Dave Ramsey mentioned this later on a recent podcast episode (which could have been a repeat) and so I looked it up.  It can be found online in a collection of his writings here.  However, I thought you might like to read the letter because it is quite interesting to see Abe’s approach to helping his family.

Dear Johnston, Your request for eighty dollars I do not think it best to
comply with now. At the various times when I have helped you a little
you have said to me, “We can get along very well now”; but in a very
short time I find you in the same difficulty again. Now, this can only
happen by some defect in your conduct. What that defect is, I think I
know. You are not lazy, and still you are an idler. I doubt whether,
since I saw you, you have done a good whole day’s work in any one day.
You do not very much dislike to work, and still you do not work much,
merely because it does not seem to you that you could get much for it.
This habit of uselessly wasting time is the whole difficulty; it is
vastly important to you, and still more so to your children, that you
should break the habit. It is more important to them, because they have
longer to live, and can keep out of an idle habit before they are in it,
easier than they can get out after they are in.

You are now in need of some money; and what I propose is, that you shall
go to work, “tooth and nail,” for somebody who will give you money for
it. Let father and your boys take charge of your things at home,
prepare for a crop, and make the crop, and you go to work for the best
money wages, or in discharge of any debt you owe, that you can get; and,
to secure you a fair reward for your labour, I now promise you, that for
every dollar you will, between this and the first of May, get for your
own labour, either in money or as your own indebtedness, I will then
give you one other dollar. By this, if you hire yourself at ten dollars
a month, from me you will get ten more, making twenty dollars a month
for your work. In this I do not mean you shall go off to St. Louis, or
the lead mines, or the gold mines in California, but I mean for you to
go at it for the best wages you can get close to home in Coles County.
Now, if you will do this, you will be soon out of debt, and, what is
better, you will have a habit that will keep you from getting in debt
again. But, if I should now clear you out of debt, next year you would
be just as deep in as ever. You say you would almost give your place in
heaven for seventy or eighty dollars. Then you value your place in
heaven very cheap, for I am sure you can, with the offer I make, get the
seventy or eighty dollars for four or five months’ work. You say if I
will furnish you the money you will deed me the land, and, if you don’t
pay the money back, you will deliver possession. Nonsense! If you can’t
now live with the land, how will you then live without it? You have
always been kind to me, and I do not mean to be unkind to you. On the
contrary, if you will but follow my advice, you will find it worth more
than eighty times eighty dollars to you.

I guess we could call this a guest post by Abraham Lincoln

I had someone hit this site looking for, “Would you sleep with me for a million dollars?”  I can’t believe that people would consider this, but then again, its people we’re talking about: the anonymous mass of Internet users who don’t have to be identified and so asking such a question doesn’t come with the stigma that asking it of your friends and classmates might.  The question that begs is this: What is a million dollars worth?

In our modern relativistic culture there is little value placed on sexuality within marriage, and the sanctity of marriage (sanctity being the setting aside as special) .  Sex is not worth a million dollars, that cheapens it, it is invaluable.  A million dollars is a lot of money, but it isn’t enough money to offset emotional scars, the fact that you’d be engaging in prostitution (see: Eliot Spitzer).

Various people have posed nude in magazines for money, taken jobs that they didn’t agree with because of a high paying salary, and of course there’s the age old televangelist schtick as well.  Money is not important if it is gained in an ill gotten fashion.  Having standards, focusing on the long term impact (how many women did something pornographic and then had children and were mortified that their children would find out?  What about parents finding out?).

A million dollars won’t buy you happiness, love, or a long term financial state (it is just as easily lost on frivolous activities and spending).  What’s a million dollars worth to you?  Is it worth your dignity?

If you want to be successful in life then there is one principle you must learn first: Learn principles. What makes a chef great? They know the principles of cooking and flavors and how they balance and then they can take unlikely ingredients and mesh them together into a signature dish. What makes an engineer great? They learn principles and then take those principles and apply them systematically to their work. What makes money managers great? They learn principles, apply them and keep their finances in order and grow their net worth.

Elementary school and primary school, and unfortunately some college classes tend to be about rote memorization. The best teachers I ever had were the ones who took the principles behind the things I was memorizing and taught me those instead of merely cramming data into my head. As a web developer/programmer I have memorized a lot of coding things, but I didn’t begin to think as a programmer until I learned the principles behind smart programming (sometimes called ‘patterns’). My finances were a mess even though I had heard good personal finance bits and pieces, but it wasn’t until I learned the principles behind sound personal finance (influenced by blogs like the Simple Dollar, NCN, and Dave Ramsey’s “The Total Money Makeover“).

Smart, successful people will be able to think with abstraction. They’ll be able to identify the principles that make up great process and then merge those principles, where they apply, to their different areas of expertise. Recently I read a book called, “Critical Chain” and it had lots of good principles in it. It is how I run my budget (which I posted a bit about before, but I’m going to write a further detailed article later), but it wasn’t how I ran my budget before reading it because I hadn’t clearly seen the principle. Once I learned it, I was able to see how it could apply to other areas in my life.

