Managing During a Challenging Economy

As many of you know, I’m a news junkie, a finance junkie, a leadership junkie, and a despiser of armadillos! (I am not going to touch on that THIS week.) The economy is front and center if you have been watching the news. Various unions are negotiating contracts to deal with inflation. Presidential debate centers around the financial stress of our citizens. And every prospective home buyer is fixated on interest rates and the changes they hope the Fed will make.

In the last three weeks, I have seen an uptick in the number of articles with reference to saving money. Suze Orman, Warren Buffett, and a host of others have conducted interviews, written articles, and referenced other resources. Most took me back to the shocking advice I read in The Millionaire Next Door many years ago. The first chapter about the strategies of net-worth millionaires in America was titled with the key: “Frugal, Frugal, Frugal.” The chapter looks at how small business owners, teachers, accountants, plumbers, nurses, and electricians have amassed net worth in excess of 1 million dollars. It’s not rocket science! They think about the price they pay for everything and often delay gratification until they can find things on sale or save up cash to get it. They’re frugal.

This last week, Suze Orman told The Wall Street Journal that “there is one frugal habit that she is adamant about — and it’s a surprising one. “I refuse to eat out,” she told The Wall Street Journal. “I think that eating out on any level is one of the biggest wastes of money out there.” While I’m not advocating that you abandon restaurants, it’s a prime example of choices we can make to manage tight finances. Her statement reflects the same habits as those noted in Warren Buffett’s lifestyle. Noting his frugal habits, he makes choices wisely, buys used cars, stays in the same house long-term, clips coupons, and (in a related article) never spends more than $3 on breakfast!

It gives me great pleasure to tell you that the book of Proverbs is chocked full of this kind of advice. Dave Ramsey often notes the money-wisdom of Proverbs, but when I’m reading the literature on money management and finance, I hear the Proverbs reverberating throughout the sanest advice.

I love eating out, movies, ball games, and a host of other great opportunities for fun. But I always recognize that every “yes” I say to one of those options is accompanied by a “no” to something else. It’s true with my schedule, it’s true in my promises, it’s true in my relationships, and it’s certainly true with my money.

If you’re feeling challenged by the economy, “small steps” always lead to big results over time. But don’t take my word for it: you have much bigger fish in the pond of wise counsel!