Rich Or Poor You Need A Budget

Poverty Comes For Everyone

How is it that anyone in the NFL can make as much as they do and still be broke with a credit score below 600? This is a question  Terrell Owens has probably asked himself. Yet, more importantly he should be asking himself “how did I get here?” Most of us have this question to our self at one time or another. However, we don’t ever have to be “there” if we plan appropriately we can avoid what most would consider “financial emergencies”.

Terrell Owens   (Photo credit: Wikipedia)

The number one way to build wealth is not to make more money, but to retrain your mind. Huh? How is that possible? The answer is simple. Your money is spent based on your choices. Our choices are a result of the way we think. Proverbs 23:7 says “So as a man thinks so he is.” If you are broke it’s because you more than likely think broke (there are very few exceptions).

There is a lot of truth to positive thinking, but thinking positive, without taking positive action will actually lead to a negative result. Why do some people end up worse off when they suddenly gain a lot of money? Is it because they just blow it? I think it’s because they are a penny wise, but a pound foolish. Am I saying they are stupid? No, but I do think that people don’t understand how to manage large amounts of money.

Charity recycling (Photo credit: HowardLake)

If someone gave you one fish you probably know what to do with it, right? You could probably think of 5 ways to utilize that fish to better your life in some way, but what if someone gave you 1000 fish? Would the fish just end up rotten and spoiled? You see the problem isn’t that you have too many fish. You just don’t know how to manage that many fish. You have to learn how to manage 1,000 fish.

Money is a lot like the example of the 1,000 fish. Managing $1 is a lot different from managing $1,000. What makes the difference? The difference is in the power of what $1 can get you verse $1000. Yet, both still need to be managed wisely. What is the first thing people say when you ask them “what would you do if you had a million dollars? Typically the reply starts off with something like “I’d buy…”.

What if you asked them the same question but with a lower amount? “what would you do if you had 100 dollars? I assure you the answer would probably start off the same as “I’d buy”. Why? They’ve never learned to manage $1. If you believe you are different try saving $100 each month depositing it into your savings account.

Bank (Photo credit: Tax Credits)

If you get paid every week take $25 out and put it into your savings. If you get paid semi monthly take $50 out and put it into your savings. The best way to do this is by automating the process through automatic transfers via online banking. You want to take yourself out of the equation. So what’s the point of putting it into a savings account that barely gains any interest?

The idea isn’t necessarily to make more money. The idea is to teach yourself to be disciplined with the money you have. Remember you have to learn to manage 1000 fish; you start that by managing a little at a time as you grow in your responsibility to manage more. If you have more money and you can do this with more than you should do so. Being faithful saving $100 a month for the next 5 years will get you $6,000. Imagine doing this from the age 20 until you were 60 years old. You would have $48,000 from just saving $100 a month. That’s not even including the compounded interest. Just imagine if you would started with your first job at the age of 16.

If you want to be different, then you have to live different. This is about the marathon and not the sprint. Don’t spend your savings. Don’t touch it! Don’t even look at it, but once a month to make sure its there and to track your progress.