Hello there,
It’s your financial literacy plug, CoachMO.
Last week, continued our ongoing series on the 6 Money Commandments with a deep dive into Commandment #2: Pay Thyself First, where we discovered the power of retaining at least 10% of your earnings as your sacred portion. I’ve been thrilled by your stories of setting up automatic savings and watching those “Future Me” funds grow. It’s a reminder that wealth isn’t about earning more, it’s about keeping what you have. But what good is keeping it if it all leaks away?
This week, we tackle Commandment #3: Control Thy Expenditure, the discipline that guards your gains and turns chaos into clarity. For those from non-financial worlds, like baristas or freelancers, this is your tool to stop wondering where the money went and start directing it purposefully.
Let’s return to our village tale. John the potter, now wiser from self-knowledge and his growing savings jar, faced a new challenge. Market days brought temptations: shiny new clays, village feasts, or “just one more” tool he “needed”. His earnings flowed in, but without reins, they flowed right out. One stormy evening, John unrolled the ancient scroll again, his fingers tracing Commandment #3: “Control Thy Expenditure.” The words leapt out: “Budgeting is a financial principle that cannot be broken. Those who break it always and will always meet the impending consequence(s).” It was a stark warning; lack of control wasn’t freedom; it was a path to perpetual problems.
The scroll explained budgeting simply: “A budget is you telling your money where to go, rather than wondering where it went.” And the ironclad promise? “IF YOU DON’T HAVE A BUDGET YOU LIVE BY, YOU WILL ALWAYS HAVE A MONEY PROBLEM. IT IS A PROMISE!!!” John saw how this tied to the bigger truth: “When it comes to financial freedom and money, it is not about how much you MAKE, rather it is all about how much you KEEP.” Without control, retention couldn’t lead to multiplication. He recalled the sobering stat from the scroll that 78% of professional athletes face serious financial hardship within 5 years of retirement, proof that even big earners crumble without this gatekeeper.
Determined, John mapped his budget using the scroll’s rule: 70/10/10/10. 70% for needs, life’s fundamental requirements for living, like housing (no more than 35% of your take-home pay), feeding, transportation, other bills (electricity, utilities, others), and debts/loan repayment. 10% for savings, 10% for giving, and 10% for wants. The key vow? “Whatever you do, you cannot consume more than 80% of your income.”
As weeks turned to months, John’s life transformed. No more end-of-month scrambles; his budget became a compass, guiding decisions and revealing leaks. The village noticed John wasn’t just surviving; he was thriving, his pottery business steady because his personal finances were controlled. This commandment bridged knowing and doing, embodying #KnowBeDo: Know the principle, understand its power, apply it daily.
In today’s fast-paced world, this is crucial for you. Apps make budgeting easy, but the principle is timeless. Money is an idea, a means of exchange, a product of value, but uncontrolled, it’s a symptom of deeper ignorance. As the proverb echoes: “The rich and the poor have this in common: The Lord made them BOTH.”
Takeaways from CoachMO
- Adopt the 70/10/10/10 Rule: Allocate 70% to needs, 10% savings, 10% giving, 10% wants. Cap housing at 35% of your income; it’s a game-changer.
- Differentiate Needs vs. Wants: Needs are basics for living (housing, food, transport, bills, debts). Wants are joys, budget them last to avoid traps.
- Track and Tell: Use a simple notebook or app to monitor expenditure. Tell your money where to go weekly.
- Avoid the Pitfall: Remember, no budget = guaranteed problems. Start small to build the habit.
- Action Step: This week, list your last month’s expenses and apply the rule retroactively. What would change? Share in replies, we’re in this together!
Next week, we’ll explore Commandment #4: Get Out of Debt. Until then, control thy expenditure, it’s the gate that protects your wealth journey!
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Your financial literacy plug.
CoachMO
