3 Principles for Family Financial Planning in Uncertain Times

As prices increase around the world, family finances are being stretched to the breaking point.

Part of the problem lies in the fact that the world’s economy is currently facing stiff challenges. According to a recent report from the United Nations, “Global growth prospects have weakened significantly amid the war in Ukraine, rising energy, food and commodity prices, soaring inflation and tightening monetary policy stances by major central banks.”

Central banks are raising interest rates to combat the highest rate of inflation in decades, but trying to avoid pushing the economy into recession. But economists believe some countries are already in a recession or soon will be.

Financial experts are also concerned that the economies of many of the world’s most prosperous nations may now be entering a period of stagflation—a time of high inflation, high unemployment and a stagnant economy.

Rising energy costs

Escalating prices for energy are impacting people around the world. With the loss of Russian gas due to the closure of the Nord Stream pipeline, European nations are facing an energy crisis of epic proportions.

“At today’s futures prices, annual spending on electricity and gas by consumers and firms across the European Union could rise to a staggering €1.4trn, up from €200bn in recent years, reckons Morgan Stanley, a bank” (The Economist, Sept. 8, 2022). That’s seven times as expensive!

A study by the University of York says this staggering increase means that by January 2023, over three-fourths of all U.K. households will be trapped in fuel poverty—unable to keep adequately warm at a reasonable cost given their income.

While Europeans will experience some of the greatest increases in energy costs—and politicians are already considering energy subsidies for the poor—the rise in prices has also occurred across the globe.

“The World Bank’s energy price index increased by 26.3 percent between January and April 2022, on top of a 50 percent increase between January 2020 and December 2021. This surge reflects sharp increases in coal, oil, and natural gas prices. In nominal terms, crude oil prices have increased by 350 percent from April 2020 to April 2022—the largest increase for any equivalent two-year period since the 1970s” (Worldbank.org).

Rising food costs

In addition to higher energy costs, families are finding it increasingly more expensive to buy food. Disruption of Ukraine’s immense food exports has been a significant factor. Although grain from Ukraine is now being exported based upon an agreement between Russia and Ukraine, farmers in Ukraine have to decide whether they will even plant next year’s crops due to the challenges of farming in an active war zone.

Together, Russia and Ukraine produce approximately one-third of global wheat exports. The combination of an ongoing war in Ukraine and Western sanctions restricting trade with Russia will make worldwide scarcity worse.

Many farmers around the world are also having to deal with dwindling supplies of fertilizers, amid disruptions of trade with Russia, previously the world’s top exporter of soil additives containing nitrogen.

Rising food costs cannot be blamed solely on the Ukraine-Russia conflict. As Deloitte Insights noted on May 31, 2022, “Prices have been rising—and quite strongly—since mid-2020. Between May 2020 and February 2022, FAO’s Food Price Index went up by 55.2%, led by a 159.4% rise in prices of edible oils, followed by strong growth in prices of sugar, dairy, and cereals.”

While rising prices for food will affect everyone, families on tight budgets will be impacted the most. Although governments may offer subsidies for energy and food to those with the lowest incomes, social unrest leading to the toppling of governments will also become a heightened risk.

Inflation, lower wages, unemployment

While rapidly rising prices for energy and food are the most immediate problems family budgets will have to navigate, the ongoing effects of inflation without comparable increases in wages will further complicate matters.

And when interest rates rise, unemployment usually rises too. The longer current financial trends continue, the more likely these factors will also add to the challenge of financially providing for a family.

Biblical financial advice

Although the Bible is not written as an economic textbook, God does care deeply about humanity. Through His instruction book for mankind—the Holy Bible—we find helpful principles regarding financial planning that have the backing of the Creator God.

Here are three of these biblical principles.

1. Pray (ask God for help)

When we face difficulties providing for our family, our first course of action should be to take our problem to God. In His model prayer, Jesus outlined subjects for us to pray about. He said that one of our requests to God could be, “Give us this day our daily bread” (Matthew 6:11).

