PAYING WITH CHECKS

Each week, I think of something that will help in the area of personal finance. This week, I was writing out the tithe check and I noticed how little I write checks. Checks are written now for only specific items, not for everything. If you observe at a check out counter that very few people write checks. Most people that write checks are usually older ladies. It can be frustrating to watch these ladies write a check. They start writing it after everything has been wrung up which can take up a lot of time. You can tell that these ladies are not time challenged.

Checks allowed people to not to have to carry a lot of money with them when they went to the store. Checks are the same as cash with the exception of a time lag. Once a check is written, the receiver must take the check to his bank and deposit it and then his bank collects the funds from your bank. This takes time for a check to clear. If the receiver takes his time in cashing the check, you will have to list that check as an outstanding check on your monthly bank reconciliation.

Checks are considered near cash. They are an early form of a debit card. What are checks good for in our day of automation? Checks are good for bill paying. Some institutions are small and do not need computer sophistication and thus paying by check is the most practical. I am thinking about the church for instance. Some churches are large enough and you can make your tithe payments by direct deposit. However, this is not practical for some churches and thus there is the usual collection with checks being written for tithes.

Unless, I can put a charge on my credit card, I write a check. For the month of November 2008, I wrote a grand total of six checks. Four were tithe checks to the church, one was for a magazine subscription and one was to pay the personal portion of the church phone bill. Checks are still practical for certain purposes, but their importance as a means of payment has been greatly diminished by the use of credit cards and debit cards, online bill paying and direct deposit.

Check writing is still with us and will probably be with us for the foreseeable future. Checks still have practicality and by maintaining certain balances with some banks, there are no transaction fees or costs to have checks printed. The church has to pay a check printing charge but this $15 or so has to be paid rarely as the church writes approximately 8 checks a month. This means that 200 checks will last 25 months. A minor expense over the course of two years.

Check writing thus is a form of payment for goods and services. It is a cash substitute and offers convenience of not carrying cash. Checks are useful when making a major purchase or making a large payment. This may require purchasing a cashier’s check from a bank. This assures the receiver that the purchaser has adequate funds to cover the transaction. In other words, checks are not going to go away because they still are a practical means of payment. If they were not, we would cease to use them. The frugal are a practical people and still use checks.

PREPAYING EXPENSES

It is good to be ahead financially. Being on top of things is the best way to go. The absolute best way financially is to not be in debt. Having no debt does not mean that you will not have any bills, you will. Each month we have recurring expenses that have to be paid. A financial situation can be viewed as a process of flows. We hear about cash flow. Cash flows in and it flows out. The key is to have more that flows in than flows out. The financial golden rule will forever be do not spend more than you earn. This principle is the key to becoming wealthy.

In accounting, prepaid expenses are considered to be an asset. Usually prepaid expenses are prepaid for less than a year and makes them a current asset on the balance sheet. As each month passes, this current asset becomes an expense. The original accounting entries are to debit the asset Prepaid Expenses and to credit Cash, as your cash account is going down. The monthly accounting entries are to debit the appropriate expense account on the income statement and credit the asset Prepaid Expenses. The principle of double entry accounting helps to keep financial statements in balance.

Why should you or a business prepay expenses? For a business, they prepay expenses such as rent because they are intending on staying in business for a period of time. A business may have to agree to signing a long term lease and have to pay many months of rent in advance. Psychologically, prepaying expenses in advance means that you do not have to hassle with preparing a payment each month. Prepaying saves you time.

Not only does prepaying save you time, but it can also save you money. For instance, my insurance is billed for six months. If I pay this bill monthly, the insurance company charges me $5 extra for an installment processing fee. By prepaying I save $25 over the insurance billing period. So it makes sense to prepay this bill. A rule of thumb is that if there is no money to be saved by prepaying, you may want to pay monthly.

Recently, I got the bill for a newspaper subscription renewal. The subscription is for a minimum of three months and a maximum of one year. There is no financial advantage in paying for three months and paying for a year. The only advantage for prepaying for a year instead of three months is time. With this I pay for a three month subscription. The reason is that money is more important to me than time.

Some businesses give you an incentive to prepay. If you prepay, they will give you a bonus or the price will be reduced. An example of this is where I buy my coffee for work. I go to a local coffee house called the Oasis. The proprietor adds $5 to your account if you put $50 on an Oasis card. Of course, it makes sense for me to prepay this because I get $5 worth of extra coffee. This is an advantage to the business and to me. Prepaying is a win win for both of us.

Only those who have their financial houses in order prepay expenses. If someone is relegated to having to pay additional fees on a monthly basis, then they are that much behind. This is why people remain in financial distress and can never get ahead is because they do not think in terms of saving money wherever possible. There are financial advantages to prepaying expenses and the frugal use these advantages to their benefit.

SPENDING ON NECESSITIES

When thinking in terms of spending money, the vast majority of money should be spent on essentials. After meeting all necessities, any left over is discretionary and can be spent in accord with one’s desires. The key to spending on necessities is first to determine what is essential to maintaining living. Immediately, food and shelter come to mind. We need food to eat and we need a place to live. Note: homes are not investments. They are a necessity.

Work is therefore paramount that the necessities of life can be met. Part of this process of work is transportation to get to work and back home. This means having reliable transportation. As with all machinery, there will be maintenance expenses. Parts on vehicles eventually wear out and need replacing. What happens if you only have one car and your car needs repairs? This puts you in a bind, as our lives are dependent upon the use of the automobile.

The obvious solution is to have two cars. With two cars, if one need repairs, you have a back up. Renting cars can be an expensive proposition. It may be an alternative in the short run, but owning two cars gives you more flexibility and less hassles. The frugal, almost to a man, will buy used cars. Why used cars? Over the course of time, it will be less expensive than purchasing a new car. Remember, even new cars will need maintenance. With used cars, it is easy to justify carrying the minimum liability insurance. Insurance is something that must be factored into maintenance expense of a vehicle. The newer the car, the more insurance premiums you will pay.

Having two cars had its advantage for me this week. My wife was walking home from work, when she noticed that the front left tire of our Buick that was parked by the curb in front of our house was flat. That day, it had rained all day and it was too late to put on an alibi tire and go get a new tire. Because I had another car, I could wait two days before I had to put the alibi tire on and go to the tire store.

The place where I go to get tires has a business arrangement with the VA employees for $5 off for each tire and 10% off for labor. The associate at the tire store noticed that the other front tire was beginning to dry rot, so the flat tire was a blessing in disguise. I replaced both front tires and got $10 off. It is an advantage to have two cars. This example is illustrative of this point.

STICKING TO THE BASICS

Most people act as if the world is not governed by absolutes. They actually believe that change is possible. They are unaware of predefined limits. They will never achieve success until they realize absolutes and begin to work with them, not against them. Any endeavor requires possessing a certain amount of knowledge and then putting that knowledge to work over and over again. Success is based upon using applied knowledge repeatedly.

Constant change results in things being in flux. This is a highly unstable and unpredictable condition. The key to success is being able to predict things in advance. Living in a stable and predictable world makes applied knowledge beneficial. Fortunately, evolution is a myth. God has created an unchangeable world. This makes knowledge a valuable tool in our having dominion over creation.

Knowledge consists of elements. Element is defined by Noah Webster’s 1828 Dictionary as, "The first or constituent principle or minutest part of any thing..." These elements are thus basic to any system. All systems are comprised of elements or basics. Without a system, failure is assured in any endeavor in life. Thus random action is of no use. Thus, systematic application of knowledge proves the falsity of evolution. Those who profess to believe in evolution and yet use systematics in the real world are hypocrites.

Having a financial system in place will assure financial success. Part of that success consists in saving money whenever and wherever possible. This means that when purchasing products, it is wise to stock up or store up as much as is possible. For instance, I like to eat popcorn. I use a product called Liquid Aminos as a topping. This product is on sale at the Health Barn for $5.49. Its normal price is $6.69. I bought the 8 remaining bottles on the shelf. Since I bought in quantity, the manager of the store gave me a 10% discount.

If I would have bought the eight bottles one at a time at the original price of $6.69, the total purchase price would have been $58.60. By buying all eight bottles at the sales price including the 10 % discount, my total cost was $43.28. I ended up saving $15.32 on the deal. This gives me $15.32 to spend on other things. This is an elementary principle of being frugal. Saving money wherever possible is wise. This allows you to have more financial options.

INVESTMENT STRATEGY II

Last time we learned that there are three levels of economic well being. The third level is the investment level. Investing means to be clothed in something permanent or not fleeting. This means that investing is not speculative. Investments are meant to be long term sustainable. This means avoiding all investments in fly by night enterprises. This means avoiding all investments based on fads. What is popular today, may not be tomorrow.

