In the House of the Wise

Proverbs 21:20 says "In the house of the wise are stores of choice food and oil. But the fool devours everything he has." Today we'd call devouring everything we have "living paycheck to paycheck." Here's the danger in doing that. If we have no reserves we'll be unprepared for when emergencies arise.

Let me be transparent. This past April (2013) when I talked with my tax guy, I found out he had estimated what tax I would owe based on someone else's salary! Long story short, I had $15,000 of income that hadn't been taxed!!! So I unexpectedly had to catch up on over $1,600 of federal and state tax. About the same time this happened I had another unexpected bill that set me back another $2,000!!! Then last month (May) just as it started heating up, the condenser unit for my AC blew up! Replacing it cost another $2,800!!! Let's do some math real quick...

    $1,600
    $2,000
+  $2,800
    $6,400 of unexpected expenses!!!

If I was living paycheck to paycheck this would've been disastrous!!! But thank God, Kristin and I had some reserves and paid for everything cash. No debt. No credit cards (we don't have any). We paid cash. The Bible is clear: We're to live below our means so we can build reserves for 1) emergencies, 2) purchases and 3) the future. 

Debt is the opposite of reserves. When we live below our means we have reserves. When we live above our means, we have debt. Are you living below your means or above? Don't be like the average American who spends $1.36 for every dollar he/she earns. What baby step can you take today to begin growing your reserves? 

Recommended resource: The Total Money Makeover by Dave Ramsey. I'd also recommend you listen to our Financial Fitness teaching series online at www.newdaychurch.cc/financialfitness