The Art Of Financial Balance

Financial Balance Lets You Enjoy Tomorrow and Today


This article is the 11th of a 14-part series that explores the core tenets of Get Rich Slowly. It originally appeared at Soul Shelter in a slightly different form.



For more than a decade, I was buried in debt. My relationship with money was a one sided love affair because I had zero respect for money. I earned a decent income, better than most and somehow I still couldn’t seem to get ahead. I lived paycheck-to-paycheck on a salary that anyone could thrive on.

I’d frequently find myself standing in a store, holding a stack of audio books, or maybe several magazines. Inside, I’d be arguing with myself, almost as if there were an angel on one shoulder and a devil on the other. Most of the time, the devil won. I’d buy the stack of CDs or the magazines by making reasons that they were necessities instead of luxuries and I would more often than not be broke waiting for the next paychect. I was a compulsive spender.

Eventually, two friends helped me to realize the path I was on. I began to read personal finance books, I started with Think And Grow Rich, I converted to the “lifestyle” of frugality. I learned to pinch pennies.

This newfound thrift was exactly what I needed. It helped me to get out of debt and to begin building wealth. I even opened my first “real” savings account, I have now built a sizable emergency fund. Best of all, I’m maxing out my retirement savings every year.

Going to extremes

Something happened along the way. As I converted from spendthrift, thrift, my relationship with money changed, it didn’t improve. I went from a woman who spent too much to a woman who spent too little.

Again, it took outside intervention for me to realize I had a problem. A few years ago, I complained about the cost of movies. I complained about the cost of groceries, etc. I even complained about the cost of hot chocolate. “You’re not being frugal,” a close friend told me. “You’re being cheap.”

That was a wake-up call. I realized that I was still struggling to develop a healthy relationship with money. I hadn’t achieved balance.

And balance is what’s required. I believe that thrift is a virtue, and I refuse to abandon it, thrift can also be a vice if taken to an extreme. It’s not wrong to spend money on yourself, when you can afford it. Money will work for you to serve the greater good when you decide to quit being a slave to it, money should be used to bring us joy, when possible.

The balanced money formula

One tool that I’ve embraced for the past few years is the balanced money formula introduced by Elizabeth Warren and Amelia Tyagi in their excellent book, All Your Worth: The Ultimate Lifetime Money Plan.

Here’s what it looks like:

As you can see, when your financial life is in balance, you’re allocating enough for savings and needs; you’re also setting some aside for the things you want. This idea is simple, but it was a revelation to me. No more spending too much on wants and no more pinching pennies, either.

Update: Oops. My original draft of this article featured a more-detailed explanation of the formula, but I edited it out because I thought we’d covered this plenty in the past. Quick review: The Balanced Money Formula uses after-tax income.

Though my fancy-pants graphic doesn’t reflect it, the percentages are more properly stated as “no more than 50% on Needs” (meaning that your needs are not expected to increase with income), “up to 30% on Wants” (again, these don’t have to increase with income), and “at least 20% on Savings (which includes debt reduction, emergency fund, and retirement savings). I apologize for the confusion.

Since embracing the Balanced Money Formula, I’ve been much happier. It’s a sort of broad non-prescriptive budget the gives me the freedom to spend on my Wants, like bicycles and new cycling gear as long as I’m taking care of my Needs and setting something aside for Savings. I’ve learned that I can stay frugal in my day-to-day life and it’s okay to splurge a little on the things I like including good hot chocolate.

Finding balance

In order to find balance, you’ve got to do some soul-searching. I think of it as a three-step process:

Find what makes you happy. Look inside yourself and ask, “What is it that brings meaning, pleasure, and joy to my life?” Be honest. How can you create a life that features more of the good stuff and less of the mundane?

Focus on your goals. Set personal goals based on the things that make you happy. If you like music, maybe one of your goals could be to learn to play the guitar. If you want to change careers, maybe one goal would be to go back to school. Make meaningful goals a priority, and let the other stuff be secondary.

Seek balance. Strive for moderation in all things. Pursue your goals, but don’t forget frugality. Be frugal, but don’t forget your goals. Work hard to build your financial fortress while allowing yourself to have a little fun, too.

The quest to achieve financial balance is about more than money. It’s also about meaning. Money is important, yes, just remember it’s not the only thing. Money is a means, not an end and success without fulfillment is failure

Each of us has parts of our lives that feel unbalanced. When we experience this lack of equilibrium, it’s important to do something about it, to make changes. From my experience, however, the most effective changes are small they’re incremental. When we overcompensate for an imbalance, we sometimes just make ourselves miserable in a different way.

About lisachristiansencompanies

A U T H O R • I N N O V A T O R • E X P E R T Dr. Lisa Christiansen is one of the most sought-after motivational speakers, life coaches, and business consultants worldwide, building an impeccable record of client satisfaction in the process. A best selling author as well, Dr. Lisa Christiansen has written such inspirational titles as My Name Is Lisa; The Two Millimeter Shift; White Sheep, Blue Skies, Green Grass; 101 Great Ways To Enhance Your Career; and others, in which she sheds light on some of the biggest questions of self-empowerment and fulfillment. Among her most recent publications, Dr. Lisa Christiansen contributed to the book 100 Ways to Enhance Your Career, which features wisdom from other well-known figures in the self-help world, including Jack Canfield, John Gray, and Richard Carlson. In 100 Ways to Enhance Your Career, Dr. Lisa Christiansen shares a step-by-step process for increasing job satisfaction, gaining more from one’s career, building wealth, and taking control of one’s destiny. Aside from her numerous books, Dr. Lisa Christiansen hosts a wide variety of seminars and retreats, where she teaches her students the secret to unlocking their inner potential and living their dreams. Some of the popular events held by Dr. Lisa Christiansen include Mastering Your Wealth, Claim Your Future, and Design Your Destiny, all of which feature her intensive coaching and unique strategies of personal transformation. Her website has a wealth of additional information on her conferences, retreats, books, and other endeavors. Join the millions of people who have already revolutionized the quality of their lives. “You already know how to survive global changes in the economy, environment and political arena, now it's time to thrive and prosper at a level beyond what you ever thought was possible,” Christiansen said. “My seminar is about seizing the power within today. Press Summary: Creator of extraordinary lives, Lisa Christiansen has served as an advisor to leaders around the world for the last two decades. A recognized authority on the psychology of leadership, organizational turnaround and peak performance, Lisa has consulted Olympic athletes, world renowned musicians, Fortune 500 CEOs, psychologists, and world-class entertainers. Lisa’s strategies for achieving lasting results and fulfillment are regarded as the platinum standard in the coaching industry. Lisa captured the attention of heads of state and the U.S. Army. Christiansen has impacted the lives of millions of people from 30 countries. Lisa has been honored by Cambridge Society of Who’s Who as one of the Top Business Intellectuals in the World. Lisa has helped millions of people create extraordinary lives globally. Her expertise and guidance has enriched the lives of icons such as pop superstar Kelly Clarkson, Olympian Dara Torres, and superstar Patrick Dempsey.

Posted on August 22, 2012, in Wealth Creation and tagged , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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