Making Money, Having Money, and Keeping Money: Why the Difference Matters

Here’s a question I want you to think about:

Are you making money, having money, or keeping money?

You might be thinking, “Ralph, aren’t those basically the same thing?”

Nope.

And understanding the difference can tell you a lot about what’s happening with your finances.

Because you can make good money and still have very little money.

You can have money today and struggle to keep it.

And if every financial problem gets answered with, “I just need to make more money,” you might be solving the wrong problem.

So let’s break this down.

First, What Does It Mean to Make Money?

This is the easiest one.

Making money is your ability to generate income.

You go to work and get a paycheck. You run a business. You work a side job. Maybe you earn commissions.

That’s money coming in.

But here’s where I want you to pay attention.

Your salary isn’t necessarily the amount of money you have to work with.

Let’s say your salary is $60,000 a year.

It’s easy to divide that by 12 and think you have $5,000 a month.

But do you?

You’ve got taxes. Maybe health insurance. Maybe retirement contributions and other deductions.

So instead of starting with your salary, I want you to look at your bank account.

How much money actually landed in your account last month?

That’s the number that matters when you’re trying to understand your monthly finances.

Now Let’s Talk About Having Money

This is where things get interesting.

Think about your finances like a bucket.

Your paycheck pours money into that bucket.

Then life starts dipping into it.

Your mortgage or rent comes out.

Car payment.

Groceries.

Utilities.

Insurance.

Credit cards.

Subscriptions.

You know the drill.

After all of that happens, how much is still sitting in the bucket?

That’s a much different question than how much you make.

And this explains something I see all the time:

You can have a good income and still feel broke.

Someone can earn $100,000 a year and have very little financial breathing room.

Someone else can earn much less and have more money left over each month.

Income only tells you part of the story.

“Ralph, I Just Need to Make More Money.”

Maybe you do.

There are absolutely situations where income is the problem.

If your basic living expenses are higher than what you’re bringing home, then increasing your income may need to be part of the conversation.

But let me ask you something.

What happens if you make more money and your spending goes up right along with it?

You get a raise.

So you upgrade the car.

You start eating out a little more.

Maybe you move into a more expensive house.

You add another subscription here and another monthly payment there.

Before you know it, you’re earning more money but you still don’t feel like you’re getting ahead.

That’s why we need to talk about the third piece.

Keeping Money Might Be the Part You’re Missing

Go back to that bucket.

You’re pouring water into it.

But now imagine there are holes in the bottom.

What’s your first instinct?

Pour more water into the bucket?

That might help temporarily.

But it doesn’t fix the holes.

Money works the same way.

Those holes can look like:

• Credit card interest

• High-interest debt

• Bank fees

• Subscriptions you forgot about

• Penalties

• Recurring charges

• Spending that increased as your income increased

Individually, some of these might not look like much.

But month after month?

They add up.

And that’s money you worked to earn that you’re having trouble keeping.

Here’s the Question I Want You to Ask

Forget about becoming a financial expert today.

Let’s make this practical.

If you want to understand your financial situation better, start with three numbers.

Number 1: How much money actually came in?

Pull up your bank statement.

Don’t use your annual salary.

Look at how much money was deposited into your account last month.

Write that number down.

Number 2: How much money do you have available?

If something unexpected happened tomorrow, what do you have available to handle it?

Maybe that number is larger than you expected.

Maybe it’s smaller.

We’re not judging the number.

We’re getting clear about it.

Number 3: Where is one financial leak?

Now look at where your money went.

I’m not asking you to find 20 things and completely change your life by Friday.

Find one.

Maybe you’re paying interest on a credit card.

Maybe you’ve got a subscription you haven’t used in six months.

Maybe there’s a fee hitting your account every month.

Find one leak you can address.

That’s your starting point.

So, Which Money Problem Do You Have?

This is where I want you to be honest with yourself.

Do you have a making-money problem?

Your income simply isn’t enough to cover your needs.

Do you have a having-money problem?

Money is coming in, but your expenses leave almost nothing behind.

Or do you have a keeping-money problem?

You’re earning money, but financial leaks are making it difficult to hold onto it and build something for the future.

You might even have a combination of all three.

That’s okay.

The goal today isn’t to solve your entire financial life.

The goal is to figure out which problem you’re trying to solve.

Because if you don’t know the problem, it’s really hard to choose the right next step.

Start With the Numbers, Not the Shame

Here’s what I want you to remember.

Your financial situation isn’t a character test.

If you didn’t know something, you didn’t know it.

Now you can learn.

And you can make your next decision with better information than you had yesterday.

Start with those three numbers:

What came in?

What do I have?

What’s leaking out?

You might be surprised by what those three answers tell you.

Have a Money Question? Let’s Talk About It LIVE

Money gets a whole lot easier to understand when you can ask the questions you’ve been afraid, embarrassed, or simply unsure how to ask.

That’s what we do at Becoming Financially Confident LIVE.

We talk about the money decisions that affect everyday life, without the shame and without expecting you to already know all the answers.

Join us LIVE at becomingfinanciallyconfident.com/live

Bring your questions. Let’s talk about your money.