ObamaCare Is the Worst Legislation in 75 Years (2010-03-29)

ObamaCare Is the Worst Legislation in 75 Years

(2010-03-29) by David John Marotta

Every week I write this column based on the principle that each citizen's first responsibility is to take care of themselves and their families so they won't burden society. And I believe the first responsibility of government is not to burden its citizens so they are able to take care of themselves.

When I suggest you save 15% toward your retirement or not spend more than 30% on housing, these are opinions just as much as when I write about health-care legislation. My goal is to provide personal wealth management to help people achieve financial freedom as well as to understand the public policy implications and consequences of government intervention. Both are an economic way of perceiving the world, seeking wisdom in the long run instead of momentary good intentions.

The recently passed health-care legislation marks a crucial turning point in the economics of our country. It is impossible to predict all the unintended consequences that will result from such a sweeping increase of federal powers. But we can be certain those powers will be used almost exclusively to limit our freedoms.

Almost anything you will be able to do in the future, you could have done without the current legislation. Every law, regulation or directive put into place will limit either what you are allowed to do or what your insurance company can do even with your consent. And from here on, every citizen, politician and lobbyist will have a stake in manipulating the new laws to further their own cause.

Many of my readers have suggested that people won't try to game the system. They claim that people are basically altruistic and will gladly pay their fair share and willingly limit their use of health-care services. I don't agree. Part of the selling point for this legislation is that people want lower health-care costs. Health care is about 18% of gross domestic product (GDP), but some grumble at paying this high a percentage even when they can afford it.

Additionally, only by using coercive methods, such as a fine or imprisonment, will the current free market choices be overcome. People rarely take kindly to such intervention in their lives. It's both natural and understandable that they will try to work the system for their own benefit.

Financial incentives matter, and the ones in this kind of socialized medicine are all in the wrong direction. Not only is the bill expensive, it is filled with bad ideas poorly implemented.

The bill requires all Americans to have health insurance and imposes a $900 fine for not having it. And all health insurance companies must insure people for the same price regardless of any preexisting conditions.

In the past people would pay thousands of dollars for health insurance so it would be there if they needed it. Now they will be able to pay a $900 fine and still be guaranteed insurance even after they develop a serious illness. As a result, healthy people with insurance will do better to drop their coverage and pay the fine until they get sick and need health care.

Rather than increasing the roles of the insured, this legislation could actually encourage healthy people to opt out of insurance. If insurance can't discriminate based on my health before insurance, why pay a dime until my out-of-pocket expenses are expected to exceed the cost of insurance?

No insurance system can survive such folly. Savvy consumers will only buy insurance if they anticipate that their expenses will exceed what they pay in premiums. Insurance companies will have no way to screen for a truly average risk pool. As a result, costs will go up until even the sick won't want to buy insurance.

The bill also provides measures for cost containment, which generally means it will be harder for doctors to get paid for their work. As much as half of the expense of running a medical office is trying to get reimbursed, and this legislation will only exacerbate the situation.

Although the details are not specified, much of the legislation will enable a broad range of powers to be granted to the federal government to use however it sees fit. Committees will decide which procedures are allowable and with what frequency. Technical groups will design the required reporting format for your private medical data. Stakeholder groups will fix prices after consultation with special interest groups. And new agencies will set minimum standards for health-care insurance.

Patients pay for about 12 cents of every health-care dollar today. This is not enough to deter health-care consumption. Costs cannot be controlled when the person who pays for a service, the person who benefits from a service and the person who grants the service are all different. Only when most of the money spent comes out of pocket will people have a vested interest in cost containment. Empowering patients to make their own health-care decisions is the only viable solution. Although the best economic alternative is having more out-of-pocket dollars, the current legislation requires insurance to pay at least 85% of health-care costs.

That last part may kill Health Savings Accounts (HSAs), which could save much of what ails our health-care system. HSAs are coupled with a high-deductible health insurance policy. Such policies are extremely inexpensive.