Therefore investing will necessarily involve the spiritual quality of prudence. Prudence is cautious wisdom. Prudence would undertake due diligence or thorough research before proceeding with an investment. It is better to understand what you are getting yourself into before proceeding. Many people rush to make a decision and they are encouraged to make rash decisions by those whose livelihood depends upon making a commission.

Making money by investing is an art. Each of us has different temperaments and therefore differing level of risks. It is best to know what kind of person you are when it comes to money and investing. We should be wanting to increase our net worth. This means investing in things of value. Value is subjectively determined. What is valuable to one person is not valuable to another. For instance, in the desert water is more valuable than gold. Value is therefore relatively determined, but this relativity has behind it absolutes that determine our actions.

Investing involves the market. Without a market in which to buy and sell there is no investment possible. Therefore investable funds should be put into a market. Even though value is subjectively determined, the market makes this value objective. This is another way of saying cause and effect. The spiritual precedes the physical even in the financial world. The market makes the invisible, visible.

Investing then is the invisible made visible at the individual level and culminates in the market where individuals make a whole. Investing then is based upon the principle of the one and the many or unity and plurality. In reality, all exchanges are based upon this theological truth and all exchanges require more than one party. Thus, finding a market that will be around for awhile would be prudent for an investor.

Once you have invested your funds, you want to be able to at least get your principal back. Of course, you want your investment to increase in value, that is why you invested your surplus funds in the first place. What is the best investment vehicle? This depends upon the individual. If value is determined at the individual level, then only that individual can answer that question for himself. There are principles of investing, but ultimately each individual is responsible for how he invests his surplus funds. Frugality and prudence are essential for the investor.

INVESTMENT STRATEGY

According to the Alpha Strategy by John Pugsley, there are three levels that make up a whole of economic well being. Most people do not think in terms of levels when it comes to economics. The first level of any budget is to take care of necessities. This is the foundational level. This level is where you earn an income. This means doing all you can to increase your skills. Being a student of your particular industry will go far in helping you to advance and increase your earning capacity.

The foundational level is something that you can never get beyond because you will always need to earn an income to meet your daily needs. This should be an ongoing process. Learning is not static, but progressive. The more you learn and apply, the more income potential you have at your disposal. Increasing your earning potential helps you to get to the other two levels of economic well being.

The next step in the process is to keep records of what you earn and what you spend your money on. You must keep track of inflows and outflows. The key here is to make sure that you have more income than expenses. This will give you a surplus. A surplus is the same as profit for a business. It is a residual and a reward for being frugal. With your surplus, you are able to live above subsistence level and able to avoid being in debt. This process takes what most people lack, self discipline. You must control your spending. You must never spend more than you earn. This is the key to any investment strategy and the failure of most people in becoming wealthy.

When you have a surplus, you are not living from paycheck to paycheck. When people live

paycheck to paycheck, they lack planning and are living in the immediate moment. They lack understanding of how finance works. With your surplus, you will need to stock up on things for future use. Your house should be well stocked up, so that you are not endlessly running to the store to get things that you need. Buying in the largest quantity is usually wise because there is usually a saving to be gained over buying a smaller quantity. Most stores have a price per unit and you can compare prices of the larger and smaller quantities of a given product.

Having a surplus allows you to buy many items of a product that are on sale. This allows you to enjoy the savings of a product over an extended period of time. The more that you can buy of that product, the more the savings. When you do this over a vast array of your purchases, you can multiply your savings and have more of your surplus left to begin on the next level of budgeting.

The highest level of this strategy once you have secured your income stream and stocked up, is to use your extra funds to invest. Noah Webster’s 1828 Dictionary, for our purposes, defines invest as, "to clothe money in something permanent or less fleeting." Investing is looking for something that will not disappear over night. Investing is not gambling nor speculative. Investing is well thought out and requires planning on the part of the investor. The question is what should I invest my surplus in? I will leave that for next time.

BUILDING WEALTH TAKES TIME

The frugal know how the world works and then lives within the limitations that have been predetermined. The frugal recognize that they live in a world of absolutes and they make these absolutes their partners in the furthering of their goals. They know that slow and steady is the way to build anything. Trying to rush means making mistakes that may prove to be fatal to one’s goals of achieving wealth.

It should be everyone’s goal to seek to improve their standard of living. Our net worth should be increasing, not decreasing. When you put your money in speculative ventures, if you lose all of your money, you have no one to blame but yourself. A fool and his money is soon parted by being reckless with his money. The wealthy are not gamblers. Gamblers are reckless. Gamblers act as if there are no consequences following their actions. Gamblers do not believe in cause and effect because they are solely effect oriented.

If work is productive, which it is, then the way of wealth is based upon earning an income from gainful employment. Work has the idea of effort behind it. Work requires everything that we have to make it work. All work has a physical component attached to it, as well as mental. Work requires the coordination between the spiritual and the physical. Work is primarily a spiritual enterprise. We do not work just to work, but there is a goal and a purpose to our work. We are bringing an objective product to the market to fulfill a need. This means that the spiritual must direct all work.

Usually, we are not able to meet all of our future needs by working just one week. It takes working week after week and year after year to be able to accumulate additional funds above our needs. To begin accumulating wealth has as its cornerstone that you must spend less than you earn. When you do this, you have a surplus. Businesses call this residual, profit. This means that costs must be kept to a minimum. The only way that costs can be reined in is by self discipline. Knowing what is a necessity and a luxury allows one to take care of essentials first and foremost. It is a matter of priorities.

As the surplus increases through systematic additions by saving a proportion of one’s income, there comes a point where this surplus must be put to a productive use beyond receiving interest income. This surplus must be made to grow. This means finding investment worthy vehicles. The best would be investing in objective items that will be used in the production process of making tangible goods. These are things that never go out of style and are thus necessities. There will always be a market for these goods. These type of goods do not become obsolete. All of this requires time and effort. Fortunately, we were made for both. This is the way to gain wealth. This appeals to the frugal, not the spendthrifts.

THE MARKET WINS

It is amazing to watch man’s attempts to beat the market system. Businesses, individuals, and governments are all in this together to see if they can somehow go around predefined limits. We hear that this is a new era or we now have new power players that will somehow lead us to the promised land of getting something for nothing. Gary North calls these types slow learners. In reality, they are no learners. These types are never able to come to a knowledge of the truth.

Most people are anti-work. They do not like work because they are lazy. They would rather be involved in some mindless endeavor that demands nothing of them. This is because mentally, they have checked out of life. They long for a life where everything is provided for them and they are free to go wherever and do whatever they want. These types are daydreamers. They desire to fashion a world where work is forever banished.

This is not the world that we live in. Paul said it best in 2 Thessalonians 3:10, "For even when we were with you, this we commanded you, that if any would not work, neither should he eat." Being gainfully employed is holiness. The standard of work is found in the Fourth Commandment of the Decalogue. Exodus 20:9 reads, "Six days shalt thou labour, and do all thy work." This gives a weekly pattern of six days of work and one day off. Since Christ has come, the weekly pattern starts with one day of rest followed by six days of work.

With the recent financial crisis, some people have not been able to afford day care. So they are seeking to find alternative ways to keep working and have their children taken care of. One alternative is to put their children in unlicensed day care. This day care is usually more affordable than day care centers. Of course, there are howls from the licensed day cares because their livelihood is being threatened.

Some of the howls that are being bandied around are that unlicensed care is a dangerous situation. Let us examine this howl. Children have been given by God as a gift and parents have been providing day care for children for six thousand years. This is a natural and normal situation. So why can’t a mother who stays at home be able to provide day care for other children? She is qualified by having her own children and providing day care for them.

The real issue is not the safety of the children. The real issue is that the day care centers do not want the competition. Regulation of day care has limited work opportunities for others thus causing day care centers fees to be overpriced. This industry wants regulation so that they can charge the consumer higher prices. They always say that they are interested in the children, but they are more interested in protecting themselves from other workers. In other words, they are liars.

Parents realize that they have limited options. So the market wins out over man’s regulations. People are going to find a way around government regulations. Call it the black market, but in reality it should be called the white market. The regulatory market is the true black market because this market seeks to limit opportunities for work. This makes the regulatory market anti-work. Regulatory markets are about creating scarcity, therefore driving up the price of their commodities.

People have fixed incomes and they must make decisions that are in their best interests. This means that they will seek to find products at the least price available. The established economic law is that more will be demanded at less price. Day care is no different. The market is winning over regulation. Every time that the market begins to want to deregulate, those whose economic interest are at risk begin to cry to the government to stop this wildcatting. The regulators are our neighbors who use the government to keep us from working.

