
The impact of war on your finances

The Ukraine-Russian war is a human tragedy on a horrific scale. The impact of war on your finances can be very significant too. Though we may be geographically far from Ukraine and Russia, the flow on impact of war is substantial, whether it is through the rise in energy prices, food prices and the general rise in the cost of living.
Our kingdom responsibility
As Christians, we should be praying for those impacted by war. We need to pray for life to be preserved, restored, refreshed, renewed. This is our powerful role. We pray for God’s resources to be released where needed, when needed, to those who need it, and in the right amounts.
Dear God, please provide for families who need Your resources today. Feed the hungry, clothe the cold, shelter the homeless and protect the vulnerable. We do not know what they need, but You do. You see them right now, and we believe Your plan is at work. Use Christians to do Your generous acts of love and kindness. In Jesus’ name, Amen.
War is expensive
War is expensive and the financial impact on a country is equally massive as priorities are shifted to support the war agenda. The United States, as an example, has spent $6.4 trillion on the military since September 11, 2001. The financial toll on the US economy will be long lasting. Future generations of Americans are being saddled with this debt.
What should we do?
Save for a rainy day. As a financial planner, I always tell people to have money for a rainy day, at least six months’ worth of living expenses. A war is more than a “rainy day”. Income opportunities may shift fast and sometimes permanently. It is therefore advised to build reserves so that you can ride out any storms.
Diversify. If you’re investing, ensure you diversify. Invest in high-quality assets. Invest in companies that produce essential products and services. Businesses that provide essential services (e.g. energy, food, etc) are likely to be around rain, hail or shine.
Stay liquid. In tough times, liquidity matters. Asset values fall and often go down rapidly due to lack of liquidity. In other words, the buyers disappear. When there are fewer buyers than sellers, there’s a liquidity problem. People are forced to sell at a loss. But the point here is liquidity is important if you need to sell, so make sure you invest in high-quality assets that have a high level of liquidity. Easy to sell, irrespective of what’s going on.
Look for Opportunity. Adverse events throughout history, usually create investment opportunities. Asset prices can be easily dislocated as events unfold. This may lead to good investment opportunities.
Learn from history
Especially during wars, markets tend to fall in advance because they don’t like uncertainty, then rebound when events start to become clearer. You need to adopt a long-term view of the stock market rather than be tossed around by the daily news cycle, i.e. stay away from headlines. Focus on good quality assets that will endure and grow over time.
The Christian view
Is there a Christian approach to protecting and managing the impact of war on our finances? Yes, as always, Christians should pray for wisdom. Read James 1:5, “If any of you lacks wisdom, let him ask God, who gives generously to all without reproach, and it will be given him.” God is the Lord of the harvest and He alone knows what we should do in times like this. He can protect, shelter, and even grow your seeds in times of war.
Align your finances with God’s word, by reading the Bible and good books, including mine (Simple Steps for the Journey to Financial Freedom), where you can actually read Biblical principles on money management.
Seek God and ask Him to clear your mind and give you peace. Don’t buy into the fear, don’t let fear drive your decision making, trust God and make wise decisions, seek the counsel of others.
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