Through wisdom a house is built,
And by understanding it is established;
By knowledge the rooms are filled
With all precious and pleasant riches
Proverbs 24: 3-4
Hello my dear fellow Proverbs 31 women in Progress!
As we all know, the Proverbs 31 woman is an excellent money manager. As I want to grow in this area (like all of us, I suppose), I started to make some research and I stumbled upon many financial resources which contradict each other for the question of establishing a budget.
Of course, you have pros and cons and the arguments of both sides are legitimate. When you establish a budget, you have a clear picture of your financial resources and their use, and you’ll be more disciplined in the management of your finances (i.e. living within your means). However, establishing a budget can be felt as a constraint and a source of pressure by a lot of people.
So, what did I decide to do?
As a wannabe wise woman, I decided to adopt the line between both sides. I mean, I did not establish a real budget but I know that my finances should be managed by an allocation which allows me a balance between savings, giving, and spending.
I decided that starting in January 2017, my finances would be managed according to the allocation that I found in the book of T. Harv Eker called Secrets of the Millionaire Mind – great book, by the way:
- 10% giving (tithes)
- 10% long-term savings for spending (precautionary savings)
- 10% on my Investment account
- 10% for my recreational activities
- 10% to further my education in every aspect, whether personal or professional
- 50% for my necessities (bills,mortgage, food, clothes)
The beauty of this system is that you can adapt it to your own situation. For example, you may live in a country where you don’t have an investment account or if you can’t trust your banking system, you may save this 10% to buy a piece of land for instance.
Finally, I’ll leave you with a word of the Wise King Solomon:
Be diligent to know the state of your flocks,
And attend to your herds;
For riches are not forever,
Nor does a crown endure to all generations.
Proverbs 27: 23-24
What do you think about this money management system? Do you have one which works for you? Please share your point of view!
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