In 1995, my daughter Vanessa was born. That same year, we started a Plan 529 for her college education. Each month a small percentage of our check went to it. This year my daughter is going to college. Looking back, that was one of the best decisions I have ever made. My goal is that my children graduate with zero student loan debt. In order to have that happen this next 4 years, I started saving the last 18.
Here is a sobering financial report: 1/3 of all Americans are in collections. “In 12 states, including the District of Columbia, more than 40 percent of residents with a credit file have a bill in collections. That includes Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, New Mexico, North Carolina, South Carolina, Texas, and West Virginia.”[i]
Here are three principles I have tried to follow:
1. Think of saving, rather than get rich schemes.
The majority of those who become rich achieve their wealth through hard work, dedication, and time. It sometimes takes a lifetime to become an overnight success. This contrasts with many who want to make money quickly. A little while ago I read an article about two individuals who had won lottery prizes. You would think these people who were poor one day and rich the next would be enjoying themselves, but in most cases the opposite occurred. With more money came more problems. Relatives they had never met before popped in demanding money. Family arguments began, leading to the divorce of the lottery winners. And since the winners’ buying habits were the same as the habits that led them to play the lottery, the money went out as fast as it had come in. Within five years, many of the winners had exactly as much money as they’d had before winning the prize, but now with significantly fewer friendly relatives.
We can’t have everything we see. This sickness starts when we are small, as we want our parents to buy “the toy,” and “the shoes,” and “the candy.” It doesn’t matter how powerful our desire to possess “that thing,” after a while it loses its attraction and we set out to try to get something else. When I present seminars on finance, I tell those who attend, “Just because it’s on sale doesn’t mean you need to buy it!” An intelligent person begins to buy things strategically. He or she know that the key to prosperity is not to wait until an avalanche of money comes in, but in being wise to know when to say “no” to a purchase, and to save. Isaac, in the Bible, became very prosperous: “[Isaac] became rich, and his wealth continued to grow until he became very wealthy,” Genesis 26:13.
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2. Think of developing their abilities, never settling.
When God made you, He broke the mold. He made you out of top-quality material, like a diamond, which becomes more valuable as it is polished. It now depends on us to take this life God has given and develop our skills, to become as effective as we can in the use of the talents we have received. The wise man Solomon had it clear in his mind when he said, “Lazy hands make a man poor, but diligent hands bring wealth,” Proverbs 10:4.
Did you notice that? The more diligent or capable we become, the more prosperous. Someone once asked a famous man if he believed in luck. He replied, “Yes, I believe in luck. The more I prepare and the harder I work, the better my luck.” There’s a direct connection between the development of our abilities and the capacity to prosper. An important point to remember is that in addition to all that you can do, you have God on your side, because you are His child, and that’s an advantage not everyone possesses. That’s why, once again, Solomon reminds us that “the blessing of the Lord brings wealth, and he adds no trouble to it,” Proverbs 10:22.
How can you develop your abilities? Here are several suggestions:
- Outstanding people. There’s a great difference between being outstanding and being average. Try to evaluate your abilities and decide to surround yourself with outstanding people who will help you become better. Learn from them. Don’t resent them.
- Exceptional resources. Not only is it important to surround yourself with outstanding people and learn from them, it’s also vital to have access to exceptional resources. There are thousands of materials and tools that can help you. Leaders are savers AND readers.
- Inspiring places. When a person wants to start up a business, one of the first things he or she does is to become familiar with similar businesses. Finding inspiring places makes a difference in our lives. It encourages us to reach unimaginable goals.
- Motivational events. Each year events take place that can make a great difference in your life. These can be one-day training courses, retreats, reunions, seminars, a conference, and similar events. I’m not sure why, but the act of leaving one’s house to find enrichment has a motivating effect that lasts a long time. If you attend with an open mind, ready to learn, you will come out of those meetings a better person than when you arrived.
3. Buy necessary things first, rather than trinkets and luxuries.
The first thing we want to establish is that those things that we believe to be necessary, such as a car or a cellular phone, most of the rest of humanity consider these luxuries. If you live in an industrialized country, such as the United States, you are among people who are in the top two percent of the richest people on Earth. Within this frame of reference, it makes sense for you to use the wisdom God has given you to determine the difference between the following:
- What is a need? What is a craving?
- What is a necessity? What is a wish?
- What is an essential? What is a luxury?
The key question is this: What are you willing to give up to reach your financial goals? I once was counseling a mother who was having financial problems, but was unwilling to cancel the cellular phones of her two children. Another couple asked for my help in educating their children, because according to them, their income was not high enough to pay for Christian education. When I arrived at their house, I found two luxury cars (one new) and a television screen more than 48 inches in size. Though perhaps they didn’t notice, they had a definite scale of values, and to judge by their possessions, the thousands of dollars they earned were best invested in a high-definition television and a more comfortable vehicle, rather than in a better education for their children.
In 2010, my wife and I each received a cut in salary. This led us to review all of our monthly expenses, to see where we could save, and we realized that the combined monthly cost of our home telephone, cable television, and Internet service was $250. We canceled all three. We now use only our cellular phones, watch movies instead of television, and use the neighbor’s Internet service (that may not have been right, please don’t judge me). When my children realized that they would no longer have cable service, they almost had a heart attack. But, I’m now happy to report that they survived. We have discovered other, more productive ways, to pass the time, such as reading a book or playing outdoors, and not one of us has died. This time of austerity has taught us that one can survive without all the conveniences of life.
A wise person can pick and choose those things that are really important, and those we think we need because society tells us so, or everyone seems to have them. Be a leader. Be a saver.