One of my pastors and I recently taught a class on stewardship at our church.

In one session, a young couple in the class asked about vacations. The question wasn’t very specific, and I took it as “is it good stewardship to spend money on vacations?” It was a reasonable and sincere question as money spent on vacations can’t be used for giving or saving.

The Bible doesn’t use the word “vacation” specifically, but several biblical principles would apply to how we might think about vacations (or “holidays” for our non-U.S. friends): stewardship, cycles of work and rest, enjoying God’s good gifts, etc.

This is often the case, as practicing wise stewardship usually means applying biblical principles in a way that seems most “right” for a particular situation.

For example, if this young couple was drowning in debt (as far as I know, they aren’t), then I would have suggested they forego any expensive vacations until they get the debt under control. If not, and they had their giving and saving plans in place, I would say they are free to enjoy an annual vacation if they want to. I would also strongly suggest that they do not charge it and then (as Dave Ramsey says) have it “follow them home.”

Principles and practices

The whole idea of retirement stewardship is based on biblical principles. These principles are found in the wisdom that the Bible teaches and the belief that God’s wisdom is right and good, and available for the asking (James 1:5; 3:16-17).

Most of the biblical wisdom on stewardship is not found mainly as laws, commands, or rules that apply to all people, all the time, and in all situations. Instead, it is embodied in principles that help us to apply God’s law to our lives in certain situations and may be applied differently by different people at different times.

Most stewardship teachers (Burkett, Ramsey, Blue, Alcorn, and others) agree on the overarching “stewardship principle,” which teaches that God owns everything and we are his managers.  They would also probably agree on these “big” stewardship principles:

1. Live below your means (Prov. 21:20; Prov. 23:4-5; Phi. 4:12; 1 Tim. 4:4, 5:8, 6:6)
2. Avoid debt (Ps. 37:22; Prov. 22:7; Rom. 13:8)
3. Build liquidity (margin) to deal with the unexpected (Prov. 6:6-8; Luke 14:28; James 4:13-15)
4. Give generously (1 Cor. 16:2; 2 Cor. 8:9-11; 2 Cor. 9:7, Phil. 4:18; )
5. Save for needs you know you will have in the near future and invest for the long-term (Prov. 6:6-6; Prov. 21:20; James 4:13-15)
6. Wisely protect what God has entrusted to you (Prov. 27:12; John 16:33; Acts 14:22)

These principles don’t apply perfectly to every situation in the same way, yet in God’s wisdom, the Bible speaks perfectly to every situation.

For example, take the first two: “live below your means” and “avoid debt.” A non-working college student who has to take out a student loan is, technically, in violation of both principles. But is that wrong; is it sinful?

Depending on their situation, it may not be the wisest decision, but that doesn’t mean it is wrong for a student to take out a loan. There may be valid reasons why the student isn’t working and has to take out a loan. Then the bigger question may be whether, when they are working and earning a regular income, they will live below their means and will, therefore, be able to pay back the loan as quickly as possible.

For these reasons and others, we have to be very careful in defining what is right and wrong when it comes to stewardship. We have to avoid the two extremes of: “It’s personal; you have to make your own choices, just do what’s right for you,” implying that every decision is situational and relative. And, “you must do it this way; it is the ‘right’ way, the ‘only way’ to do it,” as though there is one singular, universal truth – one right answer for every situation.

The reality is that because the Bible does speak perfectly to every situation (even when it’s completely silent about some of the particulars), we have to apply the principles it teaches to come up with the right answer for us. However, having done so, we can’t put it forward as a single, universally “right” answer that applies in the same way to all people all of the time.

My practices

As you know, this blog is about retirement stewardship – planning for and living in retirement from a distinctly Christian perspective. I share examples from my experience when helpful, but this isn’t a reality show about my daily life and personal finances.

