Financial Wisdom (part 1 of 3) “Money Management 101”

Money Management 101 by Apply

The bible teaches that we should beware of the love of money[1].  We are supposed to love people and use things, not love things and use people.  If you love money you will never be satisfied[2].  You can’t serve both Yahweh and money[3]. Although we have heard it said a million times, not everyone knows that the phrase “it is more blessed to give than to receive,” is from the Bible (Acts 20:35).

Treasure God, not possessions.   Luke 12:34 tells us where your treasure is, there your heart will be also.” 

Be Generous: Being generous is a great way to show God’s love.

Money is always a touchy subject. Most people assume they are making good financial decisions or at least doing the best they can.  But this is not true.  Most people are making terrible financial decisions and banks and credit card companies are exploiting them to the max. For those of you in this category, please pay attention to the next few pages.  The below listed financial principles are life changers. For those who are already making good financial decisions and for those who truly are doing the best they can, the next few pages will reinforce your good decisions and or give you insight how to better manage your money.

Just so you know… the below listed financial ideas are copyrighted text from an author who charges a lot of money for this expertise and financial wisdom.  He has agreed to release it to Apply for free to help those who are seeking Yahweh and trying to make good financial decisions.  Please forward to other Christians who are trying to learn how to make good financial decisions.  It is illegal to reproduce this material to publish under your own name or to publish for a profit.

This is a 3 part series.  Put them together and you have life-changing financial advice which many pay hundreds or even thousands to get.

  • Part 1 is Money Management 101
  • Part 2 is Business Management
  • Part 3 is Investments


Wealth Is Not Income

Income is how much money you take in.  Most people get paid by the hour or by the month.  This is also known as a salary.  Wealth is the collective value of all your assets.  We will discuss assets later in this book, but for now let’s say that assets include the equity you have in your house, the value of your liquidatable possessions, your bank account, and the value of your businesses (if you own any).   Many people have high salaries, but spend every cent.  They never build wealth because they waste their money buying things which depreciate.  On the flip side, many people with small salaries spend their money buying things which appreciate.  They are building wealth.

Build Wealth – Don’t Spend It

It is not wise to spend all that you make.  If you make a little and spent it all, you will never build wealth.  If you make a lot, but spend it all, you will never build wealth.  The key is to buil wealth with your salary, not spend your salary.

Use Your Salary to Build Wealth

For most people, their salary is the best mechanism they have to build wealth. Some people will have the opportunity and the courage to start their own business or businesses.  But for most people, they will simply hold a job and earn a salary which is paid hourly or monthly.  The average American holding a job in 2015 made $56,500[4]. If they maintain this salary and work for 40 years, they will make over $2,262,000 in their lifetime. This is pure salary, not counting compounding interest. Yet after 40 years most families have nothing to show for it.  Can you image how much money you could make if you were given 2 million dollars to invest in real estate or the stock market.

Most people don’t recognize the huge amount of money that comes to them via their salary and they totally miss their opportunity to use it to invest and prepare for their future.


In a world full of bankruptcies and white-collar criminals, I feel obligated to mention the obvious.  Elite Performers live on a budget.  They write a budget and stick to it.  This requires discipline and prioritization. Sadly, most people don’t live on a budget.  They buy things they can’t afford and hope to pay for it later.  The amazing American budget deficit is simply a macro reflection of the micro stupidity of our fellow citizens.  Balancing a budget is almost self-evident.  I wonder when it became common place to spend more than you make without going to jail or worse. (Seriously…this is a huge cultural problem which may destroy America.  I can’t say enough about the importance of budgeting)

Live Under Your Budget

If you make $2,000 a month, budget and spend only $1,800, save the rest. If you make $200,000 a month, live off way less and be generous. You will never get into debt if you live under your budget.

Marry A Frugal Spouse

Being frugal is important.  But it is even better if your spouse is frugal[5].  If you are frugal, but your spouse is a “spend-aholic” your finances are always going to suffer.  Marry someone who is also frugal and I promise you that you will reap the financial benefits.

Pocket Money

When you make your budget, be sure to include a “Pocket Money” system for every member of your family. Of course, you need to pay your bills, have an emergency savings account, and build wealth with your money first.  But if you have money left over, then give a little “Pocket Money” to each of your family members.   This “Pocket Money” is an allowance that they alone are in charge of.  When your pocket money is empty, then you don’t buy silly things.  Now that I am retired, and my income is significantly less, my wife gets $350 a month for pocket money.  She usually goes to the hairdresser and a massage therapist once a month.  She also buys either a facial cream, makeup, or a perfume each month. All of this is about $200 a month.  She then saves the rest of her pocket money for big shopping events.  $150 a month x 12 is $1,800.  You can buy a nice wardrobe each year for $1,800. One year she bought a designer handbag.  The next year a designer scarf.  She saved for 6 months and bought me a Mount Blanc Fountain pen as my Army retirement gift.

