To quote Federal Treasurer Jim Chalmers, “the global economy teeters again on the edge with a war that isn’t ending.” The global energy crisis is escalating, inflationary pressures are persisting and economies are slowing, with some of them already in reverse.
How can we as Christians prepare for the effects of harder economic times and apply biblical wisdom around money? Justin Pagotto from 1010Life believes that one of the main differences between the rich and the poor is how the rich make use of credit.
The Foundation of Saving
According to Justin, wealth is built on a foundation of saving. His ministry is based on John 10:10, and he frames his insights with the next generation in mind and a focus on raising money smart kids. He recently joined us on 20Twenty to discuss how we can change the way we think about wealth and credit cards.
‘The first thing we need to talk about is saving in general,’ says Justin. ‘Look at what is a need and what is a want. I had one particular client who was earning over $300,000 a year and could not save anything. And then other clients that are only on $50,000 who save a lot. Saving is a mindset that requires us to do whatever it takes to spend less than we earn.’
The bible is full of wisdom to help us manage our finances. But how do we balance what we know and put that wisdom to use in our own lives? One thing we should think about is where we put our trust. In our job? Our bank balance? Our super? We should start building our financial foundations around our trust in God.
‘To me, it doesn’t make any sense to borrow for something that depreciates like cars, caravans, any sort of consumer items. Why put your latest iPhone on credit? Whereas, there’s nothing wrong with debt when it’s used in a productive capacity. But this is really an open conversation. When we borrow money from institutions, it does give them some level of control over us.’
Seek Out Financial Wisdom
Unless we do our own research and seek out financial wisdom, the likelihood is we will do exactly what our parents taught us. Then we pass those habits on to our children. With Christmas fast approaching, Justin says it mystifies him that parents willingly invest in consumer things, but not in actually helping themselves or their kids learn more about money.
‘What have we done in the last ten years of falling interest rates?’ asks Justin. ‘Did we get ahead on our mortgage? Or did we just spend the extra amount on frivolous things that don’t last? You’ve got to have a strategy in place before times get tough. Paying off more of your debt and investing in things that create an income are great places to start.’
Justin says we have to think proactively and creatively. Look for sales at the supermarket, and use credit cards wisely by converting rewards points. What are we doing to educate ourselves better financially? Are we looking for ways to save money and do things better?
‘I want to encourage everyone to think differently,’ says Justin. ‘If you work as an employee, what can you actually do to add value to your employer so you can earn more money or get a bonus? If you run a business or if you are an employee who wants to start a small side business, what gift has God given you that you can turn into a service that adds value for people?’
Look to Jesus
Anything worthwhile in life takes time, energy and commitment. ‘What I’m really telling people to do is expand their capacity,’ says Justin. ‘Don’t look at the problem. Look to Jesus for the solution and ask Him, how do you want me to move forward? What areas do you want me to pursue?’
‘Saving, giving, investing and spending are four of those areas. I think they’re things we should be constantly growing in.’