Thrift: Your Hedge Against Hard Times
Are you unemployed
Perhaps you are one of thousands of people shouting at the government to fix our collapsed national economies. Your concerns are commendable. Yet, do you realize that the fix rests with you?
How well do we see that individual bad character is the real cause of the global financial crisis? The stark reality is, we helped create it. So, how do we get ourselves out of it? We must stop blaming the government and repair our own character.
Good character will help you get and keep a job. Good character will help you pay off your debts. Good character will provide you a more secure future. How? Read on!
Jeremiah the prophet was given an incredible vision into our tough times. Speaking for God, he tells us how to fix our character, “Thus saith the Lord, Stand ye in the ways, and see, and ask for the old paths, where is the good way, and walk therein, and ye shall find rest for your souls” (Jeremiah 6:16). Are we willing to do what a loving God asks?
Figuratively, God wants us to stand in the biggest city and take an honest look at society. It is not working! There is glitz and gadgets but it is all falling apart. Why? It is the people’s fault. Everyone is walking the wrong way. God commands us to reject our modern way of doing things—which is rebellion—and turn back to the old paths. God emphasizes that the old path is the good way that makes life go well.
So, what is the “old” good way that will lead individuals (and nations) out of financial crisis? It is the fiscally stabilizing virtue known as thrift.
Way to Wealth
What is thrift? We don’t know much about it today. It is much more than the name of a second-hand clothing store. History shows that we rejected thrift as a value in the early 20th century. Our current financial crisis warns us that it is time to bring it back.
Thrift means using money and other resources carefully, not wastefully.
Elbert Hubbard, a prolific writer and publisher in the early 1900s, published a pithy pamphlet titled Let Thrift Be Your Ruling Habit. “Thrift is a habit,” this little booklet explains. “A habit is a thing you do unconsciously or automatically, without thought. … The habit of thrift is simply the habit which dictates that you shall earn more than you spend.” In essence, a thrifty person has a sound self-discipline.
Benjamin Franklin, one of America’s Founding Fathers, wrote extensively on the subject. After publishing his thoughts on thrift in Poor Richard’s Almanac for over 20 years, he summarized them in The Way to Wealth. This little pamphlet has been a bestseller for over 250 years. It extols thrift as the means to gain and maintain wealth. Ben Franklin saw thrift as a positive way of life, employed by people of outstanding character.
Both of these wise men taught that thrift demands every individual work to make a living. They stressed that real wealth comes in small increments built up over time through hard work. A life of ease—which is laziness—will never produce financial security.
Understanding of the value of working hard is all but vanished from our national thinking. We live in the delusional get-rich-quick age. Many today gamble away whole paychecks in casinos playing slot machines and card games. Others hope to win big while pouring money down the lottery drains. Still others live on the dole, collecting welfare; over 42 million in America alone receive food stamps. Financial consultant Dave Ramsey warns, “Over the last 40 years we have gradually become a nation of consumers, instead of the nation of producers we used to be” (Financial Peace Revisited). Apparently, many people would rather play than work.
Love to Work
Hard work is not drudgery. Mr. Hubbard wrote, “‘All wealth comes from labor applied to land,’ said Adam Smith. … Let us say, ‘All wealth comes from loving labor applied to land.’ The successful labor is loving labor. Loving labor and thrift go hand in hand.”
Do we love to labor? People who love to labor are producers. No matter what job we do, when we love to work we produce. A farmer who loves to work produces fruits and vegetables. A cattleman who loves to work produces meat. A factory worker who loves to work produces goods. People who produce—produce wealth!
“Laziness and idleness costs twice as much as the taxes the government forces upon you,” Franklin wrote (The Way to Wealth (New Modern Edition)). If we do not love to work, we will fall behind financially. Mr. Franklin also wrote, “[A]t the workingman’s house hunger looks in but dares not enter.” Hardworking people rarely lose a job, even in hard times. Those who do, usually find other work quickly. Hard workers are not plagued by fear.
In fact, those who love labor are confident people. Elbert Hubbard explained, “[W]hen you produce more than you consume, your life is a success, and you are filled with courage, animation, ambition, goodwill. The world is beautiful, for the world is your view of the world, and when you are right with yourself, all’s right with the world.”
Ask yourself, “Do I love to work?”
Pay Your Own Way
Thrift insists that people pay their own way. This second principle warns against the bad habit of borrowing to meet expenses and especially wants. Debt is exposed as an injurious handicap. Thrift also orders individuals to step out of the welfare line. There is real personal strength in paying your own way.
Elbert Hubbard stated in his little book, “The habit of thrift proves your power to rule your own psychic self. You are captain of your soul. You are able to take care of yourself, and then out of the excess of your strength you produce a surplus. … [Y]ou are able to take care of some one else …. This is to live.”
