There are many people that feel that they would like more money. They may feel that it is unfair that some people have more money than others, perhaps they are struggling with debt or they would like to buy more things that they cannot afford. Is right to want more money like this though?
Can we be Satisfied with what we have?
It is worth starting by asking whether we can be satisfied with what we have at the moment. It is worth thinking about whether you are putting expectations on yourself that are too high. Consider whether you really need all the things that you are buying and whether they really make you happy just because you need cash now. You also should be thinking about whether you are paying more for things than necessary and perhaps if you switched provider, supplier and retailers you might be able to pay less and still have as much. It is also worth thinking about why it is that you want more.
Is it Greed?
There are some people that might accused people that want more money as greedy. This is not usually the case at all so do not let this thought hold you back. It could be that you are striving for financial freedom, to build up a good pension pot, to save up so you can send your children to university or to pay off your debts for example. These are not signs of greed, you are not wanting money for moneys sake but you want to achieve specific things with it. If you are just trying to get money because you want to ‘keep up with the Jones’s’ in other words to have things that others have then it is worth thinking about whether this is a wise thing to do. It is unlikely to make you happy and there will always be people that have more than you and so it is likely that you will always feel inadequate.
Can it be Achieved Easily?
Having more money can be easier than we might think. It is often thought that someone needs a big inheritance or lottery win to get enough money to make them happy, but this is not true. Many people who suddenly get lots of money find it very difficult to adjust and it may even make them unhappy and often then quickly spend the money and have nothing left, so this is not the answer. It is much better to work through a series of steps in order to change what you are doing so that you can achieve this. Start by repaying loans, then build up savings and investments by making sure that you only spend money on things that you need and that you really want. The steps are simple, but they are certainly not easy. However, you can start in an easy way by making sure that you are not paying more than necessary for things that you are buying. Things like insurance and electricity are often areas where we pay more than necessary and are easy to switch so start there. Then work through everything you buy and see whether you can pay less. Then start thinking about whether everything you buy is necessary and if you feel that you really want to buy those items or not. You might also want to start using some of that extra money to pay off your debts and also perhaps thinking about ways that you can earn more money so that you can start to accumulate more. It is key thought to remember that if we want more money we will normally have to work hard for it and you need to decide whether this is something that you are prepared to do or whether you think you will be happier as you are.
There are some people that dream of financial freedom. It can mean different things to different people but generally means that you will be able to have enough money in investments so that you will get paid an income without having to work. This is essentially what people do when they are retired as they have money form their pension or other sources which they use to live off and do not have to work. In the UK, we could theoretically achieve this by just not getting a job and claiming benefits. However, this is not something that everyone wants to do and it is likely that it could not be a large enough income for most people to be able to do everything they want to do. So, what can you do to achieve it?
Find a Good Income Source
You will need to start with a decent income source. This means that you will need to find a job that pays as much as you can get. Obviously, how much we earn will depend on where we live, what qualifications we have and what work experience we have. However, doing a job that is paying below what you can earn is not good, so look around to see whether you are being paid a fair wage according to what people with similar skills to you get paid. You may need to see if you can get a pay rise n your current job, try to get a promotion or perhaps move to a different job which pays better.
Reduce Your Spending
You may also need to start spending less. You will need money to invest and so you will need to make sure that you are not spending all of the money that you are earning. This means that you will need to think about what you are currently spending money on and whether it is necessary. There will be things that you have to pay for, such as tax and rent or mortgage, but you will also find that you buy a lot of things which are not necessary which you can potentially cut out. You can start by looking at everything you pay for and then seeing whether you can cut down anywhere. You may be able to stop buying certain things and also to pay less for some of the things that you decide to still buy. By going through everything you could make significant changes to how much you are spending and create significant reductions.