HSAs are based on the principle that because you pay the high deductible, you are motivated to keep costs low. And because you are unlikely to reach your deductible, your insurance costs are low. Insurance is affordable only when the likelihood of using it is low. An added benefit is that employees own their own health insurance. Hence it is completely portable. If they are laid off or decide to work elsewhere, they can take their insurance with them. In every way, privatized HSAs are working to contain costs. Given the new requirement that 85% of costs must be paid by insurance, HSAs will probably not survive the federal bureaucracy.

You can compare the current legislation to having grocery store insurance that pays for the first dollar you spend. Everyone in our risk pool will order filet mignon. First the costs will skyrocket. And then the meat will be rotten.

It isn't just that some portions of the bill are poorly implemented but the broad scope of the legislation could be fixed. It is fundamentally wrong. And it will have implications that will impoverish rather than empower individuals. The result is not good intentions with unintended consequences, but in fact ill intentions with disastrous consequences.

Only a utopian centralized planner could believe we will be able to anticipate or correct the consequences going forward. The unknown unknowns are liable to produce even more dire meltdowns. Government intervention, monopoly and regulation cause the rigidity that in turn provokes economic forces immune to market adjustments. Bubbles, shortages, deficits, defaults and moral hazard will result.

Once the government competes with the private sector, there is no competition. It is like the referee starting to play on the field. The government has banned private companies from competing with them on mortgages, Social Security and the U.S. Postal Service, and we all know how well those organizations are run.

Quality health care will suffer a similar fate. There is no systemic regulator for expenses, and consequently costs will go up and benefits will dwindle. As a result, the subsidy of the truly needy will be completely swamped by a tsunami of middle-class entitlements.

The current legislation has left undone the incentives to provide quality lowest cost health care. And it is put in place incentives that work toward impoverishing the quality and economics of our current health-care system. For these reasons and many more, the current legislation is the worst legislation passed by Congress in the last 75 years.

from http://www.emarotta.com/article.php?ID=382

Avoid Budget Busters Part 4: Budgeting Pitfalls

(2010-03-22) by David John Marotta

Thrift is having a sure hand that controls your spending so your spending doesn't control you. The goal isn't to be rich but rather thoughtful, industrious, content and thrifty.

We all know that impulse spending and unexpected emergencies can wreak havoc on your budget. But sometimes we make the mistake of deliberately budgeting the impossible. Unrealistic plans are like piano music requiring you to stretch your hand farther than humanly possible. If you purposefully set the required spending in one category too high, you won't be able to trim other categories to bring your overall spending into harmony. Here's where to look in your budget where you may be inadvertently planning for failure.

Too much house

You can't afford more house than your budget will allow. If you spend 50% of your lifestyle expenses on housing, you will not be able to live proportionally on the rest of your budget. Too much house is one of the most common mistakes a young family can make.

Try to keep your rent under 20% of your take-home pay after you graduate from college. Aim for all associated expenses (mortgage, insurance, taxes, etc.) to be less than 30% if you own property and some of the payments go toward the principal. And by no means let your housing costs exceed 38%, or your budget will be doomed before it even begins.

Despite smaller families, the size of American homes has been increasing exponentially. In 1940, the average home was only 750 square feet. The square footage rose to 983 by 1950, 1,100 in 1960, 1,500 in 1970, and 2,080 in 1990. Today the average house measures about 2,400 square feet.

In previous generations, several children typically shared a room. In today's family, kids get not only their own room but their own bathroom and home entertainment system as well. In addition to direct costs, owners of larger houses have greater associated costs such as landscaping, energy use, maintenance and repairs.

Most of us never saw our parents and grandparents in their younger days when they were struggling financially and lived in tight accommodations. It is as though we can't feel successful without immediately enjoying the lifestyle of our parents at the height of their careers. To decide how much house is enough, calculate how much house you can buy for 30% of your standard of living.

