There are a few givens in life that we just take as fact without putting too much thought into it. One of those “facts” is that the more money we earn, the better off we will be financially.
Whilst that may be true for that one day a fortnight or month that your salary is deposited to your account, it doesn’t ring true for every other day.
The truth is that it’s all about addition AND subtraction of money from your account.
We tend to focus on the addition side of this equation – the addition or deposit of money into our account.
We forget to look at the subtraction side of this equation – the spending. And that’s the side that actually makes us richer or poorer in the long run. It’s the side that we have a huge amount of control over. If we choose to take it.
Sooner or later you will realise that spending is what you need to be mindful of even if our aim is to just be financially comfortable and not break into a sweat when you see a bill arrive.
In my experience as a mortgage broker, spending is the number one downfall of just about every one of my clients.
The excuses I hear are always the same…
I’d worked hard and deserved a night out/new dress/new shoes/drinks with the boys/cocktails with the girls/a new car/a boat/an exotic holiday….
I earn a lot so I just don’t think about spending because I’ve got a lot coming in.
My partner looks after the finances. I just buy what we need to without much thought.
I’ll just put it on my credit card and figure it out later.
Sound familiar?
The number one reason that people get into financial hardship ISN’T that they don’t earn enough, it’s that they spend too much.
Is it time for you to look at the subtraction side of your equation?
