Not More Money, More Margin
October 21, 2002
The leading cause of stress in a person’s life is money. And even the number one reported problem in marriages is based on money. Everybody seems to need a little bit more. Not a lot more, but definitely more. Perhaps you’ve thought or spoken some of these statements: “If I could just get that raise, then I’ll be all set …” “Just a few extra dollars each month and we’d be just fine …” “I’m not looking to be rich; I just need a little bit more to be comfortable …” Statements like these will cheat a person out of enjoying what they have. The problem is not how much money you take in; the problem is how much goes out.
Statistically, 80 percent of people state that they “need” to make a little more money. A person making $20,000 a year will say, “If I could only make $6,000 more, then my problems will be solved.” While it’s true that a person making 20k could probably use more money, the person making $30,000 $40,000 or $50,000 a year all seem to have the same request. Why? Because as a person’s income increases, so does their lifestyle. More money, more expenses. The problem isn’t the money—the problem is the margin.
Margin is that white space on the edge of a piece of paper. Margin is a few extra minutes in your busy schedule. And margin is the extra dollars in your budget. We need margin in every area of our lives. In fact, the amount of margin we have inversely determines the level of stress in our life. Think about it next time you leave your house at 12:20 p.m. for an appointment at 12:30 p.m. Everything should be fine. The drive is eight minutes long. You just finished your last project at 12:19 p.m., grabbed your stuff and hopped in the car. No problem. This is a normal routine for most of us. Well, what happens when there is construction or an accident on your intended route? Your margin begins to decrease from three minutes to two minutes, until you don’t have any margin left. As your margin of time gets smaller and smaller, your stress level will get higher and higher. If you had 10 minutes of margin there would be no stress, no problem. Margin makes the difference.
Imagine reading a book without any margin. The words go from the left edge and stretch all the way across to the right edge. From left to right, top to bottom—no margin. Without margin reading would be uncomfortable, undesirable and probably unmanageable. The same is true with our finances. We need margin. The big lie is that most people think the way to get margin is to get more money. That is simply not true. More money will not create more margin. The reason is that as more money comes in, more money will go out. For most people, the desire to move to the next level in lifestyle overpowers the desire to have financial margin.
The way to increase margin is to decrease the amount of money leaving your checking account. Margin can only be created by good management of your finances. Discovering if you have margin is simple: take the amount of money you take in and subtract what you spend. The leftover is your margin. With credit card and other debts, many people function with a “negative” margin, which is very stressful and difficult. Often recommended is the 10-10-80 plan. That is, give 10 percent to the church, save 10 percent for later use, and live on the remaining 80 percent. This creates a sense of control over one’s finances.Generating more margin is to scrupulously focus on the 80 percent. What corners can be cut to save more and spend less? Am I being the best possible steward of my resources? What long range spending cuts can I make to increase my financial margin? The goal is to eventually gain a healthy margin in your finances.
It’s like diet and exercise. There is no easy fix, no overnight cure. True, lasting results take discipline and happen over a long period of time. The most important phrase to remember goes something like this, “I don’t need more money. I need to become a better steward of my money.” Repeat that a few hundred times, write it on your bathroom mirror. Say it until you believe it. More money is not the answer. The answer is shrewdly managing what you have.
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