Cigarettes & Coffee

Small purchases add up to huge amounts over time.  If the average pack of cigarettes is $6.00, then your pack a day habit will cost you $2,190 a year (365 x $6).  I recommend that you quit smoking immediately.  This will save your health and your marriage.  Save your health by no longer poisoning your lungs and save your marriage buy saving that money for a year to buy your wife a handbag from Louis Vuitton. Your addiction to your favorite coffee shop may also cost you 6 dollars a day. Perhaps you can buy a good coffee machine at home and bring your coffee with you to work. We have a great coffee machine at home and I average 20 cents a cup.  (Can you guess what kind of handbag my wife has?)

Cell Phones Are Money Pits

I know many people who pay 70 dollars a month for their amazing cell phones with unlimited data, phone calls, and text messages.  Wow, $840 a year is a lot of money. Many people can afford $840 a year for their cell phones.  Most people can’t.   It astonishes me to see people who I know are up to their eyeballs in debt walking around with thousand-dollar phones.  You should never go into debt (put it on a credit card) to buy a cell phone.  It would be economically be more intelligent to buy last year’s model for 100 dollars, get a prepaid sim card, and use free WIFI connections at home, school, a friend’s house, or public hangouts. This alone can save you hundreds of dollars a year which can be used to build wealth.

Pay Cash for Everything

Elite performers pay cash for everything.  This includes a car and house.  It is, however, acceptable to have a mortgage on your house. This is the only acceptable debt. But it is never acceptable to make payments on a car.  You must always pay cash for a car.  If you can’t afford it, then wait a year or two before you upgrade.  Cars are terrible investments because they depreciate very quickly.  A car should be considered a luxury which will be almost valueless in seven years. You should pay cash for everything.  This includes a television, a cell phone, furniture, or a boat.

Beware: A Credit Card Is Dangerous (Use It Wisely)

Elite Performers pay for everything in cash. We just said that in the previous paragraph.  Cash is mostly untraceable and helps protect one’s privacy. Credit cards collect information. Credit cards get undisciplined people into a lot of trouble. When used with discipline, a credit card can be practical. But please note that I said, “use it wisely” not use “them” wisely.  You only need one credit card to ensure that you can buy plane tickets and make hotel reservations. Elite performers always pay their complete balance at the end of the billing cycle. You never go over budget if you pay everything in cash. Most village dwellers make investments and have credit card debt.  This makes no sense. A credit card usually rips you off at 10-25% interest.  Standard, reliable investments (if there are such things) make between 5-10% interest.  Why make 10% on an investment while you are losing 15% on debt.

Beware: Taxes Hurt

Elite Performers protect their assets. Yes, we are supposed to “Render to Caesar what is Caesar’s” (Mark 12:17), meaning we all need to pay our taxes to compensate for our share of the Government’s service.  And for sure some places tax more aggressively than others. But with a little reading and research, you can legally minimize your taxes and maximize your savings.

The Triple Tax: An over achieving Village Dweller in Europe makes 10,000€ (euros) a month.  (1st Tax) 50% of that went to federal income taxes.  He was a self-claimed Catholic, so 10% of his pay was automatically transferred to the Vatican Bank.  That means he only brought home 4,000€ a month.  (2nd Tax) He paid 19% sales tax on everything he ever bought.  (3rd Tax) He saved 300€ a month for 45 years and when he died, he left his only son his life savings of 162,000€.  The inheritance tax was 35%.  This poor man paid 60% of his income to the church and to the government, paid 19% sales tax on everything he ever bought in his entire life, and was taxed 35% on everything he didn’t spend while alive.  The point is: Taxes are evil, so be smart about protecting your assets….and never open a business or live in Germany.

I can’t legally provide you with tax advice (because some of you knuckleheads will blame your tax mistakes on me). But I will say that you must learn to itemize your deductions.  This will help save you money.  I further recommend that you start a business.   Businesses can write off a lot more taxes than individuals.  You can deduct office space, business trips, business meals, transportation, etc.  I recommend you look into tax rules.    

Beware: Banks Are Criminals

Keeping your assets safe is very good.  Modern day banking practices are suspect, at best. Elite Performers are smart about who has access to their money and how to keep their money safe. Do your research and make good decisions about how to stockpile your assets and maintain access to them.

