There are 44 million student loan borrowers in the U.S. who have an average loan balance of $37,000. This equates to about $1.2 trillion in student loan debt. The average American carries a credit card balance of $16,424, which is up 10% from only 5 years ago. 57% of Americans have less than $1,000 in their savings account.

For being the richest nation in the world, why are so many Americans unable to manage their finances? According to an article in Forbes, money, and possessions are mentioned over 800 times in the Bible, and nowhere in scripture is debt viewed in a favorable light. While I use Biblical wisdom to back up some of these principles, you don’t need to be a believer to have a practical plan to tackle debt and build wealth.

If you are struggling to get ahead on your bills or even on where to start on your financial journey, here are a few tips to get you on the path to financial literacy, with a long-term goal of financial freedom.

Step 1 – Start a Budget

There’s an old saying that, “The journey of 1,000 miles starts with a single step.” I like to say, “The journey to financial freedom starts with a single budget.” While there are some amazing digital budgeting tools out there, it’s important to crawl before you walk. Start off by doing your budget the old fashioned way – with pencil and paper.

There’s power in writing your budget. Habakkuk 2:2 says, “Write the vision and make it plain on tablets, so that he may run who reads it.” If you want to run towards your financial destiny, write it down, as there is power in putting your budget, vision, and goals in writing.

Now that you’ve got your pencil and paper, you’ll need to figure out how much money you make each month (your income) as well as how much money you spend each month (your expenses). If your income is larger than your expenses, you’re off to a good start!

Next, figure out your fixed expenses, like your mortgage, car payment, cable/internet, etc. and start allocating money out of your income towards those expenses. Once you have your fixed expenses accounted for, start plugging money in for your variable expenses. These are things like groceries, restaurants, gasoline, heating/electric, shopping, etc.

At the end of the day, your budget should equal “$0”. You know that old saying, “The Devil’s in the details?” This applies here. Every dollar in your budget should have a home. If you don’t tell your money exactly where to go, you’ll constantly be wondering where it went! If you need some pointers on what line items you should put in your budget, click here.

I have to interject here and talk about the importance of tithing. If you’re not a Christian, tithing probably doesn’t make sense. And even if you are a Christian, wrapping your head around tithing can be hard to do. I’ve been tithing consistently since 2015. During the past 3 years, I got laid off from a job, quit a job, moved across the country to get a new job and then moved back to where I came from to take another job.

Moving is a huge expense, and not great for your budget – but that’s another story for another day. When I lost my full-time job, I tithed, based on 10% of my income – when I got a new job with a bigger salary, I adjusted again and made sure that I was still giving God 10%. Mathematically, tithing doesn’t make sense. But faith isn’t something that can be quantified. Tithing requires giving in faith first.

It means you are putting God first, even if you can’t see the big picture, and even if it doesn’t make sense on paper.

Jerry Savelle says, “Tithing isn’t a debt you owe – it’s a seed you sow.” God doesn’t need your money – but you sure do need His blessings! God could’ve picked any amount to tithe. He could’ve picked 5%, He could’ve picked 50% – He picked 10%, and “tithe” literally means “tenth”. Tithing is saying to God not only that you put Him first in your life, but that you trust Him to take care of everything else in your life. I highly recommend reading The Blessed Life to learn more!

I’m now to the point where my tithe is automatic. I don’t think about it. It’s not my money, anyways, it’s God. Deuteronomy 8:18 says, “Remember the LORD your God, for it is he who gives you the ability to produce wealth, and so confirms his covenant, which he swore to your ancestors, as it is today.”

Without Him, I have nothing.

Ok, back to budgeting. You’re not going to get it right the first month, probably not the second month, and maybe not even the third month. But it will get easier and you’ll start to hit little milestones each month. They key is to not give up. You’re only going to walk 1,000 miles if you keep taking steps, Likewise, you’re only going to reach your financial goals by continually doing a budget.

Step 2 – Set Realistic Financial Goals for Yourself

Luke 14:28 says, “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it?” Now that you know exactly how much money is coming in and out of your house each month, you can start setting up some financial goals for yourself. I like to use the S.M.A.R.T method to set achievable goals. Start building that tower. Have wise goals, too.

Proverbs has a lot of wisdom about money – like not trying to wear yourself out to get rich but at the same time not being lazy about your money. Outside of wisdom, it’s important to ask yourself this: Are my goals aligning with God’s will for my life?

Also, are they actually achievable? You may have a goal of saving up $500,000. Totally do-able. But what’s your realistic time frame? If you’re only making $60,000 a year, it’s really not feasible to say that you’re going to be able to save that much in 2 years’ time. Again, having accurate expectations will make your goals that much more attainable.

So, what are some good goals to set?

Most experts agree that your first financial goal should be to start an $1,000 emergency fund. Having that money will not only give you peace of mind (knowing you won’t have to go into debt if your car breaks down, you have an unexpected medical expense or you lose your job) but it will also give you sense of accomplishment because you hit your first financial goal. Saving up $1,000 is a big deal! You should be pretty proud of yourself.

Your next goal should be to pay off all of your debt. I’ll touch on this in the next step.

Also, in Step 2, it’s important to dream and visualize what you want your financial future to really look like. Being debt free is a great goal. Buying your dream home is a great goal. Giving to ministries and charity is a great goal. Paying for your kid’s college tuition is a great goal. Retiring early is a great goal. Think about what’s important to your life, and write down your financial goals. Will they happen overnight? No, but be consistent and adjust them as needed and you will see results.

Part 2 coming later this week…