I am pumped and ready to sprint into the world of money with the hopes of mastering this thing called money. I am 19 years old, a second-year student at university earning $150 a week, half of which I spend on surviving and the other half eventually just disappears after a while. I am slowly realising how much knowledge I lack on this topic which is a surprise because if anyone were to know, it would be someone who is studying accounting and finance at one of the leading universities in the country right? Unfortunately, this is far from the truth. If you ask me how much it costs to rent in Auckland, I would have no idea. If you offer me a mid-range 3 bedroom house for $200,000 in Auckland, I wouldn’t know if it was a deal or if you are ripping me off. This is obviously a very low point for anyone to start from and I am aware that all this may sound shocking to you but to me, this lack of understanding only drives me to learn more!
My initial step to doing anything in life is to educate myself. When I turned 16 and allowed myself to workout, although I was super keen to just dive straight into doing push-ups and running around, the very first thing I did was sit down at the home computer and watch videos on how to do a proper push-up. I watched quick video guides that taught me how to design your own workout plans and how to set your own realistic goals. This probably only took about 1 hour but that little period where I was open to learn, set the tone for how I was to workout for years to come. The same thing happened when I wanted to play basketball, 8 ball pool, even video games – I would sit myself down and learn the basics. So, when I was faced with this sudden drive to become more financially literate, you know exactly what I did – I dived into educating myself. Here are the first lessons I have ever encountered on my journey:
First Lesson: Money makes you more of what you are now
This is the first lesson I have come across which is quite simple, yet very powerful. Are you an angry person that’s always ungrateful? Well, then money will enlarge your anger issues and make you more sour than ever. It also works the other way, if you’re generous with what you have now, then when you become rich you will be even more generous. I like this lesson because it brings meaning to me now, the present. There’s a lot of “do this and wait……”, but this is a lesson I can apply instantly. From here, I have observed how money makes me feel currently and am on the road to changing myself to what I would like to be. That way when the money comes flooding in the future, I don’t have any personal heart issues that would be barriers to me. Instead, more money will mean a multiplication of everything I have now – peace, joy, satisfaction, etc.
Something else I realised from a Christian perspective is that God would only bless me if I have the right character and was capable of handling the smaller amounts first. He will never tempt us beyond what we can handle right? So why would He ever put $1,000,000 in my bank if I clearly can not handle $100? My stress would increase, I wouldn’t know what to do and would end up spending on things I didn’t need. I would be attempting to buy satisfaction which would create destructive habits that would leave me angry and constantly dissatisfied when the money runs out. What loving God would give His people money only to enhance their pains and struggles in life?
After that lesson, I am grateful that I am not some young millionaire with weak values. I feel protected and privileged to be able to learn lessons through the smaller amounts of money I have now.
Second Lesson: 5 Principles
The next lesson I have learned has come through some classic sermons (hang in there with me!). I learned 5 principles that I need if I want to be blessed financially. I don’t have the experience to expand on all of these just yet, but I hope to explore each of them more in the future and I’ll be sure to break it down for you as I live it out. But for now, here are the 5 principles:
- Be Incredibly Generous
- Save and Invest
- Foster High-Quality Relationships
- Avoid Debt
- Get on a Budget
Since I have a strong desire to take active steps I have already constructed a budget, mixing the final idea of budgeting with all the other principles. I want to become generous from today onward. I want to save and invest money from my very next paycheck. Budgeting is the perfect way to allocate every dollar I have coming into specific tasks, that way there shouldn’t be any money lying around that I would naturally waste on buying lunch and so on. My ratio I have decided to follow in an attempt to follow these 5 principles is as follows:
10% Tithe
15% Save
35% Invest
5% Give
20% Living costs
15% Money held as a buffer
I know this probably looks crazy and naive to many of you, especially those who probably have more life experience than me, but my focus here is to shape my aspirations and values right now and then let that address the ‘reality’ of life rather than the other way around. So even if I struggle to follow these ratios perfectly throughout this journey, at the end of the day I have a goal inside of me that will help me strive for a better lifestyle than my current, directionless way of spending my money.
(Two weeks later)
I have now received my normal paychecks of $150 a week which I happily split according to my newly drawn budget (exciting stuff!). I now know how much I can give, how much to save, how much I can spend and how much I am not going to touch. This allowed me to have set amounts to spend on each category which gave me more freedom and joy, especially in the area of giving!
To be very honest, it was easy to calculate the numbers and simply transfer the money accordingly, but life isn’t working out exactly as I have planned. I have come across several scenarios where I will have to spend more than budgeted, like suddenly having to spend more on food. In the end, my overall management of money is a lot healthier as this budget did bring awareness to when I was overspending. This is where I am learning the true value of the budget and not allowing myself to get caught up in each cent, otherwise it will contradict the purpose of the budget – freedom through control. I am also realising that although these lessons are simple to understand, carrying them out is a whole other ball game that heavily depends on where your heart is at. This reminds me of Luke 16:10, “Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much”. This gives me more drive to manage my small amounts now and also brings more meaning to the little figures I am playing with now because in the end, I know the way I manage $100 will impact the way I manage my future $1,000,000!
In conclusion, I think it is crucial to start with the heart. Both these lessons are relevant and crucial no matter how much money you have or where you are on this journey to financial independence. They are deeper lessons that deal directly with the heart which is the best place to start. I am sure I will come across many practical tips, all of which I will continue to share, but I am grateful that I started this journey by building a solid foundation. I hope that I hold strong to these lessons and check my heart every now and again and hopefully, you can check yours too.
Take-away Points
- Start with the heart
- More money only multiplies who you are now
- Financial control brings freedom
