The things that are necessary in life are few. Sadly, it seems that even the necessary things are often neglected. We instead cram our lives with thousands of unnecessary things. This is particularly true of government. A lot of organizations today rule by popular consent. They reflect the majority’s will as forcefully imposed on the whole group. This form of government maximizes enjoyment for the popular majority, but creates oppression and discontent for the unpopular minority.
One of the things that modern governments frequently mess up is the budget. In their urge to feed popular supporters, governments spend more than they earn. They borrow extravagantly in order to make up for the difference. This behavior is often sustained with no end in sight. When questioned, supporters of the over optimism squeak, “In the long run, we are dead.” They, like the prodigal son, think that partying is the secret to salvation. When a recession occurs to show them wrong, they quickly reshuffle the statistics and bail each other out. They neglect the following tools from the wiser minority who are not represented in democratic governments:
1. Live Below Your Means
Do not spend what you cannot afford. Having a clear idea of revenue is essential. What am I actually making? If I am spending more than I earn each day, then I will gradually come to financial ruin. Borrowing will not hide that fact, it will only extend it. Having a clear idea of your income can help you as an organization or individual live below your means. What are you taking in each month? Make sure you know it, and that you are not spending above it.
2. Ignore the Popular Vogue
It used to be the case that men in France wore tights and had long hair. Today, most men in France do not do so. If you slavishly conform to what is popular now, you will have to continually adapt as that notion changes over time. If you instead hold to unchanging values about money and life, you will not have to engage in expensive realignment weekly. There are so many people competing to be number one. There will always be someone or some organization better than you. Get over it.
3. Pursue Unpopular Things
Reach for things that are unpopular. Things like Seward’s decision to buy Alaska from Russia. At the time, it was called Seward’s folly. Afterwards, a lot of gold and oil were discovered up there. Seward was shown to be right in his investment decision. What is unpopular now may become popular later. Those who profit buy the things that are unpopular, and then transform them into popular things. Be clever. Do not copy the failures around you. Otherwise, you also will be a failure.
4. Have a Normal Source of Revenue
A normal source of revenue for an individual is a steady job. For an organization like a government, it is a clear and flat tax code. If you have a complex source of revenue, your revenue will be complex. Make sure you know how much you will be getting. Regularly set income targets for your group. Levying taxes of 10% on all the population is much better than different brackets that vary based on tiny little exceptions and deductions that your funding sources can use to cheat. The U.S. government’s tax code is far too complex. This partly explains its struggle with debt.
5. Start With Little Steps
Debt elimination pro Dave Ramsey recommends removing your smallest debt sources first. This encourages elimination of larger debts like mortgage and car. If you see your grocery debt paid off, you will have more motivation. Confucius agrees, once saying that you move a mountain by starting with little stones.
These are just some of the keys to a healthy and sane budget. Most individuals can probably think of a lot more. The chief thing is not to think of countless different ways to deal with something. The chief thing is to act on those ways. Nothing will be accomplished until governments and tax payers choose to take responsibility for their collective incompetence at managing their budgets.