Personal finance books are hot sellers. Top titles include “Rich Dad, Poor Dad” (Robert T. Kiyosaki), “The Total Money Makeover” (Dave Ramsey), and “The 7 Habits of Highly Effective People” (Stephen R. Covey) However, there’s one book that’s more popular than any of these, and it offers plenty of sound advice about money: the Bible.
Of course, most people don’t think of the good book as a personal finance guide. But it’s an incredibly useful source of monetary guidance. Numerous stories and sayings from the Bible illustrate basic financial concepts that are as relevant as ever in the modern world.
Money Tips From the Bible
Looking for a little wisdom from heavenly handbook? Bookmark these important biblical money lessons so you can return to them again and again.
1. Set Priorities
“Put your outdoor work in order and get your fields ready; after that, build your house.”
— Proverbs 24:27
This advice from Proverbs seems a little surprising at first. To some, it may be unclear why planting the field should be a higher priority than building the house since both appear to be necessities of life rather than luxuries.
However, without food, you can survive for a couple of months at most. Depending on the environment, you can survive (if not thrive) indefinitely living outdoors or with only makeshift shelters. Indeed, unhoused people do it all the time.
So in this context, your field isn’t just something you need for survival — it’s a means of survival. If you’re a farmer, your crops are also your source of livelihood. If your field isn’t properly planted and prepared, you won’t have the money you need to build a house or provide for any of your other needs.
Today, few people rely on fields for their income. However, we all have certain basic needs we have to meet to survive. And to meet those needs, most of us need some form of gainful employment. What good is a house if you don’t have the means to put food on the table or pay the rent or mortgage?
So in modern terms, this proverb means that you need to set priorities with your money. Cover the essentials — what you need to keep yourself alive and able to work — before spending money on creature comforts. In other words, pay all the bills before you spend any on new clothes.
2. Make a Budget
“Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, ‘This person began to build and wasn’t able to finish.’”
— Luke 14:28 – 30
This biblical saying is about budgeting. You know you need to cover the cost of necessities first, but those costs don’t always come up right away, so you need to make a budget. Some major expenses, such as rent payments, only come due once per month. Others, like home insurance premiums, only come due once annually. Planning ahead and saving for those intermittent expenses is a key component of budgeting.
Maybe your proverbial tower is the weekly grocery bill or financing your retirement years down the line. If you’re like most people, you have several towers going at once. Some of those you plan to build quite large over time, whereas others are smaller projects you must finish each month. Regardless, this verse advises financial planning so you can complete them from bottom to top.
3. Build an Emergency Fund
“Let Pharaoh appoint commissioners over the land to take a fifth of the harvest of Egypt during the seven years of abundance. They should collect all the food of these good years that are coming and store up the grain under the authority of Pharaoh, to be kept in the cities for food. This food should be held in reserve for the country, to be used during the seven years of famine that will come upon Egypt, so that the country may not be ruined by the famine.”
— Genesis 41:34 – 36
In this passage from Genesis, Joseph interprets a dream the Pharaoh had about seven fat cows grazing by a river that get swallowed up by seven skinny cows. Joseph concludes that the seven fat cows in the dream represent seven years of prosperity for Egypt, which will be followed by seven years of famine. To plan ahead for this disaster, Joseph advises the Pharaoh to store grain during the seven good years and use that stored grain to get the country through the seven hard years to follow.
It always makes sense to save resources in good times so you have them to help you get through lean times. In modern-day America, lean years are less likely to be a literal famine than some sort of financial crisis, such as a job loss or a health problem that saddles you with hefty medical bills. Regardless, Joseph’s basic strategy — setting aside money for future emergencies — still holds true.
This emergency fund is there to draw on when the worst happens.
4. Avoid Debt
“The rich rule over the poor, and the borrower is slave to the lender.”
— Proverbs 22:7
This proverb likens debt to slavery. Since debt tends to control every aspect of your life, the analogy is apt.
A 2015 survey by the Pew Charitable Trusts found that 80% of all Americans are in debt, and a majority of the oldest Americans are still carrying some form of debt in retirement. And 70% of those surveyed said debt was a necessity in their lives, something they didn’t want but still couldn’t imagine living without.
All that debt takes a toll on those who carry it, both mentally and physically. The American Public Health Association explains that debt can cause multiple mental and physical issues, such as stress, anxiety, depression, and high blood pressure.
5. Diversify Your Investments
“Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.”
— Ecclesiastes 11:2
This line from Ecclesiastes is a short, clear explanation of why it makes sense to diversify your investments. Nearly any type of investment can fall victim to disasters of some sort, whether it’s a plague of locusts that wipes out a grain crop or a market crash that reduces the value of stocks or real estate. So it makes sense to put money into many different types of investments so a single disaster can’t cost you everything you have.
