Philosophy Of Household Money ManagementWe are always enthused by our new purchase but that new smell wears off quickly while the payments seem to continue on forever. For the purposes of this site we will consider all debt as “bad debt” except for a mortgage to purchase a residence. Living without debt is a lifestyle and attitude change. These are the principles that can be applied for sound household money management. Give some away. This may seem crazy for someone who can barely make the payments at the end of each month, but giving money away to a worthy cause makes us put money in its right place. We also have the opportunity to stand back and see how others are more in need than we are. Never spend it all. You have to get into the habit of putting some money aside for yourself. Things come up. What these things are will be different for each of us, but they will come up. You have to have money set aside to be ready to deal with them. These things are numerous; retirement, college, broken down cars, illness, unexpected home repairs, broken appliances, etc. There are only five things that you can do with money - give, save, invest, lend and spend. There is a good reason for spending to be last in this list. Realize that God is the source. God gives us money so that we can provide for ourselves and help others. You receive what you deserve. We work for our money and you will be paid for the value that you provide. You must pull up your bootstraps and get it done. Pay with cash. Most people will spend less if they have to use cash. They find it too easy to just pull out the credit card. You must not go into debt no matter what. Debt will control you finances. The only acceptable debt is a mortgage for a primary residence. Have a personal monthly budget written down that lays out where each dollar will go. Until a plan is put on paper it will seem impossible to implement. You will also stray from a plan that is not written. This written plan is the backbone of sound household money management. More money will not cure your household money management problems. Usually more money just means deeper debt. It is how you handle your money, not how much you have that is the big problem. Our household money management principles may be a little hard to swallow, but if embraced you will start managing your money instead of it managing you. Why do we need to embrace these principles of household money management? Divorce has become prevalent in our society. Statistics suggest that as many as 80 percent of divorces are the direct result of financial trouble. Don’t let this happen to you, financial troubles can be overcome. To survive lean times. When your budget is stretched to the limit it only takes one small problem in your earning picture to send you into financial anguish. To reduce your stress. How much stress do you have when you have to worry about whether or not you have enough money to pay the bills at the end of each month? To protect you future. When you take out a loan you are assuming that you are going to have that money in the future. Do any of us really know what tomorrow will bring? To have options. Debt eliminates options. When you have payments that have to be made you lose your freedom. To teach your children. It is well known that children learn from imitation and observation and will learn how to handle money from their parents. To experience fully God’s care and provision. By refusing to go into debt we allow God to work in our lives. Rather than using a credit card we should let God work things out in his time and manner. This does not mean that we do not need to work for a living but that we simply should not spend for tomorrow what we do not have today. A household money management system where you live without debt is a lifestyle change. You spend less than you earn; you give, save and invest confidently and consistently; your financial decisions are purposeful; you turn away form compulsive purchases; you reject unsecured debt; you plan for the unexpected; you scrutinize your purchases; and you reach your goals by following a specific written plan. One of the easiest things to do that will help you realize exactly where your money is going, is to keep track of everything that you spend for one month. Get a small notebook and actually write it down. This will show you where your money is actually going and may reveal some areas where your spending is excessive or unnecessary. Just a few dollars each day can add up to a lot of money over time. If compound interest is included, it can add up substantially. Good household money management is simply doing the little things right. Three dollars each day can grow to over 35,000 dollars at only 5 percent interest in 20 years. Do you spend three dollars each day on something unnecessary? In his book The Purpose Driven Life author Rick Warren writes, “Most people fail to realize that money is both a test and a trust from God. God uses finances to teach us to trust him, and for many people, money is the greatest test of all. God watches how we use money to test how trustworthy we are. The Bible says in Luke 16:11, “So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches?”
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