Have you ever uttered the phrase, “If I made just a little bit more money….” or “I would be happy if I just had an extra $10k a year”? I think at some point in each of our lives, we all have. “You know, if we made an extra $10k, money just wouldn’t be nearly as tight and we could enjoy life!” Sure, maybe you’d be able to afford a jet-ski or you’d have a little more comfort when you write the check for that electric bill, but is this really 100% true? Does the amount of money we earn really have an effect on our happiness and our overall situation?
I’m thoroughly convinced that an increase in your salary will not improve your situation, and I have plenty of examples to prove it.
Your Salary Doesn’t Matter
I’ve seen this scenario play out time and time again, and I bet you have too! Somewhere out there, there’s a husband and wife that are living paycheck to paycheck, and they’re just waiting for the day when one of them gets a raise so they can start putting money in the savings and maybe even start a retirement account!
Well, that day that seemed it would never arrive was suddenly here! The wife just got an offer to move up in her company, and it comes with a 30% raise! They were both so excited! They could finally live like normal people! No more Ramon Noodles for dinner! In fact, to celebrate, they went out to the fanciest restaurant in town and dropped $150 on a single meal. During their dinner, they realized that her car really didn’t represent her title very well, now that she’s a big deal at her company. So, the next day they traded in their perfectly good used car and purchased a brand new mid-sized sedan that came with monthly payments!
Do you realized what just happened? Suddenly, this couple has no raise at all! Instead of being able to save and invest in their future, they’re now making payments on a depreciating asset. This happens every single day in America. We truly do mean to save and invest, but it just seems like the money is never there! The paycheck to paycheck lifestyle just continues to play out, regardless of the size of the paycheck.
More Debt Please
Our society is so accustomed to purchasing everything on credit, that when we get our hands on some extra cash it’s only natural to sign up for some more payments! This could be new furniture, a washer and dryer, a family boat, or even a small cottage on the lake! So, instead of actually getting ahead in life, we are putting ourselves farther in the hole, with very little hope of ever escaping!
Learn to Save
I have a few friends that fail to manage their money effectively. It’s true that they don’t make a large yearly salary, but it should be more than sufficient for them to coast through life without too many bumps in the road. Instead, it always seems like they’re in a financial crisis.
These same friends choose to buy their groceries at the local supermarket because they enjoy the atmosphere. It might not sound like much, but they’re paying $2.79 for bread and $3.29 for milk when they could limit their spending to just $1.69 and $2.39 at Aldi. Sure, the store isn’t quite as fancy and they don’t offer every kind of spice imaginable like some supermarkets, but it’s CHEAP! On average, if they just changed where they shopped for their food, they could save 40% on their grocery bill! If they regularly spend $300 a month at the supermarket, they could be saving$1,440 a year by switching!! Crazy huh?
If you do in fact learn how to cut down your monthly expenses, that means that you suddenly have an extra wad of cash to invest each month (do NOT go out and buy a new car!). Get into the habit of investing! So many people put this off for far too long, even those that have a hefty salary. If, however, you do start to invest your money, you will be miles ahead in the future compared to those high-income earning friends of yours. Like I said, your salary does not matter.
Learn to Be Content
Our society today teaches us that we need a bunch of stuff and a ton of wild experiences to be happy. This is absolutely untrue! Do you remember how it felt when you bought that car “that you’ve always wanted”? It was exciting wasn’t it!? But, how long was it before that excitement wore off? For most, I’d say that after a month, that car was just a car again. Happiness is not derived by the number of toys we have or by the size of our house. Happiness comes from a confidence in who you are and why you were put on this earth.
Most people increase their lifestyle with an increase in pay, but is that really necessary? No! In fact, it’s short-term thinking that often leads to empty pockets during retirement. If you are content in the present, it becomes incredibly easy to look to the future and make decisions today about what may happen 20 years from now! If you don’t have this vision because you’re never content with your current life, your salary certainly doesn’t matter.
You’re Blessed, and Don’t You Forget It
If you have a roof over your head, shoes on your feet, and food in your stomach, consider yourself lucky. With just these staple items, you are more wealthy than 75% of the world. Step back for a minute and take a look at all that you have around you. Sure, you may not have that boat that your neighbor brags about or the new Cadillac that shimmers in the sunlight across the street, but who the heck cares?? It does not matter!
Most of us own a car. Does it matter whether it’s a Toyota or a Ferrari? Absolutely not. They both get us from point A to point B. The same is true for your house. Does it matter whether you have an 800 square foot bungalo vs. a 5,000 square foot executive house? Sure doesn’t. You’ll have exactly the same comfort when you sleep at night as that big time executive that lives on the ritzy side of town.
Live with the future in mind and you’ll soon find that your salary does not matter.
What do you think? Does Your Salary Matter?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.