Though it may seem old-fashioned, there is one thing you can do financially that is guaranteed to get you ahead, no matter your income, season of life, place of residence, or personal circumstances.
My kids were supposed to start school last Wednesday, but they didn’t. In fact, I have no idea when they will start school this year. I’m sure ready for them to start, but, unfortunately, it’s completely out of my hands.
Like many other school districts in southwest Washington state, our teachers are on strike. The combination of new state laws and the resolution of a big court case have forced all school districts in the state to renegotiate their contracts, and it’s not going well in our area.
Last week, the school district sent out a letter detailing what they were offering the teachers, which would cause a $5.3 million dollar budget shortfall. It wasn’t good enough of an offer, and they are still on strike. Yesterday they had a new proposal, which would result in a $9.1 million shortfall over three years. I love our teachers and we have really good schools, but I have a big problem with that.
Who in their right mind would cause a budget deficit while we have a strong economy? Now is the time to be saving up for the down times. Just because we’ve been experiencing a bull market for nearly 10 years doesn’t mean that’s the “new normal.” It means things are due to slow down sooner, rather than later. The school district even acknowledged that under the proposed plan they would most likely have to lay off 95 teachers in a couple of years.
The “New Normal” In Budgeting
Sadly, this spending pattern has become the “new normal.” From school districts to individuals to the federal government, spending more than you have has become commonplace. This is really frustrating and hard to understand for someone as square and analytical as myself. Three minus four will always give you a negative number. It doesn’t matter how you feel or what you think someone deserves, the math doesn’t change.
You simply can’t spend more than you have and get ahead in life. But people just don’t seem to get it. One recent report found that only 40% of Americans actually spend less than they make. That’s not even half! Almost the same amount spend everything they make, and a full 18% spend more than they make. No wonder 57% of our nation has less than $1,000 in their savings accounts. We are a very rich nation, but on an individual basis, most of us are failing miserably.
What The Bible Says About Deficit Spending
Even the Bible chimes in on this. In Luke 14, Jesus talks about someone wanting to build a tower. He says that you should see what it costs ahead of time, and if you don’t have enough, don’t do it. Figure something else out.
He didn’t say, “If you really need a tower, go ahead and build it and the government will cover the shortfall.” Neither did he say, “If you’re a really good person, start building and God will miraculously provide everything for it.” No. He said, and I paraphrase, “If you start building a tower you can’t afford, you will become a laughingstock.” Your holiness or neediness will not shelter you from the consequences.
How To Get Ahead Financially
I think it’s pretty clear; you’ll never get ahead financially if you spend more than you have. Now, people in financial services tend to shy away from making guarantees. It’s forbidden by most regulators, and it’s not wise since none of us can really predict the future. However, I’ll make you this promise: If you spend less than you make, you will get ahead. Now, you probably won’t get ahead of Bill Gates, but you’ll get ahead of everyone who is spending themselves into a hole.
It may seem really old-fashioned, like cranking down your car windows by hand, but it’s the wise thing to do. You will never experience financial security and peace as long as you are spending everything you make or more. The math just doesn’t add up. I do believe that God can bless you and he does provide miraculous provision at times, but the Bible makes it clear that he rewards those who are diligent, not those who are slacking off.
How To Spend Less Than You Make
This is the hard part. Though many people struggle with it, it’s easy to spend less than you make when you earn $150,000 a year. But how about earning $50,000? Or $25,000? Those are more realistic numbers for pastors, aren’t they? It’s a lot harder to have margin on an income like that.
Step #1: Have A Plan
The first step in accomplishing your goal of spending less than you earn is having a plan. This doesn’t have to be a 50-page document drafted by a financial advisor. A simple budget is a plan. If you don’t know how to make one, follow the link. It’s basically a list of all of the money you have coming in and where it is going, broken down by categories. Research has found that those with a plan are twice as likely to spend less than they make and save the difference than those without a plan. So, you need a plan.
Step #2: Cut Spending
This is the most obvious solution. If you’re spending too much, simply stop. Spend less. There’s a good chance you have little things that could be tweaked in your budget to save money. This article will show you how to audit your expenses to do just that.
Step #3: Earn More
If you’ve cut back all you can and still aren’t making it, you need to address the other side of the equation and earn more. Perhaps you need to have a frank discussion with your church about your salary and your family’s needs. Perhaps you or your spouse need to take on a part-time job or start a side business. There has never been an easier time in all of history to make money.
It may seem old school, but spending less than you make is the way to go. It’s the only way you will ever be able to get ahead (or even keep up!) financially.
What about you? What have you done in order to be able to spend less than you make? What struggles are keeping you from doing so? Share with us in the comments!