Learn principles, learn how they can be applied across broad scopes of your life, and then forget about rote memorization. It could save you thousands of dollars, millions of dollars, your life, or a few minutes time here and there, but get past the short term rules and start thinking bigger.

When my wife and I were merely high school sweethearts looking each other in the eyes and feeling as googly as any two people could feel without being any way related to the search engine I suggested that she go on a budget. This was possibly one of the best worst ideas I’d had to date in the relationship. You see my wife is a math genius, except that she’s not a budget buffer kinda gal, she’s an accountant at heart and she wants all of the columns to add up and if forty-three cents were missing (or extra) then she would spend far too much time looking for the difference so as to balance her budget. Since then we’ve worked out a much more workable system that allows for a little tiny bit of innacuracy, just enough to not hunt for forty-three cents, but not enough to ignore forty three dollars. As she became frustrated with budgeting my wife gave up because the small details threw her for too great a loop.

Now we budget for zero. By zero I mean that we plan to spend until we have zero dollars in the checking account. We save what we need to save, we calculate our bill payments, but our focus is on the following:

1. Don’t spend it if we don’t have to
2. Anything left over goes into savings for potential snow-flaking/snow-balling if its left over after quarterly taxes
3. Next month if things get tight we may grab any previous left-over cash into the budget to buffer the differences
4. Pay with cash whenever possible, or use the debit card, but only spend what we have

As we’ve employed these principles we’ve been able to manage our finances much better than previous attempts at budgeting. With my wife focused on paying off the debt as fast as possible she’s spent a lot less on the extra little things and we’re making progress on our debt reduction like never before. We’re “budgeting” to have zero left over at the end so that we don’t spend it on the frivolous.

How do you budget?

If you have not see the Strongbad “Trogdor” video, here it is.  I know its weird, but since Homestar Runner and Strongbad tend to be internet icons, I’ll let you decide if the internet is weird before the video, or after the video.  You see: my wife’s relative had her house burn down on Monday last week.  Burninated.  Most everything is gone or destroyed.  It is pretty tough since that sort of event is so life altering.  She’s still waiting on more information about insurance and hasn’t begun (to my knowledge) the process of discovering the costs of rebuilding.

As you can imagine, this post is a reminder to back up documents off-site, or to keep them in a safe-deposit box at a bank/secure location.  I need to do this, too.  Some of the documents that she had are gone forever, some can be had for a fee (reproduction and shipping and handling costs), and some are going to be sorely missed.  Things like children’s first moments, photos, some computer data, and of course various valuables that are destroyed when flames hit them.

Consider her fire as a great lesson for us to learn from.  Consider her blessing in not being home for the fire (and therefore unscathed).  Make sure you have life-important things like wills covered in duplicate.  Make sure you have considered a location to store offsite data (external hard drives or sites that offer low-cost data hosting for such cases are a good idea).  Make sure that you tell your loved ones they’re loved - you never know what might strike, but you do know it won’t be Trogdor.

Note: This post is a tiny bit light hearted because the relative is actually doing pretty well emotionally.  I’m actually feeling kind of sick, but such is life.  Gotta travel tomorrow, so we’ll see how that goes. 

What if you lose everything that makes you financially wealthy? I am going to explore some of this in a video podcast soon, but I wanted to share a story I heard recently that just hit this point home. I know a person who had a tremendous job that promised above average income and a whole list of benefits - but that job came at a cost: it began to affect his relationships.

A time came when the financial pursuits and the relational pursuits had come to a very strong and intense decision making point. The person had to ask himself: what matters most? The way he put it was very powerful: if you lose something and it hurts, you’ve given it priority. The question that he had to ask himself was whether or not his priorities were right.

His story ended well because he was able to continue to earn a solid income, and maintain his relationships as well as strengthen them. This isn’t always the case, but you need to be prepared to let go of what doesn’t matter - and as much as this blog is about personal finance money should not be your number one priority.

This is a guest post by Brooke at a DollarFrugal.com, a 20-something PF blogger who paid off debt quickly and is trying to pay off her mortgage by November 2009 while sending her husband back to college. And doing it one dollar at a time. I strongly recommend you subscribe to her RSS feed and learn some things from her great blog.

Open Lines of Communication Open lines of communication that are needed with a budget shared between two people also transfer to other parts of your marriage. Should we raise our child(ren) in a certain way? I don’t know, let’s discuss it. It’s the same premise as where to spend budgeted monies.

Set a Check and Balance Limit We are all adults, but sometimes our “wants” get the best of us. Set a limit ($100 or $20, depending upon how tight the budget is) that is the “discussion limit”. This will use your spouse check how badly you want an item and reaffirm your joint endeavor to kill debt or raise net worth.

Set Financial Goals Together Setting goals together will cement your relationship and show the other just how much you care about them. You could try brainstorming separately (no peeking!) on what financial goals should be, then come together to discuss each idea.

