Profit or Surplus is a variable of Income and Expenses and so is Loss or Deficit. Let’s visualize the math…
2 – 2 = 0 EVEN / enough
2 – 1 = 1 SURPLUS / saving
2 – 3 = (1) DEFICIT / debt
In the EVEN space, one’s income or salary for that matter is enough to cater for the month’s expenses until the next. Majority of us start from here and it is a good place to begin. And though we stay a little longer in this space than desired, time affords us extra resources from a promotion, a business idea or synergies in marriage. Trouble sets in when our income fails to grow in equal proportion with our expenditure. Increasing family needs, life emergencies and the ever rising inflation are some of the things that can change the quality of our lives by throwing us into the DEFICIT space.
DEFICIT is where one’s expenses exceed income. To deal with this space, we must borrow. However, these borrowings if not managed well may throw us in a space of perpetual DEFICIT or debt as it is more commonly referred to. The good thing about spaces is you can move out of them even if it means squeezing self through the eye of a needle. Of course the SURPLUS space is most ideal but always seems unachievable. BUT if it is possible for others, why not us?
I tend to think these others seek additional revenue streams to the extent that one stream is able to cater for all family expenses and the rest is left to more profitable investments. Then there are those who may just have a single stream of income but manage their expenses in a way that does not exceed their income. I reckon they set percentages which they strive to survive on. They come up with creative ways of minimizing their expenditure and perhaps only eat out once a month. They seek bargains from flea markets and have no problem riding the bus.
Both who seek the increasing income and the reducing expenditure make sure they save. Not once but regularly. They are not interested in get-rich-quick schemes but take well calculated risks. Of course they are oblivious of life and are aware that DEFICIT and EVENness are all part of the SURPLUS journey. So help us God! So help us God…