Benjamin Franklin said, “A penny saved is a penny earned.” I’m sure you’ve heard that phrase, but you may not realize that it’s a crucial insight into good money management. This is MoneyWise (Live), biblical wisdom for your financial journey. On Mondays, as we start our broadcast week, we sometimes like to go “back to basics” and talk about one of the five things you can do with money. Let me review those: You can earn money, you can live on it, you can give it away, you can owe it to someone — or to the government, and you save and invest it to grow it for the future. Those are the five: earn, live, give, owe, and grow. On this MoneyWise, Rob focuses on the first of those: earning but in a non-typical way.<ul><li>Normally, when you think about earning, you think of getting a paycheck or perhaps receiving a pension or a benefit. But homing in on Ben Franklin’s words: “A penny saved is a penny earned.” If Mr. Franklin were living now, he might say, “A dollar saved is a dollar earned,” but the principle is the same. What he's getting at is that, if you can avoid spending, it has the same IMPACT as earning.</li><li>Example — A real-life MoneyWise listener's monthly cellphone bill was around $125. He thought he could find a cheaper plan so he shopped around and compared plans offered by several companies. He found one that met his needs that was only $50 a month so he made the change and thereby was able to save $75 a month on the cost of his mobile-phone service. That works out to $900 a year.</li><li>Returning to Ben Franklin’s principle, saving $900 a year is equivalent to EARNING an extra $900 a year. In fact, it’s slightly better than earning it because if the employer of this MoneyWise listener paid him an extra $900, some of that money would have been taxed. So the $900 saved was a tad better than $900 earned.</li><li>When looking at your overall financial picture, it’s helpful to view things through this lens. Always be asking, “Are there steps I can take to cut my cost of living?” If you can reduce your expense, whether its by $900 or perhaps even more, that’s JUST LIKE earning extra money, or even better.</li><li>You’re probably thinking: “In a time of rapid inflation, how can I cut costs?” First, think about goods or services where there tends a lot of competition such as cellphone service or, in some places, internet service. You might be able to get a better deal from your current provider if you ask, or you might save by switching to another company but you have to take the initiative and shop around.</li><li>What about insurance? This is an area in which you might be able to save substantially by comparison shopping, not only for car insurance but also homeowner's insurance, or perhaps a Medigap plan or Medicare prescription coverage. It is not uncommon to find wide price variations in plans and policies that are quite similar.</li><li>Another place to cut costs is at the grocery store. Some grocery chains are more expensive than others, typically because they offer more variety. Try buying all your staple items at a discount grocer and your savings will really add up over time. This might not be easy but if you spent an hour figuring out how to cut your monthly spending by $100, that works out to be the same as EARNING $100 an hour!</li><li>Probably everyone would like to get a raise but that's not something that’s going to happen very often. So think about the spending side of the equation. Ask, “How can I, in effect, give myself a raise by cutting my costs?” Obviously, you can’t cut your expenses to nothing but you may be able to cut more than you realize if you apply yourself. Don’t give up without trying. Who knows how much you might be able to save!</li><li>So when it comes to earning money, always consider BOTH sides of the balance sheet. And remember the principle from Ben Franklin: “A penny saved is a penny earned.”</li></ul>Next, Rob answers these questions at 800-525-7000 or via email at Questions@MoneyWiseLive.org:<ul><li>If you're 66 and you have a 401(k) as well as a Roth IRA, how much can you contribute to each per year?</li><li>If you're 66 and your 401(k) is currently invested in a 2025 target fund and you're not anticipating needed the money until age 75, should you change it a 2035 target fund?</li><li>Are there any faith-based financial and legal institutions? <a href="https://www.mycccu.com/">Christian Community Credit Union</a></li><li>If your husband accumulated some credit card debt and he took out a personal loan to pay off the card, how can he work to improve his credit score as he pays this off?</li><li>If your 24 year old son just moved out has good credit and his goal is to buy a home but he currently has about $16,000 of Sallie Mae school loan debt that's only been making minimum payment, is there anything he can do to get this debt paid quicker?</li><li>If you're and you just stared a new job and you're putting 8% into your a traditional and Roth 401(k), how much can contribute without penalty?</li><li>If you're selling an apartment building that has no debt on it and you don't want to put it in to a 1031 cycle, should you put the proceeds into a "Real Estate Investment Trust"?</li><li>What is the best way to begin paying down old debt?</li></ul>&lt;&lt;&lt; MoneyWise Market Update with Bob Doll &gt;&gt;&gt;<ul><li>The market is selling off today and seems the current China situation is weighing heavy. Is that what you're seeing?</li><li>How concerning is what's happening in China in terms of it's ability to spill over into US economic productivity?</li><li>What are you looking at related to the Fed and the possibility that we could see a slowing of the rate hikes?</li><li>Regarding the next decade, you say we might be in a "sideways" market, what does that mean for the average investor?</li></ul>Be sure to check out the rest of MoneyWise.org to connect with a MoneyWise Coach or access our books and our many free helpful resources. You can also find us on Facebook (MoneyWise Media) and join the conversation. Thanks for your prayerful and financial support that helps keep MoneyWise on the air. And if you'd like to help, just click the Donate tab at the top of the page.

FaithFi

Listen to MoneyWise Live each weekday at 4pm EST on Moody Radio.

MoneyWise Live

Benjamin Franklin said, “A penny saved is a penny earned.” I’m sure you’ve heard that phrase, but you may not realize that it’s a crucial insight into good money management. ﻿And just ahead, Rob explains why that’s so.

A Penny Saved - Foundation Series

FaithFi | Nov 28, 2022

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Where Faith Meets Finance

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