If our Christian stewardship is important to us, then the first thing we need to do is take care of ourselves and our family. The second thing we need to do is be prepared to take care of the rest of God’s creation. We also must understand how to manage our personal finances so that we are able to do both of these things. We should be able to reach a point in our lives where we can share in our abundance as God has shared in his abundance with us. The problem is, we have a hard time distinguishing the difference between needs and wants. And as more wants are designated as needs, we find our wallets and purses empty when it comes time for savings account deposits, and tithing.
When you hear the term, “economics,” what comes to mind? Economics is not the study of money, as some might think. Economics rather, is the study of people and the choices they make with the resources they have control over. Economics is our behavior in the attempt to prosper. Money is just the means of measurement. Since most of us don’t pay our debts by trading horses and cows, money is the means by which we satisfy our payment. Money is what we use to obtain those needs and wants. So money is what is scientifically studied to measure those choices. The economy then, is the sum of everyone’s choices to save, spend, give, take, invest, borrow, and lend. The economy is neither good nor bad, it is neutral. It does not influence us, rather we influence it. It simply represents our activities. The study of economics gives us tools to understand the cause and effect and how to fully utilize God’s abundance. Economics does not tell us what we should do, or what decisions to make. Our source for that is God. God gives us our agency to make our own choices. Those choices are part of the overall economy.
But most of that relates in general to the macro economy, and I want to focus more on the micro economy. The difference is, that macro is the money in everybody’s pocket, and micro is the money in your pocket. And that’s what I want to talk about today. The money in your pocket.
There is a term used in economics known as “opportunity cost.” Opportunity cost; is the highest valued alternative that must be sacrificed as a result of choosing among alternatives. In other words, it is what we give up to gain something else. Or in simple terms, we may also know it as, a “trade-off.” As an example, if you use one hour of your time to study the Bible, you have given up one hour of your time to watch television, or go for a walk, or sleep, or work on a project, or any other activity you could have done, or had the opportunity to do so, during that one hour time period. Opportunity cost is the option sacrificed.
Think for a moment what you do with your time, and then think what you could do with your time. Those are your opportunity costs. Part of economics is that the choice to do one thing is, at the same time, a choice that is made not to do something else. And of course, opportunity costs exist with the choices we make with our money. Suppose the town council where you live, announces to the community that they have voted to spend five-million dollars on a new community center for everyone to enjoy. They tell you how it will improve the quality of life for all who live in the community. And although it will probably improve the quality of life in the community, those who understand the concept of opportunity cost know, that if the center is not built, the resources could be used to build something else like a new library, a city park, or the re-pavement of much needed streets and sidewalks. What is being sacrificed to gain something else?
Think now for a moment about your family income, and how it is spent. It doesn’t matter whether you are single, married, retired, have a large family or a small one. Think about what you spend your money on. Obviously, we have needs that must be met. Our housing, transportation, food, clothing, health care; we must provide for our basic living needs. But, we also have wants. Wants are generally where we can really measure our opportunity costs. Because if we look at where our money goes, often we turn our wants into needs. We convince ourselves that what we want, is really what we need.
So what are we giving up to have the extra piece of pie, so to speak? It isn’t so much about what you would do if you had a million dollars. But it is more about what are you going to do with the ten dollars that you have in your pocket? Ten dollars could buy a Big Mac and some Biggie Fries and a Big Drink. Ten dollars could buy a gallon of milk and a couple boxes of cereal. Ten dollars could buy about four gallons of gas for your car. Ten dollars could buy a movie ticket and a candy bar. Ten dollars could be put in your savings account for a future purchase. What are the opportunity costs of ten dollars? Now multiply that by all the times you have every day, week, month, and year, where you made an unplanned decision to spend ten dollars on something you wanted on impulse.
So, how does a person deal with figuring out the best possible opportunity cost? How does an individual put their self into a position to control spending? One word: Planning. The Bible tells us, “The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to want. (Proverbs 21:5 NRSV)” “For which of you, intending to build a tower, does not first sit down and estimate the cost, to see whether he has enough to complete it? (Luke 14:28 NRSV)”
A really poor choice and lost opportunity, would be spending ten dollars you don’t have by making that unplanned purchase with a credit card. That’s spending ten dollars that you didn’t have in your pocket. Most people think that the reason they have financial problems is because they don’t make enough money. In reality, most financial problems are a result of people spending too much money. It is not about how much you make – but rather, it’s how much you keep. And having a household budget with a savings plan, that controls debt and helps you get rid of it, will help you with growing the amount you keep. Every person should have a goal to take 100% of their current income and live on 80%. Save 10%. And give 10%. This just isn’t a church philosophy, it’s a philosophy of a good ethical and prosperous lifestyle. It’s a plan. And it leads to abundance.
Our relationship with God is determined in great part by our choices and attitudes toward the opportunities that are in front of us — literally, every day. He has called us to be faithful stewards. Have we fully responded to that call? We need to choose to live a lifestyle that is within our means. It may be difficult at first if it is something that has not been a practice we are used to. It may feel as though we are sacrificing, but in reality we are creating opportunity. It’s not about “what would I do if I had a million dollars”…it’s about, “what am I going to do with the ten dollars I have.” Opportunity is knocking. Won’t you let it in?