by Derek Sisterhen on February 19, 2010
I joke often that, in spite of my degree in finance and career in the banking world, had I just read the Book of Proverbs I would have gotten a much better – and much cheaper – financial education. In this series I’ll highlight a few key principles from Proverbs that you can apply to your finances today.
“Know the state of your flocks, and put your heart into caring for your herds,” is written in Proverbs 27:23.
Back when Solomon was writing Proverbs, flocks and herds were currency (which often makes me wonder how they made change for a sheep, but that’s beside the point).
There are two words in this verse that leapt off the page the first time I read them: know and care.
Know. You have to know what’s going on with your money. How you behave will reveal a lot about what you know of your personal finances. Do you regularly balance your checkbook? Are you creating a monthly plan for every dollar you earn and tracking where it goes?
John Maxwell said, “A budget is telling your money where to go rather than wondering where it went.” When you know the state of your personal finances, you don’t have to wonder where your money got off to.
Care. When you care about your financial situation, you honor and respect your most powerful wealth building tool – your income. Stewards are those who manage the resources of someone else to the very best of their ability, even though they have no ownership rights. Understand that you don’t own anything, but everything – from income to assets – is a blessing.
Caring requires attention and intention. There must be a greater purpose for these resources, some larger goal to accomplish – whether retirement savings or giving to those in need.
Knowing demands your mind; caring demands your heart.
by Derek Sisterhen on February 12, 2010
I joke often that, in spite of my degree in finance and career in the banking world, had I just read the Book of Proverbs I would have gotten a much better – and much cheaper – financial education. In this series I’ll highlight a few key principles from Proverbs that you can apply to your finances today.
“In the house of the wise are stores of choice food and oil, but a foolish man devours all he has,” is written in Proverbs 21:20.
I draw two different principles from this one proverb. First, wise people have savings. Second, foolish people live beyond their means.
There are three reasons we must save money: for emergencies, for large purchases, and for wealth building. If Money magazine were providing a commentary on Proverbs, they’d reference this verse for the study that revealed eight out of ten Americans will have a major negative financial event in any given ten-year period.
In turn, it’s usually the lack of savings that throws us into deals like “90 days same as cash,” “no interest, no payments for 36 months,” and “0% balance transfers.” And then we wonder why we’re still making payments on a refrigerator when the ice maker stops working. Wise managers of resources put a portion of what they make into savings to cover life’s unexpected events along with the needs they’ll have when they retire.
Webster’s defines a fool as one “lacking in judgment or prudence.” The truth of this proverb is that we are imprudent, or irresponsible, when we spend all we make. We also know that we reap what we sow. For some of us, we reap stress, pressure, and discontentment. Others reap mounting debt to maintain a lifestyle beyond their means – they’ve devoured everything and then some.
To be successful, you must save. To save, you must live within your means.
