PRUDENCE IN SPENDING
Earning is difficult, but spending wisely is even harder. A person who knows how to spend properly can live a higher standard of life even on a modest income. By contrast, someone who does not know how to spend correctly will face financial problems even with a large income. In truth, a person who spends with prudence and economy has found the secret of increasing his income without actually earning more. He has, in effect, added to his income without making any extra money.
Think before you spend, just as you think before you earn. Do everything in a planned way, and you will never fall into financial hardship. Wasteful spending is simply another name for poverty, while thrift is another name for prosperity.
Two examples illustrate this fact. I know of one man who, after completing his MSc, got a job with a salary of 400 rupees a month. He decided to treat only 200 rupees as his actual income and deposit the remaining 200 in a savings account. As his salary increased—to 1,000, then 2,000, 3,000, 4,000, and eventually 5,000 rupees—he always treated only half as his spending income, saving the rest each month in the bank.
After living like this for ten years, he checked his account and found that a large sum had accumulated. He then left his job and started a business. Today, he has advanced considerably in that business. But he still follows the same method of life that he adopted in the beginning, and he is now enjoying a prosperous and successful life.
Now take the opposite example. Another man received a lump sum of one lakh rupees as his share of inheritance. With this, he opened a cloth shop. The shop quickly became successful. But after a few years, it collapsed. The reason was that he failed to understand the difference between sales and profit. For example, if goods worth 5,000 rupees were sold in his shop, 4,500 rupees of that was the cost, and only 500 rupees was the actual profit. But he began spending the entire 5,000 as if it were income.
Clearly, this was the worst kind of extravagance. Within a few years, he went bankrupt.
In this world, a life of prudence is another name for prosperity. A life without prudence is another name for misery.
