For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.
In a recent interview with Andy Stanley, he highlighted Proverbs 27:12 (which is very similar to Proverbs 22:3, btw) which says:
The prudent see danger and take refuge, but the simple keep going and suffer for it.
He quoted it in context of how people plan/run their lives, but it got me to thinking how it applies to personal finance as well.
For instance:
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The simple know the dangers of borrowing too much and yet they do it anyway. The prudent take steps to minimize/manage/eliminate their debt.
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The simple say that it's "common sense" that you need to spend less than you earn, yet they fail to do it. The prudent work to increase income and decrease expenses so that there's a wide margin between the two, providing them with excellent cash flow.
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The simple know that it's wise to save for a rainy day, and yet they don't save enough to cover basic emergencies that are bound to pop up. The prudent know that unforeseen expenses will come up, and they plan for them through an emergency fund.
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The simple know that their careers are important and yet they put them on auto-pilot. The prudent work to manage and maximize their careers and the income that goes along with them.
I could go on and on, but you get the point. Personal finance isn't that hard, and most people that have spent even a bit of time studying the topic understand enough basics to be fairly well off. But many fail to take action on what they know. In other words, they "see danger" but they "keep going" and hence they "suffer for it." On the other hand, the prudent react to danger by taking the appropriate measures and as a result they are kept out of harm's way.
Another good post... Wisdom is hidden in the simple things. Thank you for the time you invest into this website.
Posted by: CW | September 27, 2009 at 11:40 PM
I do want to be one of the prudent. Maybe by gowing a little slower and reading everything thoroughly.
Posted by: John DeFlumeri Jr | September 28, 2009 at 12:10 AM
it is quite some time since i read anything that has connected money and the bible. this is a really nice post and i wonder why personal finance bloggers dont do more of them
Posted by: kenyantykoon | September 28, 2009 at 03:17 AM
The working poor work but that doesn't do make for excellent cash flow.
Posted by: Terry | September 28, 2009 at 05:22 PM