Do you need more money in your life?
Are you good with money?
Of course, you do.
Of course, you are.
But are you, really? These are serious questions to ask yourself.
Some of us genuinely do need more money in our lives to get by, some of us are genuinely good with our income, and some of us make enough, but we just suck at managing our money.
Believe it or not, some people make six figures per year and live paycheck to paycheck.
And some people make 40,000 per year and do just fine.
It really comes down to understanding your money, having control of it, and deciding what kind of lifestyle you can honestly genuinely enjoy living or afford to live.
What Is Your Relationship with Money?
Your relationship with money is as old as you are.
Growing up, what was your family’s relationship like with money?
Was money a problem in your house?
Did your family stress over money?
What did you learn about money as a kid?
Did you have to teach yourself about finances?
Like any part of life, you eventually have to take control of the wheel if you want to see any change in any aspect of your life, and money is no exception to this rule.
It’s important to understand yourself, your financial situation, and your anxieties when it comes to money to conquer your own financial success.
Sitting and poring over the internet for money-saving techniques isn’t the best technique for saving money.
Understanding your problems with saving money is where you need to start.
Not taking the time to understand why it’s hard for you to save money will hurt you in the long run and possibly prevent you from being able to meet your financial goals.
Here are a few questions you should ask yourself before you begin your journey in trying to meet your financial goals:
- Why is it hard for you to save money?
- What are your daily spending habits?
- Does money stress you out?
- Do you get anxious when you think about your bank account? Why?
- Do you avoid yourself when it comes to your own financial situation?
- Do you blame your job for not paying you enough?
- Why do you not blame yourself for being broke?
Take some time to write down your answers to these questions, return to them, reflect, and do it again.
The most important thing is, to be honest with yourself.
You will probably learn more about your financial problems than you realize.
Your Financial Habits
Habits are simple, effective actions that we perform each day that produces monumental outcomes.
These outcomes may be good or bad; little by little, we either undo our progress or promote it.
Your financial habits decide your financial future, and it’s crucial that you practice good habits for your financial health.
Here are a few good habits to start doing:
Saving regularly
Start saving whatever you can whenever you can. If you can save 5 dollars per pay period, then do it. If you can save 50 dollars, then do it. Every little bit counts.
- Monitor your spending daily
You need to know how much money is going out of your bank or wallet. Make a column of all your necessary expenses each month – I’m talking bare minimum expenses: rent, food, utilities, groceries, car, insurance, phone, etc.
You probably need a lot less than you think.
Here is an example of necessary bills per month:
– Rent = 1,500
– Food/gas/household items = 700 (that’s $175 per week x 4 weeks)
– Utilities = 250
– Car = 340
– Insurance = 120
– Phone = 200
Total = 3,110
Your bills obviously will be different than this; your rent may be higher or lower, you may not have a car payment, or maybe you don’t even pay rent.
Your situation is unique to you.
Add up how much money you bring in each month after taxes and subtract your monthly expenses from your total monthly income.
You may be surprised and wonder where all your money is going.
If you find that you are in the negative, then you need to make some changes and find out where you can cut expenses.
- Build a budget and follow it.
Ah, the smell of budgets in the morning. Budgets tell you that you cannot afford your usual daily treat.
Well, you can afford it if you accommodate it in your budget.
Starting a budget is one of the smartest things you can do to get a handle on your money.
It’s basic finance 101.
Without a budget, you’re blind.
A budget should be started off as a guide. Start and go through trial and error and see what works best for you.
Over time you will master your budget.
Please note that your budget is allowed to change and fluctuate based on your lifestyle changes. So allow yourself some flexibility, stay on the road, and beware of the urges.
- Educate yourself about money
There is absolutely no way around this; if you want to develop good money habits, you need to become financially literate.
I’ve spoken about this at length in other articles, and I will continue to do so because it is an obligation you owe to yourself.
Here are a few books I recommend for some good education on your personal finance goals:
- Broke Millennial – Erin Lowry
This book is great because it gets down to the basics from the beginning, and it takes you from 401k to the bank to buy your first home.
It’s straightforward, broken up into sections for an easy and quick read, and provides great money examples.
Do yourself a favor and read it.
- Rich Dad Poor Dad – Robert T. Kiyosaki
You can’t have a financial book list without including this book. It has been recommended and talked about for years, and for a good reason.
This book gives you a very clear perspective on how money works. Not finances. Money.
Robert Kiyosaki breaks down, in straightforward terminology, how money can work for you and how you can give yourself a very comfortable life whether you’re looking to be rich or just financially free.
Get ready for an entirely new perspective on how money works.
- Your Money or Your Life – Joseph R. Dominguez and Vicki Robin
This book wasn’t written; this book evolved from the trenches of being knee-deep in “oh shit, I’m broke” and broken backs from work.