Pay off Your Debts
It can be wise to start by doing everything you can to repay your debts. This might seem odd as you may want to focus on investing money so that you can start to get an income. However, you may find that the debts will be a big expense for you which means that it will hold you back in how much money you will be able to invest. Of course, you may find that the investments have a much bigger return than you are paying in interest of your debt. However, investments are risky, and you could lose your money, which means that you may then struggle to repay the debt. So, think hard about whether you feel that paying off the debts is worth doing first.
Invest your Money
Investment is tricky. Although in the long term, statistically it should be good as the money should increase in value and might also pay an income, depending on what you invest in, there is always the risk that this will not happen and you will lose your money. You should do a lot of research first, to decide what sort of risk you might be taking, how much risk you are prepared to take and what types of investments there are. Many people will use a financial advisor to make sure that they get the right type of investment to suit them.
We spend money on things all of the time and it can seem like our money all disappears really quickly without us really noticing where it has gone. This can feel unfair and it can almost seem like we are working and just paying that money out to all sorts of people without really seeing much as a result of it. However, there are ways that we can cut down our spending. In fact we might be able to do something every day of the year that will help us to cut back how much we spend and lead to massive reductions.
Utilities, Loans Repayments and Insurance
It can be good to start with the big things. Look at your bank statement and find those big expensive things you pay for each month such as insurance, loans repayments and utilities and take on a these a day to deal with. You should be able to find somewhere that you can compare the prices between different providers of these services. This will allow you to see whether it is worth you switching to a different company to save money. This easy process could lead to you spending a lot less. You could also think about how much you use with regards to utilities and you might be able reduce your usage as well, by thinking of one change you could make at a time. You may also be able to reduce your insurance cover (if you are happy with doing this) or increase your excess to save money. You could switch your loan providers as well and perhaps consider overpaying them so that, although you spend a bit more in the short term, spend less in the long term as you will no longer need to pay for them anymore.
Food is something that we need to buy, but we may be able to cut down how much we spend in lots of ways. Eating out can be more expensive than cooking ourselves as can buying pre made food, such as take away meals, ready meals, sandwiches coffees etc. Choosing a cheaper supermarket, buying cheaper brands and buying food products that are cheaper can help as well. We may also be able to buy less food if we cut back on the food that we do not need, things like snacks, alcohol, fizzy drinks, cake, biscuits, puddings etc are all lovely foods but they are not necessary and if we can cut back even in a few of these, we could save money.
Transport, Holidays and Travel
We tend to use transport to go to work as well as to travel for leisure such as visiting family and going on holiday. These items all cost money and it is worth checking to see whether you can cut down. If you own a vehicle then see if you can pay less for insurance, fuel, repairs, breakdown cover etc. If you use public transport then see whether there are any discounts you can take advantage of or whether you can walk or cycle instead to save some money. With holidays, investigate whether there are cheaper options to the ones you normally take that will help you to save money.
Entertainment and Phones
We spend a lot of money on our phones and entertainment like going out to the cinema, clubs, theatre and concerts, tv packages, online films and things like this. Take a look at what you are paying for and thing about whether you can cut down in any areas in order to save money. Even just reducing going out by one night a month could make a difference.
You might have heard a lot about budgeting and think that perhaps you should do it. This might be because you want to pay off some debts or spend less money. However, you might not understand what budgeting is or how it works. This is something that is not surprising as it is not something that we are taught at school and so we just have to guess. It can be good to have a better understanding of what to do and then this will help you to do it more efficiently.
What is a Budget for?
A budget is designed to help you to manage your money. It is a way that you can make sure that you are not spending more than you earn. You might think it is not that much of a problem because you can just borrow a bit of money, but you will find that it will add up and you could end up borrowing so much that you cannot even afford the basics that you need because the loan repayments are so high. This can happen to anyone, on any income and so it is really important to make sure that you get in control before it can even start.
How do I do it?
There are different techniques for budgeting and it is a good idea to look into them and find out which will work for you. Some people will make sure that everything they need to pay gets paid as soon as they are paid. So that means they pay off their credit card in full, loan repayments, utilities etc and everything is paid off. Then they know that whatever is left they can then spend. