Who wants to be a millionaire. . . without answering trivia questions?

One way for you and your spouse to become millionaires is for each of you to put $2,000 a year for 35 years into a tax-free account, such as a Roth IRA. Assuming your Roth IRA accounts earn a compound annual return of 10%, which is about the average yearly increase for the stock market over long periods of time, you can become millionaires by the end of the 35-year period.

Actually, you can become millionaires even sooner, since each of you can invest considerably more than $2,000 annually in a Roth IRA, provided that the amount of your wages equals or exceeds the amount of your contributions to the IRA, and your total income does not exceed a specified maximum that depends on your marital status. All of the earnings generated by the Roth IRA will be completely tax-free, provided that they are not withdrawn before you reach the age of 59 ½ and the account has been open at least five years.

However, if you and your spouse each begin to invest $2,000 annually just five years later, your total savings in the account will be about 38% less! Not investing for the first 15 years will reduce your total savings in the account by almost 78%, and skipping the first 25 years will reduce the accumulated savings by approximately 94%.

These figures illustrate the power of compounding and the importance of starting to save early — and consistently — rather than waiting.

A Guide to Your Money and Your Financial Future, published by the U. S. Department of Labor, states:

The real power of compounding comes with time. The earlier you start saving, the more your money can work for you. . . For every 10 years you delay before starting to save for retirement, you will need to save three times as much each month to catch up. That’s why no matter how young you are, the sooner you begin saving for retirement, the better.

Although the emphasis of the U. S. Department of Labor statements is on saving for retirement, the same principle is true regarding saving for other long-term goals, such as helping your children pay for their college education.

So, where can you and your spouse find $4,000 a year to invest?A.L. Williams, who founded an insurance company bearing his name, says on page 4 of his pamphlet entitled Common Sense, “People spend their whole lives looking for a better way, a ‘get rich quick’ scheme, only to find out after it’s too late that if they had done the little things, the obvious things, the fundamentals, they would be in great shape.”

There are many places for families to find unnecessary spending in their budget. However, to do so generally requires them to make some tough decisions that will necessitate knowledge, wisdom, and self-discipline. Let’s consider each of these three factors, but in reverse order.

Self-discipline, or self-control, is a fruit of the Holy Spirit, according to Galatians 5:22-23. Self-discipline is certainly needed in making tough decisions, but it is even more important in being able to follow-through, or persevere, on those decisions. If you are a Christian and you are willing to submit to the Holy Spirit’s guidance, you are capable of exercising the necessary self-discipline in personal or family money management.

A good place to start in determining how your money should be spent is by making sure that your financial contributions to help carry out Christian ministries are in accordance with what the Bible teaches. I Corinthians 16:2 instructs us that giving should be regular (“on the first day of the week”) and proportionate (“as he may prosper”).

[Note:  When we quote Scripture in this article, we use the wording in the New King James Version of the Bible.]

Several scriptures, including Malachi 3:10, indicate that a tithe — which means “a tenth” — is the minimum that God wants us to give to His ministries. [For a more thorough discussion of financial contributions, particularly tithing, see our article entitledWhy Tithe?”]

Wisdom, or good judgment, is a gift that James 1: 5 says God will give to those who ask Him for it. Wisdom involves being able to exercise good judgment in making decisions. If you sincerely want wisdom in making personal or family decisions, including those involving financial matters, claim the promise of James 1: 5, and ask God for it.

Knowledge, or learning, can come from learning through personal experiences, but it may take many years to accumulate the necessary information regarding some matters, including various areas of personal or family money management. Therefore, it is often prudent to make the necessary efforts to obtain information from other sources. You might want to schedule meetings with a financial counselor, or you might want to read literature that has been written by financially astute people about topics on personal or family money management.

In seeking knowledge, consider using Christian sources, since they are more likely than non-Christian sources to share your value system. This is especially true if you desire to increase your contributions to Christian ministries, as well as to increase your savings for the future needs of you and your family.

Start as soon as possible to obtain the knowledge you need, and remember to pray for the necessary wisdom and self-discipline that you and your family will need in making decisions regarding your financial affairs. I John 5:14-15 tells us regarding our requests to God, “[I]f we ask anything according to His will, He hears us. And if we know that He hears us, whatever we ask, we know that we have the petitions that we have asked of Him.”