Responsible Spending

Stewardship is not just a fancy word for fundraising.

Catholics, of course, are stewards of the Church and have a responsibility to support it, maintain it and help it grow.

But Catholic financial experts note that, in the Book of Genesis, God made human beings stewards of all creation, and, as such, people are responsible for using well the resources God gives them.

And that includes the proper management of their own money.

Beyond the Church

After all, in the parable of the talents, recounted in Matthew 25 and Luke 19, the master rewards his servants who make good use of the “talents” — then a unit of money — beyond what he gives them. The Catechism of the Catholic Church says clearly that people must use what they have to properly care for their families:

“‘In his use of things man should regard the external goods he legitimately owns not merely as exclusive to himself but common to others also, in the sense that they can benefit others as well as himself.’ The ownership of any property makes its holder a steward of Providence, with the task of making it fruitful and communicating its benefits to others, first of all his family” (No. 2404).

That’s an epiphany that Phil Lenahan had years ago, when he realized he was striving to live as a faithful Catholic in all areas except the financial. He understood the need to support the Church, he said, but it took him some time to realize that stewardship had something to do with the rest of his family’s resources.

Sarah Golden, alumna of the Labouré Society. Courtesy photo

“What are we going to do with the rest of that? Are we going to manage that well? Are there criteria to determine what it means to manage it well?” said Lenahan, founder of Veritas Financial Ministries and author of “7 Steps to Becoming Financially Free: A Catholic Guide to Managing Your Money” (OSV, $19.95).

The answer is a resounding yes.

“There are a number of things in Scripture that give us some principles,” he said, adding that there are hundreds of, if not more than 1,000, Scripture passages that can apply to issues of finance and budgeting. While most of them won’t tell people how to pay down their credit card debt, or whether they should cut costs by eating out less or choosing a less expensive cable TV package — or perhaps dropping cable TV altogether — Scripture can offer principles and help set priorities, Lenahan said.

Among these is the idea that it’s important to have a plan, and that it’s important to be generous with what we have, especially with the Church — although that doesn’t mean that Catholics are necessarily obligated to follow the Old Testament rule on tithing, or giving 10 percent of their income to the Church.

A Christian obligation

The Code of Canon Law says: “The Christian faithful are obliged to assist with the needs of the Church so that the Church has what is necessary for divine worship, for the works of the apostolate and of charity, and for the decent support of ministers. They are also obliged to promote social justice and, mindful of the precept of the Lord, to assist the poor from their own resources” (Canon 222).

Scripture also gives guidance on debt, not saying that it is always bad, but urging caution.

“Generally, the way I look at it, there’s certainly a caution that we’re told to have when it comes to debt,” Lenahan said. “Do we need to be saving? Scripture’s pretty clear that we need to be saving for future obligations. We should be pretty good at figuring out expenses that we are going to have in the future, such as retirement or educating our children.”

That might fly in the face of what some people believe Scripture teaches about money. Some people, Lenahan said, point to passages such as the parable of the rich man who built another silo to store his wealth, and then died that night (see Lk 12:13-21).

But for Lenahan, the point isn’t that it’s wrong to generate wealth — Catholic social teaching is in favor of private property, after all — only that people must understand that it all belongs to God, and will go back to God, and must be used to further God’s aims.

Pope Emeritus Benedict XVI, he said, once told people who worked for charitable organizations that helping poor people with the creation of wealth, as well as the sharing of wealth, is a sacred duty, Lenahan said.

“He didn’t say redistribution was flawed or wrong,” Lenahan said. “But he didn’t say we were going to solve the problem of poverty through redistribution solely. ... It’s really a question of, ‘Does our wealth own us?’ or ‘Are we a steward of Providence?’ We might be an employer, we might be charitable about what we do, it’s not a simple line. A lot of the times Catholic teaching is so nuanced.”

Helping people

Lenahan has built a career helping people learn those principles and then put them into practice in their own lives.

“Scripture doesn’t have Quicken in it,” he said. “We use the best tools that we have available today. We want to use the best of budgeting tools that help us honor God.”

His program, which includes online classes and materials for individuals or small groups to use, is based on first learning the principles and then what practical steps to take.

“In the big picture, I’m a big believer that you get the spiritual side right first,” Lenahan said. “To me, the biggest mistake people make is on the spiritual side. All they deal with is the tactical. It’s separated from any sense of what God has instructed us in this area. If you have your spiritual life in order, you want to do what God wants of you, so you have your house in order.”

Having your house in order also means paying attention to your marriage, Lenahan said, adding that bad financial habits, or lack of a shared financial strategy, is a huge point of conflict for couples.

“For married couples, this is the primary reason that I even spent time developing the materials,” Lenahan said. “There’s a lot of commonality that the program would have with secular and Protestant evangelical versions. The primary reason that I really spent time was that I saw so many married couples having difficulty with their financial choices.”

Helping couples see those choices through the prism of faith helps them make the decisions God is calling them to, Lenahan said. One couple that he counseled told him that was the key to ending their fights over money.

