and condition of your current personal finances. We’re not addressing future plans, goals and aspirations at this point. Current state only in this first step. To take this a bit further, every 6 months I prepare a statement of my financial condition that I could deliver as an elevator speech. But I don’t share it as a speech and never discuss this on an elevator. This is for me. Likewise your personal financial condition is for you...
How do you get to knowing the state of your flocks? A major key to achieving the financial headship that is outlined for us in the Christian Holy Bible is to consistently track and manage your weekly and monthly income and expenditures. From that consistent tracking, a summary of key data points will get you the data that is needed.
The scripture didn’t instruct us to know that state of our flocks and herds only when they are doing well. If it's yours, you should know it’s condition - even if it isn’t good right now. This is the foundational step for getting our finances aligned to Christian biblical scripture.
We're going somewhere but we've got to get our ticket here!! If things have been rough for you recently, it will take courage to sit down and do this. You have what it takes! Just by completing this step things are already getting better!!
Can you commit to getting a detailed understanding of your financial condition within the next 14 days or sooner? I'm doing it. Join me!