The Waiting Game: Although it takes 1 microsecond to wire transfer $100,000 dollars from your account in Bank 1 to your account in Bank 2, the transaction may take up to a week.  Bank 1 will initiate the transaction on Monday morning.  But they won’t actually release the funds to Bank 2 until Wednesday afternoon.  During those two and a half days, Bank 1 will “play” with your money, invest your money, buy and sell with your money, and profit off your money.  Bank 2 receives the money Wednesday afternoon but doesn’t make the funds available to you until Saturday morning.  During those three days Bank 2 will “play” with your money, invest your money, buy and sell with your money, and profit off your money. You needed that money Monday morning, but get it Saturday.  They profited off your money and all you can do is sit around and wait.

Beware: Colleges & Universities Are Businesses

  • Dare I open your eyes to the fact that while a teacher may genuinely care about you and genuinely care about making you smarter, a University is a business. It must make money to survive.
  • Yes, going to college may get you a higher paying job. But “may” is the key word.
  • Yes, you can make money from a salary of a good job. But making money through a business is the absolute best way to make a lot of money.  And starting your own business doesn’t require a diploma.
  • Not all university diplomas are the same. It would be foolish to pay an exceptional price for a below average diploma.  Do your research.
  • Always pay cash for higher education. If you can’t afford it, don’t go. It is so sad to see new graduates with $100,000 plus college debt.  Starting your career with a debt the size of a mortgage is absolutely irrational. Save for college early.  Use an Educational Savings Account (ESA) or a 529 plan to save on taxes.
  • If you didn’t do what was required to get a scholarship then go to a cheaper university. Better to be the valedictorian of your local university than graduate in debt.


As many of you know, I (the Editor in Chief of Apply went to Harvard for graduate school and payed out of pocket 63 thousand dollars a year.  It killed me financially, but I graduated with zero debt and the best education in the world.  Had I not saved for years, I never would have been able to pay cash for my education.  I still believe that some educations are worth the money.  However, most aren’t.  That is why I recommend going to a cheaper university and graduating higher in your class.

Don’t Try to Impress Your Neighbors / Colleagues / Family

For my international readers, Americans have an expression “Don’t try keeping up with the Jones.” What this means is that if the Jones family buys a new house, then you must buy a new house to keep up.  If the Jones family buy a new car, then you must by a new car. If they join a country club, then you must join a country club. You must not focus on “keeping up with the Jones.”  You are not the Jones.  And statistically speaking, the Jones are broke and making bad financial decisions. You must make a good financial decision to prepare for your future rather than make bad financial decisions to impress your broke neighbors, colleagues, and family.

Emergency Savings Account

You must have an emergency savings account. When your car needs new brakes or when your washing machine dies, it is important that you pay for it in cash, out of your emergency savings account. If you don’t have an emergency savings account, then you will pay for the brakes or new washing machine with a credit card. This will only give you more debt.


I recommend that your emergency savings account is at least:

  • $2 thousand dollars (hotel money for a week if you must fly to a funeral)
  • plus $1 thousand dollars for each family member living in your household (emergency airline tickets)
  • plus $2 thousand dollars for each house you own (money to fix or replace an appliance)
  • plus $1 thousand dollars for each vehicle your family owns (major vehicle repair)


For example, a family of 5 with 3 cars and 1 house has an emergency savings fund of $12 thousand.  I hope you never have to use your emergency fund, but statically speaking, you will one day need to fly the entire family home for a funeral.

Get Rid of Debt

Hopefully you don’t have any debt and can skip to the next paragraph.  But if are like most Americans, then you have a lot of credit card debt. Let’s use my neighbor as an example.  She is proud that she has paid down her American Express credit card to only $500. She has a Best Buy credit card with $1,000. She has a MasterCard with a debt of $1,500. She has a department store credit card debt of $2,000. She has a Delta Sky Miles card with $3,000. And all of this is on top of renting her apartment and leasing her car. Wow.  She is not using her money to build wealth.


You need to pay off your smallest debt first. This will allow you to check it off your list.  As you do so, you will see small victories, and gain confidence and momentum.  In this example, my neighbor would pay off her $500 debt, then her $1,000 debt, then her $1,500 debt and so on.  You must pay off your debts and live debt free.

Own the House You are Living In

Everyone needs a place to live.  So, rather than renting a place for 20 years, buy it and build equity.  If you have a small salary, buy a small house.  If you have a large salary, buy a medium house. And if you have a huge salary and a huge family then buy a large house.  If you have made some dumb financial decisions previously and can’t get a mortgage, then start making good decisions now and apply for your mortgage in a few more years.  Beware of some markets which are terribly inflated… but for the most part, you should always own where you are living.


