Personal Finance Is More About What You Keep and Spend Than What You Make

Money is the tool that is being used in your personal finances. It can be used to build assets or create liabilities. When you have an asset, you are adding to your net worth. This can include a profitable business, growth funds, money market, etc. When you have a liability, you are taking away from your net worth. This can include credit debt, a car with car payments, a rental unit that is losing money, etc. We have to learn how to see the difference between an asset and a liability.

Now, when we become more financially wise, we will understand that we have to control our spending (thus keeping more of our income) in order to win the battle of personal finances. Eventually, we will win the war that will allow us to have total control of our money and time.

A great quote from Charles Dickens discusses in details about your personal finances:

Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.

We need to control our spending. It seems so trivial that it is overlooked. When we know how to master a few cents, we have the foundation to master handling a few dollars more. Handling money is a real-life game of Monopoly. It is not about accumulating but handling the money we have in an efficient and empowering way. It is about spending wisely by hardly spending. It is about learning and mastering money skills with a little money that will become more money later.