I applaud those providing unlicensed day care. They are the ones seeking to help their neighbor by providing affordable day care. The established day cares resent the market. The market system is always heading for decentralization. The regulators want control and thus seek to centralize everything. With a decentralized market system comes abundance and plenty of work for all with lower prices. A centralized market system produces scarcity, unemployment, and higher prices. No matter what, the market will win out in the long run as is the case in what is occurring in day care.

UNDERSTANDING ECONOMICS

Not many people have an inclination towards what is called the dismal science and yet economics is something that effects peoples lives on a daily basis. When I looked up the definition for economic or economical in Noah Webster’s 1828 Dictionary, I found out why I am an economist. Economic means "managing domestic or public pecuniary concerns with frugality; frugal; regulated by frugality; not wasteful or extravagant."

An economist is one who Webster defines as, "one who manages domestic or other concerns with frugality; one who expends money, time or labor judiciously, and without waste." Webster renders economize as, "to manage pecuniary concerns with frugality; to make a prudent use of money, or of the means of saving or acquiring property." Frugality and prudence are linked together when dealing with economics.

The theme of the Frugal Accountant is that frugality is always a virtue, so an economist is by definition virtuous. However, in our day and age, most economists are far from being frugal. Most economic policies are profligate. They are not wise and most economic policies are short term without considering the long term consequences. Henry Hazlitt wrote about when instituting any economic policy what must be consider is not only the short term consequences but also the results of the policy in the long term and its logical conclusion. This, of course, requires understanding economics.

For instance what happens when the government institutes rent control. In the short term, renters are going to pay below market prices for rent. This is good for the renters and there will be more renters than the supply of rental property, in this situation, because more will be demanded at less price. However, in an exchange, there are two sides to the transaction. What is not considered in rent control is the landlord of the rental property.

The landlord is forced to charge a set amount of rent by government decree. Since there will be more demand than supply of rental units, the landlord has no incentive to build more rental properties. When the rent is fixed below the market, the landlord will potentially be operating at a loss. There is no incentive on his part to maintain the property because he will be losing more money. Thus, we have the creation of slums and the derisive title given to the landlord of a slumlord. The cause was not the landlord, but the government’s economic policy of rent control.

Yes, people need a place to live, but it is not the government’s place to provide people with

housing. This is a family responsibility. This is where being an economist comes into play and a use of the spiritual quality of frugality. Welfare is an inescapable concept. Welfare is to be accomplished by the family, not the government. This is one of the reasons that the welfare state is an example of the opposite of economics. An economist who is worth his keep will vehemently oppose all rent controls, or he is a charlatan.

REBATES

Most businesses realize that it is not easy to get customers to purchase their products without some type of incentive. Because of competition, businesses must dangle a carrot in front of prospective customers. Some offer lower prices on products such as Walmart. There are other discounters that have been able to find a niche in the market. Some offer extra services with their sales. Some offer free samples.

This shows that the market place is a place of service, not coercion. Those who best serve the customer are going to be in business in the long run. One of the items that auditors look at when auditing a company’s financial records is does the business have a future? Is this business a going concern? Businesses must keep up or else they will be left behind and be out of business because someone else is serving the customer better.

Customers are looking out for their own best interests. So are businesses. This means that the both are seeking what is best for themselves. At some point, both of these interests are brought together into one and a sale occurs. Nothing occurs until a sale is made. A business can have all the products in the world and yet if they have no demand for their products, they will be forced out of business. There must be a demand for a businesses’ products.

Customers are relentless. Demand is never ceasing. Supplying this demand requires exertion and the removal of obstacles. The customer has it easy. He is waited upon by others. The business must put forth the effort to meet the customer’s needs and to the customer’s satisfaction, if the businessman desires to have repeat business which is a business’ lifeblood. Having an established clientele helps to ensure that a business will keep its doors open.

An incentive used by many businesses is a rebate. A rebate is an abatement in the price of a product. Rebates have to be applied for by the customer. Rebates are not given at the time of purchase. Some effort is required by the customer to receive a rebate. It would be interesting to know how many people actually take advantage of rebate offers. My guess is that it is a small percentage because effort is required to get it.

Those who are frugal will take advantage of a rebate offer. They will go through the effort of applying for the rebate. Recently, I purchased contact lens for my daughter. Her contacts came with a $40 rebate offer. To get the rebate, I had to enclose the required information and mail it off before a set deadline. It will take four to six weeks to get the rebate. To some people this is just too much effort. To me it is easy money. For the time and effort, I was being paid more than any job I work. Take advantage of rebate offers because that is what they are there for.

GOVERNMENT'S FREE LUNCH

When it comes to violating all economic laws, the government will find a way. Some corporations believe that they can violate economic laws with impunity because of their size. This goes on for awhile, but eventually it will all come crashing down because absolutes exist and can not be violated without there being repercussions. Eventually, judgment day comes. Instead of learning from the failures of the past, the government and some corporations continue to implement disastrous policies.

One economic law is that more will be demanded at a lower price. This is why businesses have sales. Businessmen know that more people will buy more of a product if the price is lowered. This law works for two reasons. One is that the lower the price makes it affordable for more people. Every time the price increases on a product, more buyers are excluded. The market for a particular product decreases with price increases. In other words, more people are being priced out of the market. The other reason is that the frugal are looking for ways to save money, so they will stock up on sale items.

Most people have heard the statement that there is no free lunch. Lunch may be free if you are not paying for it, but someone must pay. Free lunches do not exist. Only God can do things for free because only He possesses the ability to create something out of nothing. We lack this ability. We can only take what exists and make something out of it. We must get paid for our efforts in order to provide for our physical existence.

Government attempts to play God when trying to provide free lunches. Governments believe that they can create something out of nothing and their attempts always end up in failure. A recent example is in the State of Hawaii where the government is ending universal children’s health care. One of the reasons that the program is being ended is because of budget constraints. The program is being cancelled after only seven months.

Another reason cited is that people who had health care coverage for children dropped it so that they could get in on this government welfare (handout) program. Why pay for something if the government is going to give it away for free? When the government offers free lunches such as universal child health care, what always happens is that demand will exceed supply every time and everywhere it is tried. As Gary North has said repeatedly, "God is not mocked at zero price."

When demand exceeds supply, what happens is that prices begin to rise. This means that the government will require more tax money to pay for medical services or the government will pay only so much for medical services rendered by medical professionals. One of the causes of high medical costs is government money increasing demand for limited medical services. This has an opposite effect from what governments intended.

The Hawaiian failure should be a beacon to every government to avoid the rocky shore of free lunches. It is apparent that legislators have not been trained in economic law. For them there are no absolutes. This will always be the problem with these types of legislation, these laws are passed without regard to absolutes. Unfortunately, these lessons are never learned. If it is not a free lunch for children’s health care, it will be something else. This process never ends because governments are determined to play God and unfortunately, the people want it this way.

ECONOMIC IGNORANCE

What is needed and is lacking in our day and time is knowledge of the way that economics works. It is amazing that many people down through the ages have known what works and what does not work and yet, this wisdom has not penetrated through to the majority of people. Instead, what has happened is that people have been trained in is short term economics without considering the consequences of their actions.

This of course leads to economic crisis. John Maynard Keynes formulated the economics that governments follow today. His policies consist of inflation and deficit spending. These are short sighted policies because they work in the very short run, but long term, they are disastrous. These economic policies lead to financial instability. These policies are really a formulation of Darwinian evolution carried over into the financial arena.

Darwinian evolution says that there are no standards. Everything is based on chance and therefore everything is unstable because of continuous change. This leaves the world in a constant state of flux. We are now seeing the financial policies of Keynes coming home to roost with a vengeance. The supposed experts have proven to be incompetent, especially the government officials. The elite have made their millions and have gone off into retirement or were let go from their companies, leaving a disaster for others to piece together.

Just like the idea of instituting God’s law as the universal law, the gold standard is an anathema to the majority of people. Because people have as R. J. Rushdoony has said "larceny in their heart," they want to keep a system of inflation going. This is because it gives them higher wages. They are given wage increases based upon inflation rather than upon productivity. This is because most people want something for nothing. They are not ambitious and have no drive.

Until inflation is eliminated, we will continue to go from crisis to crisis. It will be a constant process. This is because our money is unstable. Instability begets instability. The best way to eliminate inflation is to be on a gold standard and to the market issuing money, not the government. Governments want control of the money supply so that they can cheat and cheat they will. Governments have a very poor record when it comes to inflation.

Darwinian evolution has conquered every area of thought, but Darwinian evolution is really anti thought. It is doltish to say the least and only dolts accept it. We do not live in a world without standards. Standards are built into the fabric of creation. Standards give us stability and measuring points. Standards give us feedback as to performance. Most of all standards are to be like God, immutable. Immutability is what gives stability.

