The Richest Man in Babylon: Seven Cures for a Lean Purse Part 2, Control Thy Expenditures

In the third chapter of The Richest Man in Babylon the book lists and details "seven cures for a lean purse." Today, we'll cover cure #2 which is:

Control thy expenditures.

As you might imagine, I love this cure! ;-)

The book starts this cure by addressing the objection that everyone always brings up first when it's suggested that they spend less than they earn and save a part of everything they make:

How can a man keep one-tenth of all he earns in his purse when all the coins he earns are not enough for his necessary expenses?

Here's the answer the book gives -- which I agree with 100%:

Now I will tell thee an unusual truth about men and sons of men. It is this: That what each of us calls our "necessary expenses" will always grow to equal our incomes unless we protest to the contrary.

That's right. It always seems that outgoes equal (or surpass!) incomes -- no matter how much the incomes grow. I've helped people who have made $20,000 a year and others who've made $150,000 and the problem is the same: their "necessary expenses" exceed their incomes.

The book goes on:

Confuse not the necessary expenses with thy desires. Each of you, together with your good families, have more desires than your earnings can gratify. Therefore are thy earnings spent to gratify these desires insofar as they go. Still thou retainest many ungratified desires.

Let's face it, most of us will still want "more" no matter how much we earn. So at some point you need to control your spending -- why not now?

This cure ends with the following advice:

Budget then thy necessary expenses. Touch not the one-tenth that is fattening thy purse. Let this be thy great desire that is being fulfilled. Keep working with thy budget, keep adjusting it to help thee. Make it thy first assistant in defending thy fattening purse.

I've written a lot about budgeting here at Free Money Finance. If you need more information on budgeting, check out these posts:

• Why We Hate Budgeting - But Shouldn't


• A Great Alternative to Quicken and Microsoft Money, Part 2


• Five Keys to Developing a Successful Budget


• Avoid the "Budget-Busters" that Kill Us Financially


• Pretend It's Not a Budget: How to Create a 'Spending Plan' You Can Stick To


• MND: Why do Millionaires have Budgets?

Click here to read cure #3.

Comments

[Steve Mertz]

This is still one of the best and simpliest books around-you are getting a lot of mileage out of this bad boy :)
http://www.freemoneyfinance.com/2005/07/the_best_financ_6.html

[contrary1]

I just finished Richest Man.......on audio here while reading blogs. Interesting & I had never even heard of it prior to seeing it referenced.
Enjoyed your post too, on banks & fees. I've found one that has no fees, no charges other than checks. I get my checks on line, and have shoppped around for the best deal on those. Now that I'm online banking and bill paying.........I sure don't go through the checks like before either
No ATM cards ever for me, so no charges there either.