When I was in my 20s I read a book called "How To Get What You Want in Life with the Money You Already Have." The author, Carol Keefe, inspired me to keep "dream jars" to save for particular goals. At the time I was a poor bookseller, and all my paycheck seemed to go to essentials: gas, food, car, rent. I despaired that I would ever be able to save for things that I enjoyed: musical instruments, travel, nice clothes. But I started a few jars, and lo and behold, the method worked! I saved for and bought a $1000 Martin guitar that I still use today 20 years later as a professional musician.
And 20 years later my financial knowledge has become much more sophisticated. I am a graduate of a 5 year Prosperity Teacher Training focused on prosperity character trait development. I have a Certification in the 7 Baby Steps of Wealth Building & Investing to help guide people out of debt and into a lifetime of financial security. For 13 years I have given generously to spiritual organizations and charities. My knowledge has grown about banking, saving, and various kinds of investing, including stock market products & real estate. Using the 7 Baby Steps our personal net worth grew by $150,000 in just 3 years.
However, when I think about it, it all comes down to GIVE, SAVE and SPEND. Any fancy financial system is simply a version of this basic balance. If you GIVE, you are a generous person and you develop a sense of humility and deservedness which attracts money to you. If you SAVE, you are wise, and your savings eliminates debt, grows your assets and creates security and peace of mind. And if you SPEND in balance with the other two, you enjoy your life without blowing it all on lifestyle. What a blessing!
So here I unpack the BIG THREE: Give, Save & Spend, and help you decide how you want to use this power trio for your financial health.
"No one ever became poor by giving." ~Mike Todd
What can you give now? We always have something to give. In fact, giving sends a message to our brain which says, "I have it to give." It reframes any scarce mindset into one of abundance. When I first started a giving practice, I gave small. But then I felt a sense of deservedness, and comfort with money. So more money came, and I was able to give bigger. It is an ever-expanding well of blessing.
Giving, or tithing, has been a longstanding practice for thousands of years among spiritual people, who understand its benefit psychologically. The Babylonians invented tithing, and taught it to the Hebrews, who very famously taught tithing as a spiritual practice in the Torah, or Old Testament. Many churches & spiritual centers carry on this tradition as a spiritual practice which benefits the giver as much as the receiver.
However, a few notes on true giving: it must be a freely given gift, not an obligation. It must be your choice, no one can tell you who to give to. And it must be to places that inspire and help you spiritually, as well as provide charitable help to the community. In the Jewish and Christian history of tithing the church or temple provided spiritual inspiration AND help to the poor. In our modern world the two have become separate. Often spiritual inspiration is found one place and charity is found another, and so we can give to both.
"A penny saved is a penny earned." ~Benjamin Franklin
As I've gotten older, and have seen money come and go, and incomes rise and fall, I have learned the power of saving to provide security through all seasons. Saving a nest egg provides for you during the inevitable ups and downs of the economy & life. When you save, you can handle emergencies, and you do not need to accrue debt, which destroys wealth & cash flow. You can cash flow everything!
The Egyptians & Babylonians saved grain in silos, helping to feed a community through lean times. What would you like to have saved for emergencies, for large purchases, for your retirement? Even if you plan to work into your elder years for your own enjoyment & life purpose, wouldn't you like to have choices about how you spend your time? Savings gives you more choice. During the 20th century employers helped to fund an employees retirement benefits. Now that is not the case. It is up to you to create wealth that will sustain you in your elder years.
Start saving now. Have a starter emergency fund of $1000. Pay off all debt. Have a fully-funded emergency fund of 3-6 months of expenses. Under $20,000 can be kept easily in a bank savings or money market account for emergencies & large purchases. When you accrue more than $20,000 you will want to look into longer term investing such as in mutual funds or real estate. Having a qualified investment advisor who can teach you about the different investment products is helpful.
"Live below your means and within your needs." ~Suze Orman
Who doesn't love to spend? But honestly, where does the pleasure end and the regret begin? Everyone has their saturation point, where the pursuit of "stuff" no longer gives a thrill. So what do you need to be satisfied & content? I believe the average American can be content with a lot smaller lifestyle than the media tells us. Back in 1950 the average house size was 1000 square feet, and people were happy. Now average home size is 1700 square feet, and are people happier as a result? I don't think so.
No, it's about contentment. Finding a way to be happy no matter how much discretionary income you have to spend on lifestyle. I found when I was getting out of debt I was happy with a little spending money for the occasional latte, or a dance exercise class. Now that we have much more income & "fun money", I find lots of extra spending money does not bring me happiness. What I really enjoy now is work that has purpose and meaning. Now that's fun!
So yes enjoy spending. But spend wisely. Get good bargains for your dollars, and spend your fun money on things that are truly meaningful. One area many folks overspend in lifestyle is housing. Your home, whether rented or mortgaged, should comprise between 25 and 35 percent of your take-home pay, no more. If you find you are spending half your income on housing, wake up! There will be little money left over for giving, saving or spending then. I recommend a down-grade.
True contentment comes from balance. I hope you feel inspired to Give, Save & Spend in a balanced way. Have fun balancing your budget and let us know how it goes!