Working hard and always short of money? That’s why

Ph.D. in sociology, coach, business trainer

“Many people feel that they don’t have enough money. Sociologists have noticed that this feeling is subjective and has nothing to do with the size of a person’s income. There is Parkinson’s law. It says that as a person’s income grows, his expenses usually grow proportionally. Most people tend to spend everything they earn, regardless of the size of their salary.

The famous American boxer Mike Tyson, at the height of his popularity and fame, received astronomical fees. At the same time, he was happy and enthusiastic to blow it all. As a result, when times got dark, he found himself almost destitute.

Mike Tyson was not alone in this behavior. Many people have this way of managing their finances. When they look in their wallet or bank account, they sigh sadly because they have no money. However, these people often lead quite tolerable and sometimes very good lives, with little or no money to spare. However, the feeling that they are poor or that they are haunted by financial problems is ever-present and poisons their lives.

The feeling of perpetual scarcity is very unpleasant. If it is inherent in you, you should get rid of it as soon as possible. So how can you learn to manage your budget more wisely?

Let’s list the markers that will tell us that we are mismanaging our money.

1. We constantly or frequently experience feelings of scarcity. We feel like there is not enough money and it stresses us out.

2. We don’t actually have money in our wallet and account all the time or there is critically little money there.

The first and second points are different. In the first case, a person can only feel the lack of money and worry about it. In fact, he may actually have enough money. In the second case, the lack of money is a real fact.

Both are unpleasant. Both of these points are markers of improper budgeting.

3- We regularly ask our acquaintances to borrow money. Agree, this is morally very uncomfortable. We know very well that we are taking someone else’s money, and we will have to pay back our own.

4. We regularly ask our significant other for money for living or shopping. It is a common situation: you are a girl or wife and you ask your man or husband for money. Everything seems normal, but there is a little negative residue from all such requests.

It is much nicer to have an independent income and to be free to dispose of your money. If we have not seriously considered this before, we should definitely think about it.

5. We periodically make spontaneous, unjustifiably expensive purchases and then run into a shortage of money.

Spontaneous purchases are nice. If they are expensive, even more positive emotions, but under one condition. Such purchases should not cause critical, total damage to our wallet. If they do, it means we’re not interacting wisely with our finances.

6. We make some of these purchases on credit. Well, this is quite sad. Taking out loans to expand your business is fine. But to do it for the sake of an expensive handbag… It smells of bad taste.

7. We regularly take out new loans to pay off old ones or to pay interest on them.

In the past, this behavior was called a debt trap or quickly led to one. Now there are a lot of banks, and it sometimes takes quite a long time to re-loan. But in general it is an extremely wrong and even dangerous lifestyle.

The presence of the sixth and especially the seventh markers in our lives indicates that we are not just mismanaging our budget, but are on the edge of serious problems, if they have not already caught up with us.

What can we do about it?

To avoid getting into such situations and to make a step towards proper financial management, let us first try to follow three simple recommendations.

1. Earn more

This may sound like Captain Hindsight. But let’s take this simple idea to heart. If we are regularly short of money, it is worth the effort to work towards increasing our monthly income. Let’s take this seriously.

2. It is worth it to make ourselves happy with money

This does not mean that we should buy expensive things on a regular basis. The point is that different people are happy about different things related to finances. Some people really feel a surge of happiness when they buy something for themselves. Others are happy when, on the contrary, they have the opportunity to set aside some money.

Let’s look deep into our desires and determine what makes us happy.

3. It is important to have a stable reserve

Regardless of our preferences, it is worth creating a stable, irreducible reserve. For someone it will be 10 thousand rubles, for someone – 100 thousand, for someone a million or 10 million rubles, and for someone – $ 10 million. The level of the reserve we need to determine based on our income and habitual lifestyle.

We need a reserve in any case. First of all, for moral and psychological reasons. A reserve can be created once and then simply maintained. Then our expenses will fall not to zero, but to its level. And we will not have the feeling of constant lack of money and total poverty.