Jul. 5, 2005 - Money Represents Priorities

This is Part V of a five-part series called Money 101.

Money also represents our priorities and reveals our hearts.  If we look at how we spend time each day it is easy to identify our priorities.  We do what we choose to do.  How much time is spent at work, sleeping, praying, reading the Bible, eating, communicating with our families, playing with our children, etc.?  Our allocation of time reveals our hearts and our priorities.  This is essentially what Jesus told Martha.

“But the Lord answered and said to her, ‘Martha, Martha, you are worried and bothered about so many things; but only a few things are necessary, really only one, for Mary has chosen the good part, which shall not be taken away from her.’”  Luke 10:41-42

Martha’s priority was preparing food and serving the guests, not the things of God.

The same principle applies to money.  How we spend money reflects our priorities in life.  When I meet with clients, their use of money reveals far more about their values and priorities than anything they say.

Money follows our hearts.  Jesus made this clear with the rich young man who asked him what he could do to inherit eternal life.

“And looking at him, Jesus felt a love for him, and said to him, ‘One thing you lack: go and sell all you possess, and give to the poor, and you shall have treasure in heaven; and come, follow Me.’  But at these words his face fell, and he went away grieved, for he was one who owned much property.”  Mark 10:21-22

The young man would not give his money to the poor because His heart was not in it.  His heart was centered on self and so he kept his money.  His money followed his heart.  If you read the context of this verse, the rich young man was really quite bright and seemed to have more promise as a disciple than any of the twelve.  Yet Jesus let the young man go his way because his heart was not right.  How did Jesus know?  Follow the money.

“For where your treasure is, there will your heart be also.”  Matthew 6:21

It can be equally said “For where your heart is, there will your treasure be also.”  Our hearts and money are inextricably linked.  Perhaps that is why 16 of Jesus’ 38 parables relate to money.  He knows that the surest way to our hearts is through our wallets.  God uses money as a barometer of our priorities and to reveal our hearts.

This concludes my brief series called Money 101.  Many future posts will refer to some of these foundational topics as there are many implications which follow from them.

Other posts in this series:

• Part I - Money 101 An Introduction
• Part II - The Usefulness & History of Money
• Part III - The Characteristics of Money
• Part IV - Money Represents Time

Jul. 5, 2005 - Money Represents Time

Money represents time.  It quantifies time in practical terms so we can spend it.  How does that work?  Let’s go back to our discussion of barter and money systems.  Without a barter or money system, we would spend the bulk of our time, if not all of it, taking care of our physical needs – providing shelter, food, and clothing.  We would need to develop and employ high-level skills in these basic functions just to survive.  This is very inefficient because it takes so much time to be proficient in each of these areas.

In a barter system we trade goods and services to take care of our needs.  If I build houses and you grow food, we can exchange with each other and save time by specializing in certain skills.  I don’t have to spend time growing food and you don’t have to spend time building your shelter.  I’ll be a better builder than you could ever be and you’ll be a better farmer than I could ever be.  As we learned before, however, bartering is still very inefficient and inconvenient.  A money system solves the efficiency and convenience problems so that we have more opportunities to trade and make even better use of our time.

In a money system we trade our time for money.  Think about how we earn money.  To get paid for anything we must invest time.  How many of us get paid for nothing or go to work for free?  We put in time at work, whether for ourselves or someone else, and we expect money in return.  If we work overtime, we expect some form of compensation for our extra efforts.  On the other hand, our employers pay us money and they expect our time in return.  It’s a neat little system.  Thus, money enables us to exchange our most precious worldly asset, time, for other goods and services.  We can’t readily trade with our time but we can trade with our money.

The concept of money representing time underpins the basis for sound financial stewardship and decision-making.  When we see every dollar as a reflection of our time, our most precious worldly asset, then we can truly “count the cost” of spending and saving behaviors.

Finally, I will conclude this brief series by also noting that money represents priorities.

Other posts in this series:

• Part I - Money 101 An Introduction
• Part II - The Usefulness & History of Money
• Part III - The Characteristics of Money
• Part V - Money Represents Priorities

Jun. 30, 2005 - The Characteristics of Money

This is Part III of a five-part series called Money 101. 

There are five key characteristics that make a specific item useful as money at any point in time.  To serve as money an item must be:

• Scarce (limited supply) – An item only works as money as long as it is scarce, difficult to obtain, or its available quantity is tightly controlled.  Gold is highly valued because it is so rare and difficult to find.  Acorns, on the other hand, are not only plentiful but can be easily found or reproduced.  We would not accept acorns as money because we can easily get them for free.
• Recognizable (mutually agreed value) – An item must be recognized as money and its value be commonly agreed upon.  A U.S. five dollar bill is distinguished from all other currencies and printed paper.  Its value for making a purchase is known and accepted.  The same could not be said of acorns.
• Durable – An item must last for long periods of time.  Money is accepted as payment and stored with the expectation that it will still be there and useful at a later time.  If it dissipates quickly or disappears altogether then it is of little value as money.
• Portable – As a matter of convenience, an item must be able to be readily carried about for use in commerce.  Items that are difficult to transport will not likely serve as money.  Can you imagine carrying around bags of acorns to spend?
• Divisible – Goods and services are not sold in quantities of equal value.  If they were, then we’d only need one denomination of currency (i.e., everything is sold in multiples of $5.00 so all we need is five dollar bills).  This is not realistic or practical.  For convenience, therefore, an item used as money must be divisible into any quantity (i.e., dollar, quarter, dime, nickel, and penny).  This allows sellers and buyers to agree upon any price for a particular quantity of a good or service.

