Financial freedom does not mean our lives will be free of any difficulty in the area of finance.
It means, giving up control over your finances and letting God take over.
It means having peace no matter what circumstance you are in, because God is now managing your finances.
Are you willing to submit under the leadership and guidance of God?
On previous article on Financial planning, I stressed the first step towards achieving financial freedom. The first step is to TRANSFER OWNERSHIP of your every possession to God and acknowledge that you are a STEWARD. At the end of that article, i asked you to evaluate your standard of living. This leads us to the next step towards financial freedom: AVOIDING INDULGENCE.
What is Indulgence?
I simply define this as rarely passing up a want or desire.
Did you know that you can decrease your expenses without reducing your living standard?
Let us do a diagnostic test by answering the following:
1) What is your monthly income?
2) What is your monthly expense?
Simple right?
My husband and i learned from a certified financial adviser that your expense rate should be less than or equal to 80%.
Your expense rate is usually divided into a 50-30 percent scheme. Necessary expenses get 50% and Wants/Discretionary items should not exceed more than 30%. Examples of discretionary items are: gifts, hobbies/sports, travel, dine out, entertainment, clothes.
God says in John 6:27, “Do not work for the food which perishes, but for the food which endures to eternal life…”
also in Matthew:25-34 “That is why I tell you not to worry about everyday life—whether you have enough food and drink, or enough clothes to wear. Isn’t life more than food, and your body more than clothing?”
What is key to this kind 80-20 percent lifestyle is NOT the SKILL of saving or investing or spending, rather it is being able to internalize VALUES such as thriftiness, stewardship and hard work.
Thriftiness is making every peso count. I highly recommend that you create a budget, not just for your business but also for your household. I for one know how difficult it is to make money so i chose to be frugal. I learn to enjoy the fruits of my labor but i set an amount.
IF you DON’T have the money, DON’T buy it. Don’t fall into the trap of being in CONSUMER DEBT (which we will tackle on the next blog).
MAKE MORE MONEY and SPEND LESS!
Discipline has negative connotation because it has to do with pain and setting boundaries. But DISCIPLINE is key to improving your cash flow.
Investing in yourself is also another way to improve cash flow. As Warren Buffet says, “The best investment you can make is an investment in yourself. The more you learn, the more you earn!”
God says in Ecclesiastes 9:10 “Whatever you do, do well. For when you go to the grave,[a] there will be no work or planning or knowledge or wisdom.”
Are you willing to look to trust God and deny yourself some Indulgence? Ask God to help you today 🙂
Read More:
- Biblical Principles of Financial Planning, Part 1
- Best Budgeting APP Guaranteed to Make your life Easier this 2016
- How much should you be saving for Retirement? Do you have what it takes to retire comfortably?
- Should I Invest Before Election?
Katrina Rey MD
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One of the best website i visited, i love it , very informative & helpful!!
Thank you Ernie. Enjoy reading.