Most Americans have money but no margin. We live on the financial edge with the stress of making it through the year or month or week without a crisis.
Note the result of living without financial margin so clearly articulated by Charles Dickens in David Copperfield:
“Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six [pence], result misery.”
Dickens’ point is that we must learn to live on less than we earn, even if it’s just a little less, or the future will hold more than a little grief.
Without margin, finances become a mess and sorting them out is like organizing a bowl of spaghetti into a symmetrical grid…a very frustrating endeavor. Many times, the most difficult step is deciding where to begin.
The answer is to establish “financial margin.” This is simply the gap between what you earn and what you spend. The bigger the gap or the more financial margin, the less financial stress.
Dr. Richard Swenson, a brilliant medical doctor recognized that living without margin is an underlying cause of stress in our busy lives.
“Overload is not having time to finish the book you are reading on stress. Margin is having time to read it twice. Overload is fatigue. Margin is energy. Overload is red ink. Margin is black ink. Overload is hurry. Margin is calm. Overload is anxiety. Margin is security. Overload is the disease of our time. Margin is the cure. Margin is the space that once existed between ourselves and our limits. It is something held in reserve for contingencies or unanticipated situations.”
In his best-selling book, Margin, Swenson provides a prescription against overloading our lives. We must create margin in four key areas: emotional energy, physical energy, time, and finances. As a result, we will experience contentment, simplicity, balance, and rest.
I hope you have already set specific goals for the New Year, but here is another simple resolution for your finances that is guaranteed to create contentment and balance for you.
Simply resolve to spend less than you earn.
If you will put this one resolution into practice, you can get out of any financial mess. Here are the steps to do it:
- Keep daily, weekly and monthly records and track all of your expenses so that you know where the money is going.
- Compare your spending against your income and look for ways to spend less.
- Establish the 80/10/10 plan. Give God the first 10 percent , save the next 10 percent and spend only the remaining 80 percent on your lifestyle expenses.
If you yearn for relief from the pain and pressure of financial overload, take the first step: resolve to spend less than you earn, financial margin will soon follow.