A recent study from CareerBuilder.com shows that nearly 4 out of 5 Americans are living paycheck to paycheck at least some of the time.
While there were some glimmers of hope in the study, it clearly revealed that most Americans are breaking the first rule of money management: Pay Yourself First.
The Bible has a lot to say about the first rule of money management. For example:
2 Timothy 2:6 —The hardworking farmer should be the first to receive a share of the crops.
1 Timothy 5:18—For Scripture says, “Do not muzzle an ox while it is treading out the grain,” and “The worker deserves his wages.”
Banks and governments understand this principle of money management and use it to their advantage every day (more on this in future articles).
In his iconic book The Richest Man in Babylon, George S. Clason makes the principle of paying yourself first the subject of the first two chapters of the section called "Seven Cures for a Lean Purse."
Start Thy Purse to Fattening
Control Thy Expenditures
Make Thy Gold Multiply
Guard Thy Treasures from Loss
Make of Thy Dwelling a Profitable Investment
Insure a Future Income
Increase Thy Ability to Earn
If you've never read the book, I highly recommend it (here's an Amazon link). I read it for the first time nearly twenty years ago and have reread it again and again. It changed the way I viewed money!
OK, so what does this mean?
Practically speaking—live within your means. The Richest Man in Babylon and most financial advisers I've encountered recommend saving 10% of your income. (Where to save it is a different question entirely, and we'll cover that in future articles.) Whatever number is right for you, budget to set aside some savings each month. Only 20% of Americans are doing that, so what are the other 80% doing? They're going into debt at a record pace. The Bible has something to say about that too.
Proverbs 22:7—The rich rule over the poor, and the borrower is slave to the lender.
Chances are they have car loans, multiple credit cards, etc., which means they are financial slaves to many masters. They go to work, pay their bills each month, and very few have anything leftover to save. Most spend any that remains. Some live beyond their means, spending more than they earn by going deeper into debt. I understand there can be extenuating circumstances for some diligent and hard-working Americans, but the vast majority of these cases are due to lifestyle choices.
There are ways to break free from this cycle of debt, including budgeting, eliminating unnecessary expenses, increasing income, various methods of quickly paying down debt, and outside-the-box ways that we can show you.
We teach our clients an extremely effective way to eradicate debt, but it begins with paying yourself first. Here's our friend Nate from Living Wealth to give you some practical tips on paying yourself first:
Learn more at www.livingwealth.com.
The information presented here is solely for informational and educational purposes. Dan Watkins is not a registered financial adviser. He can be reached at: danwatkins@livingwealth.com.