5 Foundations for Financial Freedom

Keep Good Records - Principle of Accounting (Prov. 27:23-24; 23:23)
You can do this by learning the basics of accounting. To know where your money goes, you have to know four things:

• What you own (assets)
• What you owe (debts)
• What you earn (income)
• What you spend (expenses)

Plan your spending – Principle of Budgeting (Prov. 21:5)
Plan your spending and stick to your plan. Financial freedom does not depend on how much you make, it’s based on how much you spend. Freedom comes not from making more, but from spending less. In 2009, an Average American spend 6 hours a week in shopping-related activities. Studies also shows that the more educated you are, the more you are likely to shop.

Freedom comes not from making more, but from spending less - Rick Warren

Save for the future – Principle of Savings (Prov. 21:20)
In 2009, average Japanese saved 20% of their income, average European saved 18% of their income, and average American spend 4% more than they earn. You have to realize that money that comes easily disappears quickly but money that is saved little by little will grow (Prov. 13:11) - the Bible warns against get rich quick schemes. Many people don't save because they are envying others but you can save for the future by planning to live on less. Your financial goals should have:

• Saving goals
• Spending goals, and
• Giving goals

Return 10% to God – Principle of Tithing (Mal. 3:10)
Give God first part of your income. Make sure God get paid first (Prov. 3:9). Tithing is not a repayment of a debt, it is the acknowledgment of a debt. If you think you can’t afford to give your tithe, you can’t afford not to. When you give 10% to God, you are showing:

• Gratitude for the past – thanking God for what He has done
• Priority for the present – acknowledging that God is first
• Faith for the future – believing that God will take care of you in the future

Enjoy what you have – Principle of Contentment (Eccl. 6:9)
You are not contented if:

• Your yearnings exceeds your earnings
• You can't afford it but bought it on credit anyway
• You have to constantly hustle to make ends meet
• Your home life begins to deteriorate because you are stretched out

Also remember that your kids don’t need things, they need parents. To make the this foundation work for you, you must do all five and also do them in order. See below table for how most people prioritize their money and how you can prioritize yours using divine order:

Lessons from "The 5 Foundations of Financial Freedom! - Pastor Rick Warren. Saddleback Church.