Listen on Apple Podcasts, Spotify, Buzzsprout, online, or search ‘The Stewardology Podcast’ in your favorite podcast app.

 

Albert Einstein said, “Compound interest is the eighth wonder of the world. He who understands it, earns it he who doesn’t pays it.”

 

In the past, 5+ years ago there was not a big need to speak about bank interest.  Why? Interest rates were SO low that you needed big money in order to gain some sort of reasonable interest. But today, in 2024, at the time of this recording, high yield interest rates are hovering between 4.5 and 5.5 percent!  These are decent interest rates for those that keep money in the bank. But, the problem is that many people are living in such a way that they are paying interest, not earning interest.  More and more people today are borrowing either through a loan or credit card for fun stuff, luxuries, even necessities like food and clothing, and the interest rates can be as low at 18% today, and as high as 33%!  The average interest rate charge is right around 24-25%!

  • Proverbs 22:3 ESV: “The prudent sees danger and hides himself, but the simple go on and suffer for it.”
  • Proverbs 21:20 ESV: “Precious treasure and oil are in a wise man’s dwelling, but a foolish man devours it.”

 

If You Don’t Earn Interest, You’ll Pay Interest

  • Savings is not a sign of wealth, it’s a sign of wisdom. Having reserves is not a luxury, it’s a necessity. To be a faithful steward, we must never spend everything that we earn.
  • If you don’t earn interest, you’ll pay interest. Having money in the bank (earning some amount of interest), helps to prevent us from going into debt and having to pay higher interest rates on credit card debt or other loans. Even money in the bank earning some interest with your $1000 emergency fund is an excellent place to start!  You have this money available to tap into when emergencies come and you have some element of interested coming your way as it sits there waiting for you to use it. We need to have a cushion between us and the street. That’s not a credit card! We often find that when looking at a tax return with no interest or dividends income showing (lines 2 & 3), that 3 things are often true in the life of the individual or couple: 
    • You have no savings, and little to no financial reserves.
    • You most likely have credit card or consumer debt. 
    • Also, there is a strong potential that money has been, and currently  is a source of tension in your marriage, which often leads couples to either fight over money, or avoid the topic altogether.

Earning interest is wisdom. Paying interest is often a symptom of foolishness.

  • “The borrower is slave to the lender” and that’s why we want to have reserves. Finances and debt are often emotionally stressful areas of our lives. Shame, for example, does not lead to better choices. We are not here to shame anyone. But, are you sick and tired of being sick and tired? Insanity is doing the same thing over and over expecting a different result. Earning interest may not always mean actually earning interest. However, it does mean having reserves so that you don’t have to owe something to someone else. You won’t have to be the slave to the lender because you won’t have to borrow! 
  • Remember the Rich Fool (Lk 12:13-21). In an effort to become a good steward, the Rich Fool became a bad steward in the guise of good stewardship. While we think that having reserves is wise, there is a tendency that we may have within where we go overboard with reserves and become a carbon-copy of the Rich Fool found in Scripture.  This is where we make reserves all about ourselves and our own personal comfort, and not realize that money is a resource entrusted to us for the good of our local church…the Kingdom of God as a whole…and to positively impact the world for Kingdom building sake! Remember we are called to give, invest in others, and promote good! 

 

Stewardship Application

  1. Develop a starter emergency fund (~$1,000).
  2. Stop the bleeding (paying high interest) by paying off your debt. Do not use a credit card when you are trying to pay off your debt.
  3. Budget. We need a plan for intentionally spending our money (not overspending) so we can live on less than we earn. 
  4. Set boundaries. If we don’t intentionally set up boundaries, we will not have anything left to save. When we budget, we are intentionally setting money aside for savings even BEFORE we pay our bills! It’s built into the budget
  5. Expand your emergency fund (3-6 months of living expenses)

 

Next Steps

 

Material presented is property of The Stewardology Podcast, a ministry of Life Financial Group and Life Institute. You may not copy, reproduce, modify, create derivative works, or exploit any content without the expressed written permission of The Stewardology Podcast. For more information, contact us at Contact@StewardologyPodcast.com or (800) 688-5800.

The topics discussed in this podcast are for general information only and are not intended to provide specific investment advice or recommendations.Investing and investment strategies involve risk including the potential loss of principal. Past performance is not a guarantee of future results.

Securities and advisory services offered through GWM, Inc Member FINRA/SIPC