6—Starting With The Basics
If you're broke, you don't have to stay that way
Many studies find that most Gen Zers feel their financial situation is just “fair” or worse, and some even describe it as “poor” or “very poor.”
It’s not just Gen Z, though—many Gen Xers and Baby Boomers also worry about their finances. However, for those in the 18–35 age group, the challenges seem particularly heavy right now.
This is depressing, so why talk about it? Many people have money problems because they aren’t managing their money wisely; they’re not acting as stewards. Others have them because of circumstances outside of their control.
You’ve probably heard the saying, “The definition of insanity is doing the same thing repeatedly and expecting different results.” Let’s tweak that a bit:
The definition of insanity is doing the same things as your broke peers and expecting different results.
Here’s the truth: We live in one of the world's wealthiest countries, yet many people are ”broke.” (I’m defining ”broke” as having a negative cash flow or net worth—more on that later.) Why? Because they’re making the same financial mistakes, driven by little (or bad) information, poor habits, and short-term thinking.
But you don’t have to follow the crowd. If you want a different outcome, you’ve got to act differently. NextGenSteward is your guide to help you forge a wiser, smarter, more sustainable path to financial stability and security that honors God.
You have to start with the basics. You need to know at least what they are. That itself will set you on a better financial trajectory than your broke peers:
Live below your means—or better yet, well below your means if you can. Be content with what you have and avoid comparing your clothes, home, car, or vacations to others. The Joneses next door are probably “broke”—the bank owns their house and vehicles.
Pay off debt aggressively. This means going all “Dave Ramsey on your debt,” including credit cards, student loans, and auto loans. Avoid taking on new debt, especially revolving credit and borrowing against depreciating assets.
Understand and then leverage the tax code. Maybe you’re surprised at this one, but trust me, it’s a biggie, especially over a lifetime. You don’t have to be a CPA to take advantage of tax-advantaged accounts like 401(k)s, IRAs, and HSAs. Every tax dollar saved is money you can invest and grow, give, or spend if needed.
Minimize investing costs. This is another one that is a bigger deal than most people think and doesn’t get enough attention. High fees eat into your returns over time. Keep costs low and let compounding work its magic.
Stay calm in the market. Everybody says this, but few do it. If you’re going to grow wealth, you need to ignore the daily, weekly, and even yearly fluctuations in stock prices.
Stick to a dollar-cost averaging strategy. Think of this as the “slow and steady” approach to investing. This will let you ride out market downturns without panicking and avoid chasing returns when the market is high.
Purchase the right kinds of insurance. You’ll face many decisions in this area, and insurance is costly (and ongoing), so choose wisely and take full advantage of employer benefit plans.
Think long and hard about major purchases. This is especially true for houses, cars, other real estate, etc. Not that you should never buy them, but timing and price, how much money you have to borrow, and what terms matter a lot.
Stay focused on generosity. If you do the things listed above but don’t cultivate a generous heart and give generously as the Lord leads, you may become the rich fool Jesus talks about in Luke 12:13-20.
When you break free from the “live for today” habits that the culture seems to promote and the things your broke peers are doing and humbly follow practical and biblical wisdom instead, your financial future changes—big time. Over the years, these strategies can add up to a huge difference.
I’ll break these down in future articles for you in greater detail, but it’s good to have the big picture of where we’re headed.
Lots of personal finance writers want to tell you their “secret.” The secret is there is no secret. It’s the incredible power of saving and investing regularly, compounding interest, moderation in spending, and tax efficiency. The sooner you implement these principles, the more dramatic the results will be.
You’re setting yourself up for a far brighter and wealthier tomorrow by choosing a different path today.
For reflection: Are you doing “the basics”? Do they seem beyond your reach right now? It can all be more than a little overwhelming, so think about what you need to focus on the most and ask God for His help.
Verse: “For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish’ ” (Luke 14:28-30, ESV).