It all goes back into the box
It would be tempting to jump straight to the more practical (dare I say sexy?) personal finance questions. We could discuss investing philosophy, asset allocation, safe withdrawal rate, tax optimization, buying vs renting, or saving for college. (Don’t worry – my plan is to engage all these topics and more eventually.) But we can’t start there. We need to first establish a theologically grounded understanding of the purpose of money.
It's not yours
It will be like a man going on a journey, who called his servants and entrusted his wealth to them (Matthew 25:14).
The first lesson I want to teach my kids about personal finance is one that I am still trying to teach myself. My assets aren’t really mine at all – everything that I have really belongs to God. In the famous parable of the talents, Jesus says the Kingdom of Heaven will be like a man who leaves on a long journey and entrusts his wealth to his servants’ care while he is gone. The servants are the fund managers who are tasked with investing the money wisely. But make no mistake – the clear expectation is that they return the original capital plus earnings to the master at the appropriate time.
And so it is for us. We are stewards of God’s resources that he has entrusted to us. Like the servants, we are to leverage our individual abilities and “put his money to work”. When you are the caretaker of someone else’s things, it changes how you think and behave.
You can’t take it with you
Everyone comes naked from their mother’s womb, and as everyone comes, so they depart. They take nothing from their toil that they can carry in their hands (Ecclesiastes 5:15).
The ancient Egyptians used to put riches in the sarcophagus with the mummy so the dead person could have wealth in the afterlife. It doesn’t work like that.
My junior high school youth pastor once asked, “Who here has played Monopoly?” Everyone had. “What happens after every game?” Silence. “It all goes back into the box.” Simple, obvious, but profound. How many people live their lives as if they somehow thought they could take their brokerage account with them?
Money is worthless in and of itself
Then he said to them, “Watch out! Be on your guard against all kinds of greed; life does not consist in an abundance of possessions” (Luke 12:15).
Ebenezer Scrooge reminds us of this in the beginning of A Christmas Carol, as he sits in misery surrounded by his many gold coins. By wealth he is the richest person in town – but by all important measures he is the poorest. Or consider one of my favorite movies from childhood: Robin Hood (Disney’s cartoon fox version, of course). As Prince John stews in anger about being unable to catch Robin Hood, his advisor “Hiss” (the snake) suggests, “I know! I know! You haven’t counted your money for days. It always makes you so happy.” The comment is laughable – while ‘PJ’ has endless gold, he doesn’t have an ounce of happiness.
What, then, is the purpose of money?
Money is only useful in that it can be spent.
If you are a natural spender, you’re probably saying, “duh!” But hold off before you rush over to Amazon. If you are a saver (like me), this proclamation probably makes you slightly uncomfortable.
Both spenders and savers can clearly err. I’ve known people who take extravagant vacations while simultaneously burdened with incredible debt. And I’ve seen wealthy people grimace when paying for groceries to eat. There is a better way.
There are two primary dimensions along which money can be spent:
When: Money can be spent today or saved to be spent in the future.
Who: You can spend it yourself or give it away for someone else to spend.
Putting this together, we’re left with 4 macro options of how to use our money:
Possible uses of your money
Most of us will find that our financial lives are a blend across all four of these quadrants. As in corporate strategy, our allocation of capital across these choices should reflect our mission, values, and our life strategy. The exact details will look different for each of us and vary over time as our circumstances and life stage changes. However, throughout this journey we can be guided by key truths learned from Scripture and personal finance to ensure we are leading strategic, generous, efficient, and enjoyable lives.
Conclusion
If you think that money is the end game, you’ve got it all wrong. Money is simply an enabler (albeit a very powerful one). But what kind of life should it enable? We’ll explore that in the next post.
Postscript
* Within the 4-quadrant framework above, there are interesting things to explore across other investigative dimensions as well. We’ll need to ultimately engage what we spend money on (e.g. physical things, experiences, how much house to buy), how we execute the plan (e.g. donor advised funds, credit cards), where we spend it (e.g. which organizations), and examining our hearts on why we do what we do.
**You might argue that money has value in that it can provide security, and this is different than the value it enables by being spent. While I agree that money can provide some security, I think it does so precisely because we know that (if necessary) it can be spent to buy the things that we need or want.