Is A Larger Paycheck The Solution?

 


Do you ever feel like your financial stress and ability to manage debt depends all on the size of your paycheck? When it feels like there is more money going out than coming in, it is easy to become frustrated and feel that the issue can solely be blamed on not making enough money. I am not going to deny that having a larger salary can make a huge difference at times. However, I will argue that an extrinsic issue like this may not be the first step in a solution to your money woes.

At the Center for Financial Success, we have found that the difficulty in managing money lies not in the size of the paycheck, but in one’s resolve to learn how to effectively manage their money and stick with it. People are quick to assume that a larger paycheck will solve all of their financial problems – keep in mind that even millionaires declare bankruptcy.

In our experience at the Center working with students and community members to create long-term practical money management solutions it starts with helping the client learn how to live within their means. What does this look like? It looks like avoiding the use of credit on consumer items that you need every month if can’t pay it off at the end of the month. It looks like breaking the habit of living from paycheck to paycheck and learning how to not spend every dollar you make. It involves incrementally cutting back to the point where there is actually a small amount being saved every month. This eventually leads to addressing debt, getting a month ahead, and the beginning of making progress on your financial goals.

The point of this article is not to dissuade you from pursuing a higher paying job. However, there are certain financial habits that must be formed regardless of income level. Regardless if you are making $32,000 or $1.5 million a year, you will fall into the same problems of being trapped in overspending and unnecessary financial stress without healthy spending habits.

Once you are able to develop basic financial management skills instead of focusing only on the need for more money, it can be a little easier to avoid the financial stress caused from overspending. After you establish financial goals and develop a maintainable spending plan, you will find these principles to be effective regardless of how much you earn. You will be getting “more bang for your buck” – a habit that will pay huge dividends especially as your paycheck increases!

Unfortunately, a one stop solution that magically enables someone to pick up the basics of personal financial management does not exist. Sound financial management skills can be compared to a muscle –¬† it must be exercised before it can be strengthened. Just as a weight room is a great resource to strengthen your muscles, there are great resources out there to assist you in growing your personal financial management skills. We offer resources for these skills through our blog, peer financial coaching services, and presentations. When you visit our¬†website, you can find links to external sources we find helpful.

If you enjoyed this content and would like to enhance your personal financial management skills, take a few seconds to fill out our new client form so you can be on your way to a life with less stress with Peer Financial Coaching Services.

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