Transportation

Transportation costs should be under 15% of your lifestyle spending and include insurance and maintenance as well as saving for your next purchase. Only buy a car you can pay for with cash. Your first car may be a clunker. Immediately start saving for your next car and the inevitable costly repairs. This strategy will limit the number and quality of cars you can afford. Remember, there are families earning more than you who take public transportation or share rides to work.

Most people view gasoline costs as inevitable, but they are not. Living close to where you shop and work, even if you have to own a smaller house, has economic advantages. Alternatively, consolidate trips to reduce expenses.

Eating out and prepared foods

Starbucks has become the poster child for budget busters. Buying a $4.50 cappuccino when you are young costs you $450 in your retirement account. And spending $4.50 a day costs you $450,000 in your retirement!

It doesn't have to be a latte. You can generate amazing savings from any expense. But a pricey latte illustrates the huge markup on a dollar coffee.

Aim for food to be under 15% of your lifestyle spending. You would like your food to be inexpensive, healthy and convenient, but it can't be all three. You can only pick two.

Healthy food tends to be more expensive per calorie. So do convenience foods. One person eating out can often fund the entire family eating at home. And even when you purchase food in the grocery store, prepared foods can cost more than twice what you would pay for the individual ingredients.

By learning to cook with common staples such as rice, beans, flour, oats, potatoes, and chicken, you can drastically reduce the percentage of your budget spent on food. Save even more by making your own gourmet coffee.

If you aren't rich enough to afford eating every meal out, this is the best way to scale back your lifestyle. Your food can be both reasonable and nutritious, but some assembly is required.

Clothing

Clothing expenses can break the budget. Designer clothes can be 10 times as expensive as more modest attire. And keeping up with the latest fashions requires renewing your wardrobe regularly.

For many people, shopping for clothing is a social outing and hobby unto itself. The goal is to buy something truly wonderful that will make a specific event memorable. Such designer moments may be the norm on the red carpet of the Academy Awards, but they will destroy an ordinary family's budget.

Most people aim for clothes that are respectable but not ostentatious. If that isn't enough, reexamine your values. If you must keep up with what everyone else is wearing, you need to earn more than everyone else. If you express yourself wholly through your clothes, your financial security is going to suffer.

Average-size people can find some great buys at secondhand stores. Or you can learn to sew. Children's clothes do not require much fabric, and the savings can be tremendous.

Other regular expenses

Review monthly, quarterly or annual recurring charges. Research the cheapest basic service for your phone, cable, Internet, and insurance. Compare that to what you are paying now, and ask yourself if those seductive extra features are really worth the cost. A gym membership used regularly might be a wise choice, but if you haven't shown up there for weeks, it isn't. For each expense ask yourself, "Is this really a necessity?" Any way you can reduce your regular bills saves money every year.

Increased insurance expenses

Most families who get insurance are self-selecting. If you wait until you are a high risk, your premiums will be higher. People who have insurance and then become a high risk often cannot switch providers. As a result, the pool of people covered by insurance tends to get riskier over time. As it does, those who can't switch end up with significant policy increases.

But if you have not had much in the way of claims, shopping for new coverage can help you avoid costly insurance increases. Reviewing your policies and getting a couple of quotes can be a quick way to rein in expenses.

To make this work in practice, you need to collect the quotes quickly and painlessly. Rather than the anonymity of the Internet, I recommend a few phone calls. First decide if you want to change the terms of your policy. Then get a quote for the exact same coverage from each company.

After you have eliminated a company, tell them directly. Giving someone your phone number won't waste their time, but e-mail spam can seem eternal and Internet sites are often not reputable. Review your policies once a year. After you are satisfied with your current provider, once every two or three years is sufficient.

In summary, every category of your total budget must stay within a limited percentage. Careful planning and a courageous look at your lifestyle can help you identify those budget busters. Adjusting a few spending excesses could solve all of your spending problems.

from http://www.emarotta.com/article.php?ID=381

Avoid Budget Busters Part 3: Plan on Budgeting Surprises (2010-03-15)

Avoid Budget Busters Part 3: Plan on Budgeting Surprises

(2010-03-15) by David John Marotta

Thrift is having a sure hand that controls your spending so your spending doesn't control you. The goal isn't to be rich but instead to be thoughtful, industrious, content and thrifty.

