What is cash flow? It is simply the amount of money flowing in and out every month, as you may have read here before. There is the income side, and then there is the spending side of the cash flow calculation.
Focusing on reducing expenses can be almost as fun (although not as powerful) as generating more income, particularly since it usually just involves a mindset shift, and not necessarily more work. I definitely promote conscious and wise spending, and I prefer this attitude over cheap and frugal. During those leaner times in my life, I have found several mindset shifts helpful, which I will write about over the next few weeks since many of them involve gratitude, and we celebrate Thanksgiving in the U.S. this month.
Look How Far You’ve Come…Think about how much money you made earlier in your life when you earned less, and compare that to your current income. I still remember that I modelled and sold shoes for less than three dollars an hour in my early teens; I believe it was $2.45 an hour! Granted, I wasn’t supporting myself then.
In my first job after college, I made $13,060 a year. Of course, I didn’t stay a year because, after three months, I found a much better position making the larger salary of $16,030 with better benefits, including a stock plan. Even though inflation has to be factored into that number to make it relative to today’s dollars, I am now far ahead of that number, thankfully. However, I know that I managed to live just fine on the previous salaries; this thought empowers me; I even saved enough money in my employer matched retirement account to buy my first home at age 25!
I managed to live well on a tiny budget in college, as well, and I was quite happy. Looking back at times when you had less money or income than you have now can be empowering. I think it helps you realize that it really isn’t all about the money, and focus on all you do have.
Money is powerfully important, of course, but living a purpose driven life filled with things we love, including relationships, activities, and yes, things, provide a real rich life.
Today, spend a few minutes with your wealth journal writing about a time when you had less money than you have now, and the things that you enjoyed during that time of your life.