“A man who has riches without understanding is like the beasts that perish.”
 — Psalm 49:20

Fact: At one point a cat picked stocks better than most investment managers. This alone may be reason enough to take a good look at how we approach money as a culture. If you want a good example of disciplined saving, look no further than your backyard. Chances are, you’ll see a squirrel busily stashing an acorn or two for the winter months. They save because their lives depend on it — why don’t we do the same? Not only are we not saving for retirement at epic levels, but 46% of Americans couldn’t cover a $400 emergency expense.

We can do better. We’re meant to be better than beasts — why isn’t this reflected in our behavior?

Let’s get back to the basics and look at the four P’s of Principles, Purpose, Priorities, and Path. Practicing the 4 P’s sets us apart from out furry friends, and helps us develop a sustainable, healthy relationship with money.

1. Principles

If you haven’t done so already — take time to reflect or have a family meeting to identify the financial principles your household will live by. These can include any faith-based principles you prescribe to, such as these verses on debt and saving:

“The rich rule over the poor, and the borrower is slave to the lender.” — Proverbs 22:7


The wise store up choice food and olive oil, but fools gulp theirs down. — Proverbs 21:20

If you’re not particularly religious, it is still extremely important to take this first step in guiding your personal relationship and your family’s behavior with money. Come up with some “principle-statements” like: “we don’t buy things we can’t afford in our family,” or “we save 15% of everything we make.” Regardless of your approach, write down your financial principle statements and review them regularly. Discuss them with your spouse, teach them to your kids. Your financial legacy depends on it!

2. Purpose

Purpose in work — Doing work that matters, or work that fulfills you, can be tremendously important in unlocking unlimited earning potential. If you feel unsettled in your current setup, take a beat, read some books, and learn about why you might be feeling that way. Make strategic changes that systematically align you with what you love, but don’t jump from the boat until you’re close to a dock!

Money with a purpose — There are all kinds of sophisticated and complicated financial strategies out there, but when it comes down to it, there are three basic things we do with money: spend it, save it, and give it. After you’ve adopted your financial principles, give every dollar that comes in a purpose in one of these three categories. Will you give a percentage of every dollar you make to a charity, church, or someone in need? Will you commit to paying yourself first by depositing a piece of every paycheck into an investment account to secure your family’s financial future? How will you decide how much to spend on expenses and fun? These are all questions to ask before the month begins, not after you’ve run out of money. Start by asking yourself this simple question frequently: what is this money for?

3. Priorities

Remember, money is finite. If you use it on one thing, then it is impossible to use that same money on something else. Prioritizing what we do and when is crucial. Here are some spending and savings choices we may be faced with on our journeys:

Expenses — Housing, transportation, clothing, and food/medical necessities are things that we need. Everything else is a want. How much do you need in these areas to live a comfortable life? Is living a luxurious lifestyle a priority for you? If so, it may come at the expense of other opportunities.

Short-term — Holidays, birthdays, car repairs, home repairs, travel and vacation. These things happen every year. How prepared will you be in your monthly cash-flow to handle these common occurrences? Are your expenses low enough to handle these as they come, or will success require some forethought and saving?

Mid-term — Home purchases, car replacement, furniture, and larger experiences (bigger trips). These things will most certainly require some goal-setting and separate savings accounts. Start by identifying how much you need for different items, then determine when you plan on buying that item. If you plan on buying a used car in four years at $10,000, then divide $10,000 by 48 months ($208/month), and save that much in your “car fund.”

Long-term — Retirement and legacy planning. Knowing what you will need for retirement by using tools like the R:IQ tool at chrishogan360.com is the first step to determining your monthly savings goal. If you don’t make enough to hit your goal, consider extra work or opportunities to increase your pay with continuing education or taking on additional responsibilities. Reducing unnecessary expenses can go a long way too.

When it comes down to it, how we allocate our money past covering the four needs is a choice. It’s a matter of priority — and prioritizing is way easier if we have principles and purpose.

4. Path

You’ve done your homework. You’ve identified what principles will be your north-star, your guiding light. You’ve given every dollar a purpose in your spending, saving, and giving plan, and you’ve prioritized what you will focus on to accomplish your goals. Now is the time to execute your plan. Stay on the path by surrounding yourself with a support crew, reminding yourself of your goals and principles every day, and by having the grace and resilience to get back on the path if you start to stray. Warning: keeping up with the Jones’s is a sure way to fall off the path. Stay off the Jones’s path and stay on yours.

Practicing the four P’s can help you develop a healthy relationship with money.

When we work and act with purpose, it changes things.

Everybody’s mix will be a little different, but the framework exists to help us all rise above so that we may finally gain an understanding of riches –

To be better than beasts.

Originally published at level1life.com on March 8, 2017.

Originally published at medium.com