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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. However,  financially successful people live with a margin each month. I made the decision to do the same, and here’s how I did it:

#1. Create a spending plan or a budget -For many years, I didn’t keep track of my spending and had no idea where much of my money was going. The money had vanished by the end of the month, but I had no idea where it had gone. You must be aware of where your money is being spent. This is something that a budget can assist you with. It also aids in the establishment of guardrails and boundaries. Many people run into financial difficulties as a result of straying and losing control. There are numerous tools and apps available to assist you in keeping track of your expenditures. Use the one that works best for you.

#2. Control/reduce spending as necessary –  After setting a budget, I quickly noticed that I was spending far more on gasoline than I had anticipated. By combining trips, I was able to save money on gas. My budget also assisted me in lowering my dry-cleaning costs by showing me how much it cost me each month. You must understand where your money is going so that you may make the required cuts. This entails deciding on a budget and prioritizing what you will and will not spend. Keep track of how much you spend on things like shopping, eating out, housing (could you live somewhere cheaper? ), and transportation (carpool anyone?).

#3. Use your newfound margin for saving and giving – Saving and giving are the seeds that lead to financial prosperity in the long run. I started putting money aside and giving a portion of my earnings to charity. This is something I started many years ago and continue to do now. It’s unlikely that you’ll ever be financially successful unless you save and give.

By altering your values, you can develop the habit of creating margin. You must value having a financial cushion. You must desire a financial margin more than your current lifestyle in order to reap the benefits it provides. Financial margin is the first step toward financial independence and prosperity.