People live financially two ways accumulating
wealth or debt. The problem is most individuals including myself at one point don’t know the difference. Many people
have projected the illusions of wealth but in reality they are living in a pile of debt. Money can be mean freedom or bondage
depending on it is handled.
Most
young adults under the age of 25 don’t realize that they are in a prime situation to start saving and investing
money for big pay offs into their 40’s and beyond. The fact is that most of us at the ages of 16 to19 have 0 to100
debt to income ratio. As we get into our twenties that ratio goes to 40/60 or 60/40 or worse. We spend the rest of our
30’s to50’s trying to get back to a 20/80 debit to income ratio so we can save for our retirement years. After
our 30's we don’t give our money enough time to grow and we can’t afford to take the major risks in
stocks to grow our money to provide us with the lifestyle we want as retirees.
Upon discussing this matter with my father, a former accountant I have
devised a plan of action for myself. I want to share this plan with others so we can all benefit from it. The first
step to developing this plan of action is to pay your tithes and offering. The second step is to is to reduce
your unnecessary debt in credit cards and unpaid bills that have gone to collections. The third step is to find out if
your bank or credit union offers savings products such as bonds, Roth IRA savings account, Certificate Deposits commonly called
CD’s and or Money Market Accounts. Once you have these three accounts going you can branch off into stocks and mutual
funds. Inquire about what savings or retirement packages that your place of employment or organization you
affiliated with. Most importantly if your primary bank doesn’t offer these products at a level you can afford
then find one that does.
1) Pay your tithes and offering
and give it cheerfully (1 Chronicles 4:10 and 2nd Corinthians 9:7)
Paying your tithes and offering is the most effective way
to insure that you will be able to enjoy financial freedom. When you line up with God you can’t go wrong. I used to
live paycheck to paycheck and be broke 5-6 days after pay days even with two part time jobs. I had so much debt that I felt
I couldn’t tithe. During my divorce I began to tithe again because of that the Lord started blessing
me. I was then promoted and when I got to my current command he blessed me with a nice car and a brand new
apartment. As you can see from my experiences when you line up with God’s financial plan you can see how God
takes care of us. Make God your top priority because we are always his.
2) Reduce your debt because
it does you no good to save money if you owe money.
Debt reduction is what we all should to work on. Yes,
there are some things that you will have to pay for the rest of your natural life such as tithes, taxes, and bills. There
is a very big difference between bills and debt. Let me explain, bills are accounts that pay for services and goods
that reoccurr and are necessary for you to work or live. You can’t sell a bill and get your money back. Examples of
bills are rent, utilities, and phone bills within reason, dry cleaning, and other things along that line. What is debt? Debt
is anything that you are paying that has certain value that you are paying interest on and does not increase in value. Examples
Credit Cards, Car Loans, student loans, payday loans and unpaid bills that accrue interest. Yes a bill can become a debt.
Now
that you understand the difference between debt is and what a bill is, let’s look into how to reduce our bills
and debts. You can reduce utlities bill by conserving water, gas, and electricity. Cell phones are one of the
biggest things we can save money on. Regarding your cell phone first see what providers offer discounts through your workplace.
You can then contact these providers with more information on their employee discounts. There are new laws where you can change
your cell phone provider without changing your number.
3)
Start saving and work on diversifying you savings through bonds, CD’s, money markers accounts, mutual funds,
and other money earning tools.
You should
be saving at least 25% of income a month or working towards it. Diversify your money by the types
of accounts mutual funds, CDs, money market, stocks and bonds and for CD’s and bonds by maturity date of account. A
conservative way to spread your money over your different accounts 20% in stocks, 70% in CD’s and bonds and10% in cash.
You can adjust these ratios based on your tolerance for stocks and your savings needs.
