Faith Forward with Jason McKnight: Confidence in economic uncertainty
We’re supposed to be living the American Dream—hard work, decent reward, nice home and a few fun days at the beach. Yet, so many of us actually have stress and uncertainty: Is my job secure? Will I outlive my 401k? Will the economy tank? Will a medical crisis bankrupt me? Will our children’s generation ever make it?
We obviously cannot eliminate crises. We cannot avoid the unforeseen. But is there any way to live so that we aren’t racked by stress and uncertainty? Let me offer five principles for peace in economic uncertainty. As timeless as granite, as old as the Scriptures, as universal as water, these five principles will bring flourishing throughout our lives.
First, Save More for the Rainy Day. Today may be sunny, but rain is always coming. Don’t wait until it’s storming to try to prepare for it! Save now for future hard times. Take the first 10% of your paycheck and save it. It sounds hard. You have to adjust your lifestyle. But, the sooner you make the adjustment, the better your long term outcomes are.
If your household income is $50,000, and you invest $100/wk, that’s 10%. Do that for 35 years, not even counting any raises, and you will have over $1.3M to your name. This assumes a 9% annual return, which is conservative (the S&P 500 has grown by 10.3% annually over the last 65 years). You’ve put in 175,000, and you get $1.3M.
Save for the Rainy Day, it’ll earn you 8 times what you actually put in. When you retire, no one pays you anymore. But your bills don’t go away. This savings is your “salary.” Start today.
Second, Debt makes you a slave. Interest paid to you is amazing (see #1). But it works against you, if you have to pay it. When you take debt, you pay interest. 15% to the credit cards, 9% for the car loan, 6% for the mortgage.
When you “buy now, pay later” you are telling the lender that you are willing to let them dictate your future: “I promise for the next 5 years I’ll pay the interest you’ve set.”
Our culture treats debt like its unavoidable, and some of it is; medical debt, for instance. Some debt is helpful; a mortgage has helped more people build wealth than renting ever could. But a whole lot of Americans’ debt is self-inflicted: we just want more than we currently have, and we’re happy to “buy now, pay later”.
Debt makes you a slave. To have peace in uncertainty, therefore, “take as little debt as possible, and pay it off as soon as possible.” You want interest coming into your bank, not going out of it. Principle 1 & 2.
Third, Generosity fosters contentment. The Gracious Lord of All invites us to look beyond ourselves in life. Be generous with money, time, hospitality, words and love… all of these breed in us a more contented life. Why? When we are generous, we become more like a generous God. And the more we are like Him, the more we like who we are!
Financially, if I can give money away, that means it doesn’t have a hold on me. I can’t give something away that controls me. When you give your first ten percent to God’s work (your local church, other ministries), you prove God is worth more to you than money. And God’s gift of contentment just starts to grow in you.
Fourth, Planning fosters peace of mind. If you have been paying attention, you’ll note twice so far I’ve said, “take your first ten percent” (to save and also to give). That’s because a 10-10-80 ratio is generally agreed on as an onramp to flourish: give ten, save ten, live on 80, and you’ll be fine.
The only way you know if you are hitting 10-10-80 is if you keep up with income and out-go, with bills, obligations, investment. How can you take a bit each month to prepare for that annual invoice (insurance, Christmas, big holiday). What’s your system on payday to make sure you get the 10-10 done, before you start the 80? What life-style change should you make right now to live within your means? A little planning brings peace of mind.
The fifth principle for flourishing in our economic uncertainty is this: God owns it all. The Psalmist says, “The earth is the Lord’s, and all that fills it; the world and all who dwell in it” (24:1). Because this verse is true, it allows me to follow the first four principles with joy and hope: he is the source of all that we have, since he owns it all. Let me use what he puts in my hands in ways that honor him. And let me trust the Owner to watch over me for my good. Talk about peace in life no matter the uncertainty!
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