Will you be financially able to pay for a college education for your children or for you and your spouse to retire? These are just two of the long-term financial matters that most people need to deal with sooner or later.

Larry Burkett, a Christian writer and lecturer on family financial matters, states on page 8 of his book entitled Investing for the Future, “The goals at each stage [of life] . . . all differ, but the end result is to become debt-free and develop enough surplus to live comfortably while pleasing the Lord in the process.

Before continuing, we will define financial planning.  Financial planning is a systematic process that helps people to achieve their life goals through appropriate management of their finances.  The process includes determining your life goals, gathering relevant financial information, and developing a strategy for achieving your goals.

Personal or family financial planning is one of the most important things you can do to achieve your financial goals. Luke 14:28 supports the wisdom of planning. Just as it is prudent to know the cost of constructing any structure before starting to build it, it is important to know what your financial goals are before you can determine how much money you will need to achieve those goals.

Both short-term and long-term personal or family financial planning is essential for virtually everyone.  People who have burdensome debts or who have modest income are not the only ones who can benefit from financial planning — even those who seem to be doing very well financially are likely to benefit.

Some people may incorrectly believe that if they do financial planning, it will take away their financial freedom. The truth is that, over a period of years, financial planning can provide people with more financial freedom than they would have it they didn’t do the financial planning.

To not have a financial plan is like being in a ship that doesn’t have a rudder to steer the desired course, with the result being that you and your family will be carried wherever circumstances may take you rather than to where you want to go.  When you establish financial goals, you are better able to make timely plans as to how you can achieve those goals.  If you don’t do the necessary planning, you are less likely to achieve at least some — and perhaps most — of your financial goals.

Financial planning can help you and your family to control what your financial situation will be rather than letting your financial situation control you. Financial planning helps you to take offensive action to prevent financial problems, instead of having to take defensive action when financial problems arise. And, financial planning helps to make money your servant rather than allowing it to be your master.

If you want to get started properly with financial planning, take the following steps:

  1. Prepare a list of your major long-term personal or family financial goals arranged in the order of your priorities.  If you are married, it would be beneficial if your spouse also prepares such a list.  Claim the promise in James 1:5 by asking God for wisdom for you and, if you are married, for your spouse.

  2. Assign priorities to your combined financial goals.  If you are married, both of you need to review the two lists of long-term financial goals prepared in step #1 and arrange them in the order of their priority for the two of you together.  Seek God’s will as you attempt to finalize the order of the combined list.  Also, remember that you will need to be willing to make compromises in determining what the final order of the priorities will be.

  3. After you have determined the priorities of your long-term financial goals, begin doing specific planning as to how your highest-priority combined goals can be achieved.  For example, you and your spouse may decide that it will be necessary to reduce spending for discretionary items such as vacation, gifts, eating out, etc. so you can substantially increase your total savings.  Another example is that if you or your spouse is not currently employed outside the home, both of you may decide it will be necessary for both of you to have a paying job sooner or later, perhaps after your children reach a certain age.

  4. Every year or two thereafter, spend time re-assessing your long-term financial goals in order to determine if your priorities have changed and also to evaluate how well you have been progressing toward attaining your financial goals.

You need to know your long-term financial goals when you are doing your short-term financial planning. You won’t be able to determine how much you need to save each year if you don’t have a reasonable  estimate of how much you will need for major expenditures in future years. Therefore, your long-term goals need to be given consideration in developing your short-term goals.

Short-term planning can be done by developing an annual budget. Few families will be able to attain their long-term financial goals unless they save systematically. The key to systematic savings is to make sure you pay yourself regularly (e.g., every month), just as you pay your regular monthly bills. If you don’t plan to save systematically, it is much less likely that you will have sufficient savings to meet your long-term financial goals.

If you really want to save, you probably can find a way to do so – if you exercise self-discipline with regard to your spending.  Usually, what is necessary to “find” money to save is to determine which areas of your spending are necessary and which are discretionary.  Then, you will need to decide how much you are willing to reduce or eliminate spending in the discretionary areas. Most people can cut their total discretionary spending enough to increase their savings by a total of hundreds, or even thousands of dollars, during a year.

So, why not get started immediately to do personal or family financial planning for yourself and your family! Your future and theirs depend on what you do.