You’ve worked hard to get where your at, and now the bucks are rolling in. You’re netting $50,000 annually, and life is good. But wait a second… Making good money has given you bad habits, because you’re also spending $65,000 annually. That leaves you $15,000 in the hole, and the deficit is increasing each year. Why is your net worth in the negatives? Where did all your free time go?
Sadly, there is a large population of people who make adequate amounts of money yet have nothing to show for it. The problem lies herein the wasteful spending, and material purchases. Theoretically the more money you take home, the more credit you have access to. This spells bad news for high earning habitual spenders.
Net worth has nothing to do with annual earnings! You can make a modest salary of $20,000 and be on course for positive net worth increases via prudent saving. Conversely, the guy who makes $500,000 can spend himself into negative territory. Money is just money - it comes, and it goes. How much money we make is insignificant compared to how we spend that money. This way of thinking gives hope to everyone who wants a better life for their family - through saving and discipline you really can get ahead regardless of your income. Yet, the cycle of working and spending continues across all “class” levels.
North American culture has people working harder and longer to pay for the nice house in the suburbs, shiny cars in the driveway, and numerous expensive material possessions. If we get a raise, its like a green light to borrow more, and consume more. We spend so much of our time paying for the things we deem important. Why are so many people maxed out with little regard for saving? Whats wrong with making less and enjoying the increased free time? Many live under the false pretense that we need to spend in order to enjoy.
Greedy lending & irresponsible borrowing has now caused the greatest economic recession since the Great Depression. Is this what North American society would like to be known around the world for? A lot of eyes have been opened, and I believe it was a necessary wakeup call.
We continue to work harder, picking up overtime shifts and second jobs. Then when we do have a minute to ourselves, we are out there spending it on things that end up in the closet. Our income statements are fruitful, yet our balance sheets are embarrassing. I question whether people are truly happy with their financial decisions. Have we forgotten to enjoy life?
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