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Financial Freedom Starts with an Honest Snapshot

Updated: Mar 21

Imagine that you have been away from home for a week on a business trip or family vacation, and the home has been unoccupied the whole week. No maid service, no house sitter, no next door neighbor checking on the house. It’s been empty for a week.

When you open the front door, it hits you.

That stench that tells you something is not right. What could it be? Did you forget to take out the kitchen trash? Did your leftovers in the fridge go bad? Did a squirrel get trapped and die in the attic? Was there a flood of moldy water in the basement?

You have a choice at this point. You can live with the stench; just ignore it and maybe put on a mask. Or you can search for the source of the stink and remove that source. Stench removal may be as simple as a trip from the kitchen to the trash can outside, or it can be as long and costly as a black mold abatement and restoration. Worse yet, you could have a half dozen different stinky sources! How long are you going to put up with the stench?

Before you make your choice, you must make a decision. Admit your home stinks. Be honest with yourself and break the news to your family (they probably already know).

Our personal finances stink (mine included). Blown monthly budgets. Student loan debt. Mortgages beyond our means. No savings. Credit card interest. Medical bills. The list goes on.

It’s easier to live in denial. We lie to ourselves and others that it’s not that bad. We’re embarrassed about our decisions that got us into this mess. Some of those decisions might have been sinful. Some were just ignorant. Some of our financial problems are legitimately not our fault. But others are the consequences of years of little irresponsible decisions or non-decisions.

If we really want Financial Freedom, it starts with our honesty and getting real – admitting to ourselves and to God (and our family, friends, employers, or others as appropriate) that our financial situation stinks. And that we are tired of that stench in our lives.

How to Get Real with your Financial Situation

Walk yourself through these four steps with God's grace and forgiveness rather than guilt and shame.

1) Admit WHAT Really Happened to Ourselves

Take a Financial Snapshot. This is a simple form that defines our current financial situation and how much it stinks. This is a starting line! Not a finish line. You can start right now. The Financial Snapshot summarizes the key indicators of our personal financial health, so that you can start to find the sources that stink:

a. Total Net Monthly Take Home Income – paycheck, bonuses, tips, commissions, gig work, dividends, hobbies, gifts

b. Total Average Monthly Expenses – giving, food, home (bills and expenses), vehicles (gas and maintenance), insurances, health (doctors and prescriptions), phones, clothes, kids activities (if any), entertainment (restaurants, fast food, snacks, streaming, event tickets, travel)

c. Total Monthly Loan Payments – home (rent or mortgage), back taxes, student loans, medical loans, credit cards, other loans

d. Total Savings – checking accounts, savings accounts, investment accounts

e. Total Non-Taxable Retirement Savings – IRAs, company 401(k), government 403(b)

2) WEIGH Your Finances Before God

We take our Financial Snapshot and literally weigh it against God’s truth revealed in the Bible. God weaves the scales concept throughout the Bible. In ancient times, up until just 100 years ago, scales were used to measure the weight of gold and silver in coins, as well as the weight of grain, corn, and other food commodities. There would be counter-balance weights precisely made to measure the coins and grains to prove honesty and set prices. God is much more concerned about our honest character and what we do with our money than how much money we have stored in the bank. Check out these Bible passages:

a. Ephesians 4:28 (NASB) The one who steals must no longer steal; but rather he must labor [honestly], producing with his own hands what is good, so that he will have something to share with the one who has need.

b. Proverbs 11:1-4 (NASB) A false balance [scale] is an abomination to the LORD, but a just weight is his delight. When pride comes, then comes dishonor, but with the humble is wisdom. The [honest] integrity of the upright guides them, but the crookedness of the treacherous destroys them. Riches do not benefit in the day of wrath, but righteousness rescues from death.

c. Deuteronomy 25:13-16 (NASB) (God is speaking the Law to the Hebrews) “You shall not have in your bag differing weights, a large and a small. You shall not have in your house differing measures, a large and a small. You shall have a correct and honest weight; you shall have a correct and honest measure, so that your days may be prolonged in the land which the LORD your God is giving you. For everyone who does these things, everyone who acts unjustly is an abomination to the LORD your God.”

At this point, when we look at the Financial Snapshot numbers, we should be able to tell whether or not our scales are balanced. We’re going to make our Financial Balance Chart. Get a piece of paper and fold it in half vertically (long ways). Draw a line down the crease. At the top of the left half column, write the title “Blessings.” Take the Total Monthly Net Income number and write it in the left column below the title. At the top of the right half column, write the title “Burdens.” Write down the Total Monthly Expenses number and the Total Monthly Loan Payments number. Then draw a line under them, add the two numbers together, and write the sum under the two numbers. Fold the paper in half horizontally (short ways). Draw a line across the paper fold. Now you have 4 squares. At the top of the bottom left square, write the title “Freedom Fund.” Under the title, write in the Total Savings number. At the top of the bottom right square, write the title “Future Income.” Under this title, write the Retirement Savings number.

Let’s look at our Financial Balance Chart and find out how bad it stinks. Weigh and compare the top two boxes, the Blessings versus the Burdens. Which one weighs more? If it’s the Burdens, then you are sinking deeper and deeper into debt every month, and that stinks. If the Blessings weigh more, that’s a good thing!

Now compare the Blessings to the Freedom Fund. Your Freedom Fund should be at least 6 times as much as your Blessings, so that if you lose your job, you have 6 months to find a new one. Of course, the more the better! But 6 months is the average job hunt, and it will cover most unexpected expenses like car repairs or home services. If your Freedom Fund is less than 6 months, that stinks.

Next compare the Freedom Fund to the Future Income. The Freedom Fund number should equal 5% of your Future Income number to be safe in retirement. After you turn 60 years old and you can access the IRA funds without a federal IRS penalty. Ideally if averages hold true, your Future Income investments should grow an average of 10% annually. Then you will remove 10% of the IRA money each year to live on while the core fund will remain into the future. If your Future Income isn’t 20 times your Freedom Fund, then that stinks. What do your three balances tell you?

3) CONFESS the Reasons to God and Others

Whatever the reasons for our financial stench, we need to honestly confess them to God who will forgive and forget them. At the same time, ask for financial knowledge and wisdom and where to find it. Not only that, ask for the self-control to make the tough choices to balance your financial scales. Accept God’s forgiveness and forgive yourself. If your financial choices affected your family, friends and coworkers, confess to them and seek their forgiveness and support.

4) DETERMINE You Will Change

Stop lying to yourself, cheating yourself and stealing from yourself! Are you stressed out about your finances? Decide to do whatever it takes to balance the scales back in your favor. You may not know exactly how at this point, and that’s all right. The important thing is to start the habit of being honest with yourself every day on every little purchase and financial decision. Ask God for help! Every month – every week – every day if you must, check the Financial Balance Chart. Don’t obsess over it, but use it as the Starting Line for your new journey to Financial Freedom. Update it every 3 months.

Once you have honestly looked at your personal finance situation and weighed it, you may not know where to start balancing the scales. That’s where a spiritual financial coach comes in!

A Finance Coach can help you set up a budget that works for you to control expenses, find opportunities to reduce spending, brainstorm ways to increase income, create and achieve your own savings goals, strategic investing principles, and much more. When you can release burdens and see God’s blessings, you’ll gratefully experience His favor in your life. If you feel overwhelmed by the stench of your burdens and scale balances, contact us for a free, no obligation Discovery Call. We can help you balance the scales and get to the point where you can not only provide for your future, but also share with others who have need.

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