The Ultimate Catholic Guide to Managing Your Finances

Money plays an essential role in our lives, allowing us to provide food, shelter and safety for our families. However, while practicing good financial strategies is beneficial, it is vital to remember that the word and grace of God are what’s truly important. Read this Catholic guide to finances for tips on managing your finances within the boundaries of the Catholic faith.

How Is Wealth Discussed in the Bible?

The Catholic Church’s view on wealth is directly influenced by and tied to the Bible. Though it may come as a surprise to some, money and physical possessions are some of the most referenced topics in the Bible. By following the Bible’s teachings, we can all effectively manage our finances while still walking the path of Christ.

The Bible discusses wealth and greed throughout its chapters, warning people against putting their faith in material possessions rather than God. Some of the most important lessons to take away from the Bible about finances include:

  • Avoid debt: While debt is not prohibited, the Bible strongly recommends that you avoid obtaining a large amount of debt. While some level of debt may be necessary for a home, we should avoid taking out excessive loans to buy material possessions. Any debts also need to be repaid. As Psalm 37:21 states, “The wicked borrows and does not pay back, but the righteous is gracious and gives.”
  • Do not focus on materials: Ecclesiastes 5:10 states: “He who loves money will not be satisfied with money, nor he who loves abundance with its income. This too is vanity.” While some material possessions may be necessary, a person should not focus on acquiring riches, wealth or possessions throughout life.
  • Put your faith and hope in God rather than possessions: You should never put your faith in material possessions. Instead, you should always remember to place all of your faith in God and His grace. As Colossians 3:2 states: “Set your mind on the things above, not on the things that are on earth.”

8 Steps to Managing Your Finances as a Catholic

The Catholic teaching on personal finance is to be rich in good deeds rather than money or materials. While spending money is necessary to provide for your family, it’s important to remember the Catholic teaching on money reminds us to value God’s lasting love and grace over financial or material gain. Consider these eight steps if you are looking to improve your finances.

1. Assess Where You Are Financially

The first and arguably most important step is to assess your financial status. Taking account of your finances, outstanding payments and debts is an essential part of a Catholic financial planning strategy to help you manage your money better.

To move forward effectively, you must first determine how much money you have and what bills you need to pay. A comprehensive financial plan will help you take inventory of your cash flow, debt, savings, income, investments and any other finances. You can easily assess your finances by recording your cash flow in and out for a month.

Financial self-assessments can be a wake-up call for some people who may be surprised to see how much of their income they spend on unnecessary things like dining out, expensive coffee or impulse purchases. While you may be aware of your monthly income and expenses, seeing it written out can help you understand and visualize your assets and where your money goes. You can save receipts for a month to determine where your larges expenses are, including utilities, rent or debt payments.

2. Set a Budget and Stick to It

Another essential step to improve your finances is creating a Catholic family budget to use each month. Tracking your monthly expenses can help you understand your spending habits and create realistic budgets from your take-home pay. For example, if you notice you’re overspending at the grocery store, you may want to implement a $250 grocery budget so you can still get what you need while keeping your spending in check. If you have significant expenses, such as a new car or apartment, you can consider choosing a less expensive option, allowing you to save money each month while lowering your total expenses.

Budgeting is an important step to Catholic financial independence. However, take care to keep yours realistic. Setting a strict budget full of drastic and unrealistic financial changes can make it too difficult to stick to it. If you order takeout five days a week and budget for only one takeout meal a month, you’ll have trouble following that part of the budget and be more likely to give up on the whole thing. Instead, try making smaller and more manageable financial improvements, like budgeting three takeout meals a week instead of five.

Creating a budget that fits your spending and lifestyle habits is a way to foster positive spending habits. Any effective money management technique should be realistic, actionable and align with your lifestyle habits with the aim of improving those habits. Your takeout budget can encourage you to cook at home more, helping you save money. As you progress, you can lower the number further if you feel the change will be beneficial, realistic and achievable.

While creating the budget is an important step, following through with one can be a challenge. Sticking to your budget will require self-discipline and the ability to avoid making impulsive purchases or backsliding into old habits. The reward for your effort will be your satisfaction of seeing the extra money you’ve saved at the end of each month.

