Danny Kofke, one of the regular contributors at One Money Design, my Christian Finance blog, was recently interviewed by CNN about his family’s ability to survive on a teacher’s salary. Danny and his wife have done a remarkable job managing their money wisely on minimal income. In fact, Danny wrote a book called, How to Survive (and Perhaps Thrive) on a Teacher’s Salary.
As I watched the video interview, I picked up on a number of golden nuggests Danny and his wife shared. Danny has an inspiring story that shows people can save money and accomplish their financial goals even when they don’t have a lot of income each month.
Know Where Your Money is Going
You’re likely to spend wastefully if you don’t pay attention to where you’re spending your money each month and following a plan. Knowing where your money is going requires tracking your spending carefully by either writing it down, or using money managment software.
What should you do? Create a budget and begin tracking your spending today.
Understand What is a Need
There are certain things that simply aren’t a need every month, but people tend to rationalize them as such. Danny uses the example of his cell phone and how many kids have a nicer phone than he does. Danny and his wife, on their limited income, have had to orient thier spending to needs vs wants. This means making some sacrifices and really questioning the reasons you think you need to spend money.
What should you do? Review all the expenses you’ve captured for your budget and prioritize them on a seperate piece of paper. Of those expenses at the bottom, decide if you can cut out 2-3 of them to save more money.
Danny and his wife clearly understand their personal priorities in life. Based on their lifestyle they view spending time with family more important than both of them working full-time and taking jobs that don’t align with what they are passionate about. Society today is full of people chasing after big paychecks, but unfortunately, families often suffer because of these motivations.
What should you do? I always think learning more about Biblical finance and Biblical stewardship helps people put money into perspective. The Bible has a way of changing your heart and the area of money is no different.
Another important part of their success is not upgrading when pay increases. If you continue to keep your standard of living the same when pay increases, you positively impact your ability to save, invest, and give more. Upgrading too quickly after a pay raise, or when your financial house isn’t in order, certainly can impact your ability to make forward progress towards financial freedom.
What should you do? If you receive more income, immediately move it into a separate savings account to get it out of mind and out of site. It’s best to save the money first and then discuss with your spouse, if married, which financial goals the money can help fund versus immediatley buying material items.
What do you think about the tips Danny shared?