Building Wealth with Biblical Wisdom - By Luke Petrolekas

At September's Theology on Tap, Peter and Jessica Galopoulos provided an invaluable introductory crash course in good financial stewardship. Money is as prevalent in our society as it was to the Jewish tradition of the old testament and the Roman Empire in Jesus's time. These experiences and the Wisdom of Christ on money are contained within the verses of the Bible and provide us guidance on financial management, prudence, and charity. Learning these key financial concepts that are easy to understand lead to the overall message for their talk: we have the duty to properly manage the money that God has entrusted us with.

The first rule is to be a master over your debt. Credit card debt, payday loans, student loans, and other financial instruments that have high rates of interest can cripple your future and your credit score. You must prioritize paying those off first. An exception is buying a home because you gain an asset (a home or condo) in return for your payments and it is advisable to have money saved for a down payment. Poverbs warns that “the borrower is the slave of the lender” (22:7) because instead of working for your own future you are slaving away by paying your debt to someone else without any return to you.

Instead you have to pay yourself first. Coined originally by David Bach in The Automatic Millionaire, paying yourself first means saving your money by making it automatic. Your bank can automatically deposit money from your paycheque into a savings account. A metaphor of a diligent ant in Poverbs 6:6-11 who saves food over the summer to survive the winter while the lazy go hungry emphasizes this advice. Over a lifetime, small savings could translate into well over a million dollars at even modest rates of interest. Time is the key factor. Starting early leads to better results.

The corollary to paying yourself first is budgeting. Get a handle on your expenses by listing them and seeking for more affordable solutions. Bach considers this the latte factor, little expenses which add up and become major expenses that could otherwise be used for paying yourself first.

Peter and Jessica recommend a three account structure:

- An emergency fund with 3 to 6 months of income, used to pay for unanticipated expenses and which should be stored in a savings account so you have immediate access to it.
- A short-term savings fund for anticipated expenses such as a roof or new appliances, and should be made of GICs and high quality shorter term bonds.
- Long-term investments for retirement and other financial goals made up of stocks and bonds, mutual funds and ETFs, and more complex financial instruments. These are mostly RRSPs and TFSAs.

Peter and Jessica also emphasized the importance of the appropriate level of insurance to your needs, including term life insurance (when you have dependents), tenant and home insurance, and car insurance. Insurance is meant to manage unforeseen risks, and helps provide a stable foundation instead of one built on sand.

The final point is about tithing, or planned giving of your wealth to charity. A lifelong commitment to good financial habits will produce wealth, but Christ said to the rich man that he should sell everything he owned and follow him. The rich man left with a heavy heart as he had become too attached to his wealth (Matthew 19:20-22). Tithing is a way to distance ourselves from our wealth and support those less fortunate than ourselves. Find a charity that speaks to you, such as St. Vincent de Paul, and you can arrange an ongoing giving plan. Church donation envelopes are another way. Additionally, charitable donations are considered tax deductible by the Income Tax Act, meaning you save money on your tax bill or potentially get more money in return.

Money is an important tool: understanding the fundamentals and applying Biblical principles of financial management, prudence, and charity will result in a better future for you.

About the writer:

A Faith Connections volunteer for three years, Luke Petrolekas provides the technical expertise in video and audio for Faith Connections Theology on Tap. He also shares an interest in business and capital markets, and is familiar with retail investing. His favourite book on the subject is A Random Walk Down Wall Street.