Spending & Debt: Practical Advice for Common Questions

Photo by  401(K) 2012

Photo by 401(K) 2012

Like so many issues we face in our daily lives, the topics of spending and debt, while mentioned in the Bible, aren’t explicitly mapped out for us. This leaves us with lots of questions about how to practically apply what the Bible says about money and debt into the routines of our lives. Here are a few important questions.

Is It Wrong to Spend Money?

To be short—no, it isn’t wrong to spend money. It is important to consider, however, where we are spending. What you spend money on is a good indicator of idols in your life, including vanity, security, and comfort. Wanting to look good, have nice things, invest for the future, etc. are not in and of themselves bad things, but if you are spending more money than you make, or if you look at your expenses for the month and none of them reflect the values you profess to have on Sundays, there is a problem.

While there is no magic formula, it might be helpful to consider trends and norms as you evaluate your monthly spending. According to the Bureau of Labor Statistics, 34% of the average American’s spending goes towards housing cost (rent or mortgage, taxes, insurance, utilities, furnishings, and maintenance). The next largest expense is typically transportation, which runs about 17%. Food follows, representing 13% of monthly expenditures. Insurance costs, including life, health, retirement, savings, comprise 10% of the average expenditures. Lastly personal expenses (clothing, personal care, entertainment, etc), account for roughly 16% of monthly spending. Keep in mind this breakdown is just an average of statistics, but it is a starting point for considering how your spending stacks up.1 As Christians, it is also important to consider generosity in our monthly spending. If you noticed, the statistics listed above didn’t even have a category for charitable giving. If we as believers are to put our faith to action, including tithing and generosity into our monthly spending is a very practical way to live out this faith.

Is Debt Good or Bad?

It can be both. We shouldn’t become a slave to it, nor should we rely on debt to fund our daily lives; however, it is often necessary. For example, many of us could not have afforded a college education without student loans. The end in this instance (getting an education which allows for future job opportunities and increased earning potential) often justifies the debt accumulated on the front end to pay for the education.

Another good example of debt we are often faced with is a mortgage. When my husband and I were first married, we rented an apartment for several years. But when we found out we were expecting, we knew we needed three bedrooms—one for us, one for the baby, and one for all the guests we’d now be hosting, and looking at the monthly cost of renting a three-bedroom apartment, we found that we could save money each month on the cost of a mortgage compared to rent. After prayerful consideration, and looking at the numbers, we decided that purchasing a home was the right decision for us.

So What Is the Balance?

The truth is, the answer will likely be different for each of us. You should prayerfully consider how to best monitor your spending habits and your debt levels regularly. It is generally advisable not to be spending more than you are taking in, and short-term, high interest debt (cash advances, payday loans, etc.) should always be a last resort, because in the long run you will be paying substantially more for the use of the money.

  1. Monitor Your Spending
    • For me, that looks like checking my bank balance every day or two. This allows me to know how much money I have in the bank, to ensure there is no fraudulent activity, and to plan for upcoming bills and expenses.
  2. Compare to Your Budget.
    • Reviewing budgeted to actual expenses on a routine basis helps me to understand where the money is going. Both my husband and I have debit cards for our bank account, and in the craziness of everyday life, we may not realize that we both decided to splurge, so having this consistent check-in with the numbers helps us track when we need to pull back on spending or where we have a little extra to spend.
  3. Check Your Heart
    • For example, if I’ve overspent on groceries for the month, it might be because I’ve cooked a meal for our Community Group or we’ve hosted friends for dinner, both reasons we are comfortable with overspending occasionally. However, if it is because I only shopped at Whole Foods all month (not in our budget!) so that I felt like a hip Uptowner, then that is a heart issue I would need to work and pray through. Also, if and whenever there is a little extra at the end of the month, my husband and I discuss where the extra goes. Do we give an offering to the church? Is there a family we could take to dinner? Is a friend in need? Have we donated to our university? Given to our daughter’s college fund lately? Obviously your “extra” will likely go somewhere different than ours, but you get the picture.

While these are just a few suggestions surrounding a really complex topic of spending, budgeting and debt, it is worth the time to evaluate where you are at with all this. Do you know what you are spending on? Should you be spending less? Are you a slave to your money? Are you drowning in debt? All the answers to these questions are key to uncovering deeper heart issues around money. Remember, money is not a god to be idolized but a gift which we have been given to steward.

Practical Resources

  • Mint.com helps you establish a budget and then track your spending based upon what you budget. All you have to do is create your budget, and then you can link bank accounts and credit card(s) to the site so that your transactions are automatically posted.
  • Crown Financial offers various financial tracking tools and calculators, including a rent vs. buy guide to housing, loan calculators, and savings goals calculators.

Born and raised in Knoxville, TN, Sarah graduated with a BS in Accounting from the University of Tennessee in 2009. Upon graduation, she moved to New Orleans where she attended the University of New Orleans and received her Master’s in Accounting in 2010. After obtaining her CPA license and working for several years in public accounting, Sarah became the Finance Director at Green Coast Enterprises in March 2015. She lives Uptown with her husband, Pastor Brick, and their daughter Elizabeth Jane.

1“Consumer Expenditures – 2013,” Bureau of Labor Statistics, September 9, 2014, accessed June 8, 2015, http://www.bls.gov/news.release/cesan.nr0.htm