The Practice of Financial Health
“You must gain control over your money or the lack of it will forever control you.” – Dave Ramsey
Do you have a book or a movie you come back to on a regular basis? By “regular,” I mean maybe once or twice a year. The content is so good, you can’t let years go by without revisiting it. I hope some of these topics that I share offer you something similar: timeless financial wisdom so that you and your family are put into a position to thrive.
But what is “thriving” for you? Only you can answer that. Do you like to travel? Drive fancy cars? Pursue education? Go see shows? Sporting events? Perhaps thriving for you is more laid-back: creating space for yourself to rest, read and relax after the daily grind.
Here’s a piece of advice sure to help you thrive regardless of your income: live below your means.
Practiced to Save
In short, living above your means is spending more than you earn. It’s obviously not rational — but why do so many of us do it? Spending money on that vacation, car or special thing (what you think is thriving) is actually driving you into financial despair — no matter how good it feels in the moment.
All of those fun and worthwhile pursuits can truly be great things, and are made much more beneficial when you save up the money to actually pay for them. This kind of delayed gratification is not what a culture bent on the “quick fix” wants to hear, but you will be better for it in the long run.
One of the best ways to save money and live below your means is to store away top-line cash with each paycheck you receive. That way, a chunk of money is outside the realm of temptation to spend each week.
“One day at a time” is the name of the living-below-your-means game. And to win at that game, creating (and actually adhering to) an effective budget is the playbook you have to follow.
Practiced to Invest
Some people hear the term “diversify your assets” and immediately check out of the conversation. That’s a shame, because a definition of terms can go a long way here.
Assets are what happen when you make your money work for you — not the other way around. If opening a brokerage account, or navigating the stock market in general, has ever seemed foreign to you, that’s okay. But the sooner you learn about smart ways to invest, the greater return you will see in 5-10 years … a time frame that will lapse quicker than you think.
Living below your means also pertains to purchasing a home. What would it look like to spend money on a “less-than-ideal” home, not worry about an excessive mortgage, and fix the home up to create greater value over time?
Living below your means is the first step toward using additional funds to invest. That’s where wealth is created.
Practiced to Give
Now I have a little exercise for you (bear with me here): clench your fist and hold it out in front of you. Is that how you hold on to your money? Again, a question only you can answer.
When you live below your means, you then make it possible to give money to charity or to those truly in need. This is where we examine a different kind of posture — unclenching our fists — so that we experience a different kind of wealth. A wealth that leads to legacy.
How do you want to be remembered in life? Not to get too morbid, but the money you have the day before you die will need to go somewhere the day after you die. Fact.
Part of your legacy is built on generational, financial impact. You can begin saving for impact today. All it takes is a little planning, patience, and preparation.
That’s a story worth revisiting year after year.
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