How to Spend All of Your Money
And Still Have Some


By David Sanders, C.M.C.* and Keith Legg, C.M.C.
*CMC: Certified Management Consultant

A “trick statement” you might say? How can you possibly spend all of your money and still have some if it’s already spent? The answer is you spend money carefully or with care toward specific ends (I know this isn’t 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... I’ll bet you know someone like that, right?

Well it’s easy to get caught up in this type of t-r-a-p because it’s 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.

There exists a thing called “savings” accounts. The problem with these savings accounts is that the savings somehow disappear!

We 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 one’s enthusiasm for saving and the account doesn’t get built up anymore.

We have an example from a client of a few years back. He’s 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 didn’t make sense — even to his mother! (Read on!)

It 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.

The 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 can’t 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, it’s the money you could have made but didn’t.

And 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.

You can call it “Real Financial Planning” but there’s another common term, it’s 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. It’s all there in this last sentence. It all really comes down to this simplicity.

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