From: The Potental Millionaire By Felix A. Montelara Author of Potencial Millonario
In episode 4 of my radio program, Potencial Millonario, I discussed the various types of debt and the importance of budgeting. Budgeting means that you know exactly how much money comes into your household, how much you spend, where you spend it, and how much you waste. In other words, creating a budget means you track every cent you make and spend, so you can discover all the money leaks in your household. Once the money leaks are discovered, they can be stopped. When we stop wasting money, we start saving money. This money can then be applied to outstanding debts, or saved in an emergency fund. The key idea is: stop spending what you don’t have, stop creating new debt, know where your money is, and use every penny you have to pay off old debts. Only then can you begin on the path to financial freedom.
Proverbs 27:23-27 describes what I have been discussing in the last few episodes of Potencial Millonario: “Be sure you know the condition of your flocks, give careful attention to your herds, for riches do not endure forever, and a crown is not secure for all generations.” This passage from Scripture encourages us to watch over and really know our ‘flocks,’ which in today’s society might be interpreted as households. How can we hope to be financially free if we don’t know where each dollar comes from and where each one goes? The Bible instructs us to pay attention; to be good stewards of what God provides us with. This passage also comes with a warning for those who will not take care of their gifts: “riches do not endure forever, and a crown is not secure for all generations.” This warning lets us know that life is fleeting, and we must try to be prepared for what lies ahead. However, we don’t always know what is ahead of us. It is only through a careful stewardship of our households that we can hope to weather these storms.
In Biblical times wealth was measured in livestock. In these modern times, we define our wealth with money. Knowing our modern “flocks and herds” means having a working budget and a real understanding of how we spend and save our money. Once we truly understand how we spend our money, we can undertake the difficult task of making changes to our bad spending habits. These spending habits are what make us poor, and we must correct them in order to become financially free. We can replace bad spending habits with good savings habits- then we begin to accumulate wealth and notice the difference that having money, rather than wasting money, can have in our lives.