By Lola Salvador Akinwunmi, Regular Columnist.
Have you ever wondered why some who earn a six figure income complain of money problems, yet those that earn way less have a more fulfilling and content life?
I can tell you right away it’s not what you think! More money does not make money problems go away, nor does it hide poor money management skills. It only further enhances the poor skills and mindset developed over time and elevates one to another level of problems.
Lack of Money Is Not the Answer
One thing I’ve learned over the years is that lack of money is not the answer to financial problems. What happens is that a principle kicks in a.k.a. Parkinson’s Law, which essentially means that the more money you make, the more your expenses increase. Suddenly that $500 shoe appears very much affordable.
Does that ring true? Explore with me for a minute, and you’ll discover that money problems essentially spring out of our behavior with money and have nothing to do with how much we earn. This is the truth and it’s actually very great news! If you have lots of money, this is awesome…and if you feel like you don’t have enough this is even better news because a change in perspective brings about the shift.
Not Me. Yes, You!
We’ve often heard of lottery winners who within a very short time period go from being millionaires to bankrupt. The statistics indicate that 70% will be worse off than they were within 5 years of their big win. As shocking as this sounds, we are sometimes no different. We typically ask ourselves the question “how did that happen?” And even make our own false claims that we would never make silly mistakes like “them.”
Unfortunately most of us will become like “them” if our attitude and understanding about money does not change, and we’ll sadly suffer their fate. It’s the poor foundation on money matters that gets us into trouble.
What I Should Do to Avoid Money Problems
So the million dollar question to ask is how do we ensure that an increase in money or income does not lead to an increase in financial problems?
Be Content. Yes, you are reading that right. Being content and honest with yourself causes you to take a long hard look at the choices you’ve made to date and own up to them. Your healing can only start when you take stock of where you are and your resolve to be content no matter what. Begin by monitoring the movement of your money (expenditures). Ensure you’re spending in the right places and not based on emotions or nice to have.
Those nice-to-have items are the things we can live without but purchase to either keep up with the Joneses, or dare I say, because of greed. We don’t need to have the latest and greatest technological invention.
Don’t buy an item impulsively, instead plan for purchases big or small. As you address the root of your money problems, it becomes easier to handle the pressures when the increase comes as you are able to make intelligent decisions with this newfound wealth. If planning isn’t your thing, seek professional help.
Dealing with money matters now guarantees you maintain critical work life balance by removing the extra burden that comes with financial stress as you progress in your career or entrepreneurial journeys.
Lola Salvador Akinwunmi is a Career Strategists and mother of two who teaches professional women how to leverage their careers by tapping into their inner propreneur abilities while maintaining that crucial work life balance. She is the founder of LolaSal Inc., which connects professional women to Premium job opportunities. Get more information here.