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Money: It doesn't come with instructions

People buy things they don’t need with money they don’t have to impress people they don’t like.

Money is a resource that comes with the instructions not included. Most people I know have never been taught how to manage money. For most people who I’ve worked with, when I ask about their budget – how much they make and how much they spend, they usually look up in the sky and come up with a rough guess, and that’s the extent of their financial planning analysis. It’s at that point that I roll up my sleeves and force them to roll theirs up as well. For this lesson, we’ll discuss how to manage your money by using the acronym DEAL.

D - Determine what your goals are

Without a vision for your finances, you will move without aim and intentionality. This makes you vulnerable to foolish financial decisions. There are several things you have to think about that have major financial implications like buying a car, getting married, buying a home, saving for college, paying off debt, starting a career, travel, planning for retirement, or relocation. I recommend speaking with/hiring a financial planner, preferably someone with a designation EA (Enrolled Agent), CFA (Chartered Financial Analyst), CFP (Certified Financial Planner) or CPA (Certified Public Accountant), who can help you think through the implications of major purchases like this and help you make a plan. You will keep yourself safe by surrounding yourself with good counsel.

E - Establish an emergency fund

A rule of thumb in financial planning is having an emergency fund. An emergency fund is an account that is used to set aside money that is needed in the event of a financial emergency like a major expense, loss of a job, or a serious illness/injury. It should be about 3-6 months of necessary expenses (housing, food, transportation including maintenance, and any expenses that are needed in the event of a layoff) that you place in a savings or money market account at your local bank or brokerage. This is a liquid account that is not invested in anything risky. To be liquid means the funds can be accessed quickly with little to no loss in value. Later in this chapter, there is a budget to help you determine what those monthly expenses are.

A - Automate your finances

If possible, set up your bank account to have money taken directly out of your paycheck for your savings and your bills. The more automated your life becomes, the less work you have to do in figuring things out and having to live impulsively. Having your check deposited every week, biweekly, or whenever you get paid for many people is a dangerous time. It’s a battle. The worst time to prepare for a battle is during the battle. That’s why you should automate your finances to make the process easy. Create a system using excel or a notepad and set up your fixed bills and savings to be taken directly from your account. There are tons of banks that make this possible. If you are not able to automate, you have to get your budget tight and follow it closely when you get your check. See the budget at the end of this chapter.

L - Live below your means

This might be one of the more difficult things to do in our culture. I want to give you two things to consider.

1. Track your income and expenses using your budget. Cut back on your expenses if you can. See the conversation on budgeting below.

2. Don’t fall victim to the culture of consumerism and materialism. Identify what a want is and what a need is. See the conversation below.

Marketing, Materialism, and Consumerism

Instead of focusing on the mechanics of finance, we need to address the behavior patterns around money that exist in our society. One of the main ways to address these behavior patterns is to identify the difference between a need and a want. A need is something that is necessary for survival. If the need is not met, one will not be able to function effectively and efficiently in society or can become vulnerable to disease or even death. A want is an optional desire for something immediately or in the future. The word optional means one has the ability to live without it. It’s easy to get the two mixed up when there is a strong desire. The questions to always ask to differentiate between a want and a need is:

1. Have I lived without this before?

2. Can I live without this now?

We live in one of the most marketed to cultures in the history of the world. Marketing, like commercials and Internet ads, constantly seduces us to feel that we will be unhappy or incomplete if we don’t have this new product or that new upgrade in technology, transportation and/or fashion. Every few months, there’s a new and improved version of something. Marketing and advertising make you want things you didn't even know existed. They want you to be unhappy because happy and content people don’t buy things. I recently went to the Apple store to get a battery for my iPhone. The salesman looked at me like I had three heads. He was probably expecting me to buy a new phone because that is the trend in the Apple store. Instead of walking out with an $800 phone, I walked out with an $80 battery. It’s about function over form. Performance and purpose mean more than looks and appearance. When most people hear this story, they laugh because they think it’s weird but if decisions like this are made continuously over time in different dimensions of life, the payoff will be substantial. It’s hard to go against the grain, but when you have a solid plan and a strong and motivating vision, you can do it more easily. My phone may not be as flashy, but the financial payoffs are more beneficial. Unfortunately, most people are not aware of how deeply they are influenced in this way, and if they are aware, the social pressure is too intense for them to go against it. Materialism and consumerism have dominated our culture. Materialism occurs when you place material comforts and physical possessions above your values. Consumerism occurs when you become obsessed with the acquisition of goods. Materialism and consumerism in our culture are like undiagnosed diseases. Most people won’t call it a disease. They say things like:

