Frugalnomics

There are thousands of books that purport to tell you how to become debt free and stay that way. Each year over a hundred such titles are introduced by the major publishing houses and yet, one of the best books on living a debt free life was published in 1926. The Richest Man in Babylon, by George Clason started out as a series of pamphlets designed to be given out by banks and insurance salesmen.  If the book has a flaw, it is that in a few places it reads a bit like loan and insurance propaganda.  Those times are, thankfully, few and forgivable.

If you want practical advice on eliminating credit card debt, you could do much worse than to read this slim little collection of parables. The frame of the story is that we, the reader, get an insider’s view of these happenings in ancient Babylon, home of early financial institutions. The simple stories of Arkad (the richest man in Babylon) and his friends show us basic tenets of saving, money management and investing. Because the stories are grounded in family and faith, the book is often used as a core text in christian debt relief classes.

The book was written before credit cards became the scourge they now are, but it still has a  lot to say about buying on credit. In order to reduce erase credit card debt, according to Arkad, you have to work hard toward goals. This is proven out by modern psychology. If you can set a realistic goal, it is easier to work towards it and make sacrifices along the way. One of the later stories involves a grandson who is living a life of luxury thanks to the work his grandfather did. He lives beyond even his ample means and is soon looking for ways to erase debt. His journey, his emotional journey, is one that will sound familiar to us. We often make assumptions about what our parents or grandparents did to have money. The truth, as George Clason shows us, is that they did exactly what we need to do: work hard, save money and invest wisely.