MONEY OBEDIENCE

Earn more or spend less – it doesn’t matter which!

When you face financial challenges, you get the good advice that you should either earn more or that you should spend less. Both make sense and are a good short-term fix. But neither one of them is really the problem, because for most of us, the difficulty lays elsewhere.

The bottom line is this: if you don’t have good spending discipline, you will find a way to spend a higher income once you get it. It almost doesn’t matter how high your income gets; a spending problem stays with you.

I’m no better than anyone else when it comes to this. You see, in my first job I made very little money, but I still managed to save money even with that measly income. I rented an apartment that fit my income, I drove a cheap second-hand car (maybe it was a third- or fourth-hand car), and I spent little on entertainment. Over time I have made some good money and my spending could increase. I bought a house, I drove a better car, and I spent more money on entertainment. My higher income found a way to be spent.

But all was not lost. The crucial thing is that no matter how much or how little money I have made, I always managed to save some of my income. Some years I would save more than in other years, but I always had some money left over at the end of the year.

There is one simple reason why I saved money even when I made little money: I am spending my income conscientiously and I don’t ever spend more than I make. That way I know that I can always survive no matter how high or how low my income is. I never needed a higher income to help me get out of financial trouble. (Let’s hope it always stays that way!)

If anything, having a higher income made my financial life a little more complicated and not much easier. As my higher income found ways to be spent, I acquired things that led to ongoing costs like expenses for storage, upkeep, running expenses, and so on. My necessary “fixed” expenses have increased, but not terribly so. Most of them can be lowered very easily and quickly if I ever have to do that.

To sum it up, in my personal experience a higher income has not solved any money problem for me whatsoever. My overall well-being and happiness did not change with the income either, well, not really. I do not recall feeling particularly unhappy with my low starting salary. Neither do I recall feeling particularly happy with higher incomes.

So, my advice would be not to focus too much on earning more in the future. Rather, focus on your own self right now. Find out who you are and how you can live within your own means. Never mind finding out how you could live within the means of somebody else, even if that somebody else is your own self, ten years down the road, with a higher income.

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PDYY9NU5BCUE

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Posted in personal finance