to Spend All of Your Money
And Still Have Some
By David Sanders, C.M.C.* and
Keith Legg, C.M.C.
trick statement you might say? How can you possibly spend
all of your money and still have some if its already spent?
The answer is you spend money carefully or with care toward specific
ends (I know this isnt answering the question fully, so read
on). If you follow some basic rules you will still have some money
left over after you have spent it all. Unfortunately our current society
stresses the opposite to this principle and most people in this country
spend more than they make... Ill bet you know someone like that,
its easy to get caught up in this type of t-r-a-p because
its made very easy for anyone to do. Credit cards arrive in
the mail on a routine basis. You can refinance your home quite readily.
Credit comes just all too easily, but then something happens. This
something might be a disaster like we all recently felt
the effect of. There were stories shortly after Sept.11th of businesses
that were thought strong that were now closing down! Why was that?
Well, for some of the very same reasons that individuals get into
trouble. Poor management of their funds, spending more than they
had, using credit and paying the minimum payments, paying only the
interest, etc. etc. etc.
exists a thing called savings accounts. The problem
with these savings accounts is that the savings somehow disappear!
have found that most people open up a savings account and then start
putting money in it. Then in a few months or a couple of years,
an emergency (or attractive sale) comes along and there
goes the savings. Then one tends to lose ones enthusiasm for
saving and the account doesnt get built up anymore.
have an example from a client of a few years back. Hes was
a professional and was making just above the national average of
others in his same profession. And these guys can make a good amount
of income. Anyway he had practiced for eighteen years, was a great
individual almost anyone would have liked to be his client,
had six kids and a loving wife, some dogs and a few horses. I had
a problem with him though. He was sick and tired of doing what he
had done for eighteen years, wanted to quit and go stick his hands
in dirt be a landscaper! Well this came down to the same
reasons marriages break up. Money! Not enough of it! Spending more
than one makes etc. He had the same problem as most people though
he made more than any average person. But we were able to salvage
him from running off and trying something else, handling the problem
in a way that didnt make sense even to his mother!
has often been said that if your outgo is greater than your income
your upkeep will be your downfall. Some people get paid, cash their
check and the money burns a hole in their pocket. They go and blow
half of it and then have trouble paying the rent and eat beans till
the next payday.
secret is to figure out all the money you have to spend, including
for taxes and fun as well (this includes promotion if you own a
business). Then figure out how to make that much. It may require
looking into a business you can do on the side or finding a way
to get a raise by offering to do more for your present employer
or finding a better job. If you cant figure out how to do
it, find a mentor who can help you. Because the most money you will
ever lose is not the money you waste on unwise purchases, its
the money you could have made but didnt.
the most dangerous (and common) financial move you can make is to
habitually spend more than you make. Do some real financial planning,
keep your income greater than your outgo.
can call it Real Financial Planning but theres
another common term, its called budgeting. There
are books and systems that abound in this area. There are even companies
that do this for you, especially if you are in an industry where
you make a sizable amount of income. We work with a company that
performs business management services for their clients. They handle
all of their clients bills and help with major purchases,
investments etc. But most important they put in place a concept
to spend a percentage of all income off the top into
specialized reserve accounts. They do this even for clients that
make six and seven figure incomes. And herein lies the answer. Its
all there in this last sentence. It all really comes down to this
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