There are only three things we can do with our money – give, save, or spend; and I think it should be in that order.
What I mean by give is tithing, which is to give back a portion of what God has entrusted us. This is what I learned from Crown Financial Ministries a long time ago. The teaching is based on the Bible. If you do not believe in tithing, I still recommend that you share what you have through donation to charities you support.
Tithing teaches me that the money I have is not really mine. I am merely a steward, a manager of what God owns. When I die, it will not matter how much money I have because I cannot take it with me. Tithing also teaches me to trust that God will provide for my needs.
Giving teaches me not to hoard my money, to share my blessing with others. If you want to give but you feel that you don’t have enough money, you can try to donate your time (volunteering). If you want to tithe but are afraid you won’t have enough money to live on, create a budget, tithe, and see that God will meet your needs.
OK, everybody knows that you have to save. Have you ever heard people say “I’m not going to spend anything, I’m going to save ALL my money”? Well, that is not realistic. It is impossible to live on nothing. You need money to buy food. You need money to buy your clothes, unless you have sufficient hand-me-downs; but even then, you still need to replace your underwear, socks, and other personal items. You have to pay for your shelter - rent, mortgage, or maintenance fee if you are already mortgage free. Even at thrifty stores you have to pay when you want to buy something.
When someone says “I have no money”, is this true? Does the person really have no income at all? Or the expenses seem to be more than income? If you feel that your needs are endless and you always need more money, track your spending. Look at your bank statements. Look at your tax returns. Look at your credit card statements. Look at your receipts. Where did the money go? Are there things you can do without in your life? What did you spend your money on? Is there anything that you didn’t really have to buy? Is there any clutter in your home as proof that you purchased what you didn’t need? Everyone has his/her own weakness. If you splurge on something, then you need to give up on others.
I recommend that you set aside money first before planning your spending; this will ensure that you have money saved. As for spending, you can spend as much or as little as your money allows.
To make saving meaningful, your savings should have purpose. Here are some examples.
· Emergency fund for rainy day - save for an amount that is equivalent to three to six months of your living expenses
· Christmas and vacation money, unless your spending for these falls within your monthly budget
· Big purchase goals such as down payment for a home or a car
· Long-term goals such as retirement and college funds
Spending money is probably not very difficult for most people (although for some who have been thrifty all their life, it would probably be painful to spend money, but it’s a rare case). If you have a budget, then you won’t feel guilty spending within the budget (although I know there are people who would rather not spend even when there is budget).
So where do we spend our money on? It starts with our basic needs, which are food, clothing and shelter. Beyond that, there are transportation, medical, school, and others. Lastly, there are entertainment and recreation. I wrote fourteen posts about spending that you can read on my website, www.PrudentMoneyCoach.com. Check out the first of the series from January 2016.
Everybody has money. How much we allocate to giving, saving, and spending depends on our priorities. If you allocate your money wisely, you will find that you can always adjust your spending to allow you to give and save.
For more help with reducing your money-related stress, contact me at (six zero four) 728-5139 or Effie[at]PrudentMoneyCoach[dot]com. Take advantage of my free first assessment meeting to see if we are a good fit.