A constant borrower is weak and grows weaker with every additional loan. Using a credit card is spending money only if you pay it off in full every month. Any other credit card use is borrowing. Regularly borrowing on credit cards eats up your wealth because of the lender’s interest you must pay. Excessive credit card debt has driven many into bankruptcy. The numbers are staggering: Last year, personal bankruptcies in the United States rose to 1.53 million, up 9 percent from 2009.
“Unnecessary debt is financial insanity,” Mr. Franklin wrote. “Don’t do it.” It is far better to budget than to borrow.
A budget is a written estimate of your income and expenses. It is a tool for building wealth every month. It shows you clearly if your expenses are exceeding your income. If that is the case, it is time to make some cuts. Eliminating things we like but cannot afford is difficult, but wise money managers do it regularly. Cutting unnecessary expenses (and we all have them) keeps you on the path of paying your own way.
“Don’t be a slave to loans,” Franklin admonished. “Preserve your freedom and pay cash for what you purchase, except for something very large like a house. However, only buy a house you can afford.” Thrift means that savings is one of the most important line items in your budget. Saving for the future is a matter of self-discipline. Saving money to pay cash for most things you need is always the best policy.
Live Simply
Our society is a consumption monster. We have been taught to love stuff—lots of stuff! The number-one solution to save the U.S. economy is stimulus packages designed to promote individual spending. Think deeply about this plan. It is definitely not founded on thrift! In this period of economic downturn, experts do not want us to save money—they want us to spend money on more stuff we don’t need. That’s insanity!
Thrift admonishes us to be economical. That is a term few truly understand.
For decades in the U.S. and Britain, Boy Scouts were taught how to be economical. The ninth law in the Boy Scouts Handbook states, “A Scout is thrifty. A Scout works to pay his own way and to help others. He saves for the future. He protects and conserves natural resources. He carefully uses time and property.” Do we grasp these easy-to-understand values?
Scouts learned that an economical person does not waste resources, which for most of us means money. An economical person uses only what is necessary and takes proper care of what he owns.
The words economy and economical derive from the Greek word oikonomia, from oikonomos, which means household management. Thrift is effective household management, which is good economy at the grassroots level. The global financial collapse reveals that many nations today are failing to manage their own households. It is wasteful government spending that has brought down many national houses.
There is a growing movement on the Web that challenges consumers to live with just 100 personal items. It is a measure to get people off the “work-spend treadmill” that leads to financial and emotional disaster. It teaches that less is more and encourages people to live simply. “The idea that you need to go bigger to be happy is false,” one participant related. “I really believe that the acquisition of material goods doesn’t bring about happiness.”
Benjamin Franklin taught, “If you spend everything you earn on things you don’t need or on things that add little value to your life, you will have a house full of stuff and a small bank account.” One of the wealthiest men of his time, Franklin knew that a full life is made rich with happy experiences—not stuff.
Living simply is the model of thrift. It leads a person to buy a home meant to meet needs, not impress the neighbors. It leads a person to turn lights off in a room that is not in use. It is not wasting water. It is not wasting time on useless entertainments. As Mr. Franklin stated, “Time is money.” It is being health conscious. It is vegetable gardening. It is not overeating or overdrinking. It is not frequenting expensive restaurants. It is driving one fuel-efficient car. It is owning one television set. It means cutting back on the heat in the winter and on the cooling in the summer. It is not impulse buying. It is having a quality—small—wardrobe. It is looking after appliances, furniture, the car and house.
Teaching economy, Elbert Hubbard declared, “You do not waste anything that can be used. You save it, care for it, reserve it.” Get the picture?
Live to Give
Thrift demands that we share our wealth with those less fortunate. There comes those times when family, friends and neighbors need help—financially and emotionally. Mr. Franklin wrote, “Be humble and help others when you are able. Comfort and encourage them to follow the same path, so they too may find their prosperity.” Operating from a position of strength, a person of thrift is ready, willing and able to meet those needs. Notice also that Franklin exhorts the givers to educate the needy about thrift. Throwing money at problems doesn’t fix them. Everyone must learn to shoulder his own financial obligations (Galatians 6:5). Those living by thrift are the best qualified to teach the financially unstable.
“[T]hrift … is a sister to a good many other beautiful habits,” Mr. Hubbard remarked. Thrift is a magnet that attracts other good character traits like faithfulness, loyalty, truthfulness and caring.
People who work hard, pay their own way and live simply are not selfish, self-centered people. They have learned how to control and subdue the self. They are real givers. In fact, they live to give.
Giving to those less fortunate is golden character. It is the measure of a spiritually wealthy person. Jesus Christ said, “It is more blessed to give than to receive” (Acts 20:35). Giving to the needs of others actually brings more blessings to the one who gives! That is a dynamic financial law that few know and teach.
Let’s embrace thrift. It is the hedge that will protect us from hard times. And as we practice it, we will not only help ourselves—we will be in a position to help others.
