How We Lie To Ourselves About Money
Part 2: “I can’t begin because…”
“You may be disappointed if you fail, but you are doomed if you don’t try.” -Beverly Sills
I, of course, want every one of my clients and contacts to do very, very well — and be as financially secure as they’d always desired to be.
But, it requires self-honesty to get there.
No true fortunes (however small) have ever been made without clarity about one’s self. Hence, the reason behind this series. Even for those who have larger numbers on their bank statements, these lies can be just as toxic.
In the last installment, I covered: “I will get my finances in order as soon as . . . “
Well, the second lie begins something like this: “Now that I look at my finances, I can’t begin to save because . . . ”
Everyone believes their finances are tight. The fact is that finances are always tight. For most of America, there are families living off twice your income who think their finances are tight, while other families are living off half your income, and still saving 15% of their take-home pay.
Believe your health-care costs are high? Health care is about 17.3% of the economy. On average, you spend about the same percentage in your budget. So if your income is $60,000, you likely spend something like $10,380 a year, or $865 a month. No matter what happens with the ACA.
Think gasoline costs are high? The average family spends just 5.4% of their budget on motor fuel. If your income is $60,000, that works out to $3,240 a year, or $62 a week. Fill your tank every week at that price.
The problem isn’t health care or gasoline. The problem is all the nonessentials: cable, phone features, gym memberships, subscriptions, fashions, furniture, decorating, dining out, trends, gadgets, lattes, entertainment, newer cars, larger houses.
Many people justify these extravagances by telling themselves, “I work hard. I deserve to be rewarded with some nice things once in a while. Life isn’t just slaving away at work and putting money in the bank.”
But here’s the truth: by definition, you must live well below your means to grow wealthy. Wealth is what you save and invest, not what you spend. The peace of mind that comes from knowing you have produced more than you consume is valuable in and of itself. You deserve that peace of mind.
So let’s move in that direction, shall we?