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budget

The myth of earning more

I’m a research junkie.

Image By: AMagill

I love looking at numbers and identifying trends.

Particularly around other people’s behaviors.

While I was researching google search terms on the topic of money, I stumbled upon something that stopped me in my tracks.

Something that made me rethink everything about the way I talk about money.

It turns out people really want to get rich.  In fact, 7.4 million people searched the term ‘get rich’.

The way I see it there’s two primary ways we can make that happen:

1. Earn more money

2. Spend less money

And if google is any indication, people clearly prefer option 1.

Earning money beats out spending less on google searches by nearly a 9:1 ratio (2.7 million searches compared to 301,000).

I get it, earning more seems like a magic bullet solution.

It’s easy to think that once you make six figures, richness will just automatically happen.

But it’s not always the right solution.

Making money isn’t synonymous with getting rich.  Far from it.

In fact, one survey by Thomas J. Stanley, found many high-income earners are actually less efficient at becoming millionaires than their moderate income counterparts.

Once people start making more money, they have a tendency to spend more money. They live in more expensive homes in pricier neighborhoods and increase their lifestyles to match their incomes.

If you want to really create wealth, you have to be willing to look at both sides of the coin.

Think about it:

  • How much money were you making 5 years ago?
  • Has your income increased?
  • Has your net worth increased?
  • Has it increased by the same percentage as your income?
  • Do you know what your net worth is?

Most people don’t.

I used to be one of them.  In fact, I’m a perfect example of the earn more myth.

As recently as a few years back, I was making six figures and was far from rich.

I had no idea what my net worth was.

I knew exactly how much money I made, but I had no idea how much I spent.

If income was the solution to wealth, I would have nailed it.

But as I found, creating wealth took more than a high income.

It took consciousness.

It took awareness.

It took understanding.

And it took spending less than I earned.

If Google has it right and we really want to get rich, we have to be willing to look beyond earning.  Earning is only half of the equation.

Share our comments below.  

I’m curious: what do you think about the google earn more, spend less discrepancy? 

How are you creating wealth?  What’s had the greatest affect your bottom-line?

5 Comments

Making Peace with Target

Do you shop at Target? Or Nordstrom or Banana Republic?

Not just occasionally, I’m talking at least a few times a week?

I mean, they have pretty cool stuff, right?

I’ve so been there.

My husband used to say, what exactly do we buy at Target? We seem to go there A LOT. (By we, he really meant me).

Eventually I learned the problem wasn’t about Target.

Target was simply a symptom of a bigger challenge.

The real issue was understanding why I felt compelled to spend so much money on stuff that wasn’t bring value into my life.

Target made it easy for me to disengage.

To use shopping to feel better about life for a few minutes a day.

To get lost in all the cool stuff and forget about my problems.

But  I knew I could do better than Target.  For my money, and myself.

So I took a hard look at my money.

What I saw wasn’t pretty.

Nearly all of my net worth was comprised of my 401k.

Which doesn’t sound so bad.

Until I realized I was putting 10% of my salary in my 401k and that 10% made up  up 90% of my net worth.

What exactly was I doing with the other 90%?

That’s not a simple question to answer.

On the surface I was just shopping.

Buying clothes.  And decorations for the house.

And whatever else I wanted.

Except I didn’t really want any of it.

What I really wanted was to be liked.

To be admired for my style.

To be loved.

To be happy.

And Target just couldn’t get the job done.

No matter how much I spent.

So I had to make peace with myself.

I had to discover what I really wanted.

I had to learn who I was without wearing a new outfit.

And that was hard.

It still is hard.

I’m learning to connect with myself.  Sometimes I don’t like what I see.

Sometimes it just plain sucks.

And it’s rewarding.

I’m constantly learning and growing.

I’ve learned I really don’t like Target clothes that much.

I’ve learned that I’m uncomfortable sitting still.

I’ve learned that intimacy and connection make me more uncomfortable than sitting still.

And I really want those things anyways.

I’ve learned that I’m not always comfortable letting people see me.

But I want to let them see me anyway.

I want to see me.

And when I started to see me and let the world in on what I was seeing, a funny thing happened.

Target lost its luster.

It wasn’t the joy factory I’d made it out be.

But I was.

 

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November Account Review

Each month I do a full account review of my finances.

I review every dollar I made and every dollar I spent.

Everything goes in a category.  Each category gets totaled.

Sounds kind of boring, right?

Except it isn’t.

It’s mind-blowingly fascinating.

Astounding.

Even though I plan in advance with my budget, balance my checkbook daily and generally keep good tabs on things, there’s almost always one line item that shocks me.

What I think I’m doing with my money and what I’m actually doing with it are often very different.

And it’s awesome.

I get to discover on paper how my money is working for me and how it’s working against me.

I get to learn about myself and my money on deep and rich level.

Most importantly, I get to decide if I want to keep engaging in the same behaviors or change them.

To make it even more fun, I’m going to share what I discover with you.

I’m going to tell you what surprised me and I’m going to show you how I change my thoughts around my spending to create a different result. This is where I get really, real with you.  You’re going to see how a money coach coaches herself around money.

Fun, right?

November Account Review:

Top 3 Spends

  • Mortgage
  • Food
  • Cell Phones

Biggest Surprise

Food: $1400 – Almost equally divided between eating in and eating out.

Thoughts: 

The single greatest thing I’ve discovered this month is that my thoughts about not wanting to cook are preventing me from coming up with a plan around meals.

Not only do I end up spending more on expensive, last minute food items, I actually get less enjoyment from the whole process of eating.

When it comes to making dinner, I’m often scattered, hungry and annoyed.  Not a pretty picture.

If I want to maximize my joy from food and my money, I’ve got to think about the whole thing differently.

Things to consider:

How much value am I getting from this spend?

Not as much as I could be.  I haven’t necessarily been making high quality foods or having remarkable dining out experiences.  For $1400 I expect more than what I’ve been giving myself.

Could I have the same satisfaction/enjoyment around food and spend less money?  Why/Why not?  

Absolutely.  I throw out a lot of food and am generally disorganized when I go to the store. I end up buying food that I don’t enjoy that much because it’s easy/fast. If I planned in advance for the week I could have foods I enjoyed more and spend less money.

What do I think is stopping me from planning/organizing?

I don’t really like to cook so I don’t put much planning into it.  It’s funny because not planning actually makes me dislike the entire process.  It’s time to eat and I realize I don’t know what to make.  I end up going for what’s fast and easy vs. what I enjoy.

The biggest motivator for me is that I want to enjoy my food and my money.

I’m playing around with the thought: planning my meals in advance helps me enjoy my food and my money.

It’s totally true and it helps me get excited about a plan for the week.  I know I’ll end up eating better and having more money.

Goal: Reduce food expenses to $1000 a month.

Put your comments in the comments section below. Specifically answer these two questions:

  1. Are there any categories where you’re spending more than you realized?
  2. What tips do you have for maximizing your food budget?
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