Earn What You Spend

The Your Money column in the NYTimes offers an excellent look at personal finance.  In the most recent article, Ron suggests a new editorial focus in the coming weeks in keeping with the economic times.  And it’s a focus I couldn’t agree with more.  Ron asks: 

Why not, then, turn our attention to the things we can actually control? Starting this week, Your Money is going back to basics for a while, with an emphasis on the parts of our financial lives that banks and brokers do not dictate.

This hits upon the central premise of this blog - and indeed it’s namesake - that there are primarily two variables in achieving financial independence.  Everything else is working in the margins, and while of certain import, all other variables are secondary to these two.  In it’s most basic form, we can write it as such:

Earnings > Spending

As I’ve begun to explore here, what’s in our immediate control in the current economic situation is our spending habits.  And, like in so many things in life, having an accurate picture of where we spend our money enables us to make better decisions.  This information, when we are able to view it through the proper framework, is an incredibly powerful tool. 

Again, Ron is exactly right.  Don’t worry about the budget for now.  Don’t worry about a spreadsheet that is too daunting.  The most important thing is to simply begin this process of self-awareness.