Individuals at all income levels share same universal aspiration- economic security for themselves, their families and the future generation. This goal, defined differently at different income levels is what I refer to as Financial Independence. Only 5% attain this elusive goal. Why is that? Northcorte Parkinson, a British economist in analyzing the way people relate with finances explained this using what has become known as Parkinson’s law of Money, ‘ As our income rises (in all likelihood) our expenses will rise to meet that increase’. A corollary of the law is more real ‘people the world over tend to spend everything they earn plus a little bit more’. Basically for a significant percentage, there is always too much month at the end of our money, the deficit; in most cases, abridged by a habitual debt cycle. We at Waumini Investments Holdings Ltd have developed an accountability tool, for those whose desire is to make sense of their budget, be prudence in their spending and maximize value for their income. A few meticulous folks have been writing financial obituaries- a history of the late dough- recording of expenditure with an enviable commitment. My understanding is that a budget be a spending plan, telling your money where you want it go, rather than get surprised that it is gone. This tool recommends and advices sharing our income into four broad expenditure categories, in the goal of achieving a balanced and healthy financial balance sheet.

1.  Paying God

A contribution that makes a difference in the society is a proven success strategy. A dead sea is an outlet-less water mass and consequently is not known or expected to support life in its ecosystem. In 2006, Warren Buffet gave out $37 billion of his $44 billion Berkshire Hathaway Inc. fortune to the Bill & Melinda Gates foundation in charity. The following year, Buffet jumped to the top of the table in Forbes ranking as the wealthiest guy on planet earth. “Those who give to the poor are lending me, declares the Lord, and I will reward them for what they do” ‘Proverbs 19:17.

2.  Pay Yourself

At the very next top of the priority list should be a system that ensures you keep, preserve and save a portion of every paycheck that passes through your hands. As you trade your time in gainful engagement, engage a percentage of your income permanently to work for you. You see the problem with most of us is that all we earned last month left our hands forever! If you forget everything else, remember this one- 15% of every income must beef your chest of arsenal in your Financial Independence struggle.

3.  Pay Others

Simply, take care of your bills. Define your lifestyle within the parameters and percentage recommendations for every expenditure item. Perhaps prudence to differentiate between wants and needs and the contentment to live within our means will be desirable. Remember, the Joneses do not walk in your shoes.

4.  Pay Tax

Pay Ceaser his dues. Ethical living requires us to live our side of the obligations. Still, find ethical ways to reduce your tax obligations- tax avoidance.Wealth creation has never been a factor of how much we earn alone. But a healthy and wise combination of the desire for success backed by goals, the discipline to sacrifice for those goals, having and utilizing tools like the one described here and making a conscious choice to act on these fundamentals. It makes the whole difference. Patting yourself on the back only, for how much you know won’t do the trick!