However, in this article and the next, I share a list of the major retirement stewardship decisions that I have made throughout my lifetime about spending, borrowing, giving, saving and investing, and protecting what I have. They are the things that I did that were “right” for me in terms of how they aligned to biblical principles and based on my convictions and how I applied them to my situation.

I hope you don’t think I am boasting because, I can assure you, I have made mistakes. I have been in debt. I have been too conservative with my investments at times. I have made bad purchase decisions. There have been situations when I felt that God was calling me to be more generous, but I didn’t respond.

I guess we all have some regrets. But overall, I have tried to “practice what I preach” when it comes to retirement stewardship, especially over the last 20 years or so.

It’s very likely that you have done some things differently, and that’s fine. As long as you follow biblical principles and apply them in a way that makes the most sense for you, you’ll be okay. We all have to live with the consequences of our actions.

For each thing I list, I will also refer to the biblical principle that I think applies. In that way, you will see how I used the principle to my situation. You will also see how it might apply differently to yours. Here we go…

1.  I have owned less house and borrowed less for mortgages than what the banks were willing to qualify me for and lend to me.

I have consistently tried to keep my monthly housing expense (PITI) below 30% of my take-home pay, and during the second half of my working life, I kept it under 25%. This helped me to create “margin” in my finances, which gave me greater flexibility to give and save.

The biblical principles for this one are living below our means (principle #1)  and avoiding (too much) debt and paying it off promptly (principle #2). The idea of “bad debt and not so bad debt” also applies here, as a home mortgage in a reasonable amount can provide value in the future (equity through home ownership, appreciation, etc.).

Many people have a “buy as much house as they can qualify for” mentality. The idea is to use a large mortgage as leverage to purchase what they believe will be an appreciating asset, netting more significant equity gains in the future. The use of leverage is not prohibited in Scripture, nor is the assumption of some reasonable risk. However, too much speculation can result in significant losses. Another drawback to buying too much house is less margin in your overall financial picture, which effects cash-flow and the ability to save and generously give. Finally, in times of severe economic stress, you could be more vulnerable to foreclosure.

2.  I had not used credit cards for a long time, but recently signed up for a 2% cash-back card from Fidelity Investments and have been using it regularly.

Early on, I used a credit card occasionally. But after going through Financial Peace University (FPU) many years ago, I decided to stop using them altogether. I found Dave Ramsey’s arguments to be compelling, and I was also started leading FPU classes in my church, and I wanted to be a good example. As a result, I hadn’t used a credit card for about 15 years. However, I recently signed up and starting using a 2% cash-back card issued by Fidelity Investments. They automatically put the cash into my Fidelity savings account each month based on how much I use the card. I am using the card as a tool to spend money I have, not money I don’t. Therefore, I don’t carry a balance from month to month; in fact, I pay it off automatically every two weeks.

In this case, the central principle is avoiding debt (principle #2) since credit cards are such a significant cause of it for so many people. Indiscriminate use of credit cards can also lead to excessive, impulse spending, which may reveal a lack of contentment, which is part of principle #1 (live below your means).

You may be adamantly opposed to the use of credit cards. I completely understand, and I would say, “stick to your guns.”  Or perhaps you do have one. If you are using it to buy things you can’t afford, then you probably shouldn’t have it. If you use it as a way to spend money you already have to get cash or points rewards, and you pay it off every month, that is a different matter. It isn’t “wrong” to use such a card, but it must be used wisely. Remember, the bank’s goal isn’t to make things easy for you, it’s to encourage you to carry a balance that pays them interest – that’s how they make their money.

3.  I wanted to be completely debt-free when I paid off my mortgage, which I did well before I turned 60.

I was debt-free except for my mortgage for quite some time, actually before I first went through FPU. Once I had no debt, my next goal was to own a paid-for house, which I viewed as an imperative before retirement. I had a 15-year mortgage on my house, which I was able to pay off while in my 50s once the balance was low. Being completely debt-free was a big part of my decision to retire at age 66. It reduced our living expenses (which means less income needed in retirement), and it’s just a good feeling to know that I own my house outright. Paying off our mortgage also provided what I consider a “guaranteed” return on the money I used to do it. I could have used it to chase possibly higher returns elsewhere, but that would not have been without risk.