For instance, if you were a merchant in biblical times, hoping to make money by trading cloth or spices with neighboring countries, it wouldn’t make sense to load all your cargo onto a single ship, trade with only one tribe, or choose only one good to trade in the first place. If a cargo ship sinks, a tribe stops needing your wares, or a pestilence comes over the land, you’d lose everything you had in one blow.
It’s a basic principle of investing that the more you diversify, the more you reduce your risk. Investing in 100 different stocks — for instance, by buying shares in an index fund — is far safer than investing in just a single stock.
Admittedly, there are some who argue that diversification is a myth. Their claim is that you can earn a much better return by putting all your eggs in one basket — as long as it’s the right basket. However, it takes a true genius to figure out which basket is the right one, and investors who try it are far more likely to end up losing their shirts than becoming millionaires overnight. For the ordinary investor, diversifying to reduce risk is a much safer and sounder plan.
6. Reduce Risk as You Age
“I have seen a grievous evil under the sun: wealth hoarded to the harm of its owners, or wealth lost through some misfortune, so that when they have children there is nothing left for them to inherit.”
— Ecclesiastes 5:13 – 14
In this story from Ecclesiastes, a father loses everything on a bad investment and has nothing to leave to his son. This is unfortunate for the son, but in the modern world, it could be a disaster for the father as well. That’s because his bad business venture wouldn’t just wipe out his son’s inheritance — it could wipe out his own retirement savings as well.
Because people are living longer, they’re also spending more years in retirement. Today’s 65-year-old retirees could easily need their retirement savings to last them 20 years or even longer. So if you speculate with your income when you’re in your 60s, it’s not just your kids’ inheritance you’re putting at risk. It’s the money you need to live on for the next 10, 20, or even 30 years. If you lose a big chunk of your nest egg, you could end up having to put off your retirement because you don’t have enough savings to support yourself.
If you want to be sure you have enough to retire on — and something to leave to your kids when you’re gone — reduce your investment risk as you age. As you approach retirement age, gradually move your money out of high-risk investments, such as stocks, and into
lower-risk investments like bonds and annuities that can give you a modest, steady income.
You can still leave some of your money in the stock market. In fact, you probably need to so you can earn enough to support yourself through decades of retirement. However, at least a good chunk of your nest egg needs to stay protected from market risk so you always have something to draw on for your income.
7. Make a Financial Plan
“The plans of the diligent lead to profit as surely as haste leads to poverty.”
— Proverbs 21:5
This rule from Proverbs more or less sums up all the others. Budgeting, planning for retirement, saving for emergencies — they’re all different ways of being diligent by planning ahead.
Making a financial plan is a three-step process:
- Identify your goals. It’s much easier to convince yourself to save and invest when you have a clear sense of what you’re saving for. Depending on where you are in life, your financial goals could include paying off student loans, buying your first home, financing your kids’ college education, or investing for retirement. Write down your personal goals, and go back to them from time to time to see if they’ve changed.
- Evaluate your situation. Next, figure out what your current financial situation is. This is a step you can take on your own or with help from an accountant or financial advisor. Determine your current net worth, how much you’re earning, how much you’re spending, and what kind of return you’re currently getting on your investments.
- List steps to take. Now write down your plan to get from Point A to Point B. For instance, suppose your goal is to buy a house in five years and you think you need $55,000 for a down payment. If you already have $15,000 saved, then you know you need another $40,000 over the next five years — an average of $8,000 per year. If you’re currently saving only $5,000 every year, then you need to make more money, spend less, or earn more on your investments (or all three) to hit your goal within five years. Alternatively, you could revise your goal, planning to buy a cheaper starter home that requires a smaller down payment of only $40,000, a goal you can meet without making any changes.
Without a financial plan, it’s easy to drift through life earning and spending money with no real thought for the future. Writing out a financial plan and checking it every few months to see whether you’re on track helps ensure you know what you want out of life and are on a path to get it.
If you’re a Bible scholar, you’ve surely noticed by now that many Bible verses about money weren’t covered in this list. For instance, it doesn’t include “Do not wear yourself out to get rich; do not trust your own cleverness. Cast but a glance at riches, and they are gone, for they will surely sprout wings and fly off to the sky like an eagle” (Proverbs 23:4 – 5) or the single most famous Bible verse relating to money, “For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs” (1 Timothy 6:10).
At first glance, this seems contradictory. Some parts of the Bible are talking about how to take care of your money, while others appear to suggest that it’s a mistake to care about money at all. However, when you look at all these different verses side by side, you begin to get a more balanced picture. The overall message the Bible sends about money isn’t that money itself is bad. it’s just that it isn’t the most important thing in life.
When used wisely — to support yourself, care for your family, and help those in need— money is a useful tool. However, you should control your money, not let it control you.