My philosophy is that money is like energy. Just as you have to manage your energy (how much energy do you spend working, exercising, on your hobby, relationships, etc.) you must manage your money also in a similar way. It’s also my belief that what one needs to emphasize is that it’s not too important how much you earn as it is about the balance between how much you earn, spend and keep. Also good to note is that how you earn your money and how you spend it matters a lot, too.

Let’s take a couple of scenarios as an example:

A highly paid hot-shot executive with a very stressful and demanding job he dislikes spends his extra cash on cocaine to help him cope. He has no time for family, his only friends are his co-workers. He uses his wealth to buy expensive cars that he doesn’t have time to drive and goes on whirlwind vacations in exotic destinations. And yet most of his vacation time is spent asleep in his hotel room or partying with people he doesn’t really know just to help him forget that he is unfulfilled. Despite his high-paying job, he’s now in debt because of his bad habit.

In sharp contrast, here’s a professional dog-walker who earns 6 times less than the executive but loves her job, she gets to be with the dogs she adores, gets regular exercise and spends her free time taking little backpacking trips, exploring her area of the planet. She lives frugally within her budget, pays off her credit cards each month and puts aside a little bit for retirement.

I think most people would agree the dog-walker might have more money smarts than the executive because she knows what is good for her and does it because she values herself and her life more than a huge paycheck.

A person must value oneself first and foremost and it is one’s duty to take care oneself in the best way possible. This includes how one deals with money to achieve a good personal life balance.