indicates that most people believe that they would have no more financial worries if they
could increase their income by only ten per cent. That is true in many cases, but in a
surprisingly large number of cases it is not true. For example, while writing this chapter, I
interviewed an expert on budgets: Mrs. Elsie Stapleton-a woman who spent years as
financial adviser to the customers and employees of Wanamaker's Department Store in
New York and of Gimbel's. She has spent additional years as an individual consultant,
trying to help people who were frantic with worry about money. She has helped people
in all kinds of income brackets, all the way from a porter who earned less than a
thousand dollars a year to an executive earning one hundred thousand dollars a year.
And this is what she told me: "More money is not the answer to most people's financial
worries. In fact, I have often seen it happen that an increase in income accomplished
nothing but an increase in spending-and an increase in headaches. What causes most
people to worry," she said, "is not that they haven't enough money, but that they don't
know how to spend the money they have!" ... [You snorted at that last sentence, didn't
you? Well, before you snort again, please remember that Mrs. Stapleton did not say that
was true of all people. She said: "most people". She didn't mean you. She meant your
sisters and your cousins, whom you reckon by the dozens.]
A lot of readers are going to say: "I wish this guy Carnegie had my bills to meet, my
obligations to keep up-on my weekly salary. If he did, I'll bet he would change his tune."
Well, I have had my financial troubles: I have worked ten hours a day at hard physical
labour in the cornfields and hay barns of Missouri-worked until my one supreme wish
was to be free from the aching pains of utter physical exhaustion. I was paid for that
grueling work not a dollar an hour, nor fifty cents, nor even ten cents. I was paid five
cents an hour for a ten-hour day.
I know what it means to live for twenty years in houses without a bathroom or running
water. I know what it means to sleep in bedrooms where the temperature is fifteen
degrees below zero. I know what it means to walk miles to save a nickel car-fare and
have holes in the bottom of my shoes and patches on the seat of my pants. I know what
it means to order the cheapest dish on a restaurant menu, and to sleep with my trousers
under the mattress because I couldn't afford to have them pressed by a tailor.
Yet, even during those times, I usually managed to save a few dimes and quarters out
of my income because I was afraid not to. As a result of this experience, I realised that if
you and I long to avoid debt and financial worries, then we have to do what a business
firm does: we have to have a plan for spending our money and spend according to that
plan. But most of us don't do that. For example, my good friend, Leon Shimkin, general
manager of the firm that publishes this book, pointed out to me a curious blindness that
many people have in regard to their money. He told me about a book-keeper he knows,
a man who is a wizard at figures when working for his firm-yet when it comes to
handling his personal finances! ... Well, if this man gets paid on Friday noon, let us say,
he will walk down the street, see an overcoat in a store window that strikes his fancy,
and buy it-never giving a thought to the fact that rent, electric lights, and all kinds of
"fixed" charges have to come out of that pay envelope sooner or later. No-he has the
cash in his pocket, and that's all that counts. Yet this man knows that if the company he
works for conducted its business in such a slap-happy manner, it would end up in
bankruptcy.
Here's something to consider-where your money is concerned, you're in business for
yourself! And it is literally "your business" what you do with your money.
But what are the principles of managing our money? How do we begin to make a budget
and a plan? Here are eleven rules.