5 Pillars of Financial Planning: The Sound Financial Way

5 Pillars of Financial Planning: The Sound Financial Way

What are Sound Financial's five pillars of financial planning? I'm so glad you asked! The five pillars that make up the foundation of our approach to financial planning are based on years of practical experience, as well as our trust that The Bible gives excellent instructions on financial topics.

These are simple steps. Far too often, we seem to want something complicated and fancy. But if a simple solution solves your problem and helps you reach your goals, simple is better. However, while these are simple steps, you will need to possess discipline to follow them well.

Most of us were not taught financial skills growing up. That’s not your fault. But it is your responsibility to develop the needed financial skills today.

And you can apply your own self-discipline to these five financial pillars:

I.  Be generous

You have been blessed with skills, opportunities, and resources. Some call these your time, talents, and treasure. Money is a wonderful tool to build and create wealth and it is a blessing to be a blessing to others.

Look around the world. There are wealthy and there are poor. Most people in poverty need “hand up” not a “hand out.” And you are uniquely gifted to provide that “hand up” for someone in your life.

For instance, I typically recommend that you give 10% of your income to your church (or highly selected charities).

II. Pay yourself first

I find most of us want to save (and invest) money for the future, but life just gets in the way. You may have years’ worth of habits to unwind.

So, start small. Your goal should be to save at least 20% of your income. But you may start at 5%, grow to 10%, and may take years to get to 20%. But start and grow as fast as you can.

I recently read a study which demonstrated that the average millionaire in the United States saves 20% of their income.

What excited me is that demonstrated that anyone can be financially successful. You don’t have to be a brilliant investor or entrepreneur. Certainly, those skills help but you can use your skills and financial discipline to be reach your God given goals.

I was recently asked if investing was Biblical.

And the answer is yes, the Bible is full of investment instructions.

In 2 Corinthians 9, a farmer plants seed for a future harvest. When you save and invest your money, you are preparing for life in the future.

III. Be debt free

Too much debt can kill your financial goals and dreams. But you can be free of your debts. There is a way. It takes discipline and focus, but it can be done. And it is worth it. Research the debt snowball method or read our book, Money by the Book, for a further explanation.

IV. Have a financial plan

If you follow these first three steps. If you put in the work. You will be financially successful. And then you will need a more complicated plan. Financial plans include insurance, tax, and estate planning as well as other more complex actions.

V. Trust

Who and what you trust is the most important decision you can make in your life. Trusting money to determine your success, security, or status leads to heartache. I experienced that anxiety, have the tee-shirt and wrote the book!

Remember that all while you are chasing something good, God is chasing you with something great. Enjoy Money by the Book!