Exhibit A: Tom is an ER doctor. His gross income is $500,000 a year. He drives a leased 2009 BMW with all the latest gizmos and gadgets. He lives in a lavish 10,000 sq foot house in sunny LA, owns a summer home in Tuscany,  and has put each of his three children through ivy league schools. He invests 0% of his income, has no retirement fund to speak of, and is hundreds of thousands of dollars in debt.

Exhibit B: Harry is an insurance salesman. His gross income is $75,000 a year. He drives a 2006  Toyota Camry that he owes nothing on. He lives in a modest 4,000 sq foot home in Idaho. He enjoys camping, hiking and skiing with his family and occasionally splurges on a pricier vacation with his wife. He invests 10% of his income monthly, has an emergency fund that will sustain his family for 6 months in the event of disaster. He also has a growing retirement fund and no debt except  his house mortgage which he is working to pay off within a 5 year period.

Back to our question: Who is wealthier? If you were to simply look at income, the obvious answer would be Tom. After all, he makes a whoppin’ $425,000 more than Harry annually.  Tom’s living the high life – driving luxury cars, living in veritable palaces – he’s the envy of all his neighbors. But reality is Tom is so deep in debt that he can hardly afford his monthly car payments. Tom’s answer to his financial problems is always to make more money. Yet with each pay raise, he sinks further and further into debt. Tom’s competing in a rat race that he can never win because his money controls him.

Conversely, Harry controls his money. His annual earnings are far less than Tom’s but he has learned to save, invest, and live within his means. Harry has learned to make his money work for him so that one day, he can enjoy true wealth without the stress and debt that plagues Tom’s life.

Wealth  has a lot more to do with how well me manage our money than it does our earning power. Tom will always be “poor” because he hasn’t learned how to live within his means and make his money work harder than he does. To avoid being like Tom, here are a few simple suggestions to learn how to make your money work for you.

Budget: A lot of people don’t like the idea of being tied to a budget. Instead of thinking that a budget is restricting, think of it as your plan to help you avoid the chains of debt which is the first step to building wealth. We live in a culture of credit, but that doesn’t make it right or good. Do yourself a favor and make your life easier by creating a monthly budget and do your best to live by it. When creating a budget, keep in mind that it must realistic. If it’s too rigid, you won’t be able to stick to it and then in frustration you’ll bag it. Designate some funds for an emergency, for savings, for bills, AND for activities like eating out and going to the movies. Make sure that whatever you budget, it’s something you can realistically live by otherwise it’s doomed to failure. You may even consider making a separate account for a “play” fund where you set aside a specified amount for fun, miscellaneous purchases that may not have been budgeted.

Invest: Make it a habit to set aside a specified monthly sum that you will invest. This is the key to really building wealth!  There are many excellent options beyond a traditional savings account that will get a much higher rate of return though still with limited risk. Keep in mind that when investing, you must think in terms of several years not weeks or months. You must allow your investments time enough to sit so that that the power of compound interest can work its magic.  Investing over a long period of time is the surest way of securing yourself financially in the future.

“If you will live like no one else, later you can LIVE like no one else,” says best selling author and financial adviser Dave Ramsey.  If you’re living Tom’s story, change your mentality around wealth and recognize that real wealth will only come when you learn to control your money.  Like Harry, choose to live within your means, budget, and invest your money so that one day you can really live like no on else.

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So it’s official! We’re in a recession and chances are you’re feeling the effects of it in both your personal and professional life. The good news is that while the economy may be spiraling downward, there are plenty of ways you can stay UP financially and emotionally.

1) Think happy + Talk happy = Be happy: Excessive worry is just about as productive as trying to get squeaky clean in a tub of mud. The fact of the matter is that no amount of fretting is going to improve your financial situation or the state of the union so don’t even go there – it only makes things worse. More than that, negative thoughts zap your physical and mental energy, decreasing your ability to perform well in your several roles at home and on the job, further magnifying the problem. So take a “happy pill” (Note: This is just a figure of speech. Do not actually go take a pill) and recognize that when you think and talk happy, you will be happy. When you’re positive, it increases your mental and physical capacity to do, making it easier to come up with solutions to pressing problems in your life. Like Peter Pan suggests, think happy thoughts. It will help you soar to your desired destination.

2) Work Hard, Save Harder: One of the worst things you can do in a failing economy is assume that your efforts to produce are fruitless so you, therefore, just stop trying. Yes, when there is a recession buyers and clients are more difficult to come by. What that means, however, is that you just have to be a little more creative and proactive in your business and marketing approach. Persistence and work ethic always pay out great dividends regardless of what the current environment may be like around you.

While you continue to work hard, save harder. You may not be able to go out to eat four times a week and get that fancy new plasma TV that you were hoping for right now. That’s okay! Budget your money wisely and put some aside – even a small amount is better than nothing. Living frugally will keep you out of the red and saving will give you some peace of mind.

3) Try to Maintain Life Balance: There may be the tendency to become a workaholic in financially difficult times thinking that the more you work, the more greenbacks you’ll make. Wrong! The most productive individuals leave time for self, for family, for work and for play. Continue to exercise. If you’re not already exercising a few times a week, start today. A healthy body is critical to releasing stress and fighting off disease. Spend time with the fam and continue to nourish those relationships. A good family life is always a key element of happiness and success. Schedule fun (and preferably cheap) activities where you can relax, enjoy yourself, and be rejuvenated. Too much work and no play is a recipe for mental and physical shut down.

Don’t be discouraged. Just move forward and recognize that by being positive, proactive, and striving for life balance you can make it through this and any other challenges that come your way.

So, next time thoughts of scarcity enter that cranium of yours just remember, the world is bustin’ with abundance. A world of opportunity is at your fingertips. Reach out and grab it!