Pay your mortgage off early.  I recommend one of three techniques:

  • Get a 15-year mortgage, not a 20 or 30-year mortgage.
  • Pay a 13th house payment each year directly towards the principle.
  • Pay your mortgage payment plus next month’s principle every month. This means you make the principle payment twice every month.  e. your $200,000 mortgage cost you 30 years and $1,100 a month.  Only $250 of your first payments pay the principle. The rest is interest.  Pay your $1,100 every month and pay $250 extra a month.  You will pay off your house years earlier.

Buy A Used Car

Buy a 3-5-year-old car so someone else pays the initial depreciation.  Because a car depreciates the second you drive it off the car lot, so it is never a good idea to buy a new car.  But once a car has quickly depreciated a few years, the depreciation rate slows down.  This is why I recommend that you buy a 3-5-year-old vehicle.

Don’t forget that you should only pay cash for a vehicle.  If you can’t afford to pay cash for a nice car then drive a safe junker while you save money.  A vehicle is a privilege, not a right. It is transportation, not your identity. Pay cash for your 3-5-year-old vehicle.

Disaster Proof Your Life Through A Will

Make a “Last Will & Testament” and a “Medical Power of Attorney.”  This way in the terrible event of a disastrous medical problem or death, your family will know what to do.  Don’t do it for yourself.  Do it for them.  Medical disasters and death are terrible times.  Die well by making it easy for those you left behind.  I have seen so many people die terribly. Because they weren’t loving enough or were too cheap or lazy to make a Will, their family members suffered and fought over many medical, burial, funeral, and estate decisions.

Disaster Proof Your Life Through Insurance

  • Health: This is essential. You must be able to pay for your medical expenses.
  • Homeowners: Protect yourself in case something happens to your house. If don’t have a house but are renting, then please protect yourself via renter’s insurance.
  • Disability & Long-Term Care Insurances are inexpensive, but can make a huge difference if you are ever disabled or have a long-term health care issue.
  • Life: There are a lot of variations of life insurance out there. I don’t recommend life insurance that doubles as an investment.  I recommend term life insurance until you are about 60.  After 60, term life insurance is possible, but gets more expensive.  And hopefully after 60, your family is self-sufficient and or living from your retirement in a paid off house.
  • Example 1: A 30-year-old healthy male (nonsmoker) will pay about $45 a month for 30 years for $500,000 Term Life Insurance. If he dies at 31 years old he paid in $540, but his spouse gets $500,000. If he dies at age 59, he paid in $15,660 but his spouse gets $500,000.  Either way it is a win.
  • Example 2: A 45-year-old healthy male (nonsmoker) will pay about $115 a month for 30 years for $500,000 Term Life Insurance. If he dies at 46 years old he paid in $1,380, but his spouse gets $500,000. If he dies at age 74, he paid in $40,020 in, but his spouse gets $500,000.  Either way it is a win.

Buy Assets – Not Liabilities

Smart people buy assets.  Assets appreciate over time and put money in your pocket. Assets include real estate, apartment buildings, storage units, businesses, and investments in stocks, bonds, and funds.

Wasteful people buy liabilities.  Liabilities take money out of your pocket.  Liabilities include rental contracts, leasing cars, $1,000 cell phones, awesome TVs….

Earn Passive Income

The best source of wealth is from a Passive Income. Passive Income is money earned without you actively working for it. “Passive Income” includes investments, stocks, bonds, T-bills, money markets, mutual funds, owning mortgages and other assets that appreciate in value and can be liquidated for cash, rental real estate, royalties from a book, music or software, licensing your ideas, becoming a franchisor, owning vendor machines, and owning storage units[6].


As I said earlier, most people will make money through their salary. This is an active income which exchanges money or time.   It is possible to earn a passive income using some of the above listed sources as a private person.  But for the best results, passive income sources come through small businesses.  This leads us to my next point…. Business



[1] 1 Timothy 6:10 that “the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.”

[2] Ecclesiastes 5:10 that “whoever loves money never has money enough; whoever loves wealth is never satisfied with his income.”  

[3] Matthew 6:24 no one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money”.


[5] I first read this idea in “The Millionaire Next Door.”  It is common sensical. But I want to correctly reference the originator of the idea.

[6] This list passive income sources comes from T. Harv Ecker’s book “The Secrets of The Millionaire Mind”