As noted previously, many different items have served as money throughout history by fulfilling these characteristics.  Money is not defined by the item but by the characteristics that make an item useful as money.  The particular item is irrelevant.

Homework Assignment

Now here's some homework for you.  Think about ways in which you might teach your children these basic characteristics of money.  One idea might be to consider various common items and discuss their suitablility to serve as a currency.  What are their strong points and weak points of each?  Another example might be to create a household currency for buying/selling within your family.  Select an item that meets the above characteristics and see what happens.

Better yet, why don't you dream up some ideas and share them with all of us?  Or maybe you've come across other tried and true methods.  Leave a comment and let us know!

Now we will look into the spiritual aspects of money as we consider that money represents time.

Other posts in this series:

• Part I - Money 101 An Introduction
• Part II - The History of Money
• Part IV - Money Represents Time
• Part V - Money Represents Priorities

Jun. 30, 2005 - The History of Money

This is Part II of a five-part series called Money 101. 

Why We Use Money

Without money we would operate on a barter system – exchanging goods or services with each other on an “as needed” basis.  For example, a mechanic might fix a farmer’s tractor in exchange for food.  Bartering is a simple concept but it becomes extremely complex when contemplating exchanges between billions of people!  Bartering is a terribly inefficient and inconvenient system on any sizable scale.  In contrast, a money system provides a more efficient and convenient means of exchanging goods and services.  We trade our goods and services for money that can be spent anywhere for anything.  Thus, money simply serves as a tool – nothing more, nothing less.  It’s not money that we ultimately value, but the goods and services we can purchase with it.  We value money because it allows us to purchase the goods or services we need or want.    

What We Consider Money

In this sense, the concept of money is much more important than the physical item we use for money.  For example, throughout history many different items have served as money:

• Living Animals (cattle, horses, oxen, sheep)
• Animal Parts (skins, leather, ivory, sea shells)
• Crops (various grains, spices, tea, sugar)
• Tools (agricultural implements such as spades and hoes)
• Weapons (spears, arrows, knives, swords)
• Minerals (salt)
• Stones (diamonds, rubies, emeralds)
• Metals (gold, silver, copper, bronze, iron, brass, tin, platinum)
• Crafted Objects (beads, garments, wampum)
• Coins (made from various metals)
• Paper (currency, checks)

Today we use coin and paper.  In the future it may be electronic units!  It doesn’t really matter so long as we all ascribe value to it and universally accept it.

Next we will explore the characteristics of money.

Other posts in this series:

• Part I - Money 101 An Introduction
• Part III - The Characteristics of Money
• Part IV - Money Represents Time
• Part V - Money Represents Priorities

Jun. 30, 2005 - Money 101 - An Introduction

This is Part I of a five-part series called Money 101.

Money is the fuel that runs our economic engine.  It has been around since shortly after the Garden of Eden and will be with us until the end times of Revelation.  We use money every day, yet most of us give very little thought to what it really is and what it represents.  As with most things physical, God also attaches a spiritual dimension to money.  Therefore, it behooves us to take a closer look at money and develop a solid understanding of it.

Over the next few days we're going to explore the topic of money in a series of posts.  We'll start with the practical aspects of money and work our way into the deeper spirtual issues.  Don't panic!  I'm not going to bore you with technical jargon only used by accountants and economics professors.  We're going to boil money down to its basic elements and demystify it once and for all.  Let's have some fun!

We will start with a quick look at the history of money.

Other posts in this series:

• Part II - The History of Money
• Part III - The Characteristics of Money
• Part IV - Money Represents Time
• Part V - Money Represents Priorities

Jun. 29, 2005 - Is Financial Planning Biblical?

Good question!

Over the years of working with clients and leading numerous financial workshops, I have noticed most people fall into two distinct camps when it comes to the issue of planning with their money.

At one end of the spectrum is a small group of those who believe God is virtually obligated to fulfill whatever we can dream or imagine.  If we plan it then God will surely bring it to pass.  At the other end of the spectrum is a much larger group of those who believe planning is a presumptuous exercise of the flesh.  We should just "let go and trust God.”

The truth is somewhere in between.

The Bible has quite a bit to say about establishing plans.  Here are some key verses from Proverbs to guide our thinking:

• “Commit your works to the Lord, and your plans will be established.” Proverbs 16:3
• "A plan in the heart of a man is like deep water, but a man of understanding draws it out." Proverbs 20:5
• "The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty." Proverbs 21:5

These Scriptures reveal that proper planning is an assumed activity that is wise.  Clearly we just don’t stick our heads in the sand and assume life will take care of itself.  Through prayer, reading the Scripture, and seeking godly counsel, we can confidently establish plans as the Holy Spirit guides us.

On the other hand we should not trust in our plans or presume that our goals will come to pass.  We place our trust in God and His leading step-by-step.   

• "The plans of the heart belong to man, but the answer of the tongue is from the Lord." Proverbs 16:1
• "The mind of man plans his way, but the Lord directs his steps." Proverbs 16:9
• “Many are the plans in a man’s heart, but the counsel of the Lord it will stand.” Proverbs 19:21

Our plans are not a guarantee just because we dream them up.  God does not promise our plans will come to pass even when He initiates them.  He is free to alter them as time moves forward according to His purposes.  He ultimately determines the actual steps we will take.  God expects, however, that we are considering and planning our future in consultation with Him.  This includes our money.

Jesus challenged the multitudes in Luke 14:28 with this question:

“For which one of you, when he wants to build a tower, does not first sit down and calculate the cost, to see if he has enough to complete it?”