I have decided to start a short series of the lessons I learned while on my journey to become debt free and want to share it with you.
I call this my Journey to debt freedom and each part will have a different topic, today is about the problem with thinking that having more money will solve your financial struggles.
For the longest time, I thought to myself if I can make this much or have this much saved up then I will be better off. This went on while I was in school and also once I graduated and was even deeper in debt. It became even more depressing for me when I graduated because aside from the debt, I still had my bad habits of buying into opportunities in order to get more money and get rich quick.
The flaw
Doing it for the money just made me more stressed and I had no passion just greed.
This is what essentially stuck with me because I was always worrying about money so therefore I was buying into programs, ebooks, books, and even seminars as a way to strike it rich. And the sad thing was that I thought I would strike it rich very quickly.
Hence why I have written about the hype of these gurus that talk about in books, seminars and other publications. And this is probably a huge problem going around today hence why so many are struggling.
Anyways, it didn’t click for me that more money is not the answer until just recently when I started to develop and follow a budget and I got to see that if you are disciplined with it you can live a very comfortable lifestyle. Of course, last year when I started to pay off debt aggressively I cut back on a lot of things so that kind of stuck with me and I was not tempted to spend as much, and with time I have become more disciplined.
If you can’t manage what little amount you have now, how can you manage when you have more money
This is the other problem with lottery winners that go bankrupt within a few years after winning the jackpot. The mindset here is simple, they didn’t know how to handle the little they had before, so obviously they failed at it when they got the jackpot. Furthermore, they missed out on the process of learning to manage money, being disciplined and living within their means.
Material goods cloud the real quality of life you can have
Before I used to be about wanting to get the latest and greatest gadgets, hot fashion,etc. and it took me a while to figure out that those things were not giving me long lasting happiness. They were just temporary fixes and this only changed when I changed my circle of friends and tried new things. I always enjoyed outdoor activities and being active but did not do it as much because of who I was surrounded with.
Only recently did I get to discover the tremendous joy of going for a walk, biking, hiking and not needing to spend a fortune because it is practically free. On top of free, it is very enjoyable and gives you such a wonderful feeling.
Getting back on point, I have discovered that you can have material goods too but you need to start small and go from there. Focus more on doing something you enjoy and the money will follow. I would call this delayed gratification, because you focus more on developing yourself and then rewarding yourself later when you can afford too.
Its sad to see so many of us doing it the other way around and being tied down for years with financial obligations.
Reflection…
- Have a budget and put away for a rainy day
- Are you emotionally attached to material things?
- Do material things give you short term or long term happiness, and at what cost?
- What would you do if you were given $10,000 right now?
Further Reading
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Andrew
{ 13 comments… read them below or add one }
I can’t tell you how many times I’ve read comments on blog posts about doing the frugal thing and they went something like this (I kid you not!):
“This is such a waste of time! What a dumb tip! Why do people waste their time fixing stuff when they can just go out and buy new. My time is valuable because I plan to make a $X dollars and retire before I’m 25. That way I don’t have to worry about doing stupid stuff like this.”
I think, “Gaaahh…. how old can they even be? And they think at that age that they really know how to make it big? And if they aren’t willing to be remotely frugal now, what will they do if they do somehow get a lot of money?”
The truth is that real millionaires — as in, those with actual assets and not just debt — tend to live VERY frugally, whereas lotto winners and instant celebrities tend to end up broke.
Meg from FruWiki’s last blog post..User:Meg
Meg, thanks for your comment.
Thanks for sharing that story because essentially this is how I used to be thinking that I will make it big and will not have to worry about being frugal, budgeting and living below my means.
I was just actually reading an article about Warren Buffett how he still lives in the same house, drives the same car, has no cell phone, and no gates around the house.
I can’t seem to find the link but if I do I will post it here.
tom,
Very good read! Loved the questions in the end.
It is all about the “right” mindset
Alik Levin | PracticeThis.com’s last blog post..Want To Win? – Argue, Do Not Fight!
Alik, thanks for your comment.
Glad you enjoyed it, so what would you do with the 10k?
I’d give it to my wife. We have clear separation of duties
– I bring money in (so she does), she plans expenditure, we approve together the plan together, then we execute it. Same with 10K as well as with lesser or bigger amounts
Alik Levin | PracticeThis.com’s last blog post..Want To Win? – Argue, Do Not Fight!
Alik, well personally I am not at that point where I am married but I think as long as you both have tasks assigned and things work well then that’s good.
Majority of couples and families don’t have a proper plan when it comes to handling finance.
However, I think all families need to tackle personal finance as an actual business and assign people for various tasks.
Tom,
Living in a rural area in South Korea, I can really relate to what you are saying about the outdoors.
I personally don’t have many possessions at all (my apartment would be too small to fit all that much anyway), but one of the things which I do have is a mountain bike, some gorgeous surrounding countryside through which to ride, as well as some excellent hiking trails nearby. I feel that these things are a lot more valuable than many of the material possessions which I could own.
On your main point, I agree that for those who have not learned to manage their money in an effective manner, simply more money will just mean that they mismanage more money.
On the other hand, those who practice effective strategies with regard to financial management will generally put any increases in wealth toward productive and effective uses.
Andrew’s last blog post..What I learned from almost being mugged
Andrew,
Awesome, I got a road bike and enjoy taking it out for a ride.
But I mean to a certain extent most of us have lost that touch with nature. I mean we see a new development area being put in place and they stuck on some playground or trees, thinking it makes in nice or nature like.
Thanks for point that out Andrew, because the first step is to manage what you have and then the next step is to get more money.
I’m only working part-time (sort of by choice… I took a part-time gig in my field rather than a full-time retail job) and my partner has also taken a poorly paid position in his field, so money is constantly tight. A bit more money WOULD solve that, but not the money alone, as we could probably find higher-paying soul-sucking jobs. I think it’s a choice I have to make to be broke in my 20s that will hopefully lead to better paying, interesting jobs for the rest of my life.
Meg (NOT from Fruwiki!)’s last blog post..Disconnect
Meg, thanks for your comment.
I mean i don’t know how you manage your money but of course the next step would be to make more money. Of course, finding a higher paying job for the sake of money will only do harm to you long term. Hence, you said “soul-sucking jobs”, which is a great analogy and unfortunate for so many that trap themselves in this.
Here is the link I was talking about with Meg before about Warren Buffett
http://www.budgetsaresexy.com/2009/04/warren-buffett-manor-possibly-100-of.html
Great post, I especially like the line “If you can’t manage what little amount you have now, how can you manage when you have more money”. That says it all… and it’s hard to forget about, you’re right. I think that when we’re younger we’re also a bit impatient because we know we need to get ahead and catch up to all the new standards – but it takes time to learn that you can only get ahead one step at a time, so that’s where discipline comes in. I think discipline is like taking your initial burst of motivation and stretching it out over the long term…. I’m going to retweet this post!
MoneyEnergy’s last blog post..5 Money Lessons You Should Make Sure You Learn While Still in College or University
MoneyEnergy, thanks for your comment.
Well I didn’t understand budgeting for years and just wanted to get ahead, thinking that if I have lots of money then I won’t have any financial problems.
Discipline is very important when it comes to finances because you will always have problems if you have too little or too much money.
Thank you for retweeting it.