You make good money, but you have none

16 June 2017

When we are making good money, we are not as careful with our spending, or budgeting. We also increase our living expenses and spend to maximum capacity. The more we make, the more we can afford, thus, the more we spend, the vicious circle continues.

Expensive lifestyles, are you a culprit?

Many people dream of someday making enough money to be able to buy whatever they want, and never have to worry about making their monthly pay cheque last for as long as possible. But the reality is that having a lot of money costs a lot of money, and living an expensive lifestyle doesn't come cheap. Not only do bigger houses, luxury cars and better schools cost more, but the everyday cost of maintaining fancier things can really add up. An active social life filled with weddings, parties and trips means you're spending on babysitters, travel, and clothes, you have to spend money just to participate.

A healthy lifestyle is important to most, but can come at a price. Spending on organic food, gym memberships, spa appointments, therapy and personal trainers are all great, but they too come with a hefty price tag. One must ask themselves, can a healthier lifestyle be done on a smaller budget?  Can the gym membership be swapped for outdoor exercise, can spa treatments be done at home? can a personal trainer be swapped for a YouTube video? The answer is of course they can, but when we have the money, let’s spend it before it burns a hole in our pocket.

Expenses that can't controlled and those that can

Higher income levels usually happen as you get older, and as you get older you have more responsibilities. Kids, houses and spouses, all of which are very expensive! Taxes - the more you make, the more you owe. Cars are money pits. Not only does their value constantly go down, they also devour fuel by the gallon and require all kinds of pricey maintenance.

But as the old saying goes, when there is a will there is a way. If you have access to public transport, you can save quite a considerable amount of money on fuel, parking, and maintenance over time. For a small percentage of the cost of owning a vehicle, you can get from one side of town to the next, to work and back, and to most important events. Each time you’re able to leave the car behind, you’ll be saving money. Some expenses cannot be controlled, but when we have control over what we spend, we need to take that control and use it wisely.

Could making and maintaining a budget change your life? Sounds dramatic, but keep reading...

We're all prone to developments in a financial situation, and dealing with them, both the positive and the negative changes, is as much about recognising the change from a psychological standpoint as it is about adapting your budget.

A budget is more than a tool to help you manage your money effectively; it is also an important guidepost to indicate that you’re moving in the right direction financially. Done well, a budget can help you prepare for unanticipated expenses, and afford you the luxury of spending your money on the things that are most important to you.

One roadblock to maintaining a budget and financial plan is disagreement between significant others on the subject of money. Perhaps what you consider to be a “want” is a “need” to your spouse/partner. When opinions differ, there is a might higher chance of conflict and in return, money not well spent.

An important element to successful budgeting is commitment. Budgeting is not a discreet event, it’s a lifetime journey. To be successful, you need to monitor your progress regularly and adjust your budget periodically to stay in sync with your changing life.

Rethink how you pay

Automatic payments make things much easier for paying bills, which is why if you pay your bills by direct debit you could save yourself a small fortune.

If you are in the habit of paying your bills late you're probably paying extra for the privilege. Start paying your bills on time, and say goodbye to late fees and rate hikes once and for all.

Direct debits are a much easier way of making a payment as, once set up, they don't require you to do anything else. By changing to paying by direct debit, you can save an average of €99 per utility bill a year.

Change your attitude towards your money and be grateful for what you have rather than complaining about not earning enough or having enough of it. You’ll be surprised by how much a simple change of attitude can help you to manifest more money and help you cut expenses.

Think differently about budgeting. We all have financial goals, but it takes both constructive planning and a good attitude to bring achieve them. You may make good money, but it up to you how you spend your hard-earned cash. Plan, budget and enjoy your money to its full extent.

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