Personal Budgeting
Wealth Secret.... or Recipe for a Boring Life?Being Frugal in Times of Abundance:-
I live with my family on 1 1/4 acres of land a few minutes out of town. We have no town water and need to store rain water in tanks. We have two 5000 gallon tanks that usually overflow for weeks on end during the wet season and then in the dry season we sometimes have to buy water to make it through to the wet season again. I asked a friend who lives out of town not far away from us who only has one 5000 gallon tank, "How do you manage to survive with just the one tank?"
His reply was simple. He told me that when their tank is full they treat their water as if it was the middle of the dry season and the tank was nearly empty. He commented that he thought most people splash out (no pun intended) when their tanks are full, and use water liberally because it is in abundance. Then when it is nearly all gone they have to go to extreme rationing procedures to try to manage until the rains come again.
Of course you have probably worked out that the next thing I am going to do is talk about the similarity between water and money! Most people give less thought to being frugal when the bank account seems to be flush with funds than when it is empty. They try to scrimp and scrape when there is no money in the bank account but when money is there and the pressure is off, a more liberal spending pattern is adopted.
Should I ask, "What would happen over a long period of time if you always lived like you were down to your last dollar?" I guess we all know what would happen. The surplus money would probably grow over time to become the basis for a very healthy early retirement fund. I say probably, because there is always the possibility of taking poor investment advice. Of course you may not want to be quite so harsh on yourself as to live like you are flat broke all the time. I'm sure there is a happy medium to be found.
Being frugal in times of abundance! What does this mean exactly? Well I don't think it means this:-
The actor Marlon Brando died recently. It was assumed for quite some time that he was not living in times of abundance. I found this about him on the internet:-
"He's been in pretty dire straits lately and just yesterday it was revealed he's $20 million in debt, living alone, and receiving government benefits. He had hidden his Oscars to keep them from being taken in a credit judgment."
Then I heard on the news that it's been revealed:-
His estate is worth over $30 million and includes 11 Tahitian Islands!
While this probably fits the definition of Living Frugally when Abundance exists, I think it is an unusual extreme that is definitely NOT the wealth secret that leads to the minimal financial stress and happiness that we are all looking for.
In the lead-in to this story I stated that one of the worst problems in the world today began over
the issue of not living frugally in times of abundance about 3880 years ago! What am I referring to?Well, there was a period in history, (recorded in a number of sources including the bible and other archaeological records), when throughout the lands, for seven years, crops flourished and harvests were abundant. Everything was in plentiful supply. In some countries, people squandered the abundance, eating, drinking and being merry during this period. However, in Egypt they stored the surplus. They lived comfortably, but frugally.
Then came seven years of drought and crop failure and famine. Everyone outside Egypt was in trouble. Not only did they have no harvests, they had become so used to living in plenty that it was even harder to survive on the small harvests they did manage to take. (They were not like my friend with one tank). Things went from great to rotten in no time at all!
Now you might be wondering how the Egyptians were so smart. Well the fact is, they had inside information. They knew that after the seven years of plenty would come seven years of drought and crop failure. A man called Joseph was a foreigner living in Egypt, but he was put in charge of storing the 'surplus' gathered during the time of abundance. This job fell on him because God had given him the ability to interpret some dreams that the Egyptian Pharaoh had had. In one of his dreams, seven skinny cows came up out of the Nile river and ate up seven fat cows. Joseph correctly predicted what was going to happen from this, and so Pharaoh gave him the task of preparing a fourteen year budget that would allow the surplus to accumulate until it was required for consumption in the famine years.
Unfortunately, Joseph's family back home did not plan their budget so well. They had not stored the surplus and before too long were in all sorts of trouble. When they found out that Joseph was in charge of supplies in Egypt, they moved to live with him so they would not starve. As the famine lasted for years, they stayed, became quite settled and never thought to leave when the weather returned to normal.
Hundreds of years later the decedents of this family moved out of Egypt because their relationship with the Egyptians had deteriorated quite seriously. They went looking for a place of their own to live - somewhere they could call their homeland. God had promised them a land of paradise when they left Egypt, but foolishly, they failed to follow his directions and they ended up going round in circles in the desert, never reaching their destination........... Not long after the end of World War Two, these people's descendents were finally given some land to call their own:- Israel. We all know about the trouble going on around and in Israel. Funny to think that in a way, all of this trouble is because their ancestors failed to budget properly.
When you feel like things are going really well for you and money pressure is not gnawing at you, there is a real danger that you can float along thinking everything is fine only to find one day that the advantage you had has disappeared and you are in a spot of bother. When you have an abundance, don't be in a hurry to unload it. Take your time, be frugal! You can only spend it once, but in a million possible ways up until the moment it is spent! The moment you spend it, you just lost 999,999 possibilities! It's amazing how the things we just " have to have" at some time are later of very little value to us, so don't rush in. Have some surplus put aside for the lean times. I never met anyone who regretted saving money, but I have met plenty who regretted that they did not!
So, what does all this mean for you? Well it's this simple!....... Sit down and prepare your personal budget. If you don't have a copy of Simply Budgets I will assume you have not been receiving my newsletters for long enough to have learned how it will allow you to plan a budget like the Egyptians had all of those years ago. One that allows the resources (money) to be available when the need (bills) arrives. I get really cranky when I hear some financial Guru giving the wonderful advice to "do a budget". What makes me cranky is that they never tell you how ! They just assume you will know how. Money Hints and Tips numbers 1 to 4 explain all about this, and my Simply Budgets software gives you the power to put the things I explain in those Hints and Tips into action and to plan your way through the abundant times and the lean times that lie ahead without having to move to Egypt or Max out your Credit Card.
The Million Dollar question, "Is Being Frugal in Times of Abundance" a Wealth Secret or a recipe for a Boring Life? I think it's obviously a Wealth Secret ..... If you consider that the alternative, 'Spending it All in Times of Abundance', is clearly the recipe short-term pleasure and eventual financial disaster. Spending less than you earn at any time is good advice. Life has a habit of throwing things at you out of left field. Living as if there is no left field only works between disasters. When you reach the inevitable pot-holes in life's journey, having no Plan 'B' resources means that what might have been a pot-hole becomes a huge brick wall. A great deal more anxiety, suffering and time spent recovering will be experienced.
If you're new to my mailing list keep reading the Money Hints and Tips as they come. If you've been on my list for ages, go back and look over the first four!
I often get e-mails from people saying how much they are enjoying reading my Money Hints and Tips messages and that they will get around to ordering my Simply Budgets personal budgeting software soon. If you are one of these people, and you know you need to do something about it, but you have been putting it off, it's time to take action now.
Nathan, (I didn't ask for permission to use his comment, so I can't give his surname), from Albert Park in Victoria recently ordered Simply Budgets and he also purchased Bodo's book from me at the same time. He sent me this Message:-
Fantastic Software! plus, Bodo Schafer's Book "Road to Financial Freedom" one of the most powerful books I have ever read! - Thankyou -
NathanHere is another recent e-mail I received and once again I haven't had time to e-mail back to ask for permission to use this publicly, so only first name is shown again:-
Hi David!
Firstly I would like to thank you for a wonderful product that has helped me a lot. For so long my partner and I wondered why our bank balance failed to grow and we realised that we were failing to plan for the long term. We have since looked closely at our budget and can now see the importance of planning ahead for everything. It is great to be able to look into the future and know that we will be able to pay for things and even afford some luxuries in the years to come through our careful planning.
Kay.I could go on and on, but I'd start to sound like a salesman and I'd rather let the facts and the quality of my software system and personal service I give do the selling for me.
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