Welcome to a new series on the wildly popular JosephSangl.com! In this series, I will be sharing what I believe are Fundamental Rules Of Money Management. I look forward to reading your thoughts on this topic!
Rule #4 You must have margin.
I have lived with no money in the savings account. When I was in that situation, I was very aware that it was not the best situation. It was clear that $0 in savings left little room for financial emergencies to occur, but I was unaware of the full implications of zero saving until I finally had a healthy savings account.
A healthy savings account provids margin. It allows you to think beyond today and tomorrow. Margin allows you to consider a business decision, career path, or even moving without seizing up due to making this statement to yourself, “That will cost money. Money that I do not have.” Financial margin allows you to absorb unexpected financial events (like refrigerator, hot water heater, or car failure) – without incurring new debt.
Margin also allows you to take advantage of unexpected financial bargains.
To me, financial margin equals to less stress, peace, a calm wife, and freedom.