/ MONEY SAVING TIPS, TOXIC MONEY MIND-SETS

Comparison - the fast track to being broke

Let’s face it, we compare. We compare ourselves to others all of the time, our jobs, our achievements and even our looks. This shallow and worthless mind-set (amplified by social media!) also has a profound impact on our finances. Specifically, when we are unable to make financial decisions based on sound logic, because we feel that we need to “Keep up with the Joneses”. Let’s go into some of the financial decisions that we make when we compare ourselves to others.

“I need to show them that I have money”

What stupidity. Because of insecurities in our own hearts, we try to show others that we have money. We do this by:

  • buying clothes beyond our income
  • financing cars we can’t afford
  • going on extravagant holidays to add to social media

and many more reasons. Ultimately, this comes down to one simple reality, lacking confidence and being insecure; there is of course nothing wrong with buying nice things, but when we do it at the expense (pun intended) of our future financial goals and not being able to save regularly, we truly are on the path to being broke.

“I deserve a lifestyle that I didn’t work for”

Picture this, a person earning £45,000 and working in an expensive city, such as London. Let’s quickly do a financial breakdown. This individual would typically take home around: £2,853.33 on a monthly basis (if they opt out of pension contributions - not recommended). Sounds like a lot of money, it is! Let’s break this down a little further and say:

  • I deserve to live in a nice area in London: £1800 rent p/m
  • I deserve to eat out at expensive restaurants: £350 p/m
  • I deserve an amazing car: £300 p/m
  • I deserve that brand of clothes: £200 p/m

Wondering how much is left? £203.33. Just about enough to cover travel, let alone food. So the question is, how do they have the money for food and other expenses (bills, etc)? Credit. People live at 120% of their monthly income, by borrowing every month and leaving themselves in a perpetual cycle of debt. Why? Simply because of comparison.

Simply reducing each of these outgoings by 20% would give them an extra £500 a month. Enough to not require a credit card and if they were willing to save up and buy their car with cash, they would even have enough to put away a little bit of money towards and emergency fund in case a rainy day comes along.

“I deserve to have fun like everyone else is”

Now this one is more understandable, it’s important to have fun and not waste our youth on being stingy with money, however the real problem here is that we often (if not always) equate fun with money. This simply isn’t true. When we were children, we had so much fun. Actually, when we remember these times, it’s the relationships that we formed and how we played together, rather than the money that made these times memorable. Yes there was some money involved, but the point is that we often spend to have fun when our lives are empty. We use money to fill in the void of the lack of true, authentic friendships and communities that we could be a part of.

We should aim to have fun and shouldn’t hesitate to spend on having it, but we should never use the emptiness in our lives as an excuse to overspend and ruin our financial health to appear good to others.