-“I like nice things.”

-“You want to buy quality things that last” – Sometimes this is true, but financial mismanagement is common with this kind of thinking.

-Here’s the best one: “You only live once.”

These statements are often code for I know I shouldn’t be buying this but I will anyway. I call it a disease because they adversely affect people’s lives and don’t go away until you diagnose and treat it. As a financial planner for the last several years, I’ve had the chance to witness people’s financial management practices – friends, colleagues, and clients. The results of consumerism and materialism have been massive credit card debt, broken relationships due to unpaid personal loans, car repossessions, foreclosed homes, divorces from lack of unity on the way to manage money and more. For most people, it goes something like this. Money comes in. Money goes out until there is no more money left. Then bills come, and they run all over the place wondering where the money went. The good news is - IT CAN CHANGE, but it will take courage.


Instead of trying to talk about complex investment planning with stocks, bonds, mutual funds, real estate, currency exchange, bitcoin, commodities, or entrepreneurial endeavors, I want to discuss a basic tool that most people need to get on the road to having a solid financial foundation – A BUDGET. Establishing a working and effective budget is about 10% technical and 90% behavior. It’s less about the money and more about your discipline and ability to commit to a plan. Regardless of how much money most people make, there will always be a strong temptation to spend above their means. It’s just human nature. Whatever is not intentionally managed will get out of control. Knowledge, vision, and discipline are needed in money management. So in this section, I want to give you a framework to set up your budget. It’s a straightforward tool that can change your life. Regardless of where you are in life, if you don’t manage your expenses the right way, they will get out of control and keep you from building up savings for other goals. It doesn’t matter if you are a high school student or a CEO of a company, everyone needs to learn how to budget to get a handle on their finances. Someone told me that a budget would keep them from living flexibly. I told the person without a budget they will probably lose their flexibility later on when excessive debt and unpaid bills keep them from having peace. Life is so uncertain. The least we can do is precisely plan what can be made clear. Learn this art of budgeting, which is telling your money where to go instead of wondering where it went. It’s an intentional plan that is used in directing your income and naming your expenses. See the sample monthly budget.

Sample Monthly Budget

Take-Home Income (After taxes)

