The Hope of More Money
Assuming I’m normal and that you’re normal, I suspect that you (as I once did) assume that the best solution to money problems is more money. That is, if you find yourself struggling to make ends meet, then earning an extra thousand dollars would make all the difference in the world. Sometimes what can help us get through the day is the hope that a life of ease and pleasure is only one lottery ticket, rich uncle or lawsuit victory away.

A Parade Of Poor Decisions
I spent a year and a half as a consumer credit counselor, and during that time I discovered something that I had never fully appreciated before: your financial health isn’t even remotely related to your income! I met with over 1,000 families, but learned after only three days on the job that there is no “type” of person who has insurmountable credit card debt, especially not in terms of income. Some earned less than I did and were doing quite well — their biggest problem was trying to figure out how to tighten their budget to put even more savings aside. Such clients, at any income level, were rare indeed.

I also met several people that earned many multiples of my own income — one client’s annual “bonus” was actually more than my annual salary! But all of that money didn’t solve his money problems. It’s a logical impossibility — financial health is built by wise spending, not by extraordinary income.

Working The Other Half Of The Equation
Unfortunately, people get so hung up on the income side of the equation that they begin to feel helpless and hopeless. After all, how much influence do most people really have over their income over the coming week?

But you have far more control over your financial health than you might think.

Financial health is really just a matter of continuing to build savings over time. If you have more money in savings at the end of the month than you had at the beginning of the month, you just got richer. It really is that simple. You just have to look at the other half of the equation.

When you focus on increasing your income, your control over your financial health begins sometime in the future. Your have to wait until you get that raise, get a new job or become famous. But when you focus on your spending, you have immediate control over your financial health beginning today.

Watch Your Spending To See More Savings
The best way to reduce your spending is to start tracking it. When people actually sit down and see how much they are spending, they are horrified. I once bought a couple bottles of pop every day on my way to work. But when I eventually sat down to analyze my spending and saw that I was spending over $40 a month on pop, I don’t need to tell you that I began to improve my financial health right then and there.

When you analyze your spending with the understanding that every dollar you don’t spend is making you richer, you naturally begin to make wise financial decisions. So, are you going to end this month richer or poorer?