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“One man pretends to be rich, yet has nothing.”  Proverbs 13:7

Financial margin is the gap between what you earn (your net or take-home pay) and what you spend in a month. Most people live with no margin, better known as “paycheck to paycheck”.  In other words, they spend as much as they earn, and in some cases, they spend more than they earn with the use of credit cards. Data says that 61% of people in the U.S. don’t have the financial means to address a $1000 emergency. They have no margin.  Financially successful people live with margin each month.  I learned how I could do the same.  Here’s how.

#1. Create a spending plan or a budget – I was not using a budget and I didn’t know where much of my income was going. At the end of the month the money was gone but I didn’t know specifically where.  You must know where your money is going. A budget helps you to do that. It also helps you set guardrails and boundaries. Many people get into financial trouble because they stray and lose control. There are many tools and apps that can help you track your spending. Find one that works for you and use it but track every penny. Yes, those $4 Starbucks do add up.

#2. Control/reduce spending as necessary – After creating a budget, I immediately realized I was spending much more than I thought for gasoline. I was able to reduce my fuel expense by consolidating trips. My budget also helped me reduce my dry-cleaning expense by showing me what it was costing me each month.  You must know where your money is going so you can make appropriate reductions when necessary. So this means setting a spending limit and prioritizing what you will and won’t spend. Look at how much money you spend shopping, eating out, housing (can you live someplace less expensive), and transportation (carpool anyone?).

#3. Use your newfound Margin for saving and giving – Saving and giving are the seeds that eventually produce financial success. I began saving and giving a percentage of my income.  I started this many years ago and I continue to this day. It’s highly unlikely that you will ever become financially successful with saving and giving. (Is this really part of surplus?)

Creating margin is a behavior you adopt, based on shifting your values. This has to be important to you. You have to desire it more than your current lifestyle, because you want the reward that it offers. And your journey to financial success begins with creating financial margin.

Dear Father, bless eveyone who reads this blog.  Give them wisdom to know what to do, and the courage to do it, in Jesus name amen!