It means to spend no more than we make on a monthly basis. Ideally that means to live on a cash basis and not to use credit or borrow money to provide normal living expenses. It also means the self-discipline to control spending and deep needs, wants, and desires in their proper relationship.
NEEDS | WANTS | DESIRES |
These are the purchases necessary to provide your basic requirements such as food, clothing, home, medical coverage and others. | Wants involve choices about the quality of goods to be used. Dress clothes vs. work clothes, steak vs. hamburger, a new car vs. a used car, etc. | These are choices according to god’s plan that can be made only out of surplus funds after all other obligations have been met. |
OBSTACLES TO GOOD PLANNING
à Social pressure to own more “things”.
à The attitude that “more is better” regardless of cost.
à The use of credit to delay necessary decisions.
à No surplus available to cope with rising prices and unexpected expenses.
à We tend to offset increases in income by increasing our level of spending.
The spending attitude is a real problem because it leads to:
THE DANGER POINT
à When income barely equals outgo
à Break-even is not a living point but a decision point. If all the income is consumed in monthly expenses and something unusual happens, such as the family automobile breaking down, the result is additional debt.
à A decision is necessary at this point: MAKE MORE MONEY OR SPEND LESS
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