In this same section of Jesus’ teaching, called the Sermon on the Mount, Jesus reiterated this point: “Ask, and it will be given to you; seek, and you will find; knock, and it will be opened to you. For everyone who asks receives, and he who seeks finds, and to him who knocks it will be opened” (Matthew 7:7-8).

Using a budget can help relieve the anxiety and uncertainty that we experience when finances are limited. This does not mean that we shouldn’t do everything we can do. We should budget (see point 3) and work as though it all depended on us, all the while praying fervently, realizing it all ultimately depends on God.

Of course, asking God for our daily bread is not all we pray about. In fact, there are other things that are even more important.

The highest priority in our lives must be seeking to enter the Kingdom of God, which means striving to live righteous lives in accordance with God’s commands. Speaking of the things we need to sustain our lives and of the importance of putting God first in our lives, Jesus said, “But seek first the kingdom of God and His righteousness, and all these things shall be added to you” (Matthew 6:33).

Throughout the Bible, there are accounts of God taking care of faithful people during times of famine and distress (Job 5:20; 2 Kings 4:1-7; 2 Chronicles 20:9). God can and will do the same for those who trust Him today. As Isaiah noted: “Behold, the LORD’s hand is not shortened, that it cannot save; nor His ear heavy, that it cannot hear” (Isaiah 59:1).

2. Pay God His due

Another important concept we need to remember is that we are temporary tenants here on earth and God is our landlord. Our entire planet belongs to Him. As He explains, “All the earth is Mine” (Exodus 19:5) and, “The silver is Mine, and the gold is Mine” (Haggai 2:8).

As the owner of all that we have around us and as the Being who wants to bless us, God has some basic instructions that we must follow if we want His blessing and favor.

One of the ways we obey and honor God is by tithing and giving offerings. Tithing is giving God a tenth of the increase that comes to us through our work to produce income (Leviticus 27:32). Offerings are additional gifts that we give to God as we are able and on special occasions such as His annual holy days (Deuteronomy 16:16).

It may seem counterintuitive to give money away in order to be financially blessed, but this is exactly what God instructs.

God asks, “‘Will a man rob God? Yet you have robbed Me! But you say, “In what way have we robbed You?” In tithes and offerings . . . Bring all the tithes into the storehouse, that there may be food in My house, and try Me now in this,’ says the LORD of hosts, ‘If I will not open for you the windows of heaven and pour out for you such blessing that there will not be room enough to receive it’” (Malachi 3:8, 10).

It takes faith to tithe and give offerings. But faith is what God desires and demands as a precondition for blessing us.

For further study, see “Tithing: What Is It?” and “3 Reasons You Should Tithe.”

3. Budget

After we have rendered “to God the things that are God’s” (Matthew 22:21), we need to plan how we will spend our remaining funds. A plan to keep spending from exceeding income is called a budget. Using a budget can help relieve the anxiety and uncertainty that we experience when finances are limited.

A good example of planning ahead for household needs is found in Proverbs 27. Here we read, “Be diligent to know the state of your flocks, and attend to your herds . . . When the hay is removed, and the tender grass shows itself, and the herbs of the mountains are gathered in, the lambs will provide your clothing, and the goats the price of a field; you shall have enough goats’ milk for your food, for the food of your household, and the nourishment of your maidservants” (verses 23, 25-27).

For a budget to be workable, one’s income must be greater than his or her expenses. If this isn’t the case, there are two basic options: increase your income (perhaps by taking a second job or starting a small business from home) or reduce your expenses (perhaps by cutting back or eliminating items you can get by without).

For further study and a link to a sample outline budget, see “The Bible, Budgeting and You.”

These three principles of financial management provide a good foundation for success for both individuals and families.

For additional information on managing your money, see the articles under the “Foundational Principles for Managing Family Finances” section of our website.