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such a ''spartan" approach may not
always be necessary if an individual
has character. But if your family is
in financia! trouble, the cash basis
and savings approach might be the
turning point from 6.nancial disaster
to financia! security for your family.
If
you practice this method for the
next few years, you will have learned
to safeguard yourself against trouble
with credit.
Remember, the wise family can
learn to live
with
credit, but it should
never live
by
it!
Incidentally, one should be espe–
cially cautious about buying day-to-day
consumer items like food on credit.
Problem Three - Savings
Income statistics show that family
savings have been rising over the
last decade or two.
It
is also an in–
terestiog statistical fact that the fami–
lies with savings are not the oues
experiencing financia! difficulties.
Almost every family I have ever
encountered that had monetary prob–
lems immediately reacts to the idea
of savings: "We just can't afford it !"
But they can't afford oot to ! The
lower the income, the more essentiat
it is
to
have the correct type of sav–
ings.
Already we have seen that savings
rather than credit is best for luxury
or want items. But this is not the
type of savings I am referriog to.
What most families need, particularly
those on tight budgets, is what I call
an "operating savings."
An operating savings is
not
for
specific future needs üke a vacation,
a new household appliance or retire–
ment. lt provides funds to be used
to meet unforeseen factors in your
budget.
No matter how carefully you pro–
ject your expenses into the future
when drawing up your budget, there
come times of trouble or unique op–
portunities when unplanned cash is
needed. The poorer the family, the
more it needs operating savings.
As income rises, the proportion of
yearly income kept aside for such
16
needs can be reduced. But for the
median income family,
it
should be
severa! percent of what is earned in
a year.
1f
large corporations with
millions of dollars of assets see the
need to have operating savings, cer–
tainly a family having a modest in–
come should see the need.
When I first recognized the need
for this sort of "financia! buffer" as
a basic law of financia! stability, it
took me severa! months to acquice the
needed money by adding it to my
budget on a regular-amount-per-check
basis. Now, whenever my operating
savings reaches the necessary leve!, I
drop it from my budget until I am
required to draw on it again.
At fust, you will probably consider
this area as being far less important
than budgeting and the proper use
of credit. But
it
is just as important.
Go to work on that operating savings.
Then maintain it, and doo't touch it
except for genuine emergencies. You'll
be surprised how much further it will
make the rest of your money go.
The Bigger Law
There is another principie govern–
ing tbe success or failure of your finan–
cia! matters that is more important
than the three I have already men–
tioned. It too comes from one of the
least recognized sources of financia!
information - the Bible.
Many businessmen have regularly
searched the pages of the Bible for
guidance in their daily affairs. Like
them, I have a deep and abiding re–
spect for the Bible's many practica!
words of advice, especially to the
money handler.
Consider, for example, the Biblical
principie of operating savings: "Go
to the ant, thou sluggard; consider her
ways, and be wise: which having no
guide, overseer, or ruler, provideth her
meat in the summer, and gathereth her
food in the harvest" (Prov. 6:6).
A deeper and more profound mone–
tary coocept is contained in the words
of Jesus Christ: "lt is more blessed to
give than to receive" (Acts 20:35) .
Admittedly, it is not easy when you
are short on cash yourself to decide to
devote a portion of what you have for
the welfare of others. Have you ever
considered this as a policy for your
family budget - always remembering,
of course, the limits of your financia!
resources?
Once a person can admit to him–
self that he does not actually need all
that he earns, and once he begins to
use sorne of his resources to help
others, he discovers he has begun to
lose much of his selfish attitude. This
principie of concern for others exerts
a far greater stabilizing influence on
a person than the three points men–
tioned in this article. The book of
Proverbs expresses the prioci pie in
this way, "It is possible to give away
and become ri cher! It is also possible
to hold on too tightly and lose every–
thing. Yes, the liberal man shall be
rich! By watering others, he waters
himself" (Prov.
11
:24, 25,
The Living
Bible).
Thousands have had their lives
vastly changed for the better by the
Bíblica! principie of tithing.
In summary, here are the three keys
to financia! stability:
l.
Write out a yearly budget that
enables each check to be spent almost
identically.
2.
Avoid credit buying for every–
thing but unavoidable needs. Save cash
for luxuries.
3. Set aside an '"operating savings"
for emergencies.
Aod most important of aH, examine
your own attitude. Is it selfish? Or is
it generous? Is it concerned for the
welfare of others, or only for
SELF?
Herein líes the real key to financia!
happiness ! •
NEXT MONTH we will explore
additional principies of financia!
success and sound money manage–
ment.
In
the meanúme, write for
a free copy of the booklets
Manag–
ing Y our Personal Finances
and
Endittg Y our Fintmcial
JJ:7
orries.
See addresses inside front cover.
PlAIN
TRUTH
June
1972