To avoid unplanned budget busters, set three rules for your spending: Set a dollar limit, wait at least a week each time you're unsure of a purchase and be aware of the categories where you are most likely to make impulse purchases.

But raising your awareness on impulse purchases is only part of the battle.

Many budgets are doomed to failure because of the challenge of planning for unplanned spending. Here are some of the items you either did not put in your budget or they shouldn't be in your spending.

Interest on debt

The average American family carries close to $10,000 in commercial credit. At 18% interest, that's $1,800 a year or an unnecessary $150 every month per household. If you put that payment into the markets every month over your working years earning an average 10% return, you would retire with an additional $1.5 million.

There's no reason to buy anything on credit. If you find yourself considering an expensive purchase and then trying to find the payments in your budget, you are planning for failure. The only two loans you should even consider are a home mortgage loan and a student loan for an education or training that increases your earning potential. Money makes money. Credit does the opposite. Debt breeds poverty.

Paying bills late

Debt is terrible. Paying bills late is just bad. By establishing a system for paying your bills on time, you will save every $15 payment from getting a $35 late fee tacked onto it. These foolish expenses add up over time and will quickly undo your efforts at frugality.

Many people believe that paying bills as late as possible gains them a few days of extra interest. In reality, a year's worth of interest isn't worth even one late payment. Late payments also hurt your credit score, which ultimately will mean getting charged a higher interest rate. Pay your bill early, and put your efforts to better use.

Organized people are simply disorganized people who have found a system to help them get things done. Don't think being disorganized is an innate unchangeable quality. It is common to everyone before they take the time and effort to get organized.

Pay monthly bills at least twice a month in order to be on time. These cannot be postponed. Many people find the assistance of online bill pay systems invaluable. It may also help to have a calendar reminder system or a bill organizer. Others have their credit or debit card charged automatically so they are never late.

Unknown unknowns

None of us can anticipate all our expenses. Every stage of life brings a whole new set. Perhaps extensive study and research could help you prepare. But it is easier simply to budget 10% for unknown unknowns.

The first question I usually get asked regarding this category is "Like what?" The truth is that even after identifying every expense you can think of, there will still be significant new expenses that may push you toward deficit spending. But every surprise expense is an opportunity to anticipate and plan for that expense in the future.

Insurance deductibles

Review the insurance coverage for your car and home. A deductible and perhaps a 20% copay often apply. Out-of-pocket expenses could run several thousand dollars. It is more important to limit the maximum expense than to make sure the deductible is low. Budget for the deductible and copay expenses.

Medical costs

Medical expenses are rarely planned. To prepare your budget, have some insurance in place that will limit your catastrophic loss. Second, set up an emergency fund that will cover your expenses if they reach that limit.

For families who are relatively healthy, we recommend Health Savings Accounts (HSAs). As long you spend the funds you save on qualified medical expenses, all contributions, capital gains and withdrawals remain untaxed. And like any other bank account, HSAs come complete with debit cards and checks.

To protect you against catastrophic medical expenses, Health Savings Accounts are coupled with a High-Deductible Health Plan (HDHP). The deductible can be as high as $6,000. Because you might be required to spend up to your deductible, you need a savings plan that funds your HSA up to your deductible within two years. For example, if your deductible is $6,000, put $250 a month into your HSA. Once you have amassed at least that amount, you can take comfort knowing you can at least cover your deductible from your medical savings.

We have coverage for a family of four with a maximum out-of-pocket expense of $3,500. We pay $322 a month to protect our budget and cap our potential losses. We are also allowed to contribute $6,150 a year pretax into our HSA. So we know the most our health-care costs could be is $614 a month and we budget for them accordingly.

