LIVE BELOW YOUR MEANS
We’re often told that to be successful financially requires us to live within our means. Sounds like good advice. But I want to suggest to you that to be financially free, you need to live below your means.
I want to challenge you to live on 80% of what you earn. That is 80% of your after-tax income.
With the 20% that you are not using, I want you to do two things. Give 10% to God, and put 10% towards long-term goals. Both of these are starting points not finishing points. As you become a better money manager, I want you to increase both of these, especially the giving.
Few would disagree, that as Christians we are called to live lives of radical generosity, but when we look at the statistics the level of giving is appallingly low. According to Barna……..
The second thing is to save and subsequently invest 10%. To build wealth for kingdom purposes and to fund long-term goals such as your kid’s education, retirement and so forth, requires setting money aside. We are surrounded with so many opportunities to spend money, that the majority of society lives month to month, without saving a dime. On that basis most people in rich countries, are actually poor. Not poor due to lack of income, but poor because the moment they lose their jobs, they’d be bankrupt within about 30 days.
How do you get there?
- Do a Budget (more on that in a moment)
- Learn to live on less and be content, once you get use to it, you wont miss it
- Spend time evaluating your giving. Aside from your spiritual home which should be your first and primary giving spot (your local Church), choose 2-3 other great Christian organisations, that you know intimately and automate your giving to all of them. Make it happen.
- Avoid income stealers. Debt, be it home loans or credit cards, which requires interest repayments, steal your income and lines the pockets of financial institutions.