Making More Money is Never Enough

For many people, the solution to their financial problems or inadequacies is very simple – make more money. They believe that the only financial planning that matters is increasing their income either by getting a better job or improving the revenue-generating ability of their businesses. Every other talk relating to their finance does not sound important to them. For them, if only they could increase their salary or business profit, they would finally achieve their goals and become what they want. But is this view of things accurate?

The need for good personal finance habits

For many of these people mentioned above, the whole talk about personal finance and good personal finance habits is unnecessary.

However, if we have learned anything from our experience and others, it is that without sound personal finance habits, even making more money will not help you achieve your goals or become financially independent.

[bctt tweet= ” However, if we have learned anything from our experience and others, it is that without sound personal finance habits, even making more money will not help you achieve your goals or become financially independent”]

Maximizing your current financial situation

The first thing that good personal finance habits will do for you is to maximize your current financial situation. By implementing sound personal finance habits, you would be surprised how much progress you can make towards your goals, even in your current financial situation. You would be surprised how much cash you are “leaving on the table” and how closer to financial independence you can be even with your current situation. You can even be surprised how much of the debt you incur is unnecessary and how much assets you could be building.

[bctt tweet= ” By implementing sound personal finance habits, you would be surprised how much progress you can make towards your goals, even in your current financial situation”]

Providing an appropriate context for growth

The best time to create a habit is now. The reason is simple. The more time you spend on an action, the more habitual it becomes. It works for good and bad habits. The more time you spend doing good things, the more you do it, and the easier it becomes. The opposite is also true. The next time is easier.

When you start developing good personal finance habits today, it becomes habitual and easier to continue on that path. If you keep on doing the opposite, it becomes habitual, and it is easier to continue on that path. This means the more time you delay implementing good personal finance habits, the more difficult it becomes to change. It will be easier for you to stop some bad habits today than it will be tomorrow. The more time you spend delaying, the more difficult it becomes.

[bctt tweet= ” The more time you delay implementing good personal finance habits, the more difficult it becomes to change. It will be easier for you to stop some bad habits today than it will be tomorrow. The more time you spend delaying, the more difficult it becomes.”]

As a result, when you implement good personal finance habits now, it makes it easier for you to follow through with those good habits when your income increases. There is already an appropriate context for the growth in your income.

But without good personal finance habits, even an increase in income can leave you in a worse situation than when your income was lower. Without appropriate planning and a good context, more money can even be a curse rather than a blessing.

[bctt tweet= ” But without good personal finance habits, even an increase in income can leave you in a worse situation than when your income was lower. Without appropriate planning and a good context, more money can even be a curse rather than a blessing.”]

Implementing sound personal finance habits

Let’s take a look at some of the important personal finance habits that you need to implement right now.

Budgeting

He who fails to plan plans to fail. It is not just a cliché; it is the reality of life. Know your sources of income and outline all the things you need to spend money on every month. This is the right time to look at all the unnecessary expenditure items that are draining your income and blot them out. It is also a good time to identify the huge expenditure items you have that for which you can probably get cheaper and better alternatives. Ensure you are spending below your income

Invest in a retirement account

I want to assume you are already funding a retirement account as part of your monthly expenses. But in case you are not, please do well to set up a retirement account with your employer or independently if you are not an employee.

Pay attention to necessary insurance policies

Many insurance policies are unnecessary. But many are necessary. If you don’t have health insurance, life insurance, homeowners/renters insurance, automobile, and disability insurance; then you should consider setting one up

Have an emergency fund

If you do a good job with your budget, you will have surplus funds to invest. One of the important places you need to invest in is an emergency fund. An emergency fund is a fund you set apart to cater for unexpected circumstances like job loss and medical emergencies. It will prevent you from incurring debt when emergencies occur

Pay off your bad debts

Don’t let those bad debts live long. It’s better to pay off your bad debts than invest your money since, in most cases, the interest you pay on your bad debts is more than the return on your investment.

Invest your money

Invest in real estate, stocks, mutual funds, bonds, etc. Where you invest will depend on many factors, including your individual preferences.  The structure of your portfolio will also depend on your age and how close you are to retirement. But whatever portfolio structure you choose, the key is to try and invest in good, safe, and profitable assets and spend some time learning the wisdom that guides your chosen investment platform.

Conclusion

We could say more things under each of the categories above, but the goal here is to help you understand that making more money is never enough. If you don’t have a budget, you are not saving money, you don’t fund a retirement account, you have no emergency funds, and there is a pile of bad debts and no investments, increasing your income will not do you any good. This is why people can have windfalls and still go broke. It is because increasing your income is not enough.

[bctt tweet= ” If you don’t have a budget, you are not saving money, you don’t fund a retirement account, you have no emergency funds, and there is a pile of bad debts and no investments, increasing your income will not do you any good. This is why people can have windfalls and still go broke. It is because increasing your income is not enough. “]

What you need to do is to cultivate good personal finance habits now. It will provide the right context for you to receive that higher income and maybe even a windfall. If you are not intentional with your finances, you will often find yourself in deep waters. But if you tread with more intentionality, you will be on the path towards self-actualization.