3. Find the Right Resources

It’s essential to have the right resources on your side during your financial journey. These resources can provide practical tips and tricks and help you make better financial choices. These resources can act as a general guidebook for your financial journey and help you grow and foster better spending habits. Some of the most popular financial resources for Catholics include:

  • Catholic Financial Life
  • Faith & Money Matters – 6-Week Bible Study
  • A Catholic Guide to Spending Less and Living More: Advice from a Debt-Free Family of 16 by Sam and Rob Fatzinger
  • Overcoming Worries About Money — A Catholic Perspective by Gregory S. Jeffrey
  • Dave Ramsey

4. Learn the Difference Between Wants and Needs

Sustaining our families requires necessities such as food, clothing and shelter. However, there are many additional things we may want beyond those that enrich our lives. While we all need proper clothing, another jacket becomes a want rather than a need at some point. It can be dangerous to purchase something simply to show you have the latest style or brand. Material things are fleeting, and though some may be necessary, these material things will not sustain us in the long run. When materialism becomes the center of our lives and our goals, it begins to consume us, and we can lose sight of what is truly important.

Materialism can even act as a wedge between us and God, causing us to grow self-absorbed and forget to celebrate His love and grace. Seeking security and comfort from material objects can rob us of our faith and damage our relationship with God. Becoming concerned with material items can lead us to forget our faith and lose our memory of God. Forgetting that we were made in His image can lead us to an empty and unfulfilling life.

Think instead of Mary, who seeks the wondrous and divine works of God in her life. Rather than concern herself with trivial things like wealth or prestige, Mary lives a fulfilling life helping others.

Learning to differentiate between wants and needs will help you save money and make healthy financial decisions. One simple way to identify if something is a want or a need is to ask yourself if you can continue to live easily and comfortably without it.

If you and your family can remain healthy, safe and happy without an item, it’s a want rather than a need. It’s all right to indulge your wants every so often, to lift your spirits or brighten a loved one’s day with a special present. However, continually making purchases for the sake of having the latest things can be financially irresponsible and even negatively impact our relationship with God.

5. Set Money Aside for Emergency Funds

Setting aside money can be incredibly beneficial for you and your family. Life may throw unexpected events our way now and again, and while we have the strength and love of God to help us through those difficult days, we may also need emergency savings to pay for unexpected costs. For example, if you or your loved ones fall ill, you may need extra money to pay for a hospital stay.

Even if unexpected costs remain a possibility rather than a reality, creating an emergency fund can provide you with peace of mind. If you know you have money set aside for a potential emergency, you can more comfortably go about your daily life. If an emergency does occur, you will also know you’re covered and have money set aside for the situation.

An emergency can be scary and mentally draining, making it essential to focus on the problem at hand rather than worrying about where you’ll get the money to cover the costs. Setting aside just $50 a month can build a safety net for you and your loved ones.

It’s helpful to set a goal of how much money you’d like to set aside for emergencies. For example, your goal may be to start an emergency savings account and put away $500. Achieving this is an excellent step towards financial responsibility and independence.

You can also set smaller goals to stairstep your way to larger achievements. Once you have $500 in your emergency savings, you can create a new goal to get to $1,000, then another to reach $1,500. Breaking your goals down can make them more achievable and prevent you from feeling overwhelmed.

6. Minimize Debt

The Bible states the borrower will be a servant to the lender. While borrowing money is acceptable and sometimes necessary, it should not be our entire way of life. Additionally, the Bible encourages us to repay any borrowed money.

Borrowing money is sometimes necessary, especially when starting or providing for your family. You may need to take out a loan for a house or use a credit card to pay for diapers for your child. These instances are understandable. Rather than avoiding debt entirely, we can take the Bible’s teaching and apply it to help us minimize our debt and make stronger financial choices. Modesty can be an extremely beneficial tool to help us reduce debt.

Outstanding debts can hinder a person’s ability to meet financial goals and gain financial independence. One of the first steps to improving your finances is minimizing or eliminating as much debt as possible. You can eliminate some debt fairly quickly. For example, if you have a high-interest credit card with $2,000 on it, you can focus on paying it down and eliminating that debt. However, some debts will take longer. While your home loan can be paid down and improved, it will take more time than your smaller debts to repay completely.

Debt is closely tied to materialism and wants versus needs. While many of us need a loan to pay for a home, it’s best to base our decision on finding a home that comfortably fits our families in an area with a good school. If someone takes out an excessive loan to buy the biggest, newest or best house on the market, they have crossed from need into want.

