Financial bondage can result from a lack of money and overspending. It also can be caused from the misuse of an abundance of money. Some families have enough money to be undisciplined and get away with it (financially speaking). True financial freedom requires us to be good stewards and make the most of every dollar.

An essential part of obtaining financial freedom is living within your means, or spending no more than you make on a monthly basis. This was the normal way of living and thinking only a generation or two ago. Today, however, society, advertisers, retailers, and peers pressure you to live beyond your means and to use borrowed money to provide normal living expenses. If you have a significant salary and expect it to increase, it is hard to say no to easy credit.

But if you consistently spend more than you earn, then you are making your present financial situation difficult and your future miserable. After you consistently spend less than you earn, you begin to make significant strides toward financial freedom.

A budget is the best tool to help you spend less than you earn. It is rare to find a person in financial difficulty that maintains a budget. A budget is simply an income and spending plan. It is simple in theory but challenging in practice. Remember that a budget doesn’t constrain you; it helps you maximize spending in each area.

The three levels of spending

You must have the self-discipline to control spending and keep needs, wants, and desires in their proper relationship. Needs, wants, and desires can be incorporated into your budget.

Level One: Needs

“If we have food and covering, with these we shall be content” (1 Timothy 6:8).

Needs are the purchases necessary to provide your basic requirements, such as food, clothing, lodging, medical coverage. In our culture we easily mistake wants for needs: “I need that.” We must learn how to discern true needs and admit wants. We also must take responsibility for purchasing needs wisely. If your child has outgrown his or her shoes, you have a wide choice of styles, colors, and prices from which to choose. Find something that fits your budget.

Needs comprise the greatest portion of your budget. Commit your needs to the Lord, be obedient to His Word, follow His principles, and watch Him provide for your family.

Level Two: Wants

“Your adornment must not be merely external—braiding the hair, and wearing gold jewelry, or putting on dresses; but let it be the hidden person of the heart, with the imperishable quality of a gentle and quiet spirit, which is precious in the sight of God” (1 Peter 3:3-4).

It is not wrong to have material wants; rather, it is quite natural. The trouble comes from wanting too much, wanting too soon, and being unhappy if we can’t have all we want. Admitting wants is an important step toward creating a balanced, workable budget. Wants often involve choices about the quality of goods to be used, such as steak versus hamburger. If your budget allows, schedule for wants that would bless your family; but remember that external beauty and luxuries are not what bring lasting happiness!

Level Three: Desires

“Do not love the world nor the things in the world. If anyone loves the world, the love of the Father is not in him. For all that is in the world, the lust of the flesh and the lust of the eyes and the boastful pride of life, is not from the Father, but is from the world” (1 John 2:15-16).

According to God’s plan, these are choices that can be made only out of surplus funds, after all other obligations have been met. Long-term goals and dreams should be committed to prayer and scheduled into the budget as possible.

See the following examples to clarify the differences between needs, wants, and desires.

Needs: New clothes from discount store or used clothing store
Wants: New clothes from department store
Desires: Designer clothes, custom tailored

Needs: Tuna
Wants: Shrimp
Desires: Lobster

Needs: Used family car or public transportation
Wants: New family car or used luxury vehicle
Desires: New luxury vehicle

God cares about the house you live in, the car you drive, where you work, whether your wife should work, where your children attend college, and even the food you eat. Have you ever prayed about those things? If you haven’t, how can you expect to know what God’s will is for your family?

Establish priorities with your family, particularly your children. When your children approach you with a request, help them understand the difference between needs, wants, and desires.

If it is a need, it should be supplied; however, if it is a want or a desire, perhaps your child should earn it or request it for a birthday. When children learn that they must earn some of their wants and desires, they make quick adjustments. Comic books are weighed against the value of a new baseball bat, a cheap plastic toy against a new bicycle.

Be consistent and fair but firm. Just as God will not grant you whims that work to your detriment, you must hold the same position with your children. As is true with teaching anything, you as the teacher will learn more about needs, wants, and desires for your own life than the student—your child.

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The big picture: the divisions of income

Before budgeting, you must first recognize the divisions of income.

1. The first part belongs to God. It is returned to Him as a tithe in recognition that He owns all we have. We are merely stewards (managers).

“Will a man rob God? Yet you are robbing Me! But you say, ‘How have we robbed You?’ In tithes and offerings” (Malachi 3:8).

2. Then, of course, the government wants its share, in the form of taxes.

“He said to them, ‘Then render to Caesar the things that are Caesar’s; and to God the things that are God’s” (Matthew 22:21).

3. The portion available after tithe and taxes is termed Net Spendable Income (Gross Income minus Tithe and Taxes equals Net Spendable Income). From the Net Spendable Income, you meet your family needs, such as Housing, Food, Medical, and so on.

“But if anyone does not provide for his own, and especially for those of his household, he has denied the faith and is worse than an unbeliever” (1 Timothy 5:8).

4. Then, you must fulfill your commitments from past overspending. God says to pay your debts.

“The wicked borrows and does not pay back” (Psalms 37:21).

5. Faithful management will yield a fifth portion: a surplus. The creation of a surplus should be a major goal for the Christian. This is the surplus that allows us to respond to the needs of others.

“At this present time your abundance being a supply for their need, so that their abundance also may become a supply for your need, that there may be equality” (2 Corinthians 8:14).

Even if a family is not in debt, to maximize the surplus, their finances should be budget controlled. In addition to responding to the needs of others, it’s the surplus that provides the flexibility to meet emergencies without credit. That surplus can also be used to invest and multiply your assets.

Motivational reminders

Why is it hard to have financial self-control? Here are the obstacles to good planning and budgeting.

  • Social pressures to own more “things.”
  • The attitude that “more is better” regardless of the cost.
  • The use of credit to delay necessary decisions.
  • No surplus available to cope with rising prices and unexpected expenses.
  • Offsetting increases in income by increasing the level of spending.

Adapted from Family Financial Workbook by Larry Burkett. Published by Moody Press. Copyright © 1979, 1990, 2000 by Larry Burkett. Used with permission.