Monday, July 18, 2011

Moolah Monday - 2 Financial Principles to Live By

In the aftermath that was save-a-geddon in preparation for baby #9's impending then canceled arrival to our home, I've been a bit wild and crazy in the spending department.  It's been rebellion honestly - as if to say "fine, if I can't have the new baby then I'm going to do whatever I want to do whenever I want to do it" - since I still have 4 kiddos that need my constant attention the two things I can apply that to are shopping and eating out.  I know it's a really immature response, but they don't call it retail therapy for nothing.

Yes, I feel convicted.

As I was driving home last night from a trip to the spray park with the kiddos where I did indeed go out of my way to get cash so I could buy them popsicles from the ice cream man, I was pondering my behavior and having a conversation with myself (while simultaneously having a conversation with my son in Spanish, because then he couldn't copy every word I said...haha...take that copy man...).  The conversation went a bit like this:

"Self - it's time to get your act together.  (Si, yo puedo hablar en Espanol).  All of what you have been given has been given with purpose, not to be wasted.  (No quieres que hablo en espanol porque no puedes copiarme).  Though you now have the opportunity to spend to your heart's content that doesn't mean you should.  (Porque?) You don't know what's around the corner and why God has prepared you for everything as he has.  (oh pobresito, si no le gustas, porque estas riendo?)  There is something coming and just because you don't know what it is doesn't mean you can be irresponsible."

I then proceeded to sing Bibbidy Bobidy Boo (sp?) in English (of course) because I knew my son was tired of the Spanish game and didn't know the words to that song either.

  1. Principle #1 - Just because you can doesn't mean you should.
    Surely this applies in most areas of life.  This one is all about self-control.  Though you may have resoures abounding financially (or opportunities, or abilities, etc.) doesn't mean that you should spend them without regard to wisdom.  The lack of this principle is the root of debt-crises, over-spending, and the remarkable phenomena where for many people no matter how much money they earn, they will end up living paycheck to paycheck because they choose to use resources when they should choose to save.  (Please don't hear me saying there aren't tradgedies or dire circumstances that lead people into financial distress that are indeed uncontrollable - if you find yourself in a financial crisis I pray that you will find relief).  This is also why many lotto/lottery winners find themselves in financial ruin after receiving large winfalls. 

    I remember back when I was a newlywed. I made what I thought was good money in my first "career" job. It was good money, especially for a woman in her young 20s. But I remember thinking "If only we made $XX money per month, then we'd be set". I look back on that fondly because I remember my spending patterns then and how much we struggled and how naiive I was that if I earned that figure I'd be set for life. I'm ashamed to admit we make more than double that figure now and though we are indeed blessed and financially stable today I could easily see how we could spend the money we have easily, unwisely, if we chose to. It takes a lot of restraint and self-control to live within your means.
  2. Princple #2 - Just because you "can't" doesn't mean you shouldn't. 
    In seemingly direct opposition to #1, this principle also rings true.  It isn't in direct opposition though - this principle indicates misplaced priorities.  There are often things that people should do that they believe they "can't" do.  This is true in 2 areas - giving and becoming/staying debt-free.

    In Christian and Jewish circles - the idea of a tithe is fairly well known.  It is the expectation/obligation/responsibility to give 10% of your income to God through the church.  Over time I've found this concept to be one that people often end up saying "I can't" with.  "I can't give that much regularly because it just doesn't work out financially.".  Let's say you're not a religious or faithful person, or maybe you are but not in these two religions and /or for whatever reason don't believe that the tithe is important - giving is still important.   Personally in our lives we've found that time and time again when we give we get back way more than we've given.  We do believe that the tithe is something that drives that - not that we give to get back but that it is something we've been asked to be faithful in and when we are faithful God honors that.  But we also know that what we've been given is not meant for us to consume alone - that the more we give the more room we have to receive.  I heard or saw the example demonstrated once with two people in a skit - imagine one person with unlimited balls throwing them at another person.  If that person tries to catch and keep all of the balls that are thrown at him, eventually there will be a maximum amount that he/she could catch and have.  However, if the person instead catches and gives what he/she catches to someone else, there is an unlimited potential to continue receiving.  Our lives are like that right?  The more we are out pursuing wealth the less time we have to enjoy it.  The more we try to consume it ourselves and/or keep only for ourselves, the less rich our lives are in total and eventually the less capacity we end up with overall.  But if we have it in our hearts to be givers,  we are motivated by our capacity to give not our capacity to receive, and we figure out how to do more with less, be more efficient, or we have the internal drive to find more ways to give.  Need proof?  Watch a few episodes of Extreme Home Makeover and watch what those folks do with what they have.  (not all of them of course, but many of them).

    The other area this directly applies to is getting to be and/or living debt free.  I'm going to keep this piece short because it is simple.  You can't afford not to get out of debt or live debt free.  Maybe you can't afford to do it all right now, but if you don't take the steps and make the changes in your life now to get out of debt, you won't ever be out of debt.  For most it doesn't just magically happen and you actually need to identify areas where you can cut or increase the income for a period of time to get out of debt.

    For both of these pieces (and why I put "can't" in quotes as I did) for most people the issue isn't really can't, it's won't or don't want to bad enough.  (again I add the caveat that this isn't everyone, but the majority of folks).  Those who have studied financially successful people have found two things, they are givers and they do so debt-free.  They put a priority on giving and being debt-free above the things tha we often prioritize unwisely.  What are those things?  I don't know - for us I'm sure it's the eating out and unnecesary purchases. 

    I think it's important to comment in finale on this principle that giving and being debt-free are also things that need to be done wisely and with a lot of consideration.  Who, how much, what pace, etc. are all things that aren't answered with hard and fast rules.  What's the point of all this then?  I challenge you (as I do myself) to think about your budget and if you find yourself often saying I can't to giving and remaining/becoming debt-free - look to see how you are prioritizing your family expenses and see if there isn't something that you can eliminate to enable you to more highly prioritize giving and living debt-free.
I know this was a bit preachy today - I don't know most of you so I assure you it's not aimed at anyone in particular - except me!

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