Most people think they get richer as they earn more

There are a few givens in life that we just take as fact without putting too much thought into it. One of those facts that we believe to be true is that the more money we earn, the richer we get.

Whilst that may be true for that one day a fortnight or month that your salary is deposited to your account, it doesn’t ring true for every other day of the month.

It’s all about addition AND subtraction

We tend to focus on the addition side of this equation - the addition or deposit of money into our accounts.

We forget to look at the subtraction side of this equation - the spending. And that’s the side that actually makes us richer or poorer. It’s the side that we have a huge amount of control over. If we choose to take it.

Sooner or later…

You will realise that spending is what you need to be mindful of if you want to be rich - or even just comfortable and not break into a sweat when you see a bill arrive.

In my experience as a mortgage broker, spending is the number one downfall of just about every one of my clients. 

The excuses I hear are always the same…

• I’d worked hard and deserved a night out/new dress/new shoes/drinks with the boys/cocktails with the girls/a new car/a boat/an exotic holiday….
• I earn a lot so I just don’t think about spending because I’ve got a lot coming in.
• My partner looks after the finances. I just buy what we need to without much thought.
• I’ll just put it on my credit card and figure it out later.

Sound familiar?

The number one reason that people get into financial hardship isn’t that they don’t earn enough, it’s that they spend too much.

Sadly, for many of us, it becomes a roller coaster - and it doesn’t have to be that way.

The first thing you need to do is…

decide whether this type of spending is working for you. Will it help you achieve your financial and lifestyle goals if you continue spending mindlessly?

Are you going to be able to buy your dream home? Will you manage to pay off your mortgage before you want to retire? Do you have a financial buffer in case of an emergency? Do you want your bonus to go on something fabulous rather than paying off debt? Are you teaching your kids good spending habits? 

Do you have control of your money or does your money have control of you?

I want to stop and ask:

Is it time to make a change?

If it is, there are some simple things you can do:

• Become mindful of your spending.
• Record and categorise your last month (or three) of spending and set a budget for the next three months and live on that budget.
• Take your credit card out of your wallet and leave it in a drawer at home. 
• Withdraw your weekly allowance of spending money (including groceries) and pay for everything in cash.
• Find other ways to reward yourself for your hard work other than buying things and spending money.
• Sit down with your partner (or yourself) and take equal ownership of your financial position, set your goals and review them monthly.

Just remember that as we all have our own styles of spending and managing our money, there's not a one-size fits all solution. Try a few new ways to impose limits on your spending and stay with the one that suits you, your family and your lifestyle. Don't procrastinate any longer.

So, it’s up to you

Will you keep focusing on earning more?

Or will you focus on spending less?

Imagine if you did both…

That’s when you truly become rich.