Many people think that financial security is measured solely by the number of digits in their bank balance. "If I have X amount of dollars in savings," these people think, "I'm okay." The truth is that your financial security has less to do with the amount of money you have than with the balance between earning and spending. No matter how much money you may have on hand, if you carry a heavy load of debt and allow that debt to continually increase, you have no security.

Financial Security Rests Squarely on Financial Awareness

The single most important element in financial security is the amount of attention you pay to your cash flow. A family making $25,000 a year can be far more financially secure than a family making four times that amount, if their spending is in line with their earnings. It's obvious that people gain weight when they consume more calories than they expend, yet obesity is epidemic and diets are a major national product. Similarly, it's obvious that if you spend more than you earn, you'll go broke, yet the average American's burden of credit card debt increases every year.

Astonishingly, while most people are quite clear on what they are earning, they have only a very vague idea of how much they are spending. In fact, most people believe they are spending approximately ten percent less than they actually are. The only path to lasting financial security is to remain constantly aware of your spending patterns and adjust them to your actual income.

The best way to maintain that awareness is to keep a budget. Again, this seems to be an obvious truth, yet the vast majority of Americans have no such plan in effect, and often have no idea what they've spent in any particular month until the credit card bills come in. Budgeting doesn't have to be as tedious as it once was, since there are numerous programs and methods that use the power of your computer to simplify the process. But keep in mind, the best financial planning is useless unless you make it your financial reality as well.