LEARNING A LESSON AFTER THE FACT

It is an astounding fact that most people learn their lessons after something happens and never before. We call this the school of hard knocks. Is it possible to avoid this school? It is only possible when someone accepts that there are absolutes and that these absolutes never deviate. The frugal realize that they possess wisdom which gives them foresight. They can foresee danger and avoid it. The spendthrift does not believe in absolutes and therefore repeats the same failed behavior over and over again.

Wisdom is the most valuable resource that any of us can possess and yet it is so rarely employed. Few seek wisdom. The majority of people would rather be foolish because it requires no thought. They prefer acting on the immediate moment. They make no plans, so they plan to fail and when they fail, they want someone to bail them out. The fool never understands cause and effect because if he did, then he would look for the cause of his misery and adjust his behavior accordingly. This is why he is a fool. Fools never learn to be wise.

The Harrisburg N.Y. Patriot News ran an editorial with the following quote, "But while highly intricate and playing out on a level that even financial experts sometimes struggle to grasp, the mess on Wall Street is in many way indicative of what has happened on Main Street and in Washington: Living beyond one’s means by racking up huge debts." This is what fools do. They have no comprehension of the way that finance works and yet they rush in and take out loans or run up credit card debt without the ability to pay.

This is because these people think only in the immediate moment. They have no foresight. They cannot and do not think ahead, if they will be able to repay what they owe. They only live in one dimension, now. They have not learned from their past mistakes and the future means nothing to them. They only want what they want and they want it now, no matter the consequences. This is the epitome of foolishness.

The frugal know that the only way to save money is to spend less than you earn. This absolute never changes. The only way that you can accomplish spending less than you earn is to know how much income you have and how much expenses you have on a monthly basis. This requires keeping records of income and expenses. By taking a look at your monthly expenses, you can find things that need to be cut out. One thing that needs to be done by a lot of people is reducing their monthly debt service. The less that you pay out, the more you have for yourself.

The frugal have been preaching for people not to live beyond their means for years and no one has had ears to hear. Then when this latest financial crisis hits everyone gets a hard lesson. This latest financial crisis could have been avoided, if wisdom was the prevailing attitude of our nation. It is apparent that foolishness is the intellectual norm. This is because people have been taught by our education system, there are no absolutes. The only problem is that absolutes keep appearing and prove these people to be foolish.

Living within your means takes something that the foolish lack, self-control. They are unable to control their spending and thus, they are in foreclosure or they resort to embezzling money from their employer. A spendthrift is the same as a drunkard. They are both given to excess. They have not learned how to restrain themselves. For all the talk about this present financial crisis that we are in and how people are being taught a hard lesson, unless someone learns to govern themselves, they will not change their behavior.

Budgeting is like going on a financial diet and most diets never work because people lack self discipline. Most people do not want to learn how a budget works and most importantly stick with it. This is because they know that they cannot restrain themselves. The lesson that is going to come out of this present financial crisis is that people will not have learned anything. They may adjust their behavior for a little while but like a drunkard, they will be off the wagon and back with credit card in hand saying, Charge it!

Proverbs 26:11 is appropriate in this situation, "As a dog returneth to his vomit, so a fool returneth to his folly." While this editorial newspaper article contains the wisdom that one cannot live beyond one’s means and live on debt, it will not be universally heeded for too long. It is easy to predict that there will be another financial crisis because people will overextend themselves again. What is missing here is the fact is that self discipline is spiritual and most people are not spiritual. This is why they repeat the same foolish behavior over and over again. They may be taught the lesson, but they never learn.

MINIMIZING EXPENSES

Wisdom is not something that you can earn a diploma in. Wisdom is on the application side of the equation. It is better to be wise than to be foolish and yet, most people apply foolishness rather than wisdom to their financial situations. Wisdom is a spiritual quality that cannot be purchased with money. Wisdom gives insight into every facet of life. Wisdom understands that actions have consequences and it is wise to plan ahead.

Saving money is easy to understand. To save money, you must spend less than you earn. This is the only way that saving money is possible. It is a true and tried method that works wherever and whenever it is put into practice. This is the only sure way of building up a savings and yet most people do not understand it. This is because most people have no idea what they spend their money on. They do not keep detail records. They do not keep their receipts. They do not prepare monthly income statements. In other words, they do not have a clue on how to manage money. Money manages them.

A recent example of how to minimize expenses was shown to me. I was impressed by the preplanning. My wife’s nephew was getting married. As we all know, weddings can be very expensive affairs. However, with preplanning expenses can be minimized thereby reducing the wedding’s expense. Receptions can be a time where alcoholic beverages are served. I noticed some unopened gin and vodka bottles in my brother in law's garage.

I made mention of where the wet gin was since the gin said it was dry to my brother in law. He then explained to me the arrangement that he made to minimize the alcohol expenses for the reception. His son (the groom) and he had made up a contract with a spreadsheet that was signed by his son and the bartender. They would be responsible for providing so much of the alcohol and any unopened bottles would be returned to the package store for a refund.

This was a way of minimizing expenses by preplanning. It is easy in these situations to

overestimate how much you need and therefore to overspend. Some people would just keep the unopened bottles and not hassle with taking them back for a refund. This increases the amount that they end up spending for the wedding. My brother in law is frugal. He does not spend more than he has too. It is important to minimize expenses no matter the occasion.

PANIC SETS IN

It is easy to see the way that people think by their actions. The Lord Jesus made this abundantly clear in Matthew 7:20, "Wherefore by their fruits ye shall know them." He was referring to false prophets. He said the distinguishing factor in false prophet identification is their fruits. This same example can be used for every instance, whether good or bad. Thayer’s Greek English Lexicon renders fruits, "metaphorically that which originates or comes from something; an effect, result. Work, act, deed." Actions are therefore a result of prior thinking or mindlessness.

When people have no future and no hope, they will panic. Panic is the result of no hope. Noah Webster’s 1828 Dictionary defines panic as, "A sudden fright; particularly, a sudden fright without real cause, or terror inspired by a trifling cause or misapprehension of danger." Panic can take place in the financial realm, as well as in other areas. When someone lacks foresight, panic will be the end result.

A good example of this situation occurred recently with the hurricane named Ike that hit the coast of Texas. There are a lot of refineries in that area. These refineries had to be shut down because of the hurricane. This will of course cause a disruption of the supply of gasoline in the short run. What was interesting was to watch people’s reaction to this situation. It was wholesale panic.

Rumors began to spread with stations supposedly running out of gas and the price of gas was going to exceed $5 a gallon. People were all buzzing about the gas situation. The result was predictable, long lines at the gas stations. These people panicked as if there was no tomorrow coming. Instead of doing any verifying of these reports, they just accepted someone’s word as truth and acted on these misapprehensions.

The next morning, gas had risen in my area about $.35 a gallon and you could get as much as you wanted. In this situation, having to pay more for gas is not the issue. The price will shortly come down to its previous level. The important thing is the ability to get it. Some people thought that the oil companies were gouging them. It is obvious that they do not understand the law of supply and demand. They can only think in the immediate moment. They lack the capability of seeing the final result of this hurricane. Eventually, things will get back to normal. This is a short run phenomenon.

This panic made those who waited in the long lines look foolish. The lower the price of gas was at a station, the longer the line was. Walmart was selling their gas $.20 below others and the lines were extremely long. What were these people thinking? So they saved $.20 a gallon. The frustration of having to sit in a car for a long period of time made them look ridiculous. The next time that rumors begin to fly, those possessing foresight will think through the situation before acting. The others will predictably panic.

NOT PREPARING FOR THE FUTURE

The knowledge of this world has been atomized. All that exists for the vast majority of the population is the visible world. They have denied the spiritual and therefore they are left with acting in the immediate moment. This is the thinking of an animal. Denying the spiritual leads to denying foresight. Foresight is the ability of planning ahead. The world has become atheist in denying God’s existence.

Romans 8:29 reads, "For whom he did foreknow, he also did predestinate to be conformed to the image of his Son, that he might be the firstborn among many brethren." God is Spirit. God’s Spirit is not merely His being but also encompasses His thinking and acting aspects. God, being the Creator of all things, has built into everything His definitions. He knows all things beforehand because He has built into everything their limitations. He has preordained all things to work within predictable i.e., defined limits. God’s preordination gives us a predictable world.

God’s law predestinates all things. His law limits all things in advance. All things have been preordained in advance because they all follow patterns that have been previously established by God. Demonstrating wisdom then becomes applying God’s law to all situations. Because God is omniscient, we can rest assured that by following His law that we will make the right decision in all instances. Foreknowing is the equivalent of foresight. We can foresee because we can foreknow.

We are living in a world where God’s law has been rejected by man. This means that God’s predestination has also been rejected and now man’s most visibly powerful institution, the civil government, has become the determiner of all things. The civil government uses its power of taxation to provide welfare programs for certain citizens. In other words, the government discriminates based upon being in poverty (government defined), reaching a certain age (Social Security and Medicare) etc.

