Seven ways Catholics can get their finances on track in the new year

Merriam-Webster’s online dictionary has several definitions for “resolution,” two of which caught my eye as they relate to getting your finances on track in 2012.  

The first is “firmness of resolve.” Firmness makes one think of determination, commitment and steadiness, all of which are required to succeed with managing money, especially in the challenging economic environment we are in. 

The second definition describes the process of resolving as “the act of analyzing a complex notion into simpler ones.” For many, managing personal finances seems overwhelming. By breaking a financial plan into simpler components, it becomes easier to understand and follow through — a key to succeeding with your New Year’s resolution to manage your money well. 

Seven resolutions

Keeping the above characteristics in mind, here are seven key financial resolutions that will serve you well in 2012: 

First and foremost, remember that all you have ultimately comes from and belongs to the Lord (Dt 10:14). 

Second, enthusiastically accept your role as a steward of Providence (Catechism of the Catholic Church, No. 2404). God has entrusted you with talents and resources, and expects you to develop and use them in ways consistent with his will for your life. You’ll best fulfill this responsibility by deepening your relationship with Christ. Frequent reception of the Eucharist and attendance at Mass, daily prayer, reading of Scripture and other spiritual writing, and regular confession are all ways that deepen our union with the Lord. 

Third, recognize that generosity is a key to unlocking the door to true financial freedom. Money has a way of turning us inward, toward a selfish way of life. Living generously helps us keep our priorities straight, and enhances our relationship with the Lord and those around us. 

Fourth, commit to enhancing unity and communication regarding finances in your marriage. I recommend “Family budget meetings,” where husband and wife set aside time periodically to set goals for the future, and monitor progress toward those goals. 

Fifth, make effective use of “reserve funds” in your financial plan. Doing so will revolutionize your finances. Reserve funds are for items that require saving for longer than one year. Your net worth needs to be growing sufficiently to fund these future obligations. Many people fail to factor these into their current cash flow plan, with the result that when the need arises, they aren’t in a position to pay for it.  

Think through what reserve funds you should be factoring into your 2012 cash-flow plan and how much you should build into your budget as savings for each of them. Examples include retirement; a down payment on a house; a replacement car; a Catholic formation and education; seed money for a business; and children’s weddings. 

Sixth, once you’ve assessed your net worth it’s time to develop a cash-flow plan (budget) that moves you closer to your long-term goals. Reviewing how you spent your resources in 2011 provides a good starting point, but you’ll want to make adjustments for the financial impact of major life events that you can reasonably anticipate will occur in 2012 and for spending habits that are getting in the way of reaching your long-term goals. 

The seventh step is to recognize that unproductive debt is a major obstacle to reaching your financial goals. If your past habits have generated unproductive debt, now is the time to correct those habits, and to create a plan that will eliminate those debts as rapidly as possible. 

I wish you a blessed and financially free 2012. God love you! 

Phil Lenahan is the president of Veritas Financial Ministries ( and the author of7 Steps to Becoming Financially Free(OSV, $19.95). Submit questions for columns to