EARNING AN INCOME

Finance is an extremely important area of our life. It takes up an inordinate amount of our time. We are either busy earning money or spending it. Physical life would cease to exist without it. We are surrounded by finances wherever we go. Finance is an inescapable concept. Knowing this up front brings us to the point of developing a system by which we can best use our financial resources.

I would say that the vast majority of people desire to have more money. Do you know of anyone who would turn down a pay increase, even if it was modest? Personally, I accept all pay increases, even if they are small. A small pay increase, in the short run, looks paltry but when you look over the long run, it adds up to be somewhat substantial. For instance, say your pay goes up $25 a week. This may not buy much this week but save that amount over a year by keeping your spending the same before the pay increase and you have $1,300 in a years time. You can buy something substantial now.

Most people do not think in these terms. This is because their focus is on the short term. Your class level is determined upon your view of finances. The wealthy have a long term view of finances, while the lower class are concerned about the present. Each of these views have consequences. One is characterized by planning, the other by its lack of planning. The lower class will be impulsive with regard to their finances.

The key to being wealthy is not determined by how much money you earn. It is determined by how much you keep. There are many people who earn high incomes that live from paycheck to paycheck. They are Income Statement rich and Balance Sheet poor. Truly wealthy people are potentially Income Statement rich and definitely Balance Sheet wealthy. These wealthy people have learned how to increase their assets on a continual basis.

Wealth building begins with having a financial plan in place. Without direction, we will wonder aimlessly. All financial planning begins with earning income. This takes on many different forms. What is important here is to find out what you excel at and put your efforts in to it. My wife has been working since she was fifteen (except for ten years when she did a different kind of work in home-schooling our two daughters). She wanted to work in the legal field. The Navy had a program whereby they paid for her to attend a community college to get a Paralegal certificate.

She enjoys legal work above all else. Recently, she was employed by the local hospital as a secretary. Though it was something she could do, her heart was more in the legal field. She has been recently hired by a law firm. One of her comments in her interview, was that she loved the smell of law books. It is something that she enjoys doing. This makes the drudgery and tediousness of work more pleasurable, finding something that you enjoy doing.

However, this cannot be the only criteria. Christians are always motivated by a higher standard. They believe in the Protestant Work Ethic of Ecclesiastes 9:10, "Whatsoever thy hand findeth to do, do it with thy might; for there is no work, nor device, nor knowledge, nor wisdom, in the grave, whither thou goest." Whatever we do, we are to put all our time and ability into it. We are enjoined to always give our best. I believe that whatever we do, it should be done with excellence i.e. to the best of our ability. This is to be our day in and day out attitude. Consistency is indeed a rare gem but essential for Christians and their witness to others.

If a Christian is not exhibiting excellence on the job, who is going to listen to them when it comes to matters of the heart? They have demonstrated an inconsistency that damages their witness for the Lord. The Christian must be the most reliable and dependable individual on the job. Integrity is just a word in our society but its demonstration will bring wealth to those who possess it.

Proverbs 22:29 reads, "Seest thou a man diligent in his business? he shall stand before kings; he shall not stand before mean men." The Amplified Bible clarifies this verse. "Do you see a man diligent and skillful in his business? He will stand before kings; he will not stand before obscure men." This is what a Christian is to be in their work, diligent; and skillful.

Noah Webster’s 1828 Dictionary defines "diligent" as, "steady in application to business; constant in effort or exertion to accomplish what is undertaken; assiduous; attentive; industrious; not idle or negligent." Does this describe you? If not, then you have some work to be done in your life. If you have not been diligent in your profession, then your witness for the Lord has been greatly diminished. There are many people who are great starters but not great finishers. Someone who is diligent is both. They stay after a task until it is completed. This makes them much in demand. They are a rare breed.

"Skillful" is rendered by Webster as, "knowing; well versed in any art; hence, dextrous; able in management; able to perform nicely any manual operation in the arts or professions." Someone who is skilled in any art or profession has fused together theory and practice. They are not satisfied with their knowledge and are increasing what they know. They are constant learners which increases their capacities and abilities to continue to perform at a higher level. This will increase their income.

