The Misconception of Managing Money
In my last article, we looked at the reality of pursuing financial freedom to be a blessing in God’s Kingdom. Today, we’re going to analyze some misconceptions in the matter of money management. We will succinctly focus on the following seven money management fallacies to help you evaluate your understanding of money.
Budgeting. The first misconception revolves around the issue of budgeting being too much work. However, having a budget does not have to be inhibiting. Budgeting elevates the worry of money by helping you reach goals and create financial stability. One has to ask, “am I willing to develop a plan or continue what I have been doing in hopes of getting another result?” The more you practice the healthy habit of budgeting, the easier it will become over time. Initiate the elimination of financial anxiety by creating a budget today. Proverbs’ verse says it best, “where there is no plan, the people perish” (Proverbs 29:18).
Retirement. It is never too early to start saving for retirement. Whether through a 401(k), 403(b), a ROTH IRA, or a saving accounts, make sure you are putting something aside for the future. The famous adage states that time waits for no one, so why start something tomorrow you can start today. The more money you economize in your youth, the better hope of sufficient retirement savings due to compound interest (see definition). Albert Einstein called compound interest the eighth wonder of the world. Therefore, if your employer matches retirement funds, make it your goal to take advantage of the “FREE” money. Planning for retirement needs to be a priority, and today is the best present you have toward that end. Think of retirement as a mindset and not just an age you have to reach. What do you envision yourself doing in retirement? Here’s a great resource to get you going: visit www.chrishogan360.com and learn how to dream in “High Definition.”
Minimum Payments. Another misconception about money management suggests minimum credit card payments as being sufficient to reducing debt. However, repaying your credit card with minimum payments is never enough. According to www.cardrates.com, the household credit card balance merges from $6,000-$8,000. The average credit card interest rate is 16%, with the highest interest at 36%. Paying off your credit card balance as soon as the statement is calculated is one step that will help raise and build your credit score.
Money Equals Happiness. The assumption that states making more money will provide happiness is deceptive. One major problem resulting from our sinful nature is that people who earn more money desire more things. While making more money can elevate some financial burden, it is not the solution to your money problem. Changing one’s money habit(s) is necessary to allow your money to grow and thrive. Money might make you feel comfortable in the short term, but chances are you will adjust to your new wealth quickly.
Saying No. Saying “no” to something you desire does not mean “no” forever. Financial sacrifices in the present allow more significant gains and gratification in the future. Nonetheless, delayed gratification is still rewarding. Do not be too concerned with what you can’t have now because this too shall pass. Create a plan and find a way to achieve your goal. Saying “no” to something today allows you to say “yes” later. Remember, a sacrifice today is an investment for tomorrow.
All By Myself. You are not alone. Everyone has made poor financial decisions at least once in their life; no need to dwell in the past or compare yourself to others. Having identified your problem, take realistic steps to resolve it. Don’t let today’s circumstances define who you are but let them refine you to a renewed version of yourself. Remember, your journey is a process and will take some time. As a child of God, you will receive strength from His Spirit to endure as you go through your valley experiences. A word of caution: comparison and the defibrillating need for approval will cause you to minimize your God-given potential. Guard your heart against that mindset by resting on the words found in Jeremiah 29:11, “For I know the plans I have for you,” declares the LORD, “plans to prosper you and not to harm you, plans to give you hope and a future.”
The Comparison Trap. One of the most crippling misconceptions believers face deals with the vice of comparison. Such an attitude leads to guilt and shame, which is from the enemy. Society shouldn’t dictate what your life is in actuality. Against popular belief, you don’t have to own a home, car, or even have children by a certain age. Too often, people compare their lives with their peers and even what they see on social media. Unfortunately, we live in a society that capitalizes on appearance, creating a sense of insecurity and inadequacy. Romans 12:2 says, “Do not conform to the pattern of this world, but be transformed by the renewing of your mind. Then you will be able to test and approve what God’s will is—his good, pleasing and perfect will.” There is nothing wrong with desiring the finer things in life, but it needs to be within your God-given means. Begin practicing gratitude and ask the Lord to help you be content with what you already have.
As you begin to renew your mindset about your financial journey remember Roman 8:28 “we know that in all things God works for the good of those who love him, who have been called according to his purpose.”
Charles Financial Solutions