The most applicable principle here is “avoiding debt.” Being free from both consumer and long-term (mortgage) debt also increases liquidity and margin (principle #3), which helps free up resources for giving and saving (principles 4 and 5).

You may think there are a lot better uses for your money than paying off your mortgage. If you have a mortgage at a fixed rate of 3.5% but believe that you can get, say, twice that (7%) by investing in the stock market, then that is a reasonable reason to deploy your surplus capital in that way. Just keep in mind that a 7% return is by no means guaranteed, and you could even lose money. Also, debt isn’t explicitly prohibited in the Bible, and you are free to borrow for productive uses such as purchasing a home. Nor is there anything in Scripture that says that you should have a 15-year mortgage, or that you have to pay off any mortgage by a particular time. We are obligated to pay what we owe, but we are free to do that in 5, 10, 20, or 30 years or longer. But paying it off before retirement can help when you need to start living off your savings or a fixed income.

4.  I have never owned a timeshare or a vacation home.

I like to take vacations, usually to either the beach or the mountains (we have both here in North Carolina). I once bought a riverfront lot in the NC mountains with the intent of putting a vacation cabin on it, but I never did; it was just too expensive, and I didn’t want to go in debt to do it. I was able to sell it at a small profit before the “crash” of 2008. Since then, I have concluded that I would rather “rent” a vacation than own one – with all the overhead (time and money) associated with ownership. Timeshares have never been that attractive to me either; I have heard lots of stories about people trying to get out of them, mainly due to high and unpredictable ongoing fees.

Owning a vacation home would be consistent with the Bible’s teaching that money is a gift and something to be enjoyed (with moderation) – 1 Tim. 4:4. It could also be a resource that could be shared with family and friends. But for me, the central principle here would be #1 (wanting to live below my means) and avoiding debt as it would have been difficult if not impossible for me to purchase a vacation home without additional mortgage debt, which I did not want to incur even if I could offset it with rental receipts.

You may have a vacation home, and I know many people own and enjoy timeshares. I see no Biblical prohibition against either, so providing it doesn’t significantly constrain your financial margin for saving and giving or cause you other problems, enjoy! Just make sure you can handle the financial obligations associated with them after you retire when your income may be less.

5.  I have always “tithed,” and have often given more than 10% to my local church as well as offerings to other ministries. In retirement, I am continuing to “tithe,” regardless of whether its money I already “tithed on” or not. I am continuing to give to other ministries as well.

As a young Christian, I was taught that the 10% tithe was a biblical norm and expected of all believers, so that’s what I did. Although my view of a biblically-mandated tithe of 10% has moderated some over the years, I think the giving of firstfruits, consistently, in an amount that is proportional to my income, is a principle with solid biblical support. Because I am now “retired,” I could take the position that I am not obligated to tithe on money that I contributed to Social Security that I am now receiving as income, or on my contributions to my IRA that I am taking as income in retirement, but I haven’t. I decided, Lord willing, to keep giving as I already have and to stay away from the hair-splitting that comes with that kind of thing.

The principle at work here is to “give generously” (principle #4).

If you don’t adhere to a strict tithe of 10%, I see no problem with that. But it does seem like firstfruits giving of a reasonable amount has a strong basis in Scripture. Ten percent may be aspirational for some, whereas others may be able to give much more. Most importantly, the Bible urges us to be cheerful givers; disciples who give willingly out of a heart of love and gratitude for others and a desire to see God’s Kingdom expanded on the earth. If on the other hand you have a firm conviction about the 10% tithe and feel no compulsion to tithe on money in retirement that you have technically already tithed on, I think the Bible allows for that as well. Just make sure your heart is in the right place, and that you are accounting for things correctly. (See this article for more details.)