Unbound charity Courtesy photo

“They said, ‘Once we understood that what we had really belonged to the Lord, it changed for us. How could we argue about something that isn’t really ours?’” Lenahan said.

Once people embrace the spiritual side of stewardship — as well as the idea that a husband and wife are truly one — then it’s time to get practical. The biggest mistakes that need to be corrected are that people don’t have a plan, aren’t saving enough money, don’t understand and abuse debt, and get into unproductive debt.

As with many self-help programs, whether for losing weight or making a reasonable spending plan, Lenahan’s seven-step plan starts with finding out what’s actually going on.

“Before you can determine what’s going to be happening ahead, it’s good to have a sense of what’s been happening,” Lenahan said. “We start with a 30-day spending diary. Keep a record of everything you spend for 30 days, and that’s a lot easier now than it used to be.”

That’s because software such as Quicken can keep records and divide up expenses based on where you spend your money. People still have to do some work — the program can’t tell whether the $75 spent at Wal-Mart or Meijer was for groceries, towels or Christmas gifts, or some combination of the above, unless someone tells it.

Review habits

But Lenahan said that people can get a good idea without necessarily spending too much time on it.

“My objective is to be a good steward of providence,” he said. “My objective isn’t to be accurate to every penny. These programs give you the ability to see pretty quickly what your habits have been. Maybe we have bad habits for how we buy clothing, for how we buy groceries. You go through those variable expenses — our eating out, our entertainment. That needs to be checked against reality. The numbers that are coming in from our financial institutions aren’t lying to us.”

A spending diary can help people see, for example, that the $200 a year they thought they were spending on pizza is actually more like $1,000.

Save a Family Plan charity Courtesy photo

Or that the reason savings are not growing is because people aren’t actually contributing anything toward them, endlessly borrowing their “saving” money to meet one crisis or another.

“For the most part, people aren’t good at anticipating future needs,” Lenahan said. “Chances are that if you have a car with 150,000 miles on it, at some point in the pretty near future, you are going to need to make some repairs on it, or, more likely, replace it.”

But Lenahan doesn’t advise going into debt to buy a car. Instead, he said, families should build in a car payment to themselves, setting up its own account and having money direct-deposited, so when it’s time to buy a new car, the money is there.

That strategy can apply to many predictable expenses: home improvements, children’s weddings, a rainy-day fund, an anniversary trip.

If a family can’t set aside enough money for everything — and really, almost no families can pay for everything every member wants — then it’s time to look at what can be trimmed, starting with things like eating out and entertainment.

“Those softer things — then if those don’t do it for you, then we have to start looking at harder things,” Lenahan said. “Especially as husband and wife, having those discussions about, ‘What are our goals? Would we rather fund eating out or our child’s education?’”

The hard part, Lenahan said, is seeing that many of the Catholic families he advises are living beyond where they should be, even if they are not living extravagantly.

They end up with credit card debt — something Lenahan thinks is almost always a bad idea — or they find they can’t do things they want to, things that are among their priorities, because the money isn’t there.

For Lenahan, who has seven children with his wife, Chelsey, a big priority is the education of children, from birth through their early 20s.

“I’m a big believer in Catholic education,” he said. “It could be local Catholic school, it could be home-schooling. I’m also a big believer in Catholic college.”

“I’m not a big believer in parents taking on debt for college,” he added. “I’m not a big believer in children taking on debt for college beyond about $20,000.”

As for what happens when families are able to stick to their plans and make enough money to build up wealth, Lenahan said, nothing in Scripture says that is wrong.

In fact, that gives them an opportunity to do good things, from pure philanthropy to starting businesses that employ people and allow them to build wealth.

But that’s not the whole story.

“There are some wealthy people who are doing great things,” Lenahan said. “Now, do they have a challenge? Yes, they have a big challenge: not becoming more dependent on wealth than they are on God.”

Michelle Martin writes from Illinois.

How Should You Allocate Your Money?
The following percentages are based on guideline budgets included in “7 Steps to Financial Freedom.”

Because people at different income levels have different expenses and opportunities, the percentages change a bit depending on household income. In 2012, the median household income in the United States was just over $51,000, according to the U.S. Census Bureau.

  $30,000 annual income
$60,000 annual income
(includes Catholic school tuition
or homeschooling expenses)
 10 percent ($3,000)
  10 percent ($6,000)
 Taxes   4 percent ($1,200)
  13 percent ($7,800)
 Current Education
  0   1 percent ($600)
 Savings and Investments
  5 percent ($1,500)
  7 percent ($4,200)
 Housing   38 percent ($11,400)
  33 percent ($19,800)
 Groceries   13 percent ($3,900)
  11 percent ($6,600)
 Transportation   13 percent ($3,900)
  11 percent ($6,600)
 Medical/Dental   4 percent ($1,200)
  3 percent ($1,800)
 Insurance   4 percent ($1,200)
  3 percent ($1,800)
 Clothing   3 percent ($900)
  2 percent ($1,200)
 Entertainment and recreation
  3 percent ($900)
  3 percent ($1,800)
 Miscellaneous   3 percent ($900)
  2 percent ($1,200)