The Second Secret to Accumulating Gold
(Last week I related how I’d recently re-read The Richest Man in Babylon. and we discussed the first secret to accumulating gold , a part of all you earn is yours to keep. I decided it would be good to create a series of posts adding to that first post. I will continue the theme of secrets to accumulating gold for continuity, but if you read the book, you will recognize these as the seven cures for a lean purse.)
If you thought the first secret to accumulating gold was going to be difficult for you to do, the second secret will not seem any easier, but it will help you with the first. Kudos to you for making the choice to take this step.
The second secret to accumulating gold is to have and adhere to a budget. Of your total income, keep for yourself ten percent and allow yourself seventy percent to live on. This leaves twenty percent, according to the author, for debt retirement. Personally, I give ten percent to my church, so that leaves me either ten percent for debt retirement or sixty percent to live on. Ultimately, if you don’t have debt that percentage is for saving for larger purchases to avoid having debt.
The challenge in this step is determining what your necessary expenses are. The more you make the more you spend, so you may well spend monies on things that you would think are a necessity, but really aren’t. Cable or Satellite TV is not a necessity. Going to the movies is not a necessity. These should be obvious, but if you’ve really become accustom to them, it could be difficult.
Truthfully, not everyone will have to cut really deep to achieve their ten percent, but if you’re in a fair amount of debt, even if you can save your ten percent with some ease, it would be good to make some additional cuts in order to eliminate the debt more quickly. After that you can decide to reinstate some of the cuts, or if you find you like living without them that choice is yours.
The amount of cutting will be different for everyone, and for some it will be really difficult. The only thing I can say to you right now if it is really hard for you, is that if you can find the way to make it work, it will be worth it for you. Hopefully you can catch the vision for yourself to make it through the hard times.
If your debt is too high or your income too low, so that even with making minimum payments you can’t save ten percent for yourself, then you really need to do what you can to change it. Sell some things to reduce the debt and/or take a second job or start a business on the side to increase the income.
Realize that unless you do something different, something to change what you’re doing, things will stay the same for you, or get worse. Realize too that it is not permanent. You’re making these sacrifices now for a better future, and with a better future you can go to the movies and have cable or whatever else you had to cut, but within the seventy percent, not above it. You don’t want to go back to where you started.
No matter how hard it may seem to you right now, if you don’t start now then when? Yes, I know the economy is in the tank, but be assured there will be many people who will see opportunity during this time and become wealthy. Every opportunity that someone has seized upon was someone else’s obstacle. You have to decide for yourself what you see. Don’t look at how you can’t, find a way you can. You won’t regret it.
Aside from going out less and cutting tv expenses as mentioned, you can shop your insurance rates and may be able to make some cuts that way. Insurance companies will give discounts if you have multiple items insured through them like cars and homes. It may be possible that you could find a few friends open to shopping for insurance, and let the insurance companies know that they will get bulk business, like a co-op, for the lowest bid or no business if they’re too high. (I don’t know that it will work, but it’s an idea that might work even if only due to the economy. Companies may be more willing to “think outside the box” if it means more business.)
If you have either done this already or are just starting out, if you have ideas to share, especially if they’ve worked for you, I like to hear them. What you’ve done for yourself may very well help someone else.
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