Benjamin Franklin's Legacy of Money Management

Benjamin Franklin is probably the Founding Father who was most financially aware. I have assembled some of his more memorable lines here and added my own explanation to them. As you read these quips, remember the age in which these were written. Back in the late 1700’s, it was frowned upon when one borrowed. Both Shakespeare and the churches warned people against lending and borrowing money.

Let’s keep in mind, in 1785 there were no consumer lending laws to protect us from predatory lenders. As more than two hundred years have passed since Ben was publishing his thoughts on financial education, there have been numerous changes in how we borrow and how lenders work with us. Today, borrowing to purchase a home or a car is fully acceptable. When credit is granted, it is done through a very careful approval process where a borrower’s income and past credit management is put under scrutiny.

But, just like in Ben Franklin’s time, it is not a good idea to go too far into debt

Let’s consider some of his sayings:

When you run in debt; you give to another power over your liberty. -  And  - The borrower is a slave to the lender, and the debtor to the creditor.

Meaning that when we are in debt, those who hold our debt control us and take away our freedom to a certain extent. While in debt, we are slaves to the monthly payment!

Rather go to bed supperless than rise in debt.

Franklin had a great disdain for being in debt. In those days, if you were in debt, the whole town knew it. He would rather be hungry than owe money.

Tis easier to suppress the first desire than to satisfy all that follow it.

This relates directly to “Wants vs. Needs.” Essentially he is saying, fight the urges to spend money. As you fight those urges, it will be come easier and easier to suppress the desire to spend.

For age and want, save while you may; No morning sun lasts a whole day. 

Save for your retirement and for the things you want. Start now, start early. There is no time like the present to begin. You have a limited amount of time to make a good return on your retirement funds.

Get what you can, and what you get hold; ’Tis the stone that will turn all your lead into gold.  

It seems that Ben Franklin also understood time and money. Saving your money in an appropriate investment can turn a few dollars into many or “what you hold into gold!”

Beware of little expenses; a small leak will sink a great ship.

Little things add up. It’s like two sodas from the coke machine everyday. .75 cents per coke, twice a day, five days a week, for fifty two weeks = $360! Could we find a better way to spend or save $360?

Buy what thou hast no need of, and before long thou shalt sell thy necessaries.

If you buy the stuff you want you may eventually have to sell the important things you need to pay for the stuff you want.

All of these things are as true today as they were 230+ years ago. It is not a good idea to go into debt. It is still a good idea to save. It is still a good idea to invest. It is a good idea to have a budget and adhere to it. This is timeless advice that we can all use.

But let’s also remember that not all debt is bad! There is debt that can help us. A loan on a home allows us to write off the interest that is paid annually, thus saving families thousands of dollars in hosing costs making that home more affordable for them. A car is a personal asset that gets us to work on time. So, a car loan can be considered part of an investment in our personal economic development. 

And for all of you out there looking for our next financial education workshops, your summer wait is over. Our next workshop will be "Reality Based Budgets for Teens" at our Milpitas Financial Center at 6PM on Aug. 22nd. 

Our next "Credit Myths and Repair Workshop" will take place at our Milpitas Financial Center on Aug. 29th at 6PM. 

I hope I will meet you at one of our seminars! Have a great week!