I was recently reading a finance book and came across an interesting statement. In summary, the writer said that a crisis doesn’t lead to financial collapse and foreclosures, but merely exposes the decisions that were made leading up to it. While there are exceptions to this a lot of the times it’s true, and viewing crises through that lens makes a lot of sense. Many times, people will say, “well, this business closed because of COVID.” However, it probably was not due to COVID, but the fact that the business was not on sound financial footing going into COVID. Or sometimes people say, “I lost everything in the Great Recession.” Again, most of the time it’s not the recession that forces a person to lose everything but the decisions they made leading up to the recession. If a person bought a house double the size of what they could afford because the banks allowed it and therefore was not able to save any money, that decision is why, when the crisis came, the cards came tumbling down. If a person was living conservatively, saving a part of their income from every paycheck, and was able to use those savings to cover expenses when incomes dropped, then they would likely be able to keep their house and would still be in a good position today.

There are many reasons why people prefer the “a crisis destroyed me” theory. For one reason, it doesn’t attribute any responsibility to the individual. Someone might have leveraged their investments, but when the crisis came and the investments went to zero, it’s the crisis and not the poor investment decisions that is usually blamed.

Another reason is that it allows a person to live without self-discipline. If everything is great, other than the downturn once every approximately 10 years, then you can just live for the moment and never have to budget, save, or plan.

As we know from the Bible, we are responsible for how we handle our money. A few examples are below:

Proverbs 13:11 – Dishonest money dwindles away, but whoever gathers money little by little makes it grow.

Matthew 6:21 – For where your treasure is, there your heart will be also.

1 Timothy 6:10 – For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.

As we see, how we treat our money is essential, and sound financial planning is a long-term strategy that will lead a person to an advantage. Many people think that they can take high risks and be slack when it comes to handling their finances, and they will turn things around when they need to. More times than not, that plan doesn’t work because financial security takes a lot of time, discipline, and prudent planning.

So, if you don’t have a budget or aren’t saving any of your income, please—take some time to sit down and organize your finances by creating a budget. Make sure you are saving at a healthy level, and if you aren’t, look for ways to cut your spending. Lastly, make sure your investments align with your values so that when the next crisis comes, it exposes good financial decision-making, not bad decisions leading to another collapse.