Life is all about maintaining a healthy balance. We need to eat, exercise, work, rest, and play. Since money is an important aspect in our life, in order to be successful in managing it we need to employ the skill of balance to this aspect as well.
Financial balance means being conscious of how we invest our money on a daily basis. If you put all your focus on only one area of your monetary existence you will quickly put your life off kilter.
Too many people put all their mental energies onto debt. Either racking it up or fretting about how to pay it off. Others concentrate of sacrificing for a “rainy day” or retirement or their children’s education funds. Neither of these drastic approaches work.
Successful and happy people have found a way to bridge both the desire for financial security and fun. Three vital components are included in their budgets: Financial Freedom, Debt Reduction, and Play. If you are fortunate and are without debt then fabulous, you can focus on the other two.
Financial Freedom is money that you put aside and DO NOT TOUCH. These are your money seeds that grow and grow and grow. These are your long term investments. These funds can start small, very small, and grow through compound interest and your growing knowledge. Where we put our attention, our efforts, and our money expands.
Debt Reduction is another form of investing. By eliminating credit card, vehicle debt, lines of credit, loans, and mortgages we free ourselves and our wallets for bigger and better things. By putting together a reasonable and executable plan to reduce and eliminate our debt we free our minds to learn about creating more money in our lives.
Play money is what allows us to stick with our financial plans. We cannot be serious, responsible, and hard working all the time. Without the ability to relax, laugh, and just enjoy life and money what is the point of life? By putting a portion of all our income aside for purely fun and enjoyable things we are motivated to stick with our budgets. This money is a reward for doing the right things in handling our money. I highly recommend that you spend this money monthly. Small, regular rewards have been proven to be much more effective than one big reward in some far off, distant future. You can still have the big rewards (like a tropical vacation), but it shouldn’t be the only reward.
By taking a balanced approach to money management you get to eat your cake and have it too.
“You have a divine right to abundance, and if you are anything less than a millionaire, you haven’t had your fair share.”