An Interview with Ron Blue,
Financial Planner/consultant, Author, and President of Kingdom Advisors
Q: What is the most common mistake people
make during times of economic uncertainty?
A: They react to fear and start making fear-based decisions. For example, they
stop tithing out of fear because they need the money, or try to borrow their
way out of trouble as opposed to cutting their spending. Those are probably the
two biggest mistakes people make during times of economic meltdown. We can
overcome that fear by asking ourselves, “What does God think about this? Is He
worried? What would He like my response to be?” It’s important to respond in
faith rather than react from fear.
Q: What advice do you have for someone who is in crisis mode and completely
stressed out right now because of the economic climate?
A: The first thing to do is take a really hard look at where you’re spending
money, and then take a meat cleaver to your spending plan. For example, when my
wife and I began to anticipate what was coming last year, we decided to take a
look at every item in our budget. We went through our cell phone and cable
expenses, travel and vacations, clothes, etc. We reduced some items by a
percentage and cut out some of the things that were nice to have but that we
didn’t need. We looked at our electric bill and asked if we really needed to
keep our temperature the way we wanted it. We looked at our food bill and asked
if we could eat differently. It was an amazing exercise because we’ve lived on
a budget since we’ve been married, but we were able to cut about 25 percent out
of our living expenses just by looking at them item by item.
Remember that every dollar you cut out of your short-term
living expenses is a dollar that goes right to your bottom line because you’ve
already paid the taxes on the income and presumably already given a tithe on
it. So you save dollar for dollar when you cut your living expenses.
Second thing to do is look at your assets and determine if you really need
everything you have. If you can turn some of your assets into cash, the first
place to use it would be to pay off your credit cards. When you do that, you
save yourself interest and the principle you’re paying every month. Those are
the things everyone can do no matter what their income and their job situation.
Q: Some people under financial stress tend to think obsessively about how every
penny is spent, while others go to the opposite extreme and simply “trust God.”
How can we find a balance between these two perspectives?
A: I think you choose to trust God in the process. You say, “Lord, I’m trusting
you to show me what I need to change.” So instead of just changing everything
for the sake of doing something, or, on the other hand, just trusting God and
not worrying about it, you’re going to trust God in the process. In effect,
you’re doing both things. I think that’s a step of faith, where you say, “Lord,
show me where I can cut or if there are other places where I should be looking
for additional income.” Or, “Lord, are there things we own that we really don’t
need that we can sell?” These are not easy things, but I believe they are very
necessary.
Q: What can we do in advance to guard ourselves from future economic
downturns?
A: There are four basic money-managing principles and one overarching truth.
The overarching truth is that God owns it all, so He’s the source of
everything. Every spending decision I make is a reflection of what I believe He
would have me do with His money. The four fundamental principles that everyone
can follow are: (1) Spend less than you earn. That’s just a basic principle of
living within your income. (2) Avoid any short-term borrowing because of the
expense of it. It never, ever makes sense to use your credit cards for
borrowing. You may use your credit cards for convenience, but never for
borrowing. (3) Always save some amount of money for the unexpected because the
unexpected will happen. And (4) set some long-term goals so you prioritize use
of your money in the short term. Anyone who has been doing those things for
years would have ridden out several economic storms. It isn’t primarily about
making the right investments. It’s really a matter of living within your
income, avoiding debt, and setting aside some money for the short-term and the
long-term. People who do that are the best prepared when we have situations
like we have now.
Ron Blue is co-author with Jeremy White
of Surviving Financial Meltdown: Confident Decisions in an Uncertain World
(Tyndale 2009). Ron Blue and Walk Thru the Bible have developed a related DVD
curriculum for small groups which is available from Walk Thru the Bible for
R295. Email
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to order your DVD kit today (which includes a comprehensive 84 page workbook,
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