A Formula for Financial Freedom (part 1 of 6)

“Blessed are those who find wisdom, those who gain understanding, for she is more profitable than silver and yields better returns than gold. She is more precious than rubies; nothing you desire can compare with her. Long life is in her right hand; in her left hand are riches and honor. Her ways are pleasant ways, and all her paths are peace. She is a tree of life to those who take hold of her; those who hold her fast will be blessed.” - Proverbs 3:13-18

Wisdom is the key to blessing, and this is especially true when it comes to money. Wisdom is worth more than worldly wealth, but wisdom is the best way to build wealth.

Wealth gained without wisdom leads to worry. You may get what you want, but you end up in debt. You live paycheck to paycheck and you’re never content. So you sell all your stuff just to pay rent.

Wealth gained through wisdom leads to peace. You work hard for your money and you’re happy with life. You have all you need and blessings besides. And you won’t lose all that you have overnight.

Wisdom is the insight and foresight to do what is right. Financial wisdom helps us understand how to manage our money so that we can be debt-free, enjoy life and help others. It helps us plan ahead so that when our car breaks down, or we get sick or lose a job it’s not a devastating crisis. So I want to share with you some advice about how to handle your money wisely through a budget I’m going to call the A Formula for Financial Freedom.

John Maxell says, “a budget is telling your money where to go instead of wondering where it went.” Most of my life I’ve been wondering where my money went. But over the course of the last year, in preparing for marriage and as newlyweds, Cristina and I have begun to tell our money where we want it to go.” We have not yet arrived, but we have made progress. We have had financial victories over the past year that show the process is working. Out of 5 credit cards, we have already paid off two, and will likely pay off two more by the end of the year. As far as paying for education, we have paid one student loan in full, have been making payments on the others, and been paying for my graduate school up front. I won’t owe Biola another cent once I graduate in December. So we’ve been telling our money where to go, and so far it’s working.

In the next few posts I want to outline for you the financial formula we have been following, along with a budget worksheet that I believe will help you manage your money wisely as you plan for the future.