As dangerous as want-based spending can be on a small, everyday scale, the threat to your financial health only increases along with the magnitude of the purchase. If you have a very expensive home loan, you may want to consider buying a home more in line with your income, allowing you to free up additional money to pay other debts off and create a life savings.

If you have a home that is the right size for you and your family, you should prioritize those loan payments. If possible, you can even add a little extra each month to lower your overall debt-to-income ratio and help you meet your goals.

7. Create a Life Savings

In addition to an emergency fund, you should also try to create a life savings. Most financial experts recommend having at least six months of all expenses in your life savings. That amount provides a safety net for unforeseen circumstances such as losing your job unexpectedly. Having a life savings can provide peace of mind and ensure you’re able to take care of yourself and your family even if life throws an unexpected event your way.

The more you can save beyond six months of expenses, the better, as you’ll be even better prepared for unexpected life events. A larger life savings often helps people feel more prepared, relaxed and comfortable knowing they can provide for their families.

While it’s important to focus on creating a life savings, it’s also important to set realistic goals for saving for it. Building a life savings takes time, requiring you to be patient and slowly put extra money away.

Once you have set aside approximately six months of expenses, you can focus on other important aspects of your finances, such as lowering large debts.

8. Give Back

Giving back to our local and world communities is a soul-enriching activity that can strengthen our relationship with God. God teaches us to help those less fortunate than us, and donating money can be a great way to help a local homeless shelter or worthy cause. Many Catholics also contribute to their church to show their appreciation to God and their faith, allowing the Church to grow and thrive.

If you are financially able, charitable giving and donations can enrich your relationship with God and allow you to make a difference in the lives of others. In most cases, the more money you make and spend on yourself, the more you’re encouraged to give to others and help those less fortunate.

The Catholic Church recommends cultivating a spirit of generosity through many channels, including sharing your wealth with friends and family and making charitable donations to shelters, food banks or your local parish.

While giving back is a vital aspect of managing your finances, it’s important to get your finances under control first. Once you’ve started to manage your finances, it is time to give back to the Church and your community. Even if your money is tied up in other expenses, you can donate your time to the Church or a charitable cause to help in any way you can.

How Much Should You Donate?

Once you’ve improved your finances and stabilized your lifestyle, you should consider giving back to the Catholic Church to strengthen your faith and help the Church grow. While some denominations believe in the Old Testament practice of tithing, the Catholic Church encourages its members to follow Christ’s teachings and cultivate a generous spirit.

While many people believe that tithing the traditional 10% of your income aids in that cultivation, you can start out with 1% to 2% of your salary and work your way up if you are just starting to donate to the Church. Regardless of how much you donate, the Church deeply appreciates any charitable giving members can provide and will use your donations to improve worship and the local community.

In addition to giving to the Church, you can also donate to charities or organizations that align with Catholic beliefs and values. For example, you can donate to Catholic missionaries dedicated to spreading the word and love of God to those less fortunate while also helping provide necessary and life-sustaining support to communities.

It is important to understand where the donated money goes when looking at charities. A charity dedicated to spreading the Gospel of Christ and the word of God can be a great charity to get involved with.

Even if you cannot donate money to the Church or a charity, you can still do the work of God and help others by donating your time. You can volunteer at your Church to provide an extra hand wherever they need it. Many charities and organizations also can benefit from someone dedicating their time and helping with various tasks to provide for the community.

Share Your Blessings by Donating to Catholic World Mission

At Catholic World Mission, our goal is to support and empower people throughout the world while sharing God’s truth and grace. Any charitable donations made to Catholic World Mission directly fund our programs, including Help the ChildrenLay MissionariesMonstrancesSeminarian Formation and more. Please contact us if you have any questions about our work or programs.

Please consider donating to Catholic World Mission to help us continue our mission of spreading the word and love of God throughout the world.

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Deacon Rick Medina
Executive Director at | + posts

Deacon Rick Medina is the Executive Director of Catholic World Mission and oversees the management of all of Catholic World Mission's projects in over 35 countries. He was ordained a deacon of the archdiocese of Atlanta in 2013. He currently serves at All Saints Catholic Church in Dunwoody, Georgia, and is active in several ministries, including RCIA, baptism preparation, Life Teen, Altar Server group, Grief Share, and Adult Faith Formation.

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