Unfortunately, "Obama care" threatens to eliminate consumer-driven care like HSAs by requiring minimum packages and removing the freedom to choose using insurance for disaster coverage. Forcing families to have low deductibles and be pooled with everyone else is like requiring grocery store insurance for the first dollar spent. Frugality disappears, and everyone tries to buy filet mignon.

Insurance should be only used for disasters, not everyday expenses, which provides just the right amount of negative feedback. The first $3,500 as an out-of-pocket expense works as a natural incentive to keep medical costs low.

Car repairs and replacement

Your car won't last forever. It will need major repair at some point and ultimately replacement. Decide how much you are willing to spend for the lifestyle you want, and then budget for it. Don't buy a new $30,000 car and think you won't have any car expenses for the next five years. Even if you plan on driving your new car for the next decade, you have to start budgeting for repairs and your next new car now.

Whatever you pay for your car, new or used, start budgeting to purchase another car in five years. Prices will be higher in the future, but maybe you can stretch the time to seven years so it will all work out.

If you buy a new car for $30,000, you must be able to set $6,000 aside every year ($500 a month) for the next new car. Don't borrow to buy a car and then start making payments. That's nearly always a bad idea and simply ensures you won't save, invest or grow rich. If you can't afford to save the payments in advance, you are stretching too much. Buy used or wait.

House repairs

Owning a home and surprise expenses are practically synonymous. The roof might leak. The plumbing could need replacing. A tree may need to be taken down before it falls. The heating or cooling system could need repairs. The carpet will need to be replaced.

Set aside at least 1% of the value of your house for repairs, not enhancements, each year. If you have an older home, increase the minimum to at least 2% of its value.

Emergency travel

Another unexpected category is emergency travel. Family illnesses, weddings or funerals impose themselves on a family's budget with some regularity. Sometimes even family vacations, graduations or other gatherings can strain finances. If you are both of humble means and have a large extended family, your budget could break under the strain. These are not easy decisions.

Here are some alternatives to help you cope. Perhaps you could send a letter to be read or a videotape. Maybe not everyone in the family has to attend. Consider sending a representative. Ask for help with travel or accommodations. I know that family expectations can seem unreasonable, but speaking the truth in love is always a good response.

Avoid sacrificing or jeopardizing the finances of your family simply to attend the birth of another family or a distant wedding. If you are rich in both time and resources, that circle can include a plethora of friends and family. But the rest of us need to be on a more modest plan.

No budget can anticipate every major expense. Life serves up surprises with some regularity. Putting a healthy margin in our daily living expenses gives us the stored resources to weather these major bills and then better plan for them going forward.

from http://www.emarotta.com/article.php?ID=380

Avoid Budget Busters Part 2 - Curb Your Worst Impulses

(2010-03-08) by David John Marotta

Frugality is the new status symbol, or at least it ought to be. It is green. It is compassionate. And it brings with it a financial margin for when life colors outside the lines. It helps bring us the priceless gift of serenity and contentment.

Bruce Waltke translates Proverbs 10:4 as "A poor person is made with a slack palm." To be wise financially, our hands must remain steady. Extend your hand toward an impulse purchase and with one weak flick of your credit card, all thoughtful budget planning can be hopelessly broken. And for many families, it's once on the charge, forever on the card. Excess spending slows our accumulation of capital to invest. When we are drowning in excess purchases, getting ahead is like trying to sprint through deep water.

Get control of the spending that breaks the bank. Certain purchases that are typically both unnecessary and unplanned are budget busters. Avoiding these financial slips requires hedging some of our worst impulses and constraining our desire for instant gratification. Only by saving enough in discretionary spending can we afford to put 10% of our budget toward those true and unavoidable emergencies.

Here are three rules that will help you and your spouse limit impulse buying and better align your spending with your thoughtful values.

First, limit the dollar amount you can spend unless you and your spouse both agree. You owe it to your partner not to undo months of frugality and sacrifice by acting on a whim. Honoring each other in this way helps avoid resentment and alienation that can bust your marriage as well as your budget.