In an editorial piece the Detroit Free Press was discussing heat costs for the upcoming winter. The government has a program called the Low Income Home Energy Assistance Program. This program is designed to aid government defined poor working families. This editorial made the following statement, "This is not a welfare program, and in fact, welfare generally provides more utility assistance. The long-term goal of trying to prevent welfare dependency means some aid is essential for low income families to meet their basic needs, such as for food and heat. Otherwise, workers may have no choice but to fall back on welfare simply to keep their children warm."

Of course, this is a welfare program that will make these government defined poor working families dependent upon government assistance. If the government provides assistance, then those seeking this aid will do so every year. They will apply for it every year because it is available to them. They will not learn how to budget their money so that they can pay for any heating bill increases. Everyone should know that utility bills are higher in winter and should make adjustments to their budgets to reflect this fact.

Welfare programs essentially destroy the ability of those who receive it to learn to plan ahead. In fact, it is senseless to plan ahead if you know that the government is going to provide for you. One can live in the immediate moment without any foresight knowing that the government will come through for them and why try and improve your position because if you do then you will not qualify for the assistance. Once a person accepts government welfare, he will not prepare for the future.

IMPULSIVENESS OR FORESIGHT

A person’s thoughts are demonstrated on a daily basis. The way that someone thinks eventually becomes apparent to all. There is no way of getting around this. The Lord Jesus Christ made this evident in Matthew 12:34, "...for out of the abundance of the heart the mouth speaketh." Whatever is in a person’s heart will eventually come out of the mouth and then be demonstrated in one’s actions. This is another way of saying cause and effect or the spiritual precedes the physical.

Spirituality is characterized by thinking ahead and making appropriate plans. This is the wise approach to any situation. The alternative to this is to do things rashly or impulsively. Doing things in such a manner demonstrates a lack of thought and preplanning. Impulsiveness is doing things in the immediate moment without any understanding of the consequences of one’s actions. Impulsiveness is essentially mindlessness. It is the thought level of a very little child. Impulsiveness is foolishness.

Two examples will make the contrast between being impulsive and having foresight. A neighbor was helping another neighbor whose boyfriend had locked the keys in the car. They tried getting the door open using various methods with no avail. A locksmith had been called and he told her that it would cost $35. This lady told my neighbor that she did not have $35, so she took a brick and broke out a car window.

She wanted to get into the car without considering the ramifications of breaking the window. This demonstrates a lack of appreciating the consequences of her actions. This is mindlessness. It required no thought because she acted in the immediate moment. She does not plan ahead by having financial reserves in case of emergencies. She lives like an animal who does thing solely on instinct without reasoning.

If she does get the window fixed (highly unlikely or she may put a piece of plastic over it), it will cost her about $185, if not more. Not planning ahead is costly in the long run. She got what she wanted, her car open, but the price is high as compared to what it would have cost her had she paid the locksmith to open her door. These are the kind of people who live in poverty and survive on government assistance.

On the other hand, when I went to work, my car started hesitantly. I got to the place where I park my car and turned it off. I then started it up again and it did fine. At the end of the work day, I went to start my car but it would not start. I thought the battery was dead. So I took the work truck home and went out and did my daily run. All the while I was running, I was thinking about what I needed to do to get my car running again.

I weighed different options. In other words, I was thinking ahead and making plans before I acted. This is foresight. I had also prayed to the Lord about the situation. When I was doing my cool down, I saw my neighbor’s son’s pickup. I went over and talked to my neighbor’s son and he agreed to come and see what he could do to help. We were able to get the car running again by jumping it.

I knew that I was not going to drive it home and just assume that all would be well just because it started again. So I drove the car from where it was to an Advanced Auto Store by my house. An Advanced Auto Store clerk hooked up the battery to his tester and lo and behold the test said I had a bad battery. So I got the least expensive battery since my car is old and I use it mainly just to get around town. It cost me $76.53 for the battery plus tax.

I could have assumed that the battery would start again once I stopped the car, but I did not want to take that unnecessary risk. This is because I knew the consequences would be having a car that would not start again. When people do not have financial reserves for emergencies they do many foolish things, as the first example demonstrated. It is wise to save money for emergency purposes. This shows thinking ahead and making provision.

MAKING FUTURE PROVISION

Two things that will always characterize the frugal are foresight and self discipline. These two things are the epitome of wisdom. The frugal are wise. Thus, by definition, the spendthrift is foolish. The frugal are spiritual and future oriented and by contrast, the spendthrift lives in the immediate moment and is visibly oriented. One thinks ahead and the other acts upon impulse. One understands the consequences of his actions and makes appropriate plans, while the other is continually trapped by consequences and never comprehends cause and effect.

The Lord Jesus Christ gives us a parable that contrasts the wise and the foolish with regard to future provision in Matthew 25:3-4, "They that were foolish took their lamps, and took no oil with them: But the wise took oil in their vessels with their lamps." We are not told why the foolish did not take any extra oil with them. It could be that they had made no provision for this future exigency. Since the foolish live in the present moment, it makes sense that they would not think of the future. Their lack of foresight prevents them from considering making present provision for the future.

The wise took extra oil with them because they had made provision. Noah Webster’s 1828 Dictionary defines provision as "The act of providing or making previous preparation." This is the definition of foresight. To make previous preparations means one understands the spiritual term of preplanning. This can only be accomplished by the wise. This is the hallowed ground that the foolish never tread. The reason that the foolish do not tread here is because their minds do not think in spiritual terms. If they did, then they would no longer be foolish but wise.

The parable of the wise and foolish virgins is a parable about provision. The wise take present action with an eye toward the future. The foolish have no concept of the future. They are bound in the present moment. The wise are busy making provision for the future while the foolish are making no provision for the future but spending everything they have and going into debt. The foolish are reactive. They act upon impulse and the wise act upon planning.

Knowing this beforehand means that the wise have an emergency fund. This emergency fund is in a highly liquid form. Even the wise can lose a job or have an unexpected car repair or some other emergency. By having an emergency fund, the wise will be able to smooth over these rough financial spots. The foolish have no emergency fund. When the unexpected comes, the foolish are not prepared for it. They will either have to borrow to pay off the bill or they will end up declaring bankruptcy.

Most of all, the foolish will vote for the government to provide them with emergency funds. When this happens the opposite principle of what the Lord Jesus was seeking to teach in this parable takes place. The government takes from the provisions of the wise by force and gives them to the foolish. All that this does is allow the foolish to continue to be foolish. This moral inversion penalizes the wise and rewards the foolish. Despite the government’s efforts, the moral of the story is, it is always wise to make future provision.

MENU PLANNING

The frugal are forever thinking ahead. They are led by foresight. Foresight is based upon thinking in terms of principles. Foresight is first and foremost a spiritual enterprise. Foresight by itself is of no value unless it can be put into practice. This is where self discipline takes over. Foresight is the subjective and self discipline makes the plan come to fruition. It requires both to be successful.

The frugal make plans concerning all of their lives. They are goal oriented. They know that if you do not plan, then by default you are planning to fail. Frugality is about being successful in managing of one’s resources. Management requires forethought. To be able to manage anything requires that you understand the principles of management. One of the definitions that Noah Webster uses for manager is "a person who conducts business with economy and frugality." Learning to manage our resources is wisdom in practice.

One of the major events of our daily living is eating. Most people in America eat three meals a day. Food is required to sustain our physical life. Food is essential to being productive. Our energy comes from the food that we eat. Knowing that each of us have budget constraints, it is wise to put into practice a system of menu planning. By knowing what meals you are preparing in advance, you will cut down on the time necessary for preparation and this also requires having on hand those items that are necessary for the making of the meal.

When you do not have a system in place when it comes to meal preparation, you will be wasting time and finances. Some people go to the grocery store and buy something and throw it together not caring how much money and time they are wasting. Frugality is all about doing things in an orderly fashion. By planning ahead, you generally will go to the grocery store on an infrequent basis. You buy in advance what you will need that particular week and because you know what you need, you will have it on a list.

Those individuals who do not shop with lists are not wise. Lists are designed to prevent impulse buying. Impulse buying is what drives up the expense of shopping. People without lists will be generally ones that do not have a budget. They do no prior planning and it shows. Menu planning and making a shopping list go hand in hand. This is a demonstration of understanding the situation when it comes to eating meals. It is always wise to save as much money and time as you possibly can. We are biblically enjoined to redeem the time. Menu planning is one way to redeem the time.

INSTANT GRATIFICATION MEANS DEBT

Once you understand operating principles, they do not change. The law has been predetermined. It does not change or vary. This makes life predictable and livable. Once we possess the truth of a matter, we do not need to relearn it. It is set in the proverbial stone. Paraphrasing Cornelius Van Til, "We do not need exhaustive knowledge, we require true knowledge." Understanding the principles of God’s law is all that matters in the final analysis.

