There are many misconceptions and myths about money. Many are completely untrue, but some need to be seen through the lens of a faithful, biblical steward. Here are the top six money myths and a biblical perspective.
Myth 1 – Investing is the same as gambling, so as a Christian I shouldn’t invest.
Investing is not unscriptural. In the Parable of the Talents in Matthew 25, each man receives according to their abilities and is directed to manage their portions well. Each steward was then rewarded or punished based on how he used the money given to him.
Investing is also different than gambling. When you gamble, someone else has to lose in order for you to win. It’s the ultimate get-rich-quick scheme that preys on the poor and motivated by greed and covetousness.
An important distinguisher is between investment performance and investment purpose. Performance will vary based on our response to constantly changing factors beyond our control. Increased knowledge and discipline should lead to increased skill and better investment performance.
Investment purpose is a matter of intent. As you learn to invest money according to God’s principles, you’ll find that God will increase your opportunity to help other people. The true purpose of godly investing is to increase your assets so you can serve God more fully. If you are simply multiplying your money and storing your assets without a purpose, you’ll be guilty of hoarding, like the rich fool in Luke 12.
Myth 2 – I don’t need a savings account because I have a credit card.
This is a surefire way to get into debt. A savings account is crucial because you can’t always plan for emergencies and the unexpected in life. Instead of charging unexpected bills such as car repairs and home improvements on your credit card, dip into your savings and avoid debt altogether. The Bible doesn’t prohibit borrowing, but it does discourage it.
Myth 3 – I don’t need to pay my credit card off in full every month because I am building my credit.
A very common myth is that credit card companies want to see your ability to pay off balances steadily and over time. But this doesn’t do anything for your credit score! It just prolongs the amount of time you’re in debt and the amount of interest you are paying. If you use a credit card for cash back rewards or airline miles points, pay it off in full every single month. Commit to not be in debt, even if it’s for a short period of time.
Myth 4 – Buying a house is better than renting.
When you buy a house you are investing in a property that should increase in value over time. But for some people, renting may be a better option. This could be for a variety of reasons:
• if you expect to move in the near future,
• if you have a busy lifestyle that prevents you from taking care of home maintenance and landscaping,
• if you don’t have enough money to make a sufficient deposit payment on a house, and
• if you don’t have enough income to pay your mortgage off in less than 30 years.
Once you have a mortgage, it increases your access to debt. Some people borrow more against their house as it increases in value. While that may be cheaper debt for financing purchases, the additional interest you pay is significant.
The most common complaint about renting is that you’re just “throwing away money”. However, that doesn’t recognise the costs the landlord faces for rates, insurance, repairs and maintenance. Key factors in working out whether home ownership is better than renting are:
• how long you take to pay off your housing debt
• how much house prices increase compared with your income
Look online for rent vs buy calculators to see what the best option for you is.
Myth 5 – I don’t earn enough money to have a budget.
You should have a budget no matter how much money you earn. But if you live from one pay to the next or find that money is tight, it is vital for you to stick to a budget. Recording your spending allows you to know exactly where all your money is going so you can control it, instead of it controlling you.
Myth 6 – I’m young so I don’t need to worry about saving for retirement yet. OR I’m old so it’s too late for me to start saving for retirement.
Neither of these myths could be further from the truth. If you’re young, now is the most important time to start planning and saving for retirement. Compound interest is a beautiful thing that works for you…if you give it time.
And it’s never too late to start saving for retirement. It would be better to have something saved for retirement than nothing at all. Even if you can live on New Zealand Superannuation alone, when you have savings, you can leave an inheritance for family or a gift to your church or ministry. Stewardship is about managing your life in a way that gives you the freedom to do what God has called you to. If you’re stressed or anxious about money, surrender your circumstances to the Lord and ask Him for direction.
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