“I made the money, and by darn I should be able to spend it as I wish!”
No truer words were ever spoken. Unfortunately for most, this attitude results in overspending. Having interviewed thousands over the years about their financial ambitions and concerns, it is very clear to me that we all work hard for our money but we don’t have our money work hard for us. The reasons are plenty, but the biggest reason of all is that we just don’t know how to make our money work hard for us.
The time between receiving a paycheck and spending that paycheck is very short, too short! In most cases we use the paycheck to pay for expenses we have already incurred. We are busy catching up while having more month than money. We tend to abide Parkinson’s Law of Spending, which is to “expand spending to meet the money available.”
A couple I recently interviewed I’ll call Ron and Julie make a middle six figure income as professionals. They are worried because they feel uncertain about their future (retirement) and at the same time can’t seem to get rid of their debt. Another couple I’ll call Brian and Stacey, make a high 5-figure income, have nine individual debts, and no longer have lines of credit that they can access. They are in their mid 40’s and are now worried enough to take action about their future. Finally, here’s a specific quote from a woman I recently interviewed:
“I’ve been rather satisfied with my life until recently I woke up paralyzed by the reality that my husband and I are living in financial ruin. By ruin, I mean no budget, no emergency savings, major excessive debts including credit cards and student loans. I am a spender/giver/live life today, worrying about tomorrow later kind of person. While my husband might disagree, he has a more passive approach to money, meaning he works but doesn’t oversee or know where his money goes each month and doesn’t ask much about it as long as life seems to be okay. I’m embarrassed and not proud of this mess we’re in. We talked about our needing help, but we don’t know who to trust or turn to.”
What can you do if you’re in the same boat? I suggest that you spend less time worrying about income and items you want to buy and more time managing what you already make and spend. When it comes to money you need to spend all this worrying time actually managing your money. Managing requires a system that you can repeat month in and month out. It begins with your gross income, not your deposited income. With systematic planning, using the proper computer tools you will find that life is easier because you worry less and are getting more out of the money you already generate. Reacting to financial demands is not as rewarding as proactive planning. Thinking about what to do with a surplus each month is a lot more fun than worrying about not having enough for expenses each month!
For more information about how to do the above, call Alan 801-292-1099, firstname.lastname@example.org.