Thinking in terms of the law requires thinking spiritually. No spiritual thought is possible without the law. Paul stated this principle in Romans 7:14, "For we know that the law is spiritual..." A spiritual characteristic is foresight. Noah Webster’s 1828 Dictionary defines foresight as, "...the act of foreseeing. Provident care of futurity; foreknowledge accompanied with prudence in guarding against evil."

To foresee means that one possesses foreknowledge that is, knowledge of God’s law and the consequences, both for obedience to God’s law and disobedience. Showing prudent concern about the future is something that the spiritual demonstrate in making financial decisions. The spiritual man understands the principle of delayed gratification. He understands what the Bible has to say about being in debt in Romans 13:8 which says in part, "Owe no man anything..." The spiritual man has evaluated the future and does not want to sell himself into slavery. He desires his freedom more than material possessions.

The spiritual man therefore will seek to save for the purchases that he makes that are beyond his immediate resources. He will do without until he can afford to make a major purchase. If something is true, the opposite will also be true. The spiritual man uses wisdom. The carnal minded man is foolish. Romans 8:7 reads, "Because the carnal mind is enmity against God: for it is not subject to the law of God, neither indeed can be."

The carnal minded man is led by whims. Therefore, he lives for the immediate moment without considering the consequences of his present actions. The idea of delayed gratification is anathema to the carnal minded man. He sees what he wants and he wants his desire instantly gratified. Even if it means putting his entire financial life at severe risk, he will do what it takes to get what he desires. He has no thought about the consequences nor the future. Since he is spiritually dead, he has no future. This is why he is reckless.

The carnal minded man does not think in spiritual terms. He sells his soul into slavery by the way of debt because he is already a slave in his heart. He is merely following the dictates of the principle that controls him when he sells his future to being a slave. He does not consider his ways. He lacks any remorse or any ability of reflection. It should be obvious that we not learn the ways of the foolish. Wisdom pays dividends. Learn the principle of delayed gratification. You will never regret it.

OIL CHANGE

It is time to change the oil in the cars. Oil is a necessary component in keeping an engine running optimally. The main function of oil in an engine is for lubrication. It keeps friction at a minimum. It also keeps the motor from overheating and has other functions within the engine. In other words, without oil in the engine there would be a horrendous sound from the friction within the moving parts and the engine would burn up.

Over a period of time and mileage, oil begins to break down and to accumulate waste. It becomes less effective in performing its vital function. It is therefore necessary to replace your oil at regular intervals. Most of the lube express businesses will put a sticker in your window and tell you to replace your oil every 3,000 miles or every three months, whichever comes first. According to a recent report, this may be a waste. Most oils today are of a better quality and can go for more miles than just 3,000.

I have religiously replaced my oil every 3,000 miles. I own two cars each with about 135,000 miles. What begins to happen when cars accumulate high mileage is that they tend to develop oil leaks and are subject to oil burn off. What this means is that your engine is not going to be as protected as it should when you have a high mileage vehicle. There is a service that lube express businesses offer that help with this problem. It costs more than the standard oil change will but if it helps to keep your oil doing its job, the extra money will pay for itself in the long run.

When you are not in debt, you have more options. One of those options is to upgrade service when necessary. When your budget is so limited that it allows for no options, you are skating on financial thin ice. When your only option is to purchase whatever is the cheapest without considering the quality, then you are in financial trouble. It is always wise to consider the quality of the product or service you are purchasing. If you pay for the cheap, then the quality will also be cheap.

In our present world, a car is a necessity. Therefore, its maintenance is vital. Keeping it running in good condition requires thinking ahead. It should be forever etched in your mind to have your oil replaced at regular intervals. If every 3,000 miles works for you, then do it. Cars can be expensive, especially if they are a new purchase. Being frugal teaches us that we should do our best to maintain our assets in good working condition.

When choosing a lube express place for service, there are a few things to consider. If you go to Wal-Mart, the earlier that you get in the shorter time that you will have to wait. Wal-Mart has a lube express hoping that you will go inside their store and make some purchases. While you shop you get your car’s oil changed. For me, I have to adjust my schedule to go get my oil changed at Wal-Mart. Usually, Wal-Mart’s price will be less than their competition.

I took one of my car’s to Wal-Mart yesterday. I knew that if I wanted to get in and get out (which is always my modus operandi) I had to be there by 7:00 a.m. I took my other car to a local lube express closer to my house in the afternoon. I got my car in right away. There was no wait. The price for the service was about $4 more than Wal-Mart but I did not have to spend time waiting for my oil to be changed. Besides all that, my wife works at the VA Hospital and she has a discount card for local businesses and the lube express gave me a $5 discount which made the service even less than Wal-Mart’s. Lesson learned, it pays to shop for the best value. Time sometimes means more than money.

FINANCE AND HEALTH

When thinking about making money, most people do not consciously consider their health to be a part of a sound financial plan. If you lack the capacity to be productive, then your financial well being will suffer accordingly. Most people do not practice preventative maintenance. They do nothing for their health and when their bodies finally give out, then they make a decision to do something about their health. When it gets to this point, it may be too late.

The principle of frugality teaches a person to use foresight. Foresight is thinking ahead of the future consequences of actions taken today. Most people think that having health insurance will keep them healthy. Health insurance should be renamed to what it is doctor and hospital insurance. People who are sick go to the doctor and hospitals, not the healthy. This is the same thing the Lord Jesus Christ said in Matthew 9:12, "But when Jesus heard that, he said unto them, They that be whole need not a physician, but they that are sick."

It is wise to have an exercise program and to maintain a healthy weight. The way that our weight works is based upon calories. If you consume more calories than you expend or use, then those excess calories remain in the body and will add to your weight. There are so many different diets that emphasize such things as low fat, low carbohydrate, the milk diet, the grapefruit diet etc. All these diets end up in failure because just eating one food gets monotonous.
God put into food what your body requires protein, carbohydrates, and fat. The key is not to over consume. Once again, it gets back to temperance or self control. In general, we should only consume enough food to keep our body running optimally. This does not mean that we cannot enjoy a treat or snack. Eating food should be an enjoyable event. Watching your calories requires preplanning. It is being aware of how many calories you are consuming on a daily basis. If you want to lose weight, you will have to run a calorie deficit. A calorie deficit is where you use more calories than you take in. Once you get to your desired weight, then you simply run calorie equilibrium.

"CDC: Tennessee ranks third among obese states" was a recent Associated Press Article. This article had the following quote, "In today’s America, poor people tend to be obese: The cheapest foods tend to be calorie-heavy, and stores offering healthier, and more expensive food choices are not often found in poor neighborhoods, she said." In this quote, we seek linked together obesity and poverty. This is because of the eating of calorie-heavy foods. These people must be unaware of the detrimental health consequences of eating excess calories.

Being obese has a physical drain on one’s drive. It makes one lethargic and unproductive. The obese are not known for their physical prowess. They are trapped by the law of cause and effect. Their obesity causes a lack of health which translates to a lack of productivity which translates to a lack of finances which leads to poor nutritional choices. They are lethargic because when you consume too many calories, it has the same effect on the body as being drunk. Consuming too many calories is food drunkenness.

This newspaper article confirms what the Bible has said about continuous excess calorie consumption in Proverbs 23:21, "For the drunkard and the glutton shall come to poverty: and drowsiness shall clothe a man with rags." Excessive calorie intake is gluttonous. The result is lethargy which will result in a man being in financial ruin. There is no way around the law of cause and effect.

The lesson to be learned here, is that if you want to be wealthy, you will have to watch your calorie intake. Health and wealth are closely related. It is hard to separate the two from each other. As with all facets of life, the successful have this one main characteristic of self control. They have mastered themselves and will allow nothing to master them. This requires what the obese lack, self discipline or self government.

FINANCIAL FAILURE

There are many ways to learn a lesson but for some reason man learns best utilizing the method known as trial and error. No matter how much wisdom is imparted to an individual, he feels the need to test things out for himself. This means that mistakes will be made and there is the real possibility of financial failure along the way. Financial failure can sometimes be our best friend rather than an enemy.

We are living in a day and age when failure is not allowed. If there is some kind of competition, there are no winners. Everyone gets a medal for participating. What this does at a psychological level is to teach that there is no difference between excellence and mediocrity. Everyone a winner and no one a loser. The important thing is not to reward excellence and ability but to penalize those who do well for doing well.

The world of reality separates the competent from the incompetent. This is a good thing because someone that is not qualified to a job can move to another for which he will be more qualified. If he is allowed to demonstrate his incompetence, he is forced to either upgrade his skills to become competent or find another line of work. In other words, he is allowed to fail that he might learn to succeed.

