That’s right, what you make is as important as what you spend or what you don’t spend (save). You probably know someone who has a six-figure salary that is still in debt and can’t seem to have the finances together. Or you know someone with a modest salary and who is striving, and you wonder how they can manage. The secret lies in how well they handle what they earn. Wealth building depends on your ability to save and invest properly.
What most of us have not mastered yet is to leave within our means. I can even go a step further and say we should leave below our means (for a season). It’s very tempting to purchase things we want but don’t need just for our comfort, keep up with the trends, or to impress others. Although this will make you feel good for a moment, it will destroy your financial health. There are millions of ways to spend your money, and I’m pretty sure no one needs advice on that. What I want you to focus on is the future, NOT the now!
Before you make any purchase, ask yourself questions. Take time to make decisions. And avoid impulse purchases.
Your lifestyle needs to adjust to your income, not the other way around. What does that look like? You know how much money you have or earn; you know what you can and can’t afford (if you don’t, figure it out). There are zero excuses for buying things you can’t afford. I know life happens, and sometimes you can’t help but take on debt. If you do, try to limit the amount you borrow to the minimum and have a plan to pay it back as soon as possible. Pick a date when you will have that debt paid off.
Don’t upgrade your lifestyle with an increase in income. You heard me correctly: your income’s growth is an opportunity to build wealth, not to increase spending. I’m trying to shift your mind about this spending mentality that we see being praised and encouraged around us. Just because everyone is doing it doesn’t make it right. You CAN be different. You NEED to be different to protect your financial future and legacy.
Good habits and consistency will beat a high salary any day. The principle of money management applies whether you make $30,000 or $100,000 a year: (1) You have to spend more than you make, (2) You have to save, then (3) You have to invest and build wealth. If you can’t master step #1 on a low income, you won’t learn it with a higher salary. There is a saying that we gain the most valuable lessons during hardship. Don’t discount your entry-level salary, thinking there is nothing you can do with it. It’s during those times where you learn to “stretch” the dollar. And hopefully, those lessons will stay with you even when your income goes up.
Whatever salary level you are at, start learning and applying these sample money management concepts, and I promise you will feel empowered and motivated. Don’t put it off. The perfect time to start your financial journey is now! Little by little, you can create a financial future that you are proud of. It won’t happen overnight, but as long as you are working on it, you’re winning.
“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” Robert Kiyosaki
