If I knew then what I know now – surely I would’ve done things differently!
Every hear those words before?
Every say them!?
I catch myself saying them every now and then.
We all have various lessons we wished we would’ve learned at an earlier stage in life.
The great news is that it’s never too late to change. It’s never too late in the game of personal finance to turn the ship around.
Money has a funny way of controlling us doesn’t it?
Our thoughts, our desires, our motivations – they are all impacted by our money.
Learning these lessons early on will help you stay in control of your money rather than letting it control you.
1. Spend Less Than You Make
I spent an entire post talking about this very point – so I won’t hammer it too much here.
At the core of our personal finance is this very thing – you cannot spend more than you make and expect to get ahead.
It’s so simple, so basic that it’s almost insulting to mention it – but time and again I hear from folks who just can’t seem to get this in their minds.
The earlier you “get this”, the better off you’ll be.
2. Pay Your Tithe First
The Bible talks about honoring the Lord with your firstfruits (Proverbs 3:9), which back in an agricultural society meant bringing your best produce and livestock to the Lord first.
In today’s economy, a practical application of this can be: the first check you write when you get paid is your tithe.
Giving back to Him is a natural response we have when we realize how much God gave us.
We don’t do it to earn God’s favor, but rather to show our gratitude for canceling our greatest debt.
Don’t wait til you “have money’ to give, because that day never comes. Rather give back to the Lord first for He promises to provide for your needs.
3. Pay Yourself Second
After you give back money to the Lord, the next check you should write is to yourself.
This means you should have a set percentage or a set dollar amount that you save before you pay everything else.
Usually, if you don’t do it beforehand, what happens is that you may typically spend all of your money and by months’ end – there’s none left over to put into savings and investments.
Saving before your other bills – even if it’s only a small amount – will help establish a consistent pattern of savings and will also help you realize the importance of putting some money away.
4. Debt is Slavery – Not Leverage
This is something I wished I would’ve learned early on when I was in college. The first day of school my freshmen year I signed up for a credit card mainly to get a free T-shirt.
Little did I know that a little plastic card would lead to thousands of dollars in credit card debt. Unfortunately I thought that credit cards were a good source of leverage – and I paid dearly for those mistakes.
Using leverage to buy a home is something many of us have to do, but using leverage to buy everday items or depreciating assets is typically not a wise move.
The Bible illustrates a great point when it says that the “..borrower is slave of the lender” (Proverbs 22:7).
5. Contentment is a Jewel
One of the biggest reasons we take on massive amounts of debt and struggle to get ahead is because we lack contentment.
Contentment is defined according to Merriam Webster as:
feeling or showing satisfaction with one’s possessions, status, or situation
Whether in good times or bad, in excess or in want, when we learn how to be content with what we have, where we live and what kind of car we drive we can start making big strides with our finances.
Contentment is a rare gem in today’s society and an area I hope I can grow in as well.