Remember the famous “Marshmallow Test”?
Actually, it’s not really just marshmallows. The kids who went through the test could “could choose a cookie, a pretzel stick, or a marshmallow”. (Source: Bloomberg Business Week) Anyway, Stanford professor Walter Mischel told the kids that “[t]hey could eat the treat right away, or wait 15 minutes until the experimenter returned. If they waited, they would get an extra treat.” Mischel monitored the kids as they grew old. What he discovered was a breakthrough.
As they matured and became adults, the kids who had shown the ability to wait got better grades, were healthier, enjoyed greater professional success, and proved better at staying in relationships—even decades after they took the test. They were, in short, better at life. … It has changed the way educators and psychologists think about success: The lesson is that it’s not just intelligence that matters, but self-control and patience and being able to tame one’s impulses—from the desire to eat the marshmallow to the desire to blow off an exam or have an affair. (Ibid)Here we also see the secret to success as far as our finances are concerned.
[Today, we continue with our F-I-N-A-N-C-E-S acronym. We already saw that “F” stands for ‘First Give To God,” “I” “Invest In Yourself,” “N” “Never Live A Life Of Debt,” and “A” “Avoid get Rich Quick Schemes.”]
“N” stands for “Needs, Not Wants.”
According to Proverbs 21:17, “Those who love pleasure become poor; those who love wine and luxury will never be rich.”  The Message version goes like this, “You’re addicted to thrills? What an empty life! The pursuit of pleasure is never satisfied.” Since that pursuit is never satisfied, it will just siphon off your finances.
I usually say in Filipino, “Kung hindi kailangan, hindi kawalan.” (“If you don’t need it, it’s not a loss.”) So, fight impulse buying. I love books, for example. But I don’t usually buy at first sight. I wait for a day or two before buying a book. That way, I could get over my initial excitement when I saw the book. Then, I could really weigh if I really need it or it’s just a want. If I don’t need it, I don’t have to buy it.
So, before buying that new gadget, ask yourself first, “Do I really need a new mobile phone? Or, I just want to have it as a status symbol?” Of course, you may try to answer “yes” to both questions. But, unless you are a CEO who needed to have a nice car and other symbols of power to keep a successful image, it’s either a “yes” to the former and a “no” to the latter or a “no” to the former and a “yes” to the latter. If your phone is still working, then it’s just a want. If your phone already gave up the ghost or it no longer meets your purpose for having it, then it’s actually a need. Wait and weigh before buying anything.
“C” stands for “Control Your Spending.”
“Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty.” (Proverbs 21:5) According to my friend, health and wealth life coach Chinkee Tan, “If it’s not written, it’s not a budget.” We budget when we write how we plan to manage our money.
It starts with writing down our expenses. It’s very frustrating when we find out our money is almost gone when it’s only a day or two after payday and we don’t even know where it went! It pays to know where our money goes. Writing it down would help us see whether we spent it well or not. It would also help us cut down on expenses. For example, if we see that we are eating out too often, we can decide to cut it down. But we can only see that if we kept a list of our expenses.
I know of a friend who keeps even his parking tickets. He keeps tabs on his expenses. At the end of the year, he would meet with his family and they would compare their budget goals with what they actually spent. That’s also a good way to train our kids to budget.
One tip that is helpful is to actually put your money in envelops marked for its intended expenditures. My wife and I have this envelop marked “Recreational Fund.” That’s our budget for eating out and other leisures. If there’s no money left in it, we don’t go out. That disciplines us to live within our means and even, by God’s grace, below our means.
Another habit I have is to count how much money I actually have in my wallet everyday. It’s not that I have a lot of money in it. (How I wish there’s more!) But it helps me keep track of my spending. I learned it the hard way. There were times before that I thought I had an x amount of money yet I discovered to my dismay that it was not that much.
As Chinkee Tan loves to say in his financial seminars, “Money is supposed to make your life easier. If it makes your life harder, then you’re not handling it right.”
Read “Wise Words on Wealth” Part 1 | Part 2
 All Bible verses are from the New Living Translation, unless otherwise noted. Emphasis added.