Babylon

A few posts back I wrote about money and worry. I don’t think that I know anyone who isn’t at least a little worried about money. They’re either worried about the recession/depression, their debt levels, the fact they don’t own a house or that they can’t afford a shiny new watch. Seems to me that we’ve got our heads screwed on the wrong way…again.

Earlier this year I read The Richest Man in Babylon by George Classon. It is a collection of stories that teach you how to get out of debt and become wealthy. And it’s not a bunch of crap like a lot of books on wealth. No get rich quick silliness. Just a lot of ideas that are so sensible they’ve been forgotten and are now uncommonsense.

Here’s the basic premise: of the money that you earn (no matter how much or how little) allocate 10% to savings, 20% to debts and the rest to living expenses. Never pay more than 70% for living expenses and never fail to save and repay debt. This method will get you out of debt, build savings and allow you to live comfortably (although you may have to forgo things you want in the immediate term).

It works. It’s not fast. It’s a simple concept that might be exactly what you need.

Money = worry

I’ve worked out over the past few months that the only thing that I actually worry about is money. And I know I’m not alone.

When you break it down there are so few things that we actually really worry about. If you think about your worries I expect you’ll find out that 80% or more are related to money.

The silly thing is that there is heaps of money about. It’s just that you don’t ever seem to have enough of it.

I remember when I was at uni. I earned about $6000 for the whole year in 1995. And amazingly, I was able to go out on the turps, buy piles of CDs and generally have a good time. And I even saved a few dollars. (Yes, I did get a Government allowance too.)

Fast forward a few years I’m earning over $40K as a software developer and I seem to have less money to use freely. What the?

Sound familiar?

Perhaps the problem is spending rather than earning. Perhaps we are too keen to have everything now. Perhaps we really do have enough money and too many wants.

So, what to do? Delay gratification. Earn now, spend later.

And stop worrying damn it!

(I promise I am trying to follow this advice too!)

I can’t afford it

Organic food. Is it worth it? You decide. Read this for a start.

If you decide it’s worth it then don’t say “I can’t afford it”. What else can you afford? Pay TV, expensive meals at restaurants, cool shoes, alcohol…?

It’s a matter of priorities. We can generally afford what we need but more often than not spend our money on what we want.