Negotiate the dollar amount. I suggest setting a limit of 1% of your monthly budget. If your annual spending is $60,000 and your monthly budget is $5,000, you would need to confer on any purchase over $50.

The idea of setting a limit will seem more acceptable if you consider the millionaire mindset. Millionaires recognize that saving and investing just $100 a month over the course of your working career produces a million dollars at retirement. They watch their spending carefully. They recognize that frugality is just another way to describe deferred consumption, which is the definition of capital. And capital, once invested, is what produces an ongoing income stream.

Put another way, if the average budget should include 5% taxable savings each month, every time you mindlessly spend over 1% of your budget, you lose more than a fifth of what you should be saving and investing outside of retirement accounts. I've seen many financial affairs ruined by the repeated spending of amounts much less than $50 at a time.

If you are struggling financially and having trouble agreeing on your goals, you may want to set the limit lower. As you both begin to feel your spending is under control and your savings exceeds your targets, you can readjust the limit higher. Exceptions can be made for regular bills and necessary purchases such as utilities and groceries.

Talking with someone else about a possible purchase can clarify your thinking not just about the item but also about your other competing financial priorities. It changes the question from "Do I want to buy that?" to "What do I want to give up to buy that?"

The second rule limits the frequency of mistakes. Practically speaking, you can learn to postpone spending one purchase at a time. When our children were very young, they had to wait a week before spending money on a toy. After the seven days, they often wanted a different toy instead. Then they had to postpone the purchase again.

Children should be required to wait as many days as they are years old before being allowed to make a large purchase (that is, more than a week's allowance). You can use the same technique to strengthen your own slack palm.

When you're tempted to buy something, wait a week before acting. If you still aren't sure, wait another week. There is always tomorrow, and most of the time you won't remember what attracted you to it in the first place. Simply learning to delay and avoid impulse buying can cut your spending in half.

My wife and I sometimes wait years to be sure a purchase will further rather than impede our goals. The rule is simple. If you are not sure of a purchase, wait another week. This ensures that your hand will be confident, not slack, when it decides to act.

The goal isn't to be rich but instead to be thoughtful, industrious, content and thrifty. If you struggle with Madison Avenue's mantra of personal fulfillment through excessive spending, turn the image around. Nearly all of our spending is discretionary, and every spending delay can be a way to bring peace into your life.

The third rule is to recognize the categories where you make mistakes. Dieting works because you are forced to observe what you are eating and learn which foods tempt you to break your calorie budget. Creating a financial diet works similarly. It creates a system that makes spending money more painful. Simply keeping track of all your purchases in a small spiral notebook makes you more mindful.

Refrain from discretionary spending in any budget category that is under pressure. It might be eating out. It might be clothes. It might be household items. If you keep your budget in mind, it will help you not to spend more money than you intended.

Whatever your lifestyle, you probably think everything would be just fine if you had $10,000 more a year. That is the deceptive seduction of wealth. We don't realize there are people living off $10,000 less than we have who are saying the exact same thing.

Ask yourself, "What will I do when I run out of money?" Whatever you would do then, you should do now to keep your spending under control and live within your means. The best way to learn to be content is by taking money out of our spending categories and saving it. The less we spend, the better we will learn to be satisfied. Just as the harder we train, the better our endurance.

If you must satisfy frivolous spending, limit the amount and budget for it. Set aside a half of a percent each for husband and wife. For a family with a budget of $60,000 a year, this would be $25 a month each. If you wanted to buy a $300 item, you might have to save up for it for an entire year. But only put this in the budget if you are saving adequately for all your other big goals.

An even better way is to lovingly meet each other's desires through the portion of the budget allocated to giving gifts. Too often family members don't know what to purchase. Consequently, unwanted or inappropriate gifts represent a great deadweight loss of value. But when we leave our desires in the hands of others by offering, say, a gift certificate we can afford, we build family bonds rather than resentments.

