Budgets, Investments, and Liabilities
CBN.com My girlfriend keeps telling me I need a budget. Is it even necessary? How do I set one up?
PAT ROBERTSON: You ought to be thankful you've got such a smart girlfriend. Maybe one day she'll make you a good wife. A budget is really simple. It has to do with how much income you have from all sources. You put that down. Then you ask yourself, What am I spending my money on? How much do I spend for rent? How much do I spend for clothes or food or perhaps an automobile? The idea is to have more coming in than what goes out. That is a budget. It's a carefully thought out plan of how much you're going to spend. You'd be amazed what control that will give you if you not only set it, but live within it. Along with that, you set up a certain amount that you give to the Lord, at least a tithe or more, and then a certain amount, maybe 10 percent, for savings. You set up a systematic saving program.
I'm getting married next year and thinking about buying a house. I heard it was the best investment you can make, so should I buy the biggest house I can possibly afford or purposely buy smaller? And also, I was wondering what me and my fiancée could be doing to prepare financially for marriage.
PAT ROBERTSON: In the book Rich Dad, Poor Dad, the poor dad thought that a house was a great investment. The rich dad said it's a liability. The rich dad was right. The average house is a tremendous liability. You have taxes. You have mortgage payments. You have interest. You have maintenance. You have all the other costs that go along with home ownership that are too numerous to mention. As a young couple starting out, I would suggest that you find someplace that you can rent so you can build up something along the way. Then if you want to use your money that way, that's your business. But at the same time, I think the biggest thing is to start building up a nest egg little by little by little and save the largest amount of money you can. Whatever you do, don't go into hock for furniture. Don't go into hock for other consumables. Don't build up credit card debt. Stay out of debt if you possibly can and get your money working for you instead of you working for money.
I was thinking about going back to school to get my master's in business, but I hate the thought of all that student loan debt. Is education a worthwhile investment or a liability when you have to borrow?
PAT ROBERTSON: Education is one of the best investments, because if you have a college degree, your earning capacity is dramatically different than it is if you have a high school degree. I'm talking about a matter of $200,000 to $250,000 in a lifetime or more. So, it's not a bad investment. There are so many programs available. You could find work grants where you work in the refectory, you work in the library, or you're a student teacher. You could do something to earn extra money. You can also study online. You can get degrees online so you can keep your job. There's nothing to keep you from doing that. Don't load up with a lot of debt, but a little bit of debt to make an investment like that is not necessarily a bad thing.
