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Budget > Managing your Finances like a Reservoir (1)

There are two ways to increase the depth of water in the reservoir. You can increase your income stream or you can be more resistant to the outflow of water (irrational spending). Increasing the income stream is usually much more difficult than building a more resistant dam because it relies, in large part, on factors that are out of your control. If you avoid the reality of a low supply of water or you are waiting for something to happen that will get you out of your situation, you may be “praying for rain” to fill your reservoir. Instead of addressing the root of their problem (budgeting and spending problems), consumers often find themselves doing a desperate “rain dance” and trying to juggle their bills around an income stream that is just not sufficient enough to support their outflow. The key to successfully managing your reservoir is to accumulate water (wealth) behind your dam. Building a stronger dam with better floodgates may be the most effective way of filling your reservoir because controlling the floodgates (spending) is directly within your control. Building your dam may require some sacrifices and some hard work, but the true reward is the pool of (true) wealth that you will find behind your dam. If used wisely, the pool of wealth can appreciate in value and bring more prosperity. It can also give you relative security in times of drought. In order to start building the new dam, you will need to acknowledge that the old reservoir system was flawed and you must accept part of the responsibility for allowing it to be that way.

 


  

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