How to Manage Your Money
BASICALLY there are three ways to manage money: (1) Spend it, (2) save it, or (3) give it away. Let us first discuss how to spend money wisely.
If the Great Recession has highlighted nothing else, it has shown the wisdom of living on a well-planned budget. What is a budget? Simply put, it is an estimate of how income will be used, whether by an individual, a family, a business, or a government.
A Family Project
How can you plan a budget? “All family members,” says the book Budgeting, by Denise Chambers, “should be included in drawing up the plan so that all have a commitment to the family budget.” Periodically, all should get together to see how their budget is working. Creating a successful budget can become a rewarding family project as each one finds ways to live within the family’s income.
To work out a budget, some people use a computer program. Others simply use a pencil and a sheet of paper, which they divide into two columns. One column is for income, and the other for expenditures. It is also important to include in the budget a monthly amount to cover once-a-year expenses, such as income tax and perhaps a vacation.
A time-tested method of budgeting is based on the use of envelopes or folders labeled “Food,” “Rent,” “Transportation,” “Electricity,” “Medical Bills,” and so forth. In the past, people put cash for those expenses in the envelopes each month. Now many feel it is safer and easier to deposit money in a bank account and withdraw it as needed.
Jonathan and Anne, who live in South Africa with their two daughters, often use the folder method of budgeting. “If your salary is deposited in a bank account,” says Jonathan, “it is just as important to be strict about how your money is divided. For example, if you run out of your monthly allowance for meat, then you should not take money set aside for savings to buy more meat.”
Jonathan used to run a business, but now he and his family have chosen to be volunteer workers and are involved in building places of worship. Because they treasure this life of giving, they need to live on a budget more than ever. The family regularly have discussions to see how their budget is working and to make needed adjustments.
The Greater Happiness
Studies show that giving of resources to others, including time and energy as well as some money, brings a greater happiness. To the extent your resources allow, it can be the best of the three options mentioned in the introduction.
Chris Farrell, in his book The New Frugality, says that savings are “a means of supporting spending.” He recommends: “One of the most valuable and sensible things you can do with your money is give it away.” * Farrell adds: “When you think about what matters most, it’s usually relationships, experiences, and the sense of making a difference, not money and possessions.”
Michael Wagner, an economist, seems to agree. In his book, Your Money, Day One, aimed at motivating youths to save, he states: “When you take it upon yourself to help those who are less fortunate, that kindness and generosity will come back to you in a variety of positive ways, but most rewarding is the feeling you will experience in your heart by helping your fellow man.”
The Bible acknowledges that giving results in happiness. As discussed earlier, the Bible contains sayings that can help you manage your resources wisely. Now, consider seven more of these wise sayings.
^ par. 12 Money can be given away in the form of gifts or hospitality such as preparing meals for friends and family.
THE sayings below are found in an ancient book filled with maxims that have proved to be practical and up-to-date. Consider how these may be helpful in managing your money.
1. “A mere lover of silver will not be satisfied with silver, neither any lover of wealth with income.” (Ecclesiastes 5:10) Those are not the words of an envious man of little means. One of the richest men who ever lived, King Solomon of Israel, wrote them based on his personal experience and observation. Wealthy men of more recent times have made similar remarks.
2. “If we have food and shelter, we will be satisfied with that. Those who long to be rich, however, stumble into temptation.” (1 Timothy 6:8, 9, NET Bible) Those words were written by the apostle Paul, who gave up a prominent career and became a follower of Jesus Christ. Unlike some religious leaders today, Paul firmly resisted any temptation to take material advantage of his students or associates. Instead, he could honestly say: “I have coveted no man’s silver or gold or apparel. You yourselves know that these hands have attended to the needs of me and of those with me.”
3. “Who of you that wants to build a tower does not first sit down and calculate the expense, to see if he has enough to complete it?” (Luke 14:28) Jesus’ illustration might be applied to a situation you may face: When making a purchase, especially with a credit card, will you buy impulsively or be patient and count the cost? Do you really need the item, and can you afford it?
4. “Those who borrow are slaves of moneylenders.” (Proverbs 22:7, Contemporary English Version) The recent world financial crisis has exposed the folly of credit-card and other forms of debt. “It is common for a person today to have, on average, over $9,000 in credit card debt on four or more credit cards,” states Michael Wagner in his 2009 book Your Money, Day One.
5. “The wicked one is borrowing and does not pay back, but the righteous one is showing favor and is making gifts.” (Psalm 37:21) Declaring bankruptcy is viewed by some as an easy way out of paying back what they owe. On the other hand, those who value a good relationship with God are not only conscientious about paying back what they owe, if they can possibly do so, but also generous with what they have.
6. “A young man I used to be, I have also grown old, and yet I have not seen anyone righteous left entirely, nor his offspring looking for bread.” (Psalm 37:25) Those words were written by a man who suffered unjust treatment. For years he was a fugitive, sometimes living in caves and sometimes seeking refuge in a foreign land. Eventually, this fugitive, David, became ancient Israel’s king. During his life he experienced for himself the truthfulness of the above words.
7. “There is more happiness in giving than there is in receiving.” (Acts 20:35) Those words were spoken by the greatest man who ever lived. “For the joy that was set before him,” Jesus spent his life on earth in the service of others. Now he enjoys immortal spirit life in heaven at the right hand of “the happy God,” Jehovah.
We can have no greater purpose in life than to imitate the example of Jesus by doing all within our power to be in a position to serve the interest of others. No doubt you will agree that it is better to be a cautious saver, so as to be able to be a generous giver, than to be a selfish spender.