By failing, he will learn what went wrong originally and then he can make the necessary adjustments that will ensure future success but he must be allowed to fail. Some think that failure is a bad thing. It is if you do not try to succeed but you will fail all the way to success, if you do not give up. However, our government system will not allow anyone to fail financially. They bail out the incompetent who have failed in business thus ensuring that the financially incompetent will continue to squander scarce resources. These businesses are not allowed to fail and thus they will not be forced to make the necessary adjustments that will result in financial success.

When you know that there are no repercussions for failing financially, you will not take the necessary precautions. When you know that the government i.e. taxpayers will bail you out no matter what you do, you will spend money as if there is no end in sight. You will throw caution to the wind. When your money is on the line and you know that no one is going to bail you out should you fail, you will be cautious in your spending and business practices.

Many big corporations know that the government will bail them out should they go bankrupt. This sends the wrong message to businesses. They will not alter their behavior unless they know that the market will bring financial sanctions against them for their reckless business practices. The government is not alone to blame in these bail out schemes. Businesses needs to get their financial houses in order. They must be allowed to fail no matter how big they are and how painful it is. Failure is the key to success.

SPENDING MONEY EVERYWHERE

Spending money for most people is an emotional experience. I was reading a book about financial management and the author said that spending money was emotional. When I realized this, I made a determination to view money logically rather than emotionally. This meant that I could get serious about paying off my debts. It was not to much longer after this realization that my debts were paid in full and I was debt free!

This is the key to money management, taking the emotion out of it. This is also a form of self discipline. Being self disciplined requires doing the right thing, not the emotional one. This is where most people get into financial trouble is that they use money as an emotional release. Spending money makes them feel better about themselves. They have not learned yet that self esteem comes from within, not from without.

The opposite of being frugal is being a spendthrift. Noah Webster’s 1828 Dictionary defines spendthrift as, "One who spends money profusely or improvidently; a prodigal..." To spend money improvidently shows a lack of foresight which means not having a plan. Spendthrifts do not have budgets. As soon as they get any money, it burns a hole in their pocket and they have to spend it immediately. A spendthrift is a person who is spiritually out of balance.

The prodigal son of Luke 15:11-32 is an example of the results of a spendthrift. Luke 15:13-14 reads, "And not many days after the younger son gathered all together, and took his journey into a far country, and there wasted his substance with riotous living. And when he had spent all, there arose a mighty famine in that land; and he began to be in want." The prodigal son had no concern for the future. His motto was eat, drink, and be merry for tomorrow, we die. He never thought about that tomorrow he may still be alive and then what was he going to do? As with all spendthrifts, he was in want or poverty.

Probably one of the worst things a spendthrift can do is to go outside his home. Wherever he goes, he feels as though he has to spend money whether he needs anything or not. Since, he has no budget, he will not know where his money is going. He probably will spend money that he has not earned yet and then he will complain that he does not know why he is having financial troubles. A spendthrift needs to spend more time at home. This will prevent him from spending money needlessly.

The frugal are financially self disciplined. They have a budget and a financial plan. They can go into a store and look and not buy anything. The frugal will many times shop ahead. In other words, they will go to a store to gather information about future purchases. I did this recently by going to a sporting good’s store and looking at some running clothes. I made a mental note of the prices and left the store without buying anything. I was not under any compulsion to buy anything just because I was in a store. Unfortunately for the spendthrift, he lacks the self discipline to do likewise.

KEEP YOUR RECEIPTS

Accurate information is a valuable commodity. Without it we are going to make many unnecessary mistakes. The key to mistakes is not that you are not going to make any, it is what you do about your mistakes. Do you learn from them or do you continuously make them over and over again? Mistakes are made because we lack omniscience. Realizing this, we should seek out sources of accurate information.

It is truly amazing to go into a store or a coffee shop and witness a customer has making a purchase and the cashier will ask the customer if he wants his receipt, (shouldn’t the cashier automatically give the customer the receipt and allow the customer to make the decision whether to keep it or not?), and horrors of horrors, the customer says no. This probably means that the customer does not keep track of his purchases and ultimately, what he spends his money on.

What is a receipt? A receipt is an accurate record of purchases made at a particular establishment. The receipt is designed to give the customer the information needed to accurately record his purchases in categories on his income statement. An income statement is a statement that shows income and expenditures. The difference between income and expenditures results in either net income or net loss.

The question becomes how can someone know whether they have net income or net loss if they do not record their purchases from their receipts? The receipt is important because by recording it you can see where you spend your money. You can make adjustments in your spending habits that will help you keep your budget. Recording transactions is essential to financial well being. Without this necessary information, you will potentially overspend.

Accounting information is accurate information. It allows you to know what your financial situation is at any given point in time. A receipt is accounting information and therefore accurate. Your bank and credit card companies are keeping track and making the necessary adjustments to your account whether you do or not. Errors can be made by banks and credit card companies. Without your receipt, you cannot prove anything that might be in your favor and you are stuck with the error.

A receipt also demonstrates ownership. It is a transfer of goods from a business to an individual. It therefore establishes property rights. When I purchase something at a business, it is mine. Without a receipt, you cannot prove that you own the property. If you try and return it to a store without a receipt, they may think that you stole it and are trying to get something for nothing. It makes the process easier when returning merchandise. If you have accurate information, then the store can act appropriately.

The next time the cashier asks you if you want your receipt, emphatically say; yes, I am a frugal accountant and frugal accountants keep their receipts because they like accurate information and establishing property rights.

THE IMPORTANCE OF SAVING MONEY

The frugal possess a valuable asset, foresight. Foresight is the idea of thinking ahead prior to taking an action. This means that the frugal have an understanding of economics. The frugal begin knowing that we live in a world of scarcity. The goods that we see in the market did not magically appear. They were produced through work. The most important phase of economic activity is production. If nothing is produced, nothing can be consumed.

Goods in the market have prices. These prices are there so that we can make rational decisions in our purchases. Prices are informational. What a frugal shopper will do is to make himself aware of what the price is for things that he buys. The frugal have developed price awareness. The frugal knows where he can get the best deal and that is where he will buy his goods. Grocery stores put out weekly flyers with their sale items listed.

When purchasing a large ticket item, it pays to shop around for the best deal. It may take going to all the stores that sell a particular item. If you can save $100 on a purchase, it will be worth the effort and gas expended. The frugal understand that their funds are a scarce resource. He cannot print off more money, like the government, without being thrown in jail. He must budget his money. He does not want to spend more for an item than he has to.

When you save money on your purchases, you will have money left over to spend on other items. This means that your money will go farther. This is called stretching your budget. An item that we all use is toilet paper. Some people will buy the Cadillac of toilet paper. I have found a 12 Double Roll pack of toilet paper at Kroger for $3.95. Last time I bought toilet paper at Wal-Mart it cost $5.84. I saved $2.07 plus tax. I can take this $2.07 savings and spend it on something else that I want. To me toilet paper is toilet paper.

When you save money on a multiplicity of goods that you normally purchase, then you will have money left over to spend on some luxury item that you may have been saving for. All of this takes pre-planning. Once you understand the importance of saving money, you can make a game out of it. You can demonstrate your deftness when it comes to your shopping. It is an acquired skill to save money and an important one at that. First, though you must understand mentally the concept of saving money and its importance in the long run. Don’t be shortsighted.

DEBT CAUSES PHYSICAL PAIN

The subjective precedes the objective every time. This means that the spiritual comes before the physical. Man is made in the image of God. This image is a spiritual or ethical image. Physical pain sometimes has a spiritual source. A negative spiritual condition will result in negative emotions being demonstrated. The opposite is also true. A positive spiritual condition will be manifested by positive emotions.

Some debt is unavoidable at times. The key to staying out of debt is self control. Usually, when someone is deep in debt, it is a direct result of someone who cannot control their purchases of goods and services. Rather than being frugal, they are spendthrifts. Their spending is an emotional release. It makes them feel better about themselves because they have an inadequate personality. They have not discovered the true source of joy.

Debt is a form of death. Excessive debt leads to bankruptcy and poverty. This is a situation of financial death and ultimately of the ability to make a living. Once someone begins down the road to debt, it seems as though there is no way off. The lure of debt is the ability to get money instantaneously. The problem is that this money has to be paid back. Not paying back just debts renders the borrower a thief. This is the message of Psalm 37:21, "The wicked borroweth, and payeth not again..." Stealing is death to the soul.

Being deep in debt engenders the negative emotion of anxiety. Noah Webster’s 1828 Dictionary defines anxiety as, "Concern or solicitude respecting some event, future or uncertain, which disturbs the mind, and keeps it in a state of painful uneasiness." When someone is anxious, they are consumed by what is causing their pain. They can think of nothing else. This pain is a constant gnawing pain.

