Justin Hiebert

Catalyzing Change

Understanding Financial Health

Posted on 22 Dec 2016 in Coaching, Discipleship, Leadership, Life, Life Purpose, Teaching | Comments Off on Understanding Financial Health

Sometimes, financial health isn’t what it seems…

Born in 1839, John D. Rockefeller combined an astute business mind with some fortuitous timing to become one of the richest men of his day. In his later years he was widely regarded as a generous philanthropist, paving the way for cultural engagements, the arts, and higher education.

His estimated net worth in today’s dollars is believed to be around 340 billion dollars. For context, the richest person in the world today is Bill Gates at a measly net worth of roughly 86 billion. Rockefeller’s net worth is nearly four times that of Bill Gates.

And yet, when asked once how much money he needed to be happy in life, he famously responded, “A little more than I have now.”

Peak Financial Happiness

We all have a necessary relationship with money. If we value things like food, clothing, and shelter, you need money to have those sorts of things.  This means that whatever we set our hands to, has to make a living possible.

But there’s a reason that financial health is at the top of the Health and Integrity Pyramid. While we all need it, all crave it, and all want it, we often want to make this portion bigger in our lives than it really needs to be.

In short, we all wrestle with the tension between the necessity of money and the god of Money. While we might shudder at someone like Rockefeller saying, “a little bit more” if we’re honest with ourselves, we’d give the same answer.

But studies have shown that financial happiness peaks at around $75,000 a year.

So how do we find the balance between “A little bit more” and “I have enough”?

Finances, Financial Health, Money

Good budgeting is step #1

Understanding Financial Health

What we need to do is understanding how financial health works.

First, start with income and subtract expenses.

Debts, car loans, mortgage payments (or rent), utilities, etc… You know, the every day stuff that depresses you a little bit when you log in to check your bank balance.

At the end of the month, are you in the red? If so, you’re not financially healthy (but you already knew that, didn’t you).

Time to figure out where it all went wrong. Are you legitimately not making enough or are you just not budgeting and prioritizing effectively? The most common problem is actually budgeting. Eliminating frivolous spending needs to become priority number one.

In short, do everything in your power to eliminate debt. Sacrificing cable for a few years is well worth knowing that you don’t owe money to anyone.

But if you are making enough, have a balanced budget, and have the blessing of leftover, what then?

Planning for the Future

Start planning for the future. I’m guessing you’d like to retire someday, own your own home (debt-free remember), and perhaps do some traveling. We can plan for those major life transitions easier once debt is eliminated.

Setting aside money for these events allows us to rest at ease with our finances. It starts by asking a basic question: “If I want to continue this quality of life after I retire, how much do I need to set aside?” We’re not talking extravagance, and we’re not talking about being able to buy a small island after you retire. We are, however, taking about not having to worry if you’ll have enough to live the life you want to live.

By giving yourself a definitive number, you can find a number of ways to start saving up for that: savings accounts, CD’s, Investments, retirement plans, etc…

When those issues are sorted out, intentionally planned for, and deliberately pursued, it opens up one other option we all crave regarding money.

Generosity

I’ve never heard a person claim, “I wish I made more money so I could be more stingy with what’s mine.”

No, typically we want to make more so that we can give it away. The problem is that when we do make more, if our budget isn’t in order, if our debt isn’t eliminated, and if our retirement isn’t planned, we just keep throwing money at the problem.

Financial health and financial generosity dictates that we must first have our own home in order. We must be (or in the process of working on) debt free. We must plan for our future, and then we gain the ability to be extravagantly generous.

This doesn’t mean that we wait to give away money. It also doesn’t require that we be debt-free before we start practicing generosity. But what it does mean is that you’ll never reach the level of generosity you want if you don’t first take care of those issues.

Scripture and Us

In fact, Scripture tells us explicitly (several times) that we are to have generosity in whatever our current circumstances are. Luke 21 tells us of the widow giving extravagantly giving up all she had to live on. Even in the midst of her poverty she could practice generosity. Jesus praised her for her actions. Jesus also told countless stories about the need for generosity, and several New Testament letters express a need to give beyond “what seems reasonable.” Biblical stories consistently point to the need for generosity, regardless of our circumstances.

Many of us pride ourselves on giving away money to the homeless on the street corners, organizations advancing good causes, or agencies working to help those in need. But the difference in financial health is what we’re able to give away. With no planning, continuing down the current waters of budget-less wandering, we might be able to give away five or ten percent of what we make.

But ordering our financial health and pursuing that passionately will allow us to someday give away twenty percent or more.

It requires a little planning, and a lot of work, but it is definitely worth it.

Aligning Priorities

This is why I include financial health in the Health and Integrity Pyramid. It’s there and it needs to be, but it is also why it’s at the top.

But we must also understand that money doesn’t make us.

Our significance comes from our calling, who God has made us to be.

Effectiveness in leadership and life starts first on building great internal health. We must develop our character, nurturing our soul, care for our bodies, and stimulate our minds.

The outward result of strong inner health is found in the quality and depths of our relationships. Those around us will see the work we’ve done and be blessed by it.

And when that is in order, we can pursue our finances and really begin to bless others.

—————

Next week, we’ll conclude the series on the Health and Integrity Pyramid by examining a life of Total Generosity.

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Justin Hiebert

Coach - Change Catalyst - Speaker at JSHiebert Leadership Coaching
I'm here to help you break free of the stuck areas in your life. As a coaching catalyst, I'll help you discover your Life Purpose, live with greater passion, and develop clarity. I specialize in leadership development, holistic health, burnout, and relationships. I frequently write, speak, and teach in these areas, and would love to help you however I can. Outside of work, I love my wife, children, and the great outdoors. I can frequently be found reading a book or riding motorcycles.

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