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Debt and the Emergency Fund

Friendly borrowing is an unmistakable sign of improvidence. When it runs from week to month, and from month to year, it destroys confidence, and the bonds of friend ship are broken. Then the borrower criti cizes his friend and openly complains of him. In brief, he curses one who pays toll for him over the bridge.

A chronic borrower is a paradoxical object. He attends his clubs, smokes good cigars, pur sues the pleasures of life, and regards obli gations lightly, apparently oblivious that his honor is involved.

The summation of the matter is: i. Have as few charge accounts as possible.

2. Pay them promptly every month, or whenever due.

3. Build up an emergency fund, remem bering it is the anchor that will hold you secure some day when you are in troubled waters.

4. Avoid the loan shark as you would avoid pestilence.

5. Do not borrow from your friends. You cannot afford to pay the price in wrecked reputation.

6. Whether money buys necessities or pleasures for you, see that you get your money's worth.

7. Your friend is no longer a friend if you cannot pay what you owe him. And, after all, friendship is above the price of ma terial things.

8. Any man can keep out of debt who lives within his income.

9. Better a frugal life than the foreclosure of a chattel mortgage.

1o. Better lend than borrow, but do neither if you can avoid it.

Here follows the story of how one woman found her way out of the debt situation : We were forever struggling to pay last month's bills—and some of the month before.

It made me so weary to buy to-day's supplies with those overdue charges in view that I didn't enjoy my meals.

Fortunately we had a little money in the savings bank, which, despite our debts, we had clung to as a veritable life-preserver. My husband's pay came in once a month and it was enough—if we only had known it.

One month-end, it was the 3oth of May, I made up my mind to break my rule about not touching the savings bank account. I drew out all but ten dollars, paid every bill, took the pay envelope of eighty-five dollars for May, and made up my mind that there after we should live by rule rather than by accident. So I made a budget, putting down every regular item of expense. I knew we could stand that. I suspected that our trouble grew out of irregular items. And I was right.

When I was sure I had everything on my list that belonged there, I set against it the amount it called for, if the charge was a fixed one. On others that varied from month to month I allowed enough. The total amount was nearly seventy-four dollars. The eleven dollars went to the savings bank at once to begin to make up the withdrawal.

Then I paid the June bills as they fell due and found at the end of the month that my estimate of seventy-four dollars was over three dollars too much. I put this aside against a possible deficit in the next month's account.

This plan has worked perfectly, and for the reason that we now pay from the budget list and not from a notion that we can afford anything that strikes our fancy.

Anyone who will try this plan will get out of trouble. It is just a sensible way of keep ing your own accounts. It means spending by system.

The way to do it? Well, what I do is to rule off a sheet of paper every month. This is no trouble. And then I make a list of items. Against each item I put the exact amount required, or as near it as past experi ence tells me is right.

Then I pay every bill promptly.

And I never forget that any balance belongs to the savings bank at the end of the month.

It is easy enough. If you ever run short, the savings account is ready to help. A rainy day fund is like an umbrella, it is all right to put it up when the rain comes.

Now debt is not infrequently, perhaps it generally is, a symptom of wrong methods. It spells wrong thought, wrong ideas about money earned and spent; in short, a wrong mental condition. As savings and economy must begin in thought, so debt must be avoided by thought, for it is everlastingly true that as a man thinketh in his heart so is he. If he thinks debts, they come to him.

"The best use of money," says the proverb, "is to pay bills." The American writer, Ralph Waldo Emerson, sums it up tersely when he says : "Spend for Power and not for Pleasure." He means that a man can increase himself if he spend wisely; he can buy things of real value to himself, and not alone the foolish things that merely keep on repeating the old round of animal sensation.

Again this writer points out: "The estate of a man is only a larger kind of body." If his body wants drink, drink becomes his estate; and his estate is soon debt-involved; because, it is drink-involved. If a man wants to live in the comfort and content of a well ordered life, he will spend with system. And once he learns that, he will always be prepared for debt and never buried beneath it.

Once in debt, however, what is to be done? First of all let us not be cowardly, but ascer tain the extent to which we are in arrears. We are as one lost in the woods; the great question is : How shall we get out into the clearing? Manifestly, not by standing still; not by running around in a little ring. Ef fort must be aroused and directed.

"Let every man have the fortitude to look his affairs in the face—to keep an account of his items of income and debts, no matter how long or black the list may be. He must know how he stands from day to day, to be able to look the world fairly in the face. Let him also inform his wife, if he has one, how he stands with the world. If his wife be a pru dent woman, she will help him to economize his expenditure, and enable him to live hon orably and honestly. No .good wife will ever consent to wear clothes and give dinners that belong, not to her, but to her shop-keeper." * * Dr. Samuel Smiles.

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