The frugal are well aware of the dangers of debt. While they may take on some debt for business purposes or a mortgage, they will try and keep this debt load at a manageable level. They will avoid excessive debt. The best situation is to be debt free. This frees the frugal from the negative emotions, especially anxiety. The frugal take the advice of Paul in Philippians 4:6, "Be careful for nothing..." The Amplified Bible renders this portion of this verse as, "Do not fret, or have anxiety about anything."

Not being in debt brings the opposite emotion of anxiety, it brings peace of mind. Those who have peace of mind can think of how to earn more money or concentrate upon other things than how they are going to pay their bills. The frugal do not suffer mental pain like those deep in debt and therefore, they will not suffer from physical pain. Being deep in debt causes unneeded stress and those under stress do not think well. It is a vicious cycle being deep in debt. The pain is not worth it. The frugal know this in advance and avoid debt as much as possible.

QUALITY OR QUANTITY?

I think about things to write about when I go to the store. The reason for this is because the store is where the frugal spend their hard earned money. They are not on unemployment or using food stamps. The frugal believe in earning their way through life. They do not believe the world owes them a living. The frugal are industrious and hate laziness. The frugal are achievement oriented. When they go to work, they get the job done.

I shop mainly at Wal-Mart because their prices are the lowest and the quality of their products is adequate in most cases. For example, I have spent $3,350 at Wal-Mart and the next grocery store I have spent the most at is Kroger at a paltry $665. I have spent over five times more at Wal-Mart! However, this does not mean that I will give all my money to Wal-Mart. Kroger, at times, has superior quality over Wal-Mart.

Price is an important factor in being frugal, but it is not the only factor. Prices are objective, but our decisions regarding the products we buy is subjective. If we buy something based solely on price, we will get what we pay for. Economic law states that more will be demanded at less price. This means that luxury items will demand a higher price. They are luxury items because of their scarcity. Those items that are in abundance usually are of less quality.

Quantity is objectively determined and quality is subjectively determined. You have to look not only at the quantity but you must determine its quality. For instance, you can buy two pounds of bread at a cheaper price than you can buy a 100% Whole Wheat loaf of bread. You save money, but there is no comparison to quality and nutritional value. At some point, nutrition has to matter. If you buy junk food, it will have an effect upon your health and budget. While you saved some money, your health may suffer and in the long run cost you more.

Generally, Kroger has better quality produce than Wal-Mart. My wife loves navel oranges. We bought a four pound bag at Wal-Mart. There was a lot in the bag, but they were small. I just bought an eight pound bag of navel oranges at Kroger. They are much bigger than the ones that I bought at Wal-Mart. I eat an apple every day. The best quality apples that I have found are Cameo apples sold only at Kroger. These apples remain crunchy for a long time and taste like apples. If you buy something that is low quality, you may end up throwing it out and wasting money.

Part of eating food is not only for health reasons, but also for enjoyment. Food is to be enjoyed. Eating has an emotional aspect to it. I would rather eat something I enjoyed rather than eating something that is cheap, but lacks any quality. Psychologically, we must feel that we not only got a good quantity, but that we also got good quality. The frugal think when they shop. The frugal want quantity, but they prefer quality over quantity.

BAD EXAMPLES OF FINANCIAL MANAGEMENT

The media is in the business of using bad examples. Negativity sells. No one wants to read a story about someone who overcame the odds and succeeded. This does not sell. Wisdom is not something that people are interested in. They want the dirt on someone. They compare themselves to a loser and say to themselves, at least I am not as bad as he is. When they have to compare themselves to a successful man, they do not measure up and thus for them, ignorance is bliss.

If you believe the media does not have an agenda, then there is no hope for you. You are willingly deceived. The media reports on effects, not causes. They are not interested in getting to the bottom of anything. They would not have anything to report if the news was all good. They need bad news and so they go looking for bad examples. Bad examples are good for the frugal. Bad examples show us what to avoid.

A recent Associated Press article was titled "More drivers running on empty." Here is a representative quote from this article, "With gas prices hovering at $4 a gallon, motorists like Saba are putting less fuel in their tanks — then coming up empty on the highway." This is an example of poor planning. Those who do this are seeking to evade reality. No matter what, high fuel prices are here to stay for awhile.

Nothing is going to change gas prices in the short term. We must accept the reality of the situation. Gas is a commodity. It is a necessity. It has to be part of one’s budget. With the price being what it is, it behooves the frugal to increase the amount allocated to gas in his budget. This is being realistic. The increase in the price of gas is incremental. It does not comprise one’s entire budget. Incremental rises in a necessity of one’s budget requires a corresponding incremental increase in funds allocated to that budget item. This means that something must be cut back to make the budget work.

Those who are running out of gas demonstrate that they do not understand financial matters. They do not have a budget. They lack planning and preparation. They do not know how many miles their car gets per gallon. They are running on empty because they do not understand that finance is first and foremost a spiritual enterprise. Demonstrating foresight is a spiritual exercise. The frugal plan ahead and do not run on empty.

MORE OPTIONS

Life is about making choices. We will have to make decisions whether we want to or not. Making the right decision is always the challenge. Having options available is the key. So many people have burdened themselves with their poor decisions. Decisions have consequences. So many people do not understand that they live in a world of cause and effect. Their decisions will have results.

We make financial decisions all the time. Our view of money is determined by our value system. We live in a nation where death is prized more than life. Abortion and homosexuality are physical death. They are first and foremost spiritual death. Debt is financial death. Debt leads to bankruptcy and poverty. It is a state of want. Debt is based upon the unearned. It is seeing something with your physical eyes and coveting it without the immediate means to pay for it. This is death to an individual’s future. It is the mentality of a slave. Slavery is death to freedom and independent judgment.

When you are in debt, you own nothing. You only own what you have paid for. The way to handle your financial situation is learning contentment. Contentment is a spiritual attitude of being satisfied with one’s present condition. When someone is content, their goal and decisions will be not to live beyond one’s means. The only way to rein in your financial situation is by establishing a budget. A budget categorizes your means (income) and your expenditures. A budget provides you with objective financial information. The numbers are the numbers.

Staying out of debt gives you more options. Your income is not all spoken for. You can invest money in a new opportunity. You can go out and eat at your favorite restaurant without having to worry about what to order. You can put more money in savings. You can increase your children’s allowance. You can start a part time business and potentially work to where it is a full time business. The options could go on and on.

Proverbs 22:7 is true, "...the borrower is servant (slave) to the lender." Lending money is a lucrative business. Being able to lend money means that the lender has excess capital to loan. To be able to lend means that some point the lender has been frugal in his business dealings. Remember it is better to be a lender than a borrower. It will definitely give you more options and having more option is a good thing.

FINANCIAL ACCEPTANCE

It is probably a defense mechanism when your first reaction to a situation is one of denial. It takes time for the mind to accept a new reality because a new round of integration must take place. We must relearn things from what they have been previously. Denial is the first step into acceptance. Denial is an attempt to evade a new reality. We think that this cannot be happening. This is all a bad dream and I will wake up and everything will be as it was before.

When things do not change, but actually worsen, then our next mental step is to think, it might be true. The signs are obvious for all to see even if the causes are not. This intermediary step is half way between denial and acceptance. If you were walking a flight of steps, you foot would be half way between the previous step and the next step. You are beginning to think differently about the present situation. Your mind has almost completed the integration process.

When the integration process is complete, you come to the point of acceptance of the new situation. Your mind comes to peace about the situation. This is the point where you think, I knew this all the time. You probably had a foreboding at the beginning of the new situation that the ending result would be what it presently is. How long it takes to go from denial to acceptance depends upon how quickly an individual integrates the new situation in his mind.

Staying in a state of denial without acceptance is not mentally healthy. It demonstrates an inability to integrate concretes into concepts. I have come to grips with the incredible price inflation that we have been experiencing. I have come to accept that prices are not going to go down anytime soon. I do not know if the recent price inflation is a result of shortages, increased demand, or monetary inflation, or a combination of all three. All that I know is that I have accepted it.

Acceptance does not mean that we are satisfied with the present situation. It is time to look for causes for the price increases and seek ways to see that they are reduced. We live in a world of cause and effect. There are logical reasons why prices are increasing. If they are because of government intervention in the market, it is time to scale back the government’s involvement to what the government should be, a police man.

If the market is allowed to function properly, then supply and demand will come more in line. It is when the government gets involved that things get skewed. This is because a government operates on different principles than a business. A business is involved in the positive, where the government is concerned with the negative. A business grows by earning a profit. A government is financed by taxes. The government needs to be reigned in and limited so that prices can decrease and we can begin a new round of integration that is psychologically pleasant. The price increases have caused much psychological pain. I am tired of pain. I prefer financial peace.