I wrote a post recently about how broke people can’t give. It’s true. If you are paying out every single dime you earn just to cover your expenses, there is nothing left to give away. What’s the issue? Is more money the answer? When I coach someone on their finances, only about 10% of them don’t have money left over after we go through the exercise on paper to list out all their sources of income and all required expenses. Even those who swear at the beginning of our meetings that there just isn’t enough money and their financial ship is sinking are usually less than 30 minutes away from discovering (usually to their great surprise) that there is actually surplus money coming in. Obviously therein lies the problem.
If more money isn’t the real answer and most families actually do have enough, then what’s the issue? If the math works, then it has to be a behavior issue. There is no other reasonable answer. For that reason, we have to look at behavior. Why is it that most families, no matter the income, believe more money is the answer? Why is it that the majority of Americans want to be generous but aren’t? My theory: many of you have forgotten the difference in a need, a want and a wish.
Most people want to be generous – they want to be able to support causes they believe in, care for those less fortunate and help out families who may need it. But they’ve forgotten the difference in what they need and what they want or wish to have.
The concept of needs, wants and wishes is really very simple. But due largely to a debt-infused, easy money society, fueled by constant marketing and advertising campaigns, we have gotten our priorities so far out of whack most of us now believe the lies that we need every modern convenience, and we need it badly enough that we can’t save up and buy it with cash. So we go to work every day to pay stacks of bills and give our money away to finance companies. We go to work every day to pay payments on stuff we don’t even like any more and wish we’d never bought. We go to work every day and are literally slave to the lender because we can’t escape the mess we’ve gotten ourselves into.
May I offer an alternative idea? Why don’t you look around you and consider the things that truly are burdens rather than blessings and get rid of them! Literally give that stuff away (or sell it!). Give the stuff back to the finance company, the bank, the credit union, or whatever other place that keeps sending you bills. I know you may not be able to send it back to them directly, but you sure can sell the stuff and pay off those debts, right? Why not radically change your thinking and realize stuff isn’t what makes you happy? Why not get rid of all the stuff that keeps you under a burden of debt so you can free yourself from it?
I know this idea is a bit outlandish and some would even call it crazy. Consider it with me for a minute, though. Indulge me. Let’s say you decide that anything you can’t actually pay for – pay CASH for – you simply don’t buy? Give it a trial run. Here’s how. On paper: With the exception of groceries, utilities (and cable and cell phones don’t count here), clothes and BASIC transportation, cut out everything else that costs you money and see what that your budget looks like. See how much free money you have floating around that you get to save, spend on things you really want and can afford, or give away to anybody or any cause you want. Before you continue, take a deep breath.
Now, add back a dose of reality. Remember it isn’t evil to have a nice car, a decent house, a cell phone or cable television. If you can afford those things and want to pay for them, go for it! With that in mind, begin adding back the things that really do matter to you, one by one, in their order of importance. You may say giving to charity matters – put your money where your mouth is. You may say you believe in a certain cause – put your money where your mouth is. You may say you need to save for retirement (and you do) – put your money where your mouth is. When you run out of money to “spend” on paper, see what didn’t make the cut. If cable TV, a particular hobby, the new car you’ve been eyeing or the big vacation you are planning in a couple of months don’t make the cut, decide whether or not you want to save for a while or stick the habits that have kept you from financial success.
It is really up to you. The way I see it, about 90% of those in “financial trouble” are really just not putting their money where their mouths are. The other 10% really do have a math issue – there truly isn’t enough money coming in. Here are a few thoughts on that issue. For everyone else, I encourage you to break out some paper and get to work.