Chaurcey Boyd Enterprises LLC (CBE LLC)

Financial Literacy Info

CBE LLC provides a variety of products and services aimed at enhancing success in the area of financial literacy as it relates quality socio-economic life.


Managing finances is important to quality of life. There are five basic principles that one should apply to financial management. Two of these I recommend dividing into levels.

  • Earn
  • Spend Level 1
  • Save
  • Invest Level 1
  • Protect
  • Spend Level 2
  • Invest Level 2
  • Invest Level 3
  • Spend Level 3
  • Borrow

Generally, one should try to apply these principles in sequence. Earn should be first and borrow should be a last resort.

Consider a new high school graduate. Ideally, he/she has not borrowed and therefore has no debt.

He/she starts a job earning money and spends only on absolute necessities, e.g., food, clothing, housing, public/family/friend transportation, and health insurance. If the government requires health insurance and it is not provided by one's employer then it is a necessity.

Save about 20% of what is left after deducting the above absolute essentials from your take home pay. Take home pay is after tax deductions. Here he/she puts aside something for emergencies, home purchasing, retirement or other later needs.

If public transportation is inadequate or undesirable invest in a car/truck as a short-term asset. He/she uses earnings to pay for the car. Here I define a difference between a loan and investment. A loan is when you borrow money to pay to someone else. An investment is when you use your earning to pay for something. Remember that the purpose of transportation is to reliably get you from point A to point B and looks should not be priority; that is, don't buy what you can't afford.

Next he purchases life insurance protection at least sufficient to cover funeral expenses so he/she does not burden family in case of early death. More coverage can be added later before one ages and before health issues arise since life insurance is cheaper for younger and healthier persons. In fact, it is best that parents purchase life insurance on children and children take up payment when they get grown making sure the beneficiary is changed if parents pass on. Protection is placed at the particular point since it is more likely than not that most young people will not die early but yet it should not be delayed beyond that particular point. At this point he/she also purchases health insurance as he/she ages due to likely increased need for health care if not already required by the government.

He/she then moves to level 2 spending to purchase things that are less necessary than level 1 but desirable to have reasonable fun and enjoy life but which will not prevent one from applying the next principles in sequence in a reasonable time frame.

Next at some point he/she invests in a home as a long term assets. Here he/she uses savings as a down payment and earning to purchase the home. See earlier definition of difference between an investment and a loan. If possible, make as large a down payment as possible. Make sure there is no early pay off penalty to avoid paying three times the selling price of the home which is the usual home purchase industry fix (scheme). The financing institution such as banks end up with the overage money. A house certainly does not appreciate in value that much that fast. Nevertheless buying is better than renting as you build equity in buying and have a better overall quality of life, stability, and net worth owning rather than renting someone else's property

Next at some point he/she invests in a retirement plan even in addition to one that may be available on the job which is usually insufficient.

Next comes the last resort. Borrow for what you can't do without and pay it back as soon as possible or it will eat your quality of life up. Pay on time else it will affect your ability to borrow at a good interest rate through a bad credit score. The credit system is fixed to draw you into borrowing so they don't give you a good score if you have no credit history. But don't be trapped by that fixed system. You will get a ton of credit card offers as it is designed to make money off you at high interest rates. Be wiser than them. Have one personal credit card and pay it off each month or at least pay more than the amount due so you don't end up paying around three time what you borrowed. If you have a credit card or department store card use it every once and awhile or they might cancel it.

The truth is sometimes one is not able to apply the above principle in sequence due to a lack of sufficient earnings to cover one's needs. When not able to, one should work to get oneself back in position to be able to apply in sequence. The longer one stays out of that position the most likely one's quality of life will become increasingly impaired.

Finally, each person ought to devise a model that works for their life at various points in their lives applying the principles set forth in the above model unless one has better principles that works for him/her. For example, one may not be able to depend on public/family/friend transportation due to nonavailability or being too burdensome. In this case, saving may have to come after purchase of personal car/truck, etc.

Of course, the more money one earns the greater the flexibility to acquire and satisfy needs/desires earlier. Thus, young and middle age persons should always be looking to make moves to increase their earnings if their current employment do not offer them sufficient increases in earnings. Employers understand but if not move any way. But don't move until you know you have another solid job locked in. Never be afraid to change employers even relocate geographically. You can always move back home later in life if desired! Of course if one is self-employed as a business owner then appropriate adjustments would be made to the model as one is one's own employer.

Having a quality life for self and one's spouse and children should be priority. As the scriptures says if one does not take care of those in one's household or otherwise having primary responsibility then that person is worse than an infidel (nonbeliever) and has denied the faith.