I have been gifted with the ability to write. I have been studying writing and grammar books because I want to become better at writing. Also, I have been studying logic and rhetoric because a lot of what I deal with is based upon arguments. I want to improve in these areas so that any argument that I bring the table is irrefutable. I never did like losing and I do not intend on losing a debate because I was not diligent and skillful.

This is a starting point to gaining wealth. It begins with being productive and providing service. God hates laziness. It is time to get busy.

THE FRUGAL ACCOUNTANT

There are many things that are important to us. Some are more important than others. Once we have learned good financial practices, we should keep doing them over and over again. When you find what works, it is always wise to keep such a program implemented. Following a system is a wise practice. It enables one to sort out what works and what does not.

What is frugality? "Frugality" according to Noah Webster’s 1828 Dictionary is "prudent economy; good husbandry or housewifery; a sparing use or appropriation of money or commodities; a judicious use of any thing to be expended or employed; that careful management of money or goods which expends nothing unnecessarily, and applies what is used to a profitable purpose; that use in which nothing is wasted." One can hear the old saying waste not, want not.

Prudent is cautious wisdom. Frugal people do not put their money in speculative investments. They would be more prone to try and make money in tried and true ways. In the above definition, there is not a negative to be found. You see the words, prudent economy, good, sparing use or appropriation, judicious use, careful management, expends nothing unnecessarily, profitable purpose and nothing wasted. The frugal person is a wise man.

Webster renders an "accountant" as "one skilled in mercantile accounts; more generally, a person who keeps accounts." Mercantile accounts are business accounts. An accountant records financial transactions. Accountants use what is called double entry accounting. This is what keeps the financial statements in balance. At a very basic level, the two statements that will be used here are the Balance Sheet and the Income Statement.

The Balance Sheet is comprised of three parts, Assets, Liabilities and Net Worth. Net Worth is the residual between what you own (assets) and what you owe (liabilities). Net Worth is what you actually own free and clear of any claims. The Income Statement records revenues and expenses to arrive at net income or net loss. This statement allows you to assess where your money comes from and where it is spent. It allows you to see if you are operating in the black (good) or whether you need to declare bankruptcy (red).

A frugal person is one who operates their financial affairs cautiously and judiciously. They have maintained meticulous financial information by keeping accurate records. They know how much they spent on each category. They are wise in not spending more than they earn. If they want to spend more money, they find ways to make more money.

It is a well known fact that the majorities of businesses fail because of poor management. The first businesses were households. Businesses are based off of the model of households. One of Webster’s definitions of manager is interesting. It is "a person who conducts business with economy and frugality." Proper management training takes place within the family. One who learns how to manage assets and control spending, in a household, will be qualified to do the same when conducting an outside business.

Good managers economize and are frugal. They pay attention to the smallest of details, realizing that the smallest can eventually add up to the biggest. They watch the bottom line known as net income or net loss. A good manager knows that some things are beyond his control and that the unforseen can and does happen. Since he has been judicious in his affairs, he will have the necessary assets to meet these emergencies.

Good managers follow Romans 12:11, "Not slothful in business; fervent in spirit; serving the Lord." If you are not to be something, then you are to be its opposite. Slothfulness is sluggishness, being idle or laziness, slowness or being tardy. Paul is encouraging us then to be earnest and diligent in the affairs of life. A good manager will be all of this. They are characterized by their resolve to accomplish the task until it is completed. They are reliable and their word is solid.

Being a frugal accountant is first and foremost a spiritual enterprise. Ethics do matter. Substance is more important than form. We all want to be financially successful. One cannot be financially successful by not learning the rules that govern success. This is why this discussion began with the idea of instituting a system. With it you are guaranteed financial prosperity.

Deuteronomy 29:9 reads, "Keep therefore the words of this covenant, and do them, that ye may prosper in all that ye do." Financial prosperity can only be achieved upon keeping God’s ethics. Not only knowing what these ethics are but also applying them will bring about the desired results. Financial prosperity is defined as having all of your physical needs met. Usually, this also means that you have in excess of your needs supplied because of being wise in financial matters.