Spend Less Than You Earn
A gap between your income and expenses is the foundation of financial strength.
If you spend every dime you earn — or more — you are stuck. There is no slack in the system to deal with the bumpiness of everyday life, and no resources to design your future.
To get where you want to go, you have to know where you stand today. That means shining a light on your finances — maybe for the first time — to see exactly where the money goes each month.
For some, this is just tedious work: pulling numbers together and putting them on paper. But for many, it feels heavier. Personal finance is personal, and even the thought of looking into the money mirror can stir up fear, embarrassment, or shame. Acknowledge those feelings and press on.
Avoidance keeps you stuck. Action moves you forward.
Your first action step is to put a typical month of your finances on paper using the Monthly Cash Flow Template below. Until you see it clearly, everything else is guesswork.
Getting your numbers may be some tedious work but it doesn’t have to be complicated. Log into your bank accounts, credit cards, or payment apps and download the last few months of transactions. Use that information to fill out the yellow highlighted cells of the TODAY tab of the template. Since not all expenses happen monthly, put annual or occasional items in the designated area at the bottom. Enter the annual totals for these items and the template will convert them to a monthly basis. Once completed, your financial picture comes into focus.
The goal here isn’t perfection or tracking every penny. It’s building a clear snapshot — one that tells the true story of your financial life in a typical month. Your move.
Monthly Cash Flow Template - Microsoft Excel file
With the current reality documented, you finally have the clarity to make decisions about your path forward. Look at the details. Are you spending money on what you actually value? Is there a gap you can build from? Where are you overspending? Where do you wish you were spending more?
A useful rule of thumb: spend lavishly on what brings you joy, cut ruthlessly on what doesn’t. This isn’t about deprivation. It’s an audit — making sure your hard-earned money is spent where you decide, not wasted by default.
The next action step is to use this new insight and complete the TOMORROW tab of the Monthly Cash Flow Template, designing the future you want. Eliminate expenses that don’t matter, reallocate to the ones that do, and maximize the gap between income and expenses. That surplus is the fuel for an intentional life — and you’ve just created it.
If you’ve come this far, you’ve already done the hard work most people avoid. You’ve created the gap, and that surplus is fuel. With Principle 2, you light the engine.