This fantastic book was written from real experience; this isn’t a book that will take you on a fantasy ride to marshmallow land.
This book will give it to you like it is and wake you up to reality.
It will hurt as you read to realize that you have been blindly led into those trenches of the bullshit philosophy of “get a job and work hard.”
Then it will lead you into the land of “wake your ass up.”
This book will help you realize what’s truly important to you and what your relationship with money has become.
- Financial Freedom – Grant Sabatier
This man went from having $2.26 in his bank account to saving over 1 million dollars in 5 years. This is how he did it.
Do I need to say anything else?
There are so many books that I could recommend and countless more books and articles that I do not yet know of, but these are great for essential money habits and to help your relationship with money evolve.
There is no getting around the fact that you need to save as much as you can as often as you can, and once you build a budget, you will probably realize that you don’t need as much as you initially thought.
And by educating yourself about money and finance, you’re setting yourself up for success.
And be prepared to get comfortable with being uncomfortable because looking at your financial situation can hurt, but you will eventually thank yourself for that.
How Well Do You Understand Money?
Understanding money and personal finance is a skill, and like any skill, you have to learn it. And you have to start somewhere.
We have already established that looking at yourself and your habits is a good place to start. The next thing is to learn how money works.
Getting good with anything requires development, and how do you develop? Practice. Practice. Practice.
It takes time, and it takes effort, and it takes failure.
Most people think they just need more money and all their problems will go away. But, unfortunately, that’s simply not true.
There are many people who suddenly come into substantial amounts of money, and in a short period, they’re in an even worse financial situation than they were before.
What Would You Do If You Won Your State Lottery?
This is a dream for many people, and I grew up talking about it myself. The image is beautiful: everyone would be so happy.
All your problems would be gone.
No one would be arguing anymore.
You would never have to worry about money again.
This isn’t true, but before we get to why it isn’t true, answer this question:
What is the first thing you would do if you won the lottery?
Most people would say how they would buy so many houses, travel, buy boats, eat good food, and donate a lot of it.
But how many people have you heard say, “I would find a good lawyer and an accountant to explain how to best deal with all this money.”
In the context of this type of conversation, I have never heard anyone give this response to that question.
Why?
Because people don’t understand money.
Let’s be honest, money solves problems. It makes a difference. It can make you happy.
But money can cause you a lot of problems, too.
Imagine you won the lottery. You become publicly known, and suddenly your sister from your second mother, Rachel, who hooked up with Bobby, who she met through your aunt Lucy calls you, telling you how much she misses you and you should send her money.
People call threatening to sue you for ruining their life because you cut them off in traffic.
You get through all that nonsense, and next year the IRS wants to audit you on your new level of “income,” and you suddenly owe a lot of money in taxes.
But you have no idea how to deal with any of this because you have never had this much money in your life, and before you know it, you’re back to where you were because you spent all your money on your dream life, and you have no money to pay all these taxes.
Having money does not mean that all problems go away; most of your problems will still be there, and there will also be a whole new set of problems waiting for you.
But one of the best defenses against this is to educate yourself about finances.
Money should never be condemned because it really does solve many problems, but if you don’t understand how to deal with your current level of income, how can you expect to be able to develop yourself further financially?
How Do You Stack Up Financially?
I’m not talking about in comparison to your friends; I’m talking about a comparison to where you want to be and your level of understanding of finances.
Do you ever read your bank statement?
Do you have debt? How much?
Do you have any investments?
What is your net worth?
What is your credit score?
How much money do you have in liquid assets?
Do you have any assets?
How many liabilities do you have?
Do you understand the difference between a liability and an asset?
What are you doing to change any of this?
The answer to the last question should really be one you sit and think about.
You need to plan to pull yourself out of any bad situation.
As Benjamin Franklin said, “If you fail to plan, you are planning to fail.”
A Few Things to Reflect On
For some of us, we can tell you the exact price of a large pepperoni pizza with buttery crust (I know) from your favorite pizza place out the door. Tax included!
But damned if we can tell you how much money we spent today.
So many of us sit around and complain about how we don’t make enough money, but not many sit around talking about how we can make more money.
Everyone has time to complain about their situation, but no one has time to fix their situation.
In his book Start Where You Are, Chris Gardner wrote, “You can only depend on yourself. The calvary ain’t coming.”
The point is that when you’re in a bad situation, you have to take inventory of your life, understand what got you in the position you’re in, and come up with a plan to get out of that situation.
Some of us genuinely do need more money to survive, and one of the quickest options for making more income is to pick up a second job.
You could also start up your own side hustle.
Whatever your situation is, if you are having financial trouble, you need to ask yourself, do you need more money, or are you just bad with money?