Here is a section from Gordon D. Fee's book on interpretation of scripture, "How to Read the Bible for all its Worth"
on how to interpret parables:
The Parables of the Kingdom So far our illustrations have all been taken from parables of conflict between Jesus and the Pharisees. But there is a much larger group of parables — the parables of the kingdom — that need special mention. It is true that all of the parables we have already looked at are also parables of the kingdom. They express the dawning of the time of salvation with the coming of Jesus. But the parables we have in mind here are those that expressly say, “The kingdom of God is like. . . .” First, it must be noted that the introduction, “The kingdom of God is like . . .,” is not to be taken with the first element mentioned in the parable. That is, the kingdom of God is not like a mustard seed, or treasure hidden in a field, or a merchant. The expression literally means, “It is like this with the kingdom of God. . . .” Thus the whole parable tells us something about the nature of the kingdom, not just one of the points of reference or one of the details. Second, it is tempting to treat these parables differently from those we have just looked at, as though they actually were teaching vehicles rather than stories calling for response. But that would be to abuse them. Granted, the divinely inspired collections in Mark 4 and Matthew 13 in their present arrangement are intended to teach us about the kingdom. But originally these parables were a part of Jesus’ actual proclamation of the kingdom as dawning with his own coming. They are themselves vehicles of the message, calling for response to Jesus’ invitation and call to discipleship. Take, for example, the interpreted parable of the sower (Mark 4:3 – 20; Matt 13:3 – 23; Luke 8:5 – 15), which is rightfully seen by Mark as the key to the rest. You will notice that what Jesus has interpreted are the points of reference: The four kinds of soil are like four kinds of responses to the proclamation of the kingdom. But the point of the parable is the urgency of the hour: “Take heed how you hear. The word is being sown — the message of the good news of the kingdom, the joy of forgiveness, the demand and gift of discipleship. It is before all, so listen, take heed; be fruitful soil.” It will be noted, therefore, that most of these parables are addressed to the multitudes as potential disciples. Since these parables are indeed parables of the kingdom, we find them proclaiming the kingdom as “already/not yet.” But their main thrust is the “already.” The kingdom has already come; God’s hour is at hand. Therefore, the present moment is one of great urgency. Such urgency in Jesus’ proclamation has a twofold thrust: (1) Judgment is impending; disaster and catastrophe are at the door. (2) But there is good news: salvation is freely offered to all. Let us look at a couple of parables that illustrate these two aspects of the message. 1. We begin with the parable of the rich fool (Luke 12:16 – 20), which Luke has set in a context of attitudes toward possessions in light of the presence of the kingdom. The parable is easy enough. A rich man, because of his hard work, thinks he has secured his life and is resting complacently. But as Jesus says elsewhere, “Whoever wants to save their life will lose it” (Matt 16:25 // Mark 8:35 // Luke 9:24). Thus the man is a fool in the biblical sense — he tries to live without taking God into account. But sudden disaster is about to overtake him. The point of the parable, you will note, is not the unexpectedness of death. It is the urgency of the hour. The kingdom is at hand. One is a fool to live for possessions, for self-security, when the end is right at the door. Note how this is supported by the context. A man wants his brother to divide the inheritance. But Jesus refuses to become involved in their arbitration. His point is that desire for possession of property is irrelevant in light of the present moment. This is also how we should understand that most difficult of parables — the Shrewd Manager (Luke 16:1 – 8). Again, the story is simple enough. A property manager was embezzling, or otherwise squandering, his master’s money. He was called to produce accounts and knew his number was up, so he pulled off one more enormous rip-off. He let all those owing money adjust their accounts themselves, probably hoping to secure friends on the outside. The punch of this parable, and the part most of us have difficulty handling as well, is that the original hearers expect disapproval. Instead this monkey business is praised! What could possibly be Jesus’ point in telling a story like that? Most likely he is challenging his hearers with the urgency of the hour. If they are properly indignant over such a story, how much more should they apply the lessons to themselves. They are in the same position as the manager who saw imminent disaster, but the crisis that threatens them is incomparably more terrible. That man acted (note that Jesus does not excuse his action); he did something about his situation. For you, too, Jesus seems to be saying, the urgency of the hour demands action; everything is at stake. 2. The urgent hour that calls for action, repentance, is also the time of salvation. Thus the kingdom as present is also Good News. In the twin parables of the hidden treasure and the pearl of great value (Matt 13:44 – 46), the emphasis is on the joy of discovery. The kingdom overtakes the one; it is sought by the other. In joy they liquidate their holdings for the treasure and the pearl. The kingdom is not the treasure; and it is not the pearl. The kingdom is God’s gift. The “discovery” of the kingdom brings unutterable joy. You will notice how this same motif is thoroughgoing also in the three parables of the lost things in Luke 15. This, then, is how one needs to learn to read and study the parables. They are not to be allegorized. They are to be heard — heard as calls to respond to Jesus and his mission.
Fee, Gordon D.. How to Read the Bible for All Its Worth (p. 165). Zondervan Academic. Kindle Edition.