Wealth Skills

I don’t have enough money

Posted on 12 November 2009

We mostly think we need more money to have what we want in life. Frequently, we focus our efforts, energy and thinking on making more money, having more income. While doing that is valid, something else is required to have what you want in life sustainably throughout your life.
In reality, over a period of 5 or 10 years, most of us made progressively more money (individually or as a household) and we still don’t have what we want to have in life. If you find this statement reflective of your situation, you are missing the key component of success for having what you want in life, sustainably over time. So what’s missing?
The foundation for having what you want in life is managing what you have today (the income you currently earn) in a way that allows you to have what you want.
When you manage what you have in a way that allows you to have what you want today and in the future, the formula is:

• Have at least 3-6 months of your total expenses in cash to manage through unanticipated events such as job loss, unexpected medical expense or a major repair. I call it a “safety net.”
• Save for retirement (long term future needs) and the anticipated or planned future expenses (a purchase of new car, vacations, etc).
• Manage your on-going living expenses so they total less than your current income minus savings (for retirement, planned future expenses and the safety net, if the “safety net” is not yet fully funded)
• Choose how to spend money based on what provides the greatest value in your life.

When you manage what you earn today in that way, you will have a solid financial foundation for having what you want in life on an on-going basis.
Focusing only on making more money does not lead to having what you want in life. If you earned various levels of income and you do not experience having what you want your own life is the best proof of it. If right now you are thinking “But when I make the really big money then I’ll have what I want,” you are hanging onto the illusions that money is the determining factor in having what you want in life.
When you manage what you earn today in a way that allows you to have what you want today and in the future making more money will expand your life, in all aspects of it. It is simple. Try the above formula and see what happens over time.