Source 1: Job $2000___

Source 2: ________

Total Income: $2000___

Less: Tithes/Offerings $200____

Less: Savings $200____

Net Cash Available $1600_­­__

Fixed Expenses

Rent/Mortgage $500____

Auto Loan/Bus Fare ________

Auto Insurance $50_____

Credit Card Payment $400____

Water/Gas ­$50_____

Electricity $50_____

Medical/Life Insurance $50_____

Total Fixed Expenses $1,100____

Variable Expenses

Auto Repairs/Maintenance $50____

Lunches ________

Groceries $200____

Recreation/Cable TV ________

Laundry/Dry Cleaning ________

Telephone $100_____

Gasoline $100____

Clothing ________

Grooming (Hair/Nails/Etc.) $50_____

Vacation Reserve ________

Other: ________

Other: ________

Other: ________

Total Variable Expenses $500____

Total Expenses $1,600___

(Deficit) Cash $0______

Pick up your notebook and calculator or use Microsoft Excel and type it in so you can use this every month. Whatever works for you. Once you have nothing left, you must STOP spending. It’s called zero-based budgeting. If you have any goal, one thing that you will need is SACRIFICE. Sacrifice is the ability to give up what you want in the short term to get something of greater value and significance. Trust me. If you practice this consistently and diligently, you will be in a really stable financial position and when emergencies show up, you will be in a position to address those emergencies. Make a choice today that you will not be one of those individuals – whether you are in high school, college, or someone looking to improve their financial lives, know that it’s never too late to start and just because you were disciplined yesterday doesn’t mean you can be undisciplined tomorrow. Most people have done dumb things with money, and I am no exception. Please learn from the mistakes of myself and so many other people. Before you make your next financial decision, put a budget together and commit to sticking to it.

When I was in high school, I had a part-time job that I used to buy clothes, sneakers, and put minutes on my phone (I know, I’m old). My mother would always tell me to save my money so that I could have some later on. I wish I would have listened. Saving my money could have helped me in much better ways than wearing the latest fashion. At this point, you should not worry about being the best dressed but being the best prepared for the next stage of life by saving money and focusing on being the best you can be. Today's credit card society makes it easy to get now and pay later but economic realities eventually set in, and we regret the mistakes made and live with a sense of shame. Our unbalanced culture emphasizes the acquisition of more stuff without considering the toll taken on your emotional, relational, physical and mental health to acquire it. Sometimes, money is too expensive. We need to come to terms with the fact that, to concede to the demands of an imbalanced and sick culture is to be sick ourselves. In light of this painful admission, the first thing I want you to do is to let go of the shame of financial mistakes. Hold on to the guilt because guilt signals that a mistake was made, and a lesson needs to be learned. Shame signals that you are defective because of those decisions. You are not defective if you’ve made poor financial choices. You’re human. The good news is that you will remember the painful tuition you paid to the school of life and remember not to make the same mistakes. Ultimately, we are made to be producers and not only consumers, and if you produce more than you consume, your life will be better off. If you only consume and don’t produce, then you can only be proud of what you consume. I imagine a day when people are more apt to tell you about the business they just started than the new car or phone or belt or shoes they bought. That would be a significant cultural shift. If you want to steer clear of the harried, financially based life that most people live, you have to decide that you will become a producer more than a consumer. I dream of and pray for the day when people are in positions where they can become self-sufficient to make major life decisions from a position of power and not lack.

Reflection Questions

1) Do you struggle with materialism or consumerism? What are your shopping habits? Take a look at your closet. If you own something that has lost its actual usefulness that you cannot give away, you don't own it. It owns you.

a. Note: Because of the power of marketing to cause us to suspend our reasoning mind, a good rule of thumb with major purchases is to wait overnight before making a purchase.

2) If everyone manages the money the way you do, would that be good or bad news for the community you live in? (Church, family, organization, etc.)

3) Who do you go to for financial advice? You will find a million talking heads on TV, podcasts, and YouTube. You have to decide for yourself who you will listen to and follow. Make sure their philosophies line up with your values and that they have a track record of success with their message. It’s easy to give an opinion. It’s hard to find a qualified one.

4) Give yourself a grade.

a. A – You stick to your budget 90% of the time

b. B – You stick to your budget 80% of the time

c. C - You stick to your budget 70% of the time

d. D - You stick to your budget 60% of the time

F – You don’t have a budget. Most people are here, and there’s no curve. The problem is you can’t get kicked out of this school because you will always be in a finance class. Money matters because it controls your options. I firmly believe that this issue is a reason why many people can’t pursue their calling. They are so swamped with the aftermath of financial chaos that it’s a daily struggle to get moving. Start today with a plan. Contact an EA (Enrolled Agent), (CFA (Chartered Financial Analyst), CFP (Certified Financial Planner) or CPA (Certified Public Accountant) if you have a need for assistance or take advantage of a financial planning course. I highly recommend Dave Ramsey’s Financial Peace University. Go to to find a course in your area.

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