More Month Or More Money – Which One Do You Have?

More money or more month. Which one do you have left over at the end of each month? Do you have more days of the month left when the money is gone?  Too many people live paycheck to paycheck and assume that they will be able to keep their jobs and the lifestyle it supports. In today’s uncertain economic climate, it is important to be very deliberate with all of your income.

For example, do you get excited every year when you get a couple thousand dollars back from the IRS in a tax return? If you do, I want you to view it in the proper context. That is simply excess tax money to the government the previous year. It is nice to get a refund, but treat that money as valuable income.

I have had too many friends view it as a financial windfall. Instead of using that money to help solidify their financial foundation, they go out and buy something frivolous. Many of them did so,  despite struggling with debt. That is a big mistake!

Treat All Money as Valuable Income

The same is true with inherited money. I worked with a guy who was famous for really bad personal choices. He came into some money and asked some of us what he should do with the cash. Most of us said pay off debt then invest the rest. He was famous for being broke and living from paycheck to paycheck.

After considering all of the advice, he went out and bought a huge boat.  The boat sat at his in-laws’ house for most of the year. I think he used it three times in the two years that we worked together. Later, he had to sell it for pennies on the dollar to avoid bankruptcy.

That is an extreme example, but the message is clear. Take a hard look at your circumstances. There are only two ways to balance a budget that is out of whack. You either need to cut back on expenses, or increase your income. Hopefully you are always looking for ways to do both.

Avoid the Poser Mentality

It is to your financial detriment to play the game of just trying to impress others. I have worked with so many people who felt the need to keep up a certain image. Some of these people worked really hard to make it look like they were a high roller.

If you are a regular reader, you know my opinion when it comes to having nice stuff. I wish the best for you and your money. I really want you to get the things that having meaning to you.  The issue today is that most people who think they are in high society today have high mortgage payments, high car payments, high insurance payments, high credit card debt, and high blood pressure due to the stress of a high intensity job. Is it worth the cost to your health and your future?

My wife and I lived in a very middle class neighborhood for around ten years and we used to laugh at all of the Seven Series BMW’s that went up and down the main road by our house.  I have a large family from Bavaria in southern Germany, so I am a big fan of BMW. Several of my family members work for BMW. Those cars have incredible engineering. The “Ultimate Driving Machine” is really amazing on the Autobahn.  But, I doubt most people driving them in that area had the cash to buy the car, so they probably leased them.

Set Meaningful Priorities

A quick internet search showed me that the majority of those cars lease for $1000-$1500 a month. If you have the cash and can afford it, I hope you enjoy the fine German luxury.  But if you are spending most of your money to rent a car that is depreciating in value each time you jump in the driver’s seat, I would challenge you to reevaluate your priorities.

I knew a client who got involved in a business with some partners who had to drive luxury cars to “look the part”. Well, after things got tough in the business and the partners bailed, guess who got stuck holding the bill? There are all kinds of phrases to describe people like that – champagne tastes on a beer budget, filet mignon on a hot dog budget, big hat with no cattle.

I love this Tamil proverb that roughly translates into English “Lavish outside the home, starving inside of it”.  There are a lot of posers in this world that try to present themselves as wealthy when their net worth is negative and they are buried in debt. True wealth is built on having money, valuable assets, and a strong net worth.

Balancing Career and Finances

Even if you really enjoy your job and you are happy with your salary, make sure you focus on work life balance. Use your money to help recharge the batteries when you need it and take a vacation. One of the worst things I did was when I was trying to save like mad in order to make a career change, I skimped on vacations and time off. That was a huge mistake.

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You need time to take a break from the stress of day to day life and rejuvenate yourself. Even though I was desperate to make a change, I should have taken some time outs along the way. You will find more satisfaction in your work. It also helps you realize that the world will not stop rotating if you take a few days out of the office. It does not have to cost a lot of money to get a well-deserved break.

Do not become so frugal that you feel like there is no fun allowed. You work to support yourself and you deserve to enjoy every day you can. Budget some fun money for your hobbies and other pursuits. Use your resources to spend time with people that bring you some joy.

Find What is Important to You

It is interesting when you read about people who are in a work environment in which they feel content. In most of the studies I have read, things like work-life balance, good management, strong culture, and job advancement are more important to people than compensation and benefits. It is really important to decide what is truly important to you.

I know myself and many former colleagues have made a job change solely for more money and it ended up to be a huge mistake. In some of the worst case scenarios, I know several people who left for a “much better opportunity” and were let go shortly after accepting the position due to budget cuts.

You can’t always protect against that situation, but again I say buyer beware and make sure you do your homework before leaving a good environment. Sometimes you are better staying somewhere for a little less money to keep the things that are more important to you.

Chasing a salary is not going to make you happy if you are missing the things that keep people satisfied in a job. If you want to generate more income, there are so many side opportunities these days to pursue.




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