Financial Wisdom 101 and a Warning

Michael Kelley:

I’ve started reading a new blog called Get Rich Slowly. I’ve found it to be pretty entertaining and at the same time informative on the subject of managing your money. Today’s post was the 14 tenets of the Get Rich Slowly Philosophy. Here are a few to get you started:

1. Money is more about mind than it is about math. That is, financial success is more about mastering the mental game of money than about understanding the numbers. The math of personal finance is simple — spend less than you earn — it’s controlling your habits and emotions that’s difficult.
2. The road to wealth is paved with goals. Without financial goals, you have no direction. If you have no direction, it’s easy to spend money on things you’ll regret later. But if you’re saving for a house, your daughter’s college education, or a trip to Europe, your goal will keep you focused, making it easier to spend on what’s important and ignore the things that aren’t.
3. To build wealth, you must spend less than you earn. Basic math, yes, but it’s important. Successful personal finance is all about building positive cash flow. By decreasing your spending while increasing your income, you can get out of debt and build wealth.
4. Saving must be a priority. Before you pay your bills, before you buy groceries, before you do anything else, you should set aside some part of your income. If you have to start small, start small. Even $25 a month is good. As you earn more and develop better habits, save as much as possible. (My wife saves nearly a third of her paycheck!)
5. Small amounts matter. Your everyday habits have a huge impact on your financial success. Frugality and thrift help build good habits, and make a real difference over time. Plus, there are tons of opportunities to flex your frugal muscles.

Read the rest here.

When my wife and I teach our marriage class we stress the importance of managing money well.  Had Dave Ramsey come into my life when I was 22 I would not have made many stupid choices with money that I did in my 20's.  It's not rocket science.  Who would be dumb enough to pay 25% interest on their credit cards?  Uh... 90% of those living in the US right now.  So money is clearly not about the math, it's about killing the childlike need for instant gratification that lives in all of us.  Living in our freakishly fast paced culture doesn't exactly help either.  So we stress these things with young couples and warn of the chaos that will rule in their home if they choose to make unwise financial decisions. But...

There is a danger that lurks of which we need to be constantly aware.  If you do these steps outlined above, you will most likely have a lot of money.  Usually, if you work hard and are wise, money will not be a huge problem for you.  This can be a blessing but also a HUGE curse.  Jesus warns over and over pertaining to the dangers of wealth and how it can anesthetize your need for the Gospel thus sending you to hell.

So what should we do?  Be stupid with money so that we have less of it?  Of course not, but as we practice wise financial methods we should also constantly draw near to the warnings of Jesus concerning wealth.  Being habitually generous towards Kingdom pursuits is a meaningful way to combat these dangers.