It took me a long time to fully understand this profound truth: Money is not for spending. It is for managing first and then for spending. No one knows better than I do that it takes courage to believe that, but when you do, it will transform the way you think about and then manage your money.
Imagine this: It’s Friday, a day you have come to know and love as Cake Day (just go with me on this). You want cake, you love cake, and doggone it, you deserve to eat cake! You stop at the store and pick up the required ingredients to bake your favorite cake.
The most bizarre thing happens on the way home. You can’t wait. You begin eating the ingredients because you are so hungry for cake and simply cannot help yourself. You gulp a couple of eggs, chew up some butter and sugar, then down a load of flour and cocoa.
You pull into the driveway completely disgusted with yourself. You try to hide the evidence but it’s all over your face. But the worst part: Eating the cake was not nearly as satisfying as you'd dreamed. It was, in fact, anything but enjoyable. Now you feel ashamed and embarrassed. You conclude there’s nothing you can do until next Cake Day but suffer and beat yourself up for having been so incredibly foolish. And hope that no one finds out.
An absurd analogy, for sure, but it does illustrate the foolishness of eating food that has not yet been prepared. The very same ingredients that made you sick could have become a culinary masterpiece had you incorporated them into a recipe. Those cake ingredients were not for eating. They were for preparing first—also known as “managing”—and then for eating.
It is equally foolish and unsatisfying to spend money that has not first been managed. To manage money simply means to take full possession of it, subject it to a specific plan, then direct it accordingly. It is a matter of creating a season of ownership between receiving and dispersing.
Managing money is a learned discipline—a conscious effort that produces gratification.
When money flows into your life, you are responsible for what it does, where it goes and how it performs. You are the boss. You can watch it drift away and out of your control, or you can manage it according to a formula, a plan—a specific “recipe” that you have developed and is a part of who you are.
It doesn’t matter if you are a single parent struggling to survive with no outside help, or the CEO of a prosperous business—you need to know ahead of time exactly how you will manage every dime that flows into your life.
There are certain mandatory elements that must be part of your management system, elements like giving and saving. When you bring sanity and reason to the management of your income, feelings of dissatisfaction, worry, and hopelessness will quiet down. You will be driven to find and then plug the money leaks in your life.
A commitment to spending no more than you earn will become so important you'll find yourself keeping track of where the money goes. Don’t be surprised if you begin to reduce, reuse—even (gasp) recycle as a way of living within the plan you have developed.
No matter your situation—single, married, old, young—whether you’re deeply in debt, unemployed or at the top of your career, you need a system through which to process every dime that enters your life. Only then will you fully understand why money is not for spending. It is for managing first, then for spending.