In summary, to avoid impulse buying, set limits, wait a week, and watch out for those categories that entice you to break your budget. And when you must spend frivolously, limit those purchases to a small fraction of your budget.

from http://www.emarotta.com/article.php?ID=379

Avoid Budget Busters Part 1 - Thrift, an Old-Time Virtue Making a Comeback

by David John Marotta

"Thrifty" isn't a virtue we hear about very often these days. In fact, the only association I used to make with the word is at the end of the Scout Law I had to memorize when I was a boy: "thrifty, brave, clean and reverent."

The Boy Scouts of America Handbook states, "A Scout is thrifty. A Scout works to pay his way and to help others. He saves for the future. He protects and conserves natural resources. He carefully uses time and property." Sounds like good advice for us all.

No matter how rich or poor you are, thrift is an integral part of your budget. If you are struggling, you need to stretch every dollar as far as you can. And if you are well off and in a higher tax bracket, every dollar you spend could cost you as much as two dollars in earnings. Recessions naturally bring out the quality of thrift in families but, more often than not, it's due to necessity, not virtue. But being thrifty is a godly and biblical virtue.

Bruce Waltke, an authority on the Bible, wrote the two-volume "The Book of Proverbs (New International Commentary on the Old Testament)." His commentary offers wisdom about life's important decisions on such issues as wealth, women and wine.

Biblical values provide an older and more holistic approach to life that runs counter to our materialism-trumps-all approach to happiness. If the book of Proverbs is part of your religious canon, the message will be particularly important. And even if you think the biblical message is too bound in its own time and culture, you can still consider it an alternative to being unwittingly manipulated by today's relentless advertising messages.

It seems strange that thrift needs both defining and defending these days. Back when "The Boxcar Children" was a popular series of stories about the virtues of depression thrift, the mantra was "Use it up, wear it out, make it do or do without." Today some of us may find that adage stingy and heartless. But our grandparents were wise in ways that are especially valuable in these times.

Waltke explains that in the first few verses of Chapter 10 of Proverbs, Solomon first lays out the ethical and theological and then the commonsense foundations of wealth. The practical sayings "teach that industry, contentment, thrift and forethought will produce wealth and protect against poverty."

He translates the first half of Proverbs 10:4, "A poor person is made with a slack palm." "Slack" connotes careless and negligence. He explains, "Chaos ever threatens to undo the created order, and, if unchecked by diligence, destroys hard-earned wealth." Many families trying to live within their means fall to impulsive coveting only to suffer from buyer's regret after the fact.

Marital fidelity is only as good as your worst affair. A chain is only as strong as its weakest link. And thrift is only as valuable as your worst budget blunder. To be financially successful, families must learn how to avoid these budgetary pitfalls. You cannot go into debt with time. Every day you are given another 24 hours. But it is possible to go deeply into financial debt. The consequences can be dire, and digging your way out is extremely difficult.

Waltke describes the admonition of Proverbs this way: "The diligent are thoughtful, not hasty, accumulate wealth, and attain power and dominion." This isn't a health and wealth gospel. God doesn't want you to be rich. God wants you to be thoughtful, industrious, content and thrifty. He is more interested in your character than your accumulated capital. To whatever extent God has given you control, it's your obligation to steward those resources well.

If thrift still makes you feel too much like a penny-pinching miser, consider that frugality is making a comeback as the eco-friendly green way to live. Today's planned obsolescence is taking a toll on the environment. And trading fads and fashions as they become "so yesterday" is as costly to the earth as it is to our pocketbooks.

And if you believe thrift means you aren't doing your part for the world economy, think again. Saving and giving or investing is the way to feed the hungry and raise the masses of the world out of poverty. Instead of indulging ourselves, we should live well below our means. Then we can afford to give generously and to invest in the development of countries where charity or capital investments can do the most good. We live simply in order that others might simply live.

Be proud of your thrift. Save, invest and be generous out of your largess. Only those who live well below their means have the means to fund the ventures that can change the world for the better.



from http://www.emarotta.com/article.php?ID=378