Over the years, I’ve had several conversations with people about their financial health. They really want to follow God’s design for their money. They want to give generously, save wisely, and live appropriately. They long to find themselves in a place where they can live the generous life that God created them to live for the sake of his kingdom.
But they have no idea what their next financial step should be. They stop in their tracks simply because they do not know what to do next.
That’s why I created and first introduced The 8 Money Milestones—a map for obtaining financial health for the sake of giving and living generously—in The Money Challenge. And because our motivation for getting financially healthy is rooted in a desire to live generously, The 8 Money Milestones start and end with generosity.
I love hearing success stories from those who follow the milestones, stories from people like Noah in Texas who paid off over $50,000 in debt on his journey to living the generous, Kingdom-advancing life.
I hope you are the next success story.
As you read the milestones, consider where you are on the journey.
Milestone 1: Start giving
Generosity is the foundation upon which real, biblical financial health is founded. According to the Bible, generosity is our priority. We are to give our first and our best. Wherever you find yourself financially, financial health starts with giving.
Milestone 2: Save $1,500 for a minor emergency
You will get hit with a financial emergency. Encouraging, right? Your dishwasher will break. A tire will go flat. When these minor emergencies happen, many resort to credit cards, perpetuating their financial challenges. Be different than everyone else. Set aside money so you can cover the emergency with cash.
Milestone 3: Max out your 401(k) or 403(b) match
If a company match is available to you, get it. It’s part of your employee benefit. Ignoring the match is ignoring your money. The long-term financial impact of maxing out your match is tremendous. Don’t miss out on it.
Milestone 4: Pay off all debt except your mortgage
To pay off debt, I recommend a well-known method called the Snowball Method. This method encourages you to pay off debts from the smallest balance to the largest balance. Once a debt is paid off, you apply the amount you were paying to the smaller debt to the larger debt. Like a snowball rolling down a hill, the amount you are able to put toward debt gradually increases.
Milestone 5: Save three to six months of living expenses for a job-loss level emergency
If you are single and without children, lean toward the three-month end of the spectrum. If you are married with children, lean toward the six-month end of the spectrum. Let those for whom you are financially responsible help determine how much you need saved.
Milestone 6: Put 15 percent of your gross income to retirement
Plan on making your retirement years the most generous, open-handed years of your life. Set aside money for retirement so that you are not a financial burden on others and so that you can have even more time and money to put toward advancing God’s Kingdom.
Milestone 7: Save for college or pay off your mortgage
Too many assume mortgage payments are just like utility bills, payments that will be with them for the rest of their lives. Believe it or not, you don’t always have to have a mortgage payment. You can be mortgageless. Sure, it takes time and intentionality, but it is worth it. Imagine what life would look like without a mortgage payment. Imagine what your generosity would look like without a mortgage payment. Imagine what your retirement would look like without a mortgage payment.
If you have kids, consider initially focusing on college instead of your mortgage. More than likely, college expenses will be a more immediate issue.
Milestone 8: Live generously
You have financial health. But not so that you can spend money on whatever you want. You have financial health so that you can give and live ridiculously generous lives, being a part of God’s mission in a way you never imagined.
Those are your 8 Money Milestones. Get to know them. Maybe put them up somewhere in your house to encourage your journey.
Art Rainer is the Vice President for Institutional Advancement at Southeastern Baptist Theological Seminary. He writes widely about issues related to finance, wealth and generosity, and is the author of The Money Challenge: 30 Days of Discovering God’s Design for You and Your Money, The Marriage Challenge: A Finance Guide for Married Couples, and his latest book, Find More Money: Increase Your Income to Tackle Debt, Save Wisely, and Live Generously. Art lives in Wake Forest, North Carolina with his wife, Sarah, and their three children. Connect with him on Facebook for more advice!