With many things causing stress in today’s world, here is a short list of financial practices that will reduce your stress, make managing your money simpler, and generally improve your quality of life.

1. Spend less than you earn.

It sounds easy, but this is too often our greatest financial challenge. The vast majority of people that come to me for counsel are experiencing some version of violating this rule. They may say they want to talk to me about debt, refinancing, paying for kids’ college, etc., but the real issue is that they are spending more than they should, which has created a stress point in their current budget.

I grew up with this simple saying:

“If your OUTgo exceeds your INcome, your UPkeep will be your DOWNfall.”

How true it is, regardless of how much you may earn!

Did you ever go roller-skating? In the era I grew up in we would spend hours skating on Saturday nights. It was always a highlight to play “Limbo.” The goal was to see who could skate underneath the limbo bar without knocking it off. Of course, there was always someone there who seemed to be made of rubber who made me look bad. I want you to imagine that the limbo bar represents your income. Your expenses always have to be less than your income if you are going to skate under the bar. Of course, if your income is higher, it is easier to keep your spending underneath it. So, look at your budget from both an income and expenses perspective. The lower your expenses are in comparison to your income, the better off you are.

2. Give first, save second.

Learning to give first as a way of life helps you to remember where your provision comes from. When you honor the Lord first, you are acknowledging that all you have comes from Him. It breaks some of the materialistic grip that money may have on your life as you begin to find more joy in giving than receiving. It also helps you to reorient your financial goals from temporal to eternal. Often, those who spend more than they earn also suffer from a lack of generosity.

Notice this principle is a combination of giving and saving. We are taught in God’s Word to be givers and savers. Saving is an indication of self-control. It is the ability to avoid spending money today so that you will have what you need tomorrow. When both of these practices are working well, most financial problems will begin to disappear.

How much? I think it is best to give ten percent of your gross annual income to God’s kingdom and save ten percent as well until you reach your short-term financial goals of having 3-6 months in an emergency savings account. You then begin saving for long-term goals like retirement.

3. Avoid being “house poor.”

The biggest financial decision most of us ever make is the decision regarding our housing. Too often in America, we find couples have become “house poor” because they stretched to buy a home in their preferred neighborhood, their preferred school district, or with their preferred amenities, only to get several months into it and find they stretched too far. If your total housing expense, which includes your rent or mortgage, insurance, taxes, maintenance and utilities, is 40% or more of your total income, you are likely under financial stress.

Moving down to keep your total housing expense at 30% or below will relieve a great deal of stress. You can use Crown’s free calculator to help figure out your monthly mortgage payment amount based on the amount you plan to borrow, the length of the loan, and annual interest rate. Renting may also be a great option to reduce some of your tax and maintenance costs.

4. Drive used cars.

This is typically the second biggest financial purchase we make. Most people cannot afford to drive off the lot and immediately experience the impact of a 20-30% depreciation of the purchase price. If you buy a brand-new car for $25,000, you are almost immediately poorer by the tune of $5,000-$8,000 by the time you drive off the lot. If you finance the car, you will lose even more.

It makes so much sense to buy used cars. Someone else has done you a favor and already paid for the cost of depreciation…you should thank them!

Here are my personal guidelines for buying a used car: one owner, clean Car Fax report (no wrecks, no auctions, no rebuilt title, no floods, etc.), good maintenance records (dealer certified if possible), less than 100,000 miles but with the possibility to drive it another 150,000 miles maintenance-free. It takes work, research, and patience, but it is possible to find great deals using this framework.

5. Invest early.

By following the guidelines above, you will be able to have money to invest sooner than later. Remember, an investment is money that is at risk of loss while savings are not at risk. You only invest money after meeting your savings goals in #2 above. The reason that early investors have the advantage is that they give their money a long-term opportunity to grow. Investing takes time.

If you think of investing like planting a tree, it may die. But if you take good care of it, nurture and water it, over time it will begin to grow and grow. The longer you allow it to remain planted in one spot, the more likely it is to produce good growth yields. This is the philosophy of value investors as opposed to traders or gamblers.

Once you’ve saved your emergency fund, start investing on a small scale and do a little each month. You will be surprised at how significant these small decisions will become as the decades pass.

When looking at these five simple practices, it’s easy to see where you may be making mistakes that cause you stress. By making adjustments in your housing and transportation expenses, you can alleviate a great deal of pressure that you may be experiencing right now.

That’s the “what” but not the “why.” Biblical financial practices are also affected by your motives. We’ll explore more about that next time.

This article was originally published on Beliefnet, July 2020.