Even though the phrase sounds like investing in the stocks of religious organizations, it is not what everyone thinks. However, that does not mean financial planning and the Church do not go hand-in-hand. Faith based financial planning is simply planning according to Christian values, and investing in organizations that operate according to those values.
Like traditional planning, Christian or religious financial planning also aims to secure a person’s future; however, it differs from secular financial plans by how a person selects their financial advisor. A faith-based planner will choose managers, companies, and financial plans that align with their ideologies and values. It is also referred to as value-based investing.
Christian Financial Planning
Christian financial planning is broadly categorized into two groups: Catholics and Protestants.
- The Catholic framework for economic life has ten principles that outline planning based on the economy and financial situation. Catholics also do not invest in firms that produce weapons or are a part of the adult entertainment industry.
- Protestant financial planning is often based on social and ethical concerns. Protestant churches also have Ethical investment advisory groups that advise them on policies and finances.
Does Faith-Based Planning Work?
Faith based financial planning is quite similar to traditional planning. There is no guarantee of generating better returns on investment after investing through religious principles. Specific risks are also involved in faith-based planning and getting help from professionals who subscribe to the same spiritual principles. It is essential to find investments that provide good returns while also aligning with the person’s short-term and long-term goals. An excellent advisor can secure the future by recommending stocks, bonds, and exchange-traded funds based on a person’s faith.
Someone aligning with faith-based planning can also donate to a religious organization like a Church or non-profit to get a tax deduction. An appropriate donation will also support the institution while embodying its principles. Estate planning is also an excellent option for faith-based planners to transfer their wealth to a religious institution after passing away.
Rules and Regulations
Although the rules of Christian life are pretty easy to understand, the real-life application of the same rules is often tricky. Efficiently applying the same principles is challenging without proper knowledge of religion and finance.
Financial Advisors
One can find many financial advisors in their location. However, finding a faith-based planner practicing a particular faith is complicated. Therefore, some people are forced to maintain their finances without external help due to a lack of proper advisors.
Final Thoughts
There is a need for faith-based financial services as every faith has specific guidelines to follow. The written words of the Gospel can guide a business toward success and help it to maintain the status quo. People can make good choices by planning through the lens of their religious values.
