Six Simple Tips to Develop a Savings Plan

Money is part of our everyday life. Money if used wise it becomes a great servant. However, when we allow poor money management to put a yoke on us and our family, we become the servant of money, and money is a terrible master.

One of the lessons we learned from the recent recession is that we cannot trust those in power to protect our investments and savings from the shaky hands of our politicians and the federal reserve. After being indoctrinated with the consumerism philosophy as the cure for all financial ailments learning to save money becomes a challenge for most families. It is important to know how to manage money efficiently to ensure healthy savings. It is the creation of a savings program that can help us sustain the stormy weathers that are ahead of us.

Before you start looking into an investment program, start by developing a savings program. Most of us have heard of saving money "for a rainy day", but many of us never quite get around to developing a personal savings plan. In our economic model where we focus on consumerism it can be difficult to make a savings plan a priority, but the longer we wait, the less opportunity we have to accumulate a healthy financial amount.


Here are six steps you need to develop a workable savings plan:

1. Determine a savings fund adequate to meet emergencies and achieve special goals. Develop your budget from the amount of savings you need to create a cushion your family needs for the rainy days and not from expenses you currently have. 
2. Add up your total income, including any funds you receive in addition to your earnings.
3. Figure out your total fixed expenses such as rent or mortgage, insurance premiums or car payments.
4. Estimate how much you need for day to day living expenses.  
5. Keep your savings funds separate from your operating funds.  This keeps the savings funds separate from the operating funds and you can see your savings account growing every month which provides motivation.
6. Make the savings systematic, for example you can establish a fixed amount every month  of $100 or you can establish a % of your gross salary.

Remember that you will grow richer each month as you pay yourself first. Good money management is more than financial formulas. It is controlled by the current events in our lives, so it needs to be modified as situations in our lives change. Do not be discouraged if initially your savings plan does not meet your goals. You may need to review your plan and identify the areas that need to be corrected, revise your plan and go at it again. This system works regardless of your job position and/or income level.

What has our government done to our money?

"Give me control of a nation's money and I care not who makes it's laws"
Mayer Amschel Bauer Rothschild

"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States"
Sen. Barry Goldwater (Rep. AR)

"From now on, depressions will be scientifically created." 
Congressman Charles A. Lindbergh Sr., 1913

This is a question that we all in the United States must be asking ourselves. Currently in the United States we manage our inflation levels through the manipulation of the interest rates. The consequences of this policy are devastating to savers and those attempting to live off of the passive income generated from their capital and create wealth.

How did we allow a private company to destroy the value of our currency and the wealth of a nation?

As part of the education process of developing financial intelligence, I highly recommend Murray Rothbard’s "What Has Government Done to Our Money?" You will discover how commodity based monies (real currency) has been replaced by fiat currency created by the central banks around the world. Through
this process, we the people slowly and unknowingly reliquished our wealth creation power to be controled by the government through the process of inflation, excessive taxation and devaluation of our currency.

The understanding of basic finance and money creation is essential to the understanding of our current financial crisis, how we are going to get out of this problem and how we are going to prevent it. It is imperative the we do something now, otherwise we are enslaving our children and our grand-children
to a life of perpetual goverment legalized slavery. This slavery does not discriminate on racial, ethnic, sexual orientation, or theological ideologies.

The Federal Reserve's, a private corporation, monopolistic grasp on the creation of our money out of thin air is responsible for boom-bust cycles in our nation. They are guilty of the destruction of our nation's wealth. Does this whole financial crisis or "financial cliff" have you baffled? Then this reading is a must for you.

It is the federal intervention with their fiscal policies that depreciates the value of the dollar, thus increasing inflation. This fiscal policy of "more money in the economy will fix the problem" is not necessarily good. Think about it, suppose there are today twice as many dollars in the economy as the day before. The normal reaction is that this is a good thing, we have more money. This could be true if the population doubled over night or we as a nation produced/manufactured more valuable services/products. If we are missing these elements under the fiat currency system, $1 is worth half as much as before.

This is what happened in the Weimar Republic after WWI. In 1929, the onset of the depression in the United States of America produced a severe shock wave in Germany. The economy was supported by the granting of loans through the Dawes Plan (1924) and the Young Plan (1929). When the American Stock Exchange (Wall Street) crashed in 1929, this left the struggling German economy in chaos. Industries failed and unemployment rose to 6 million. Social unrest followed, as people starved. Unemployment grew rapidly and in September 1930 a political earthquake shook the republic to its foundations.They owed so much to other countries from the Versailles Treaty that they printed money to pay their debt. As a result, there was hyperinflation, which caused their currency to become virtually worthless. Aside from the economic consequences, the poor state of the economy made way for a young, charasmatic politician named Adolf Hitler to capture the hearts and minds of the German people. You know the rest of the story.

In economic terms, printing money out of thin air is known as “monetizing the debt.” When a country prints more money to get out of a debt problem, it hopes to pay back the debt with more money than it had before. Doing so is inflationary and debases the currency. This may work short term for the government, but most likely it will make Americans poorer as their hard-earned dollars purchase less. You may be given a momentary illusion of prosperity and you may think that you escaped being directly taxed but inflation is another form of tax on your wealth.

Here are four ways that a government can use to debase your currency:

1. Lowering the Quantity of Gold or Silver in Coins - In recent U.S. history, since 1965 all coins changed from silver coins to clad coinage. This makes the coins a fiat currency since they are only worth something because the government has decreed it.
2. Eliminating Commodity Backing - By eliminating a commodity backing of a paper currency, the only backing is by government decree.
3. Deficit Spending - governments print excessive amounts of money. Inflation occurs when the supply of money outpaces the demand for money.
4. Fractional Reserve Lending - creating money out of thin air banks lend out much more money than they have in the bank. This can be a factor of 10 to 1 or more.

Financial intelligence, requires that we gain an understanding the cause and effects of our fiscal policies for effective financial planning and wealth management and preservation.

How did we allow a private company to gain control of the printing of our money, debase our currency and determine the fiscal policy of our nation? Why do we allow this private company to go unsupervised and unaudited?

One reason I recommend this reading is that you do not need a Phd in economics to understand it. The book covers what is money, government manipulations used to gain control of money from you and I, and provides two hundred year history of money and currencies in the Western world. It is through the studying and  understanding of past events that we learn how government has abused its role, stole our wealth and sold us into slavery to the international bankers.

We were duped into exchanging coins made with gold and silver into gold and silver certificates and finally into unbacked paper currencies. During this recommended reading you will learn that real money is a commodity whose value is proportional to its weight. Therefore, paper currency, or its digital equivalent, have no such value.

I rediscovered my passion for economics by reading Dr.Rothbard's book and I expect that some of you will also learn or rediscover the importance of economics as part of our development of financial intelligence.

If you think that money market funds are just another checking account...

Many investors when they close their equity positions and need a place to park their cash, they do not use their checking account. Most of them will sell their stocks and let their stock broker place the proceeds into a money market fund. Nothing wrong with that if you are aware the risks associated with this type of account. Many investors when they receive their monthly investment statement and look at the allocation of their investment portfolio and see "cash" they assume their money is parked in a low risk account similar to a checking account but better since it holds high-quality short-term commercial paper that almost never defaults and gives them a higher yield than checking.

However, that assumption can lead you to some frustrations later when you see your "cash" dwindling. If you review the account information of your money market fund you will notice that the fund is investing in some disturbing things such as European bank debt. However, you may think that you can get your money out with a mouse click, right? After all it is like a checking account and it is your money.

You may be for a surprise. The US Fed recognizes the potential weakness of the money fund system and is considering withdrawal limits on money market funds.On July 19, the Federal Reserve Bank of New York said it supports limiting some types of money-market fund withdrawals in a bid to protect those funds from suffering the equivalent of a bank run. Interesting!

Many things that have been sold to us as "risk-free", may after all not be so "risk-free". Money market funds must be reviewed and you cannot assume that it is "like a savings account" with no or little risk. Many things that we were told that were sound investments need to be re-evaluated. Banks can no longer be trusted to be "too big to fail", Corporate America cannot be trusted to properly compesate us for our labor, governments do run out of money, and even the all mighty dollar stops functioning as a store of value.

What will happen next? Will our government impose control over our retirement accounts?

Lets Talk About Money

"The wise has valuables and oil at home, but a fool soon runs through both."Proverbs 21:20

Last week we talked about fraud. Today lets talk about money. I will get to basics and for many of you, it will be too basic. However, it is important for the benefit of all of our readers.

To begin, I would like to clear the air and get rid of the myth that money is not important and it is bad or evil. Lets set the record straight. Money is important, extremely important if you want to live in today's society. If you are planning to live in a desolated island, money may not be important. The reality is that money is an important part of our lives, whether you want to accept or not. Pretending otherwise is foolish. Without money we cannot provide shelter, food or clothing to our families. Without money we cannot be generous and fund ministries and help the less fortunate.

What is money? Money is the harvest of our production. What we receive for our production and services, which allows us to obtain the production and services of others. You may hear people say "Money won't bring happiness", but as I travel in this journey we call life I notice that money brings more happiness than poverty. I am not saying that money is the most important thing in life and that we must elevate money to the level of God. I am just saying that money is important. To think otherwise is foolish. To be able to develop wealth this must be clear in your head.

Money is not bad nor evil by itself, what is bad or good about money depends on what we do with our money. If you take your hard earned money and provide the basics to your family, help the poor and fund ministries then your actions would put the money to good use. If you take your hard earned money and use it to fund your vices and develop illegal activities, then your actions put your money to bad use. In my opinion what is bad is your desire for money above all things and at all cost. That is when you become a slave of money.

However, the pursuit of money leads to your own destruction. It is proven over and over, just look around. Have you noticed that those who go in the pursuit of money (aka money slaves) are those heavily in debt, work grueling hours for a compensation that does not cover their basics, money is never enough (the more they have the more they spend), money never lasts (the faster they earn it, the faster they spend it), are constantly worrying where they’re going to get the money to pay for they bills and are willing to do almost anything to get it (money slaves?).

Money has the ability to reveal our true person. It is easy to say "I am a good person", "I am a Christian", "I help the ones in need", blah, blah, blah. I tell them, show me your checkbook and we will see. The way YOU use money reveals more than words. The use of money reveals who you really are. If you are greedy, money simply shows your greed. If you are dishonest, money will highlight this characteristic. If you’re poor minded, money doesn’t help you because you can’t control it. If you are a fool, you’re soon parted from it.


Having a clear understanding about money and its proper place in our lives and use of it will help us be better prepared to develop wealth. Does money equal wealth? Definitely not. Money is only a small part of wealth, it is only one of the many resources available to build wealth. Money in the hands of the unwise just makes a fool with money and the prime candidate for frauds and devoured by alligators. Money is just a tool to serve us, never for us to serve money. Having a clear understanding of the proper place of money in our lives will prevent us from ending up being slaves of money.