Everybody creates a certain amount of income and during their lifetime by one means or another – through employment, investment or setting up a business. What you do with that income determines how financially successful you will be and ultimately impacts on your enjoyment of life.

Managing money is a bit like juggling balls while walking along a tightrope. Imagine each ball represents an area of financial outlay in your life and the tightrope is your budget. Your aim is to keep all the balls in the air without losing your balance. Take your eye off the balls or the tightrope and you can come crashing down. Everything needs to work perfectly in balance. There is a balance to be made between paying bills and spending money on luxuries; between spending money now and spending it later; between spending on lifestyle and investing in assets that will produce more income; between earning more and working less.

Those who are less adept at managing money tend to operate in the here and now, living from payday to payday in the absence of clear goals. Financially successful people are able to rise above the present and take a long term view of their financial situation, taking into consideration the trade-offs that need to be made to achieve financial balance over their lifetime.

The keys to achieving the right balance are:

1. Setting long term goals
2. Proactively managing how and when income is spent
3. Proactively managing the balance between lifestyle assets (house, car etc) and investment assets (property, shares, businesses etc)

Your long term goals should not be financial goals but goals for what you want to achieve or enjoy in life. How and when you spend your income and how you balance your assets will determine whether you achieve these goals.