Understanding Behavioral Finance as a Christ Follower
by Genie Short
There is this word buzzing around in the financial realm, it’s called Behavioral Finance. It’s not a new concept. It has been around since the early 1980s. The idea is to understand the behavior pattern of people regarding their investments. It measures people’s perception and how people’s behavior can move the market up or down. This measurement helps investment companies make some calculated guess as to how market might make a movement before it happens. People who know about this typically work or dabble in the financial world. Investment companies apply some form of algorithm that is designed to make trades in milliseconds. How is this related to us as Christians just trying to figure out how to manage our money on a daily basis? The important word here that we should take is: “Behavioral”
Webster Dictionary defines“behavioral” as: relating to or concerned with the social, psychological, and emotional factors that affect financial decisions and behavior…
I’m no psychologist but in my 30 years in the financial world, I’ve become a keen observer of people and their behavior towards money, (that includes my own) in which I find at times challenging and bewildering. Good or bad, we all have an inherit way of behaving around our finances. Some of those are directly influenced by what we’ve seen from our parents, guardians, or someone of authority growing up. To some degree, some of us catch it from being pressed against situations that we find ourselves in and make a “knee-jerk” reaction in order to survive.
We fight as Christ followers in so many ways when it comes with money. We mainly battle from what our eyes see, our envious eyes keep us from really seeing things from what the bible tells us about handling our finances. The pull is strong and our behavior can be unpredictable. It is especially hard in a rich country like ours as we are surrounded with so much material excess. So how can we keep our wits about us when it comes to our behavior towards money that honors God?
1. We remember WHO owns it all, hint: it’s God’s. (Psalms 24:1) This will help our mind to re-adjust that everything is His and we are only the manager of His resources. Understanding this will keep our priorities align with His will for us, instead of the other way around.
2. Finance is about 20% head knowledge and 80% behavior. To be successful at the money thing, it takes a lifestyle adjustment. Being patient with ourselves, learn what we can and the most important thing is the PRACTICE part. I would call this our “rubber meet the road” reality, this is when we see what we are made of when it comes to dealing with money. (Hebrews 12:11)
3. We must remember that we have an enemy who is using distractions and all sort of ways to separate us from God and our true calling. Being aware and alert to this fact will help us win in the way we handle money and our behavior towards it. (1 Peter 5:8)
4. Remember, you and I are not alone. God is always with us and we must trust that what He began in us, He will complete it. (Romans 8, Philippians 1:6) If you’ve made some bad financial choices or have behaved in such a way that resulted in you condemning yourself for it, STOP and accept that you have a God of grace who loves you. You can always come to Him, and if you have difficulties, ask for help. Never forget that you are God’s, when you ask, He will send help your way. (John 14:14, Matthew 7:7)
Genie is a Registered Investment Advisor with a local independent company for over 16 years and has been in the Financial Industry since 1988. She has been attending Journey Community Church since 2004. She is a devoted follower of Christ, a wife and mother of two. She had gone through some difficult financial struggles throughout her life. She has a very strong calling to minister through her talents and training as a financial specialist, coaching people to obtain financial wisdom.
She learned about Christian financial principles through The Crown Ministry by Larry Burkett in 1996 and she completed a course in Dave Ramsey’s Financial Peace University in 2013 and has been helping by coordinating the classes at Journey Community Church ever since. Her motto in life that was passed down to her by her Spiritual Mom and Dad, is “You can’t teach what you don’t know, you can’t lead where you don’t go.”