Build an Emergency Fund For your sanity and your spouse’s. An emergency fund is the easiest way to feel secure and not rely on the evil credit cards. Seriously, just do it.

Even Thinking About the “D” Word Is Bad for Finances Divorce is sad for people and our finances. If you go into the commitment with the idea that marriage is forever, you won’t even consider divorce (of course, there are extenuating circumstances, but you get my point). With divorces come two households and the support of these separate households.

Use Joint Assets to Build “The House’s” Assets The stay-at-home mom is a classic example of this. She can attend one online class per semester, coming out after 5 years with 15 classes (equivalent to more than 3 semesters of college), just using naptime. What about retirement funds? My husband made a lot less than I do, but I funded his IRA because I know it will benefit both of us.

Attack Finances as A Team This supports your “one team, one fight” mentality and solidifies your stance against the rest of the world (or at least corporate America!). Have at least a binder somewhere for the non-bill-payer of the family to reference in case anything should ever happen to the bill-payer. Go over the binder together once a year to ensure it is understandable and current. Agree how much to pay each month and make a budget together.

Find Cheap Hobbies Mountain biking is our favorite pastime these days. Spending time out in the fresh air can’t be beat, in my mind. With cheap hobbies, you are spending quality time together, but not spending a ton of money. We constantly play cards. Another place we spend a MULTITUDE of time is the library. Both of us are college students and our son is learning to read, so we kill a bunch of birds with one stone here. Cheap hobbies are cheap (duh, Brooke) and doing them together means you’re spending time doing something you enjoy together. It doesn’t get any better than that!

Buy a Present for the House Instead of Each Other This may be arguable for some relationships, but it’s worked out great for us. Instead of buying each other trinkets, we buy a quality piece of furniture or sports equipment that we pre-discuss and find at the lowest price. It makes me a lot happier than blingy jewelry or flowers that die! Or try funding just $100 of a Roth IRA for each other instead of presents. It will pay off in a large way later.

Shared Sense of Accomplishment The sense of accomplishment that came when we paid off our debt (Oct 2002) after a year of scrimping and clawing was an adrenaline rush. This is a shared experience much stronger than any night out on the town with friends or flashy car. It is part of our shared identity that no one can take away from us!

Personal finances strengthen marriage in a huge way. Money is often cited as the most common reason for divorce, but I would argue lack of money education is the most common reason for divorce. Educate yourselves together and you’ll gain more than just knowledge!

As a teenager (and twenty-something) I really blew it. I made more mistakes than you could list off in a podcast (and still get anyone to listen to it). But instead of focusing on the failures, I’m going to list of things I wish someone had told me. Give it a listen and watch the slides in this movie file - ready for your iPod (or iPhone). The video is about five minutes long.

Five Things About Finances I Wish I’d Known as a Teenager

Requires iTunes or Quicktime.

Its a wee early for implementing a New Years resolution, but its never too early to start doing some of the things I’d like to do. One of the reasons that I moved from Dallas/Fort Worth (DFW) in 2004 and relocated my family to Denver was to go to a church here. It was a big move with some big implications. We left friends there in DFW but we hadn’t found a church we felt comfortable calling ‘home’ and after giving up (we were notably picky and have since learned to mellow out… but that’s another story) we looked at a few places to move and finally picked Denver. At our church we have learned a major amount of things about our relationship with Christ. One of the passages that has rocked my world since moving here is Second Corinthians 3:18:

And we, who with unveiled faces all reflect the Lord’s glory, are being transformed into His likeness with ever-increasing glory, which comes from the Lord, who is the Spirit. [New American Standard]

This passage describes a relationship with Christ that is intimate and unencumbered with the normal distractions of life, but instead lends itself to the illustration of a bride and groom looking at one another, gazing with nothing between them. I recall standing on the stage in our wedding ceremony and looking at my wife-to-be and thinking, “I’ve never seen anything more beautiful - I must continue to behold her, to gaze at her and enjoy her beauty.” If anything had come between us I would have known it! Money can be one of those things that draws your gaze away from beholding. It can act like a hand that sticks out between you and the Lord and blocks your gaze. If money becomes one of those elements then its time to move on. It is time to get rid of the distraction that has interfered with the beholding of the Lord.

The consequences of beholding the Lord is that money and wealth get their proper place in life. You don’t find them to be worth beholding because they don’t hold a candle to the glory of the Lord! The consequences of beholding the Lord also include our spiritual growth. As we meditate on God’s glory (the emanating character of Christ) this passage tells us that we’ll be transformed into His likeness. Money can barely transform us into anything, and at best plastic surgery is temporary… but beholding has eternal benefits - I like that.

The second in a series on “The Ultimate Money Maker” that covers the following:

1. Look for something you like doing that you can make money doing in a way no one has made money on it before.
2. If you find something that others are doing, what can you do differently?
3. Do you have a plan? If not, why? Make one!
4. Find a mentor.
5. Get networking already!

The file is around 6 minutes long and weighs in at 8MB in size. You will need iTunes or Quicktime to listen.