There's a big difference between making a good living and enjoying a good life. You demonstrate respect and appreciation for money the same way you would anything else of value in your life, be it an heirloom rug, an expensive hand tool, a close friend, or cash in hand. If you want it to last, you've got to take care of it. Throw it around carelessly or ignore it completely and guess what's going to happen?

Remember, your goal is not just to put a fatter paycheck in your pocket. You want to achieve financial independence, which means making a good living and enjoying a good life, where money enhances your well-being, not exacerbates your stress. Financial independence does not come from what you earn. It comes from what you do with what you have. No matter how sizable your salary, the money will slip through your fingers if you bypass this step.

Yet this step is frequently neglected, even by the best and the brightest. It was the biggest surprise I had when interviewing six-figure women. With earnings that ranged anywhere from $100,000 to $7 million, the whopping majority, as confident as they were professionally, were surprisingly insecure financially. They were so busy making money they didn't bother to take care of it.

Of all the people I've interviewed for my books, or met during my travels, I can safely say, the ones with the highest net worth were not necessarily the ones who made the most money. They were the ones who took the best care of their money.

Rampant, unintentional spending is often the culprit. Like Pavlov's dog salivating when it hears the dinner bell, as soon as people boost their earnings, 'Ka-ching,' they bump up their spending, then wonder where those extra bucks went.

Making conscious, deliberate choices about what you do with your money is precisely what this step is all about. And as I see it, there are only four choices you need to make to fully respect and appreciate money. I call these four choices the Four Rules of Money.

1. Spend Less (Only buy what you can easily afford)
2. Save More (Pay yourself first)
3. Invest Wisely (Put money in assets that grow in value over time.)
4. Give Generously (Use your money to make a difference )

Most of us have the giving generously part down pat. But unless you handle the first three, giving can become an act of self-sabotage. Not only do you jeopardize your future security, but you diminish the impact you can have with your money.

The success of this step rests in following the Four Rules in the order they're listed. That means, before anything else, don't spend money you don't have. And then make darn sure there's something left over for savings. Believe me, it's next to impossible to overcome underearning if you're still whipping out credit cards while bills go unpaid. Even if your debts aren't completely paid off, do not—I repeat DO NOT—add to them. Not only does debt drain your energy, but it lulls you into a false sense of sufficiency.

"If you use debt to meet your needs, you'll never be free of underearning," agrees Jerold Mundis, author of Earn What You Deserve. "Debt is the cruelest form of poverty. It gives you the illusion that you have far more than you do."

Debt SUCKS. It weighs you down. It drains your energy, your resources, your peace of mind, and your quality of life. Until you get rid of your credit cards—tear them up, hide them from sight, or freeze them in ice in a tin can—and start paying down your bills, you'll have a very tough time reaching the next level of your life that you aspire to.

Careless spending or continuing to debt is like boarding a train traveling the wrong way. You'll never get where you want to go. At the same time, you do not want to head in the reverse direction—DEPRIVATION—where your emotional and/or physical needs are not being met. Important message to all underearners: Spending less does not mean misery and hardship.

Deprivation is endemic to underearning, being both a symptom and a source of the condition itself. Doing this step does not require either scarcity-thinking or severe self-denial. But it does require a certain amount of delayed gratification. There is a difference. Cutting back is not the same as cutting out completely. And financial prudence does not imply forsaking necessities, or even some pleasures. The distinction is critical. Discernment is the key. Cut back by taking little bits out of each category. Otherwise, budgeting becomes like crash dieting. Deprivation creates a hunger that will drive you right back to the stores on a buying binge.

But budgeting is only the beginning. You've got to be willing to take some risks in order to make a little extra. In truth, our biggest financial risk is not market volatility. Our biggest risk is to do nothing at all. Sure, the market's ups and downs are scary. But you can significantly cut your losses with due diligence, a long-term approach, and adequate diversification. On the other hand, if all your cash is sitting in the bank—or worse, under your mattress—you don't need a crystal ball to predict your future. Your purchasing power will shrink like a bunch of steamed spinach. Unless a portion of your savings is in assets that grow faster than inflation and taxes eat it away, your greatest danger is that you'll outlive your money.

For instance, say you've just gotten a $1000 bonus. You're smart enough to save it, so you put it in the bank, where the return is guaranteed and it earns about two percent. In about 20 years, your original investment, adjusted for inflation, will be worth a grand total of $500 (assuming inflation doesn't rise above three percent.)

But if instead you put that $1000 in a stock mutual fund earning ten percent and never add one cent to it, in 20 years you'd be looking at over $6,000. Big difference.

What if you don't have $1000 lying around? Here's the truth: You don't need a lot of money to create wealth, not when you consistently set aside small amounts over a period of time. Mere pocket change adds up surprisingly fast with the magic of compounding (where you're earning interest on your earnings as well as on your original investment). For example, if every day you aside 50 cents to put into a mutual fund earning eight percent (a reasonable return today), in 20 years, you'll have $10,000.

Check the statements which are true for you.

* I am clear on my financial goals.
* I know my net worth
* I have no credit card debt.
* I have enough savings to live on for three to six months.
* I have money invested in a retirement account.
* I have investments outside a retirement account.
* I understand the investments I own.
* I will have enough money to live on in retirement.
* I have a will.
* I know where all my financial documents and records are.

This is what respect and appreciation of money looks like. Pay special attention to the statements you did not check—that's the work you need to do next.

Copyright 2005 Barbara Stanny. All rights reserved. The information contained in this article may not be published, broadcast or otherwise distributed without prior written authority.

Author's Bio: 

Barbara Stanny, the leading authority on women and money—is on a mission—to revolutionize women's relationship with money. As a bestselling author, sought after speaker, workshop facilitator, and money & wealth coach, Barbara teaches women to earn the money they deserve, build the wealth they desire, and step fully into their power! Visit