A couple of weeks ago, I talked about the four parts you really need to have in place to get control of your finances. Those parts were:

Knowing your numbers-This means that you’ve got your finger on the pulse of where your money’s at. You know how much you make as a household, you know the numbers on your debt, but you also know the numbers of how much you’ve got saved. 

Deciding-Making a conscious decision about the priorities for your life. It’s unlikely that you’ll have the money to pay for everything in the world, so what are you going to decide is important enough that you prioritize it in your life?

Creating Margin for Today-This means that you’re on a plan. Margin is the money that’s left over after all of our expenses have been paid for. It’s the amount I believe we need to be focusing a lot more of our attention on. Keeping this financial equation in mind:

income-expenses=margin

Margin is the money that you’re able to pay down debt with. It’s the money that you use to reach your goals faster. It’s the money that you have left over at the end of the month so that you’ve got some money to enjoy.

And this is what I mean by creating margin for today. It’s making sure that you’re giving yourself that breathing room today for your money.

Saving Margin for Tomorrow-This is where you save enough money from today so that you create a bright future for tomorrow. You do that by investing your paycheck into smart retirement accounts. By saving now, you’ll make sure that when you do get to retirement, it will be a joyful time. 

This is also where you make your plan to become totally debt free. You want to decide that you aren’t going to add any more debt and make a plan for eventually getting rid of all the debt that you have now.

But what does it look like if you are missing a piece?

All 4 pieces will need to work together if you’re going to be successful with your finances. That’s why it’s really important to make sure that you have each piece in place.

So what does it look like if you’re missing any of these 4 pieces?

Missing Knowing Your Numbers-When you don’t know your numbers, your finances can actually be a really scary place. 

This may be where you’re at if you’re a little too afraid to check out how much the total on those student loans racked up to be. This may be the place you get to if you aren’t sure how high those credit card balances have gotten.

But it could also be where you’re at if you’re not sure how the numbers work out for your retirement. 

My grandad is really knowledgeable about the stock market and investing. It’s why I first took an interest in investing and learning how all of that works. 

But it always scared my grandmother. She didn’t understand it. When my grandad would invest, it made her really fearful. She was afraid that they’d lose all of their money. 

But what she didn’t know what that their retirement was already secured and that my grandad really knew what he was doing.

Knowing your numbers is going to be really important for you. And f you’re the nerd and you’ve got all the money figured out, encourage your spouse to learn enough to know that there’s a plan.

Missing Deciding-If you know your numbers, you’re creating margin for today and saving for the future, but are missing deciding, you’ve completely taken out any joy that can come from your money. This means that you haven’t really set your priorities for what you want your money to do. You’re just saving and saving, with no real reasoning in sight.

Money is a tool. A tool that can enhance our lives when used the right way. Deciding means you’re setting the priorities for your life. And if you’re in great shape, you’re out of debt and saving for the future, it’s time that you learned how to spend money.

Sometimes learning to spend can be a challenge for people. But if you’ve got the money, don’t be afraid to use it on something that brings you joy. 

It’s not a waste when it’s spent on something that really enhances your life, or creates an experience that you’ll be looking back on and telling friends about for the rest of your life. 

That’s money well spent.

And it would be a shame if you learned how to accumulate all this wealth, but never learned how to live a little.

Missing Creating Margin for Today-If you’re missing creating, you may know your numbers and you may have decided what’s most important to you, but now is where the real work begins. 

To create that margin, you need to plan for it. The best way to do this is to come up with a budget that will guide your dollars to what they need to do each month for you.

Don’t be afraid to budget. 

It’s going to help you get where you need to go.

And getting our money where we want it to go so that we’re living out our priorities is the ultimate goal. 

When you aren’t making a plan, you aren’t making the type of headway you could be making. 

When you aren’t ensuring that you’re living on less than what you make today, there’s likely stress in your life and you’re backed up against the financial edge. Statistically, you’re probably having more arguments with your spouse over money and it’s a strain on your marriage. 

Missing Saving-When you’re missing Saving, you’re not saving and planning your margin for the future.

You may be living it up today, but by not making a long term financial plan for your money.

Saving and spending for today is a balancing act. You need to make sure that you are setting aside money to enjoy today, but there needs to be a longer plan in mind for the day that you do retire.

And the earlier you start, the easier it is to really amass a great nest egg for retirement. 

If you’re not saving, you run the risk of not having the retirement you’d hoped for because you never really planned for it. 

It’s important to have all 4 pieces in place. 

It’s a balancing act.  Missing any one knocks you off balance. 

So my question for you this week is this. Do you feel like you’re missing something in Knowing, Deciding, Creating, or Saving?

What would you need to know to be able to have everything working together the way you’d like?

Let me know. I’d love to hear your thoughts.

Jared