You can explore previously closed possibilities. When your debts are gone and you\u2019re spending far less than you\u2019re bringing in, you have the financial freedom to chase your dreams.<\/li>\n<\/ul>\nPlan a Financial Margin<\/h3>\n
Have you noticed that life doesn\u2019t always go as planned financially? That\u2019s why you need a financial margin.<\/p>\n
In his book \u201cMargin: Restoring Emotional, Physical, Financial, and Time Reserves to Overloaded Lives,\u201d Dr. Richard Swenson describes margin like this:<\/p>\n
\u201cMargin is the space between our load and our limits. It is the amount allowed beyond that which is needed. It is something held in reserve for contingencies or unanticipated situations. Margin is the gap between rest and exhaustion, the space between breathing freely and suffocating.<\/em><\/p>\n\u201cMargin is the opposite of overload. If we are overloaded, we have no margin. Options are as attractive as they are numerous, and we [overcommit financially].<\/em><\/p>\n\u201cIf we were equipped with a flashing light to indicate \u2018100% full,\u2019 we could better gauge our capacities. But we don\u2019t have such an indicator light, and we don\u2019t know when we have overextended until we feel the pain. As a result, many people commit to a 120% life and wonder why the burden feels so heavy.\u201d<\/em><\/p>\nOur need for margin applies to our schedules and finances. If your living expenses are running beyond your income limit, you have no financial margin. When the car breaks down or your income declines, you have no reserve or margin to pick up the slack.<\/p>\n
Give Generously<\/h3>\n
You might be thinking, \u201cWhat? Giving money away is a key to personal financial success?\u00a0 That\u2019s crazy!\u201d Well, it\u2019s counterintuitive, but hear us out.<\/p>\n
\n- Giving breaks the power of spending and accumulation.<\/li>\n
- Giving gets the focus off yourself and enables you to see the needs of others.<\/li>\n
- Giving forces you to admit that you already have more than enough.<\/li>\n
- Giving helps you realize that you can find joy in meeting the needs of others.<\/li>\n
- Giving helps you see the difference between your needs and wants.<\/li>\n
- Giving is self-denial. Through self-denial, you realize that your life can be fulfilled without more stuff.<\/li>\n<\/ul>\n
We encourage you to give giving a try. If you are not giving in some way to help others, start with $100 a month. If you are already giving money away, increase the amount by 5% or 10% this year. You can grow into being a generous giver.<\/p>\n
Over Bob\u2019s 30 years of working in financial life planning, he has yet to meet a generous person who didn\u2019t have great financial peace of mind and contentment.<\/p>\n
Create a Partnership<\/h3>\n
If you are married or in a committed relationship, you and your significant other need to be aligned financially. In most cases, one is the saver and one the spender, so agreeing on financial goals might be hard but is necessary. When the two of you commit to working toward a desired financial future, both help carry the load. The joy experienced when the goal is achieved is greater when it\u2019s shared.<\/p>\n
Start by talking about these broad, long-term goals:<\/p>\n
\n- Financial independence (retirement).<\/li>\n
- Debt reduction and elimination.<\/li>\n
- Family needs.<\/li>\n
- Major purchases over the next five years.<\/li>\n
- More charitable giving.<\/li>\n<\/ul>\n
The six principles above work if applied consistently and diligently over time. Consider engaging a certified financial planner (preferably someone operating as a fiduciary instead of a salesperson) to assist in your financial journey. Outside perspective and expertise could be invaluable.<\/p>\n
You\u2019re unlikely to be an overnight financial success, but that doesn\u2019t mean you can\u2019t achieve financial peace of mind over time and enjoy the journey.<\/p>\n
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