Reflections on God and Money: Creating a Budget (5)

Now the weight of gold that came to Solomon in one year was 666 talents of gold, besides that which came from the explorers and from the business of the merchants, and from all the kings of the west and from the governors of the land…

All King Solomon's drinking vessels were of gold, and all the vessels of the House of the Forest of Lebanon were of pure gold. None were of silver; silver was not considered as anything in the days of Solomon. For the king had a fleet of ships of Tarshish at sea with the fleet of Hiram. Once every three years the fleet of ships of Tarshish used to come bringing gold, silver, ivory, apes, and peacocks.

Thus King Solomon excelled all the kings of the earth in riches and in wisdom. And the whole earth sought the presence of Solomon to hear his wisdom, which God had put into his mind.

1 Kings 10:14-24

It is probably true that for most of us, for most of our lives, most of our money is spent on survival costs. This is less true the richer you are, and it was certainly not the case for King Solomon, but it is also true that with wealth comes responsibility. Solomon not only had to care for his own needs and the needs of his extended family but the entire royal court and, to some degree at least, the most remote resident in his kingdom. That is why he appointed people to keep the sorts of records that are quoted above.

It is also probably true that those who can afford many lifestyle choices spend a significant proportionate of it on impulse – impulse spending! I have heard impulse spending described as like a leak in a water hose that makes watering a garden or cleaning a car more difficult and time consuming than it need be. And so by reducing our impulse spending, we can divert money to important things - lifestyle choices, saving and giving, depending on your priority.

Having created your budget, see if you expect to spend less than you get during the budget period. If you see that you will spend more, and there is not some very good reason for it, then realise that routinely adding extra spending on to a credit card or overdraft can only ever be a short-term solution – and an expensive one at that!

But if you do spend less than you get, do not be tempted to leave it there. You need to make your budget work for you, so that you can begin to live more the way you want and do more of the things you like. The further down your budget table you go, the more control you can have over what you spend.

If all this sounds unrealistic, because you doubt that you can make a difference to what you spend, I understand. During 10 years teaching personal finance, I think the greatest challenge has been to persuade people that things can be better: that just because their parents are always in debt, it is not inevitable that they need always be in debt; that just because they have accumulated huge debts, they cannot be free of them. That just because they feel trapped in certain lifestyles, they can aspire to something better.

Of course, some things cannot be changed – at least, not at a human level. A slave in a country where slavery is legal cannot simply walk into freedom. But I have never said that money can change everything! It is simply a tool to be used to the best advantage.

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Handling money and dealing with debt can be complicated and neither the author nor anyone else involved in the production of these Reflections is responsible for any action you take, or fail to take, based on what is written here. You are invited to put a link on your website to these Reflections. You are welcome to copy these Reflections for personal study or for circulation to family and friends on a non-profit basis. For any other purpose, whether or not for profit, you will require written permission in advance from the author before copying, reproducing or transmitting extracts in any form or by any means, electronic or mechanical, including photocopying, recording or using any information storage and retrieval system.

Friday, 8 February 2013

Creating a Budget (5)