Why Your Beliefs are Essential to Good Finances

beliefs essential to financesI get asked occasionally why I’m so inclined towards saving and conserving. Every frugal person has their own background story on what turned them into budget-conscious individuals.

For me, it was a combination of several factors ranging from my childhood to my own personal development.

My household was not exactly what you would call liberal when it came to spending. While kids now are touting iPads, laptops, and brand new video game systems left and right, the phrase “We can’t afford that!” was uttered on a daily basis by my parents, mostly at the grocery store.

We weren’t poor, but we didn’t waste money on unnecessary purchases. If we purchased what we need, nothing more. We had an old TV, drove old cars, and I rarely ever wore new clothes. Most of them either hand-me-downs from friends and distant relatives. This helps explain to some of my friends why in my childhood pictures I’m always wearing Utah Jazz shirts (my mother is from Utah).

As a result, I did not acquire the sense of entitlement that plagues a lot of young people. The impression I got was that if you had food and clean clothes, it was enough. The concept of an allowance was as foreign to us as sushi.

Let me put it in perspective for those of you who lived before the Internet age. When I was in first grade, my brother and I were at a garage sale, where there was a regular Nintendo (NES) for sale, complete with a TV, remote control, two controllers and a Zapper gun, plus Super Mario Brothers and Gauntlet. All for $15.

We had to beg – on our knees – to convince our parents it was a worthwhile purchase. And then we had to pay for it by doing additional chores around the house.

Another part of it, incidentally, was biblical. In church, our entire congregation recited the Lord’s Prayer aloud during Sunday worship. The version we used had us saying, “forgive us our debts, as we forgive our debtors,❠so the concept of being a debtor seemed highly undesirable to me, even though I had yet to read any verses discussing debt.

Additionally, after spending time with families of varying income statuses, I realized that the definition of “rich,” “poor,” “wealthy,” and “impoverished” are all a matter of perspective. In my hometown, my neighborhood was considered the “poor” area, where the average house was worth $300,000. When I went to college, however, most of the students thought of me as rich just because I came from the Seattle area.

And, frankly, I’ve always preferred having less than having more. The more wealth and possessions you have, the greater luxuries and amenities you own, the harder it is to let go, whether you are forced to or circumstances demand it. I learned through the years that expecting money, rather than attempting to earn it honestly, was a bad recipe for life.

I saw this with other kids my age who were raised to believe there are short cuts to success and loopholes that can be exploited. They racked up large student loans, which they spent on things other than their education, all without asking whether or not they would be able to pay it off when they graduated. They are the ones, I’ve found, who have the hardest time trying to be frugal, because they believe they must maintain a lifestyle that is consistent with someone else’s, whom they consider to set the definition of their living standard.

This is why I strongly believe that frugality starts with one’s perspective and mentality. Unless you actually believe you need to save, you won’t be able to resist the temptation to spend when you come across something you badly want to buy. An individual’s attitude is the most important contribution to making good financial decisions.

It’s like anything in life. The first step is to develop the right mindset.

So for those who are trying to get their financial house in order, here is a list of little ten commandments to consider.

Being wealthy only means what you want it to mean, nothing more.
There is a fundamental difference between what needs and wants; one is few and defined, the other is limitless and is never satisfied.
Aside from a house mortgage and a few other exceptions, debt is bad.
True success requires hard work and determination. Distrust any easy❠routes offered to you.
Trying to keep up with the Joneses is like trying to keep up with the wind.
If you are not content with what God has given you, you will never be content with what you want Him to give you.
A person should be defined not by what they consume, but what they produce.
The most valuable things in life cannot be bought or sold.
When you die, you should have greater treasures stored up in Heaven than treasures you accumulated on Earth.
You have many freedoms, but no entitlements. Act as though you will receive nothing and must earn everything in life.