It’s not how much money you make; it’s how you manage it that makes all the difference in this world. You can earn a six-figure salary and still not have two nickels to rub together if you don’t control your spending and a new survey proves it.
It’s not how much money you make, it’s how you manage it that makes all the difference in this world. It’s true; you can earn a six-figure salary and still not have two nickels to rub together if you don’t control your spending and a new survey proves it. This is MoneyWise Live - biblical wisdom for your financial decisions.
The results of a recent survey by Lending Club were surprising. It showed that more 1/3 of Americans earning at least $250,000 a year are living PAYCHECK TO PAYCHECK. That’s roughly 5x the average salary in the U.S. and it means those high earners are spending everything they earn and saving nothing. And it really brings to mind Proverbs 21:20, “Precious treasure and oil are in a wise man's dwelling, but a foolish man devours it.”
Mishandling money certainly isn’t limited to those in high income brackets. The survey showed that of Americans:
64% earning $50 - $100,000 a year live paycheck to paycheck.
46% earning $100 - $150,000 a year live paycheck to paycheck.
41% earning $150 - $200,000 live paycheck to paycheck.
36% earning $200 - $250,000 live paycheck to paycheck.
The problem really has little to do with how MUCH a person makes. It’s what our friend Ron Blue calls a “consumptive lifestyle.” That’s when you’ve given in to the world’s view of money and possessions thinking they can make you happy.
Sadly, many Christians fall into this trap and IT CAN HARM our relationship with God. 1 John 2:16 warns, “For all that is in the world—the desires of the flesh and the desires of the eyes and pride in possessions—is not from the Father but is from the world.”
When you begin to live by the Bible’s financial principles, being productive and living on less than you earn, saving for emergencies, investing for when you can no longer work and giving generously to God’s Kingdom, you begin to grasp the lesson of delayed gratification.
By looking at just ONE of those principles - saving - you can see what a blessing it is to have money on hand for emergencies so you don’t have to borrow.
We all need a financial safety net no matter how much money we make. Almost no one goes through their working years without losing a job at least temporarily. Not having an emergency fund of 3 to 6 months’ living expenses is just ASKING for trouble. And, when you live that way, it’s inevitable that you’re going to run up debt. If you’re not prepared, you’ll have to BORROW to meet your expenses.
A lot of folks will say they just don’t make enough to save anything and that’s certainly true in some cases. We also hear from people with very small incomes who wouldn’t dream of living paycheck to paycheck and they do everything they can to live within their means and have an emergency fund.
2 things will help you break the cycle of living paycheck-to-paycheck.
Have a spending plan. It’s the only way you can get control of your finances and create a little margin with your discretionary income. Without a budget, it’s almost impossible to save anything. Download the free MoneyWise app to get started. Work with one of our volunteer coaches. They can walk you through, step-by-step, on how to develop a spending plan. They’ve been where you are, and now they want to help others manage God’s resources wisely.
Learn to be content with God’s provision. Everything you have even your ability to earn a living comes from God. He’s promised to provide for your needs and He’s always faithful. So pray for a spirit of contentment.
And as you do these things, be generous with your giving to God’s kingdom. It’ll break the power that money and possessions can have over you.
Next, Rob answers these questions at 800-525-7000 or via email at Questions@MoneyWiseLive.org:
If you own 3 rental properties, currently have a HELOC for some earlier expenses and now have the need for additional work for those rental properties, should you add to the HELOC or pull money from your IRA?
How does one go about purchasing I Bonds?
If you're 54 and expect to retire around age 70, have little retirement saved so far, you just bought a house and have a full 30 year term left and you're coming into some money, should you use the money to pay off your mortgage or start investing for retirement?
If you have some real estate you wish to give to your church, is there anything you should do to make the transaction easy for all stakeholders?
If your parents are retired missionaries moving to the US and they've given you their nestegg as an early inheritance, should you use the money they've given you to purchase a house or should they just go through the mortgage process?
If you've heard of a product called Unlock that takes that offers you the difference in cash between the value of your home minus your debt for it at zero percent interest, it matures in 10 years and is done in exchange for the future value of your home, is this a good program to participate in?
If your 30 year old car was totaled recently, what are some resources to help you find a replacement automobile? Kelly Bluebook, Edmunds and Carfax
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