What would you do with a million dollars?
$1,000,000.00—that is a lot of money. My smile expands with each zero. Have you ever thought about what it would be like to have that much money? Would you buy a new car, go on that dream vacation or buy a new house? Why not all three? What would you do with the money? Would you give some of it away or keep it all for yourself? It’s worth taking time to ponder the question—what would you do with a million dollars?—not just as a fun exercise but because you will have $1,000,000.00 pass through your hands during your lifetime. Not convinced? Let’s do some math. Let’s say that you make $25,000.00 a year for your entire work life of 40 years.
$25,000.00 x 40 years = $1,000,000.00
That is 40 years without a single pay raise! You’d have to work pretty hard at not getting a pay raise to never get one. What is your annual salary? Is it higher than $25,000.00. Is it $50,000 or more? If you said yes, you will make millions in your lifetime. Of course, I can hear some of you saying, “Well, that will take decades! I don’t have a million dollars now.” Others are saying, “I wish I could keep all the money I make, Uncle Sam gets his share first!” All of these are valid points, but let’s not miss the main point.
You have been given a great responsibility that the majority of the world does not have. You will, more than likely, make and spend $1,000,000.00 in your lifetime. So, let’s rephrase the question from “What would you do…” to “What will you do with your million dollars?” How are you using it now? Do you know what you spend your money on or does it seem to disappear without a trace? Are you planning how it should be spent or just letting life dictate where it goes? Jesus said a lot about this type of behavior. Here is one example:
“Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, ‘This person began to build and wasn’t able to finish.’
— Luke 14:28-30 (NIV)
Jesus uses the word “ridicule” which implies that not “estimat[ing] the cost” would be foolish. In the financial world, estimating the cost is called budgeting. If you just winced like a vampire with a face full of garlic, you are not alone. A budget can be an intimidating thing. It requires discipline. You have to get good at saying, “no,” when you don’t have the money for something. It is hard work that will require a lifetime commitment of estimating the cost before spending. It will also set you free from financial anxiety and put you back in control of your money. It will get easier the more you do it and more exciting as you experience the benefits of planning ahead.
What does it look like?
I’ve included a link below that will give you more details, but here is the basic idea:
- List your total household income.
- List your total expenses (giving, savings, mortgage/rent, bills, groceries, eating out, gas, insurance, etc)
- Separate income into pay periods (weekly, bi-weekly, monthly, etc)
- Separate bills and expenses by pay periods
- Use this list (budget) to see how much money is needed to cover all expenses for the month
- Repeat this process each month
Fincancial Peace University
Dave Ramsey, a financial expert and founder of Financial Peace University (FPU), says that it takes about three months of disciplined budgeting before you really get good at it. FPU also teaches how to get out of debt, invest for college and retirement, save more and give more. If you are interested in joining our next FPU small group please email us (firstname.lastname@example.org) or sign up at Hydrate.
Dave Ramsey Blog – How to Budget