Introducing Your Financial Gap (Your Key to Financial Freedom)
Most people think financial freedom comes from budgeting, discipline, or cutting back.
But the truth is simpler:
Financial freedom comes from understanding and using one number – your Financial Gap.
Your Financial Gap is the space between what you earn and what it truly costs to live your life. It’s the room you have each month to fund your goals with intention. The space you create for the life you actually want.
And knowing this number changes your financial life.
Why This One Number Matters
Your Financial Gap tells you:
- how much you can save
- how quickly you can pay off debt
- how aggresively you can invest
- how much flexibility you have month to month
- how close you are to your dream life
It’s your decision point. The moment you get to choose how to use your money. It also gives you awareness, which is the foundation of financial clarity. Ultimately, it becomes your starting point for every goal you want to reach.
Mind the Gap – Literally
If you’ve ever ridden the London Tube, you’ve seen the phrase “Mind the Gap.”
The gap is the space between the train and the platform. The distance you have to be aware of to step away safely.
your finances work the same way.
Your Financial Gap is the space between your income and your expenses.
Ignoring it causes stress and financial uncertainty.
Being aware of it gives you direction, confidence, and control.
How to Calculate Your Financial Gap
To make this number real, break down your monthly expenses into two buckets: fixed essential expenses and variable essential expenses.
Fixed expenses include:
- Rent or mortgage
- Utilities
- Car payment
- Insurance
- Loan payments
- Child care
These are the bills that stay roughly the same each month and that you’re committed to paying.
Variable expenses include:
- Groceries
- Gas
- Healthcare expenses
- Household items
- child-related expenses
These do fluctuate, but they’re still predictable if you look at your average monthly spending.
Here’s the key:
Variable doesn’t mean “don’t plan for it.” It means plan the category, not the penny. You must include these averages to calculate a realistic Financial Gap.
How to plan variable expenses without overthinking:
Look at the last three months of spending in each category. Take the average and use that number going forward.
How You Use Your Financial Gap Shapes Your Future
Once you calculate your gap, the real power comes from how you choose to use it.
Any gap, big or small can transform your long-term financial life when you direct it with intention.
Here’s an example of how two women with similar incomes use their gap differently, and how those choises compound over 30 years.
Your gap isn’t about perfection, it’s about direction. Over time, small intentional decisions become massive outcomes.
A Real Client Example
I once worked with someone who felt behind that her Financial Gap wasn’t “big enough.”
When we calculated her numbers, she realized she had $300 left over after her fixed and variable expenses.
She immediately minimized it:
“That’s nothing. I’m broke.”
But here’s the truth:
Having any gap at all is already a win.
You are not behind because your gap isn’t big. You’re also not failing if your gap isn’t $1,000. And having a small starting point doesn’t make you “bad with money.”
A Financial Gap – even a small one – means you have space.
You have options. You have a starting point.
And you can increase it over time.
When she reframed it this way, something shifted. She stopped judging herself and started making intentional decisions. And that is what actually changed her financial life.
What Your Financial Gap Tells You
If your gap is positive
This is where intention makes all the difference. You can choose to:
- Invest
- Save
- Pay off debt faster
- Increase your guilt-free spending
- Or widen your gap even more
A positive gap gives you power but complacency stalls growth. Use it intentionally.
If your gap is small
Small is still something.
It grows, it compounds, and over time, it creates consistency.
Your job is to widen it over time by reducing expenses and boosting income.
If your gap is zero
This is information, not a verdict.
Now you know exactly where your money is going and you can make adjustments.
Awareness is your turning point.
If your gap is negative
Negative doesn’t mean hopeless. It means something in your financial life is out of alignment, and you have the information you need to start correcting it.
You can:
- Cancel subscriptions you don’t use
- Call your credit card company to request a lower interest rate
- Reduce fixed and variable expenses
- Shop around for better rates on your phone service, internet, car insurance, etc.
- There’s only so much you can cut – you’ll need to increase your income
A negative gap is a call to action, a wake-up call, not a judgment.
Your Gap Is Your Opportunity
Your financial gap isn’t just a number. It’s the space between your current life and the life you want.
It’s the space you create and the space you protect.
Most importantly, it’s the space you choose to use with intention.
When you know your gap, you’re no longer guessing. You’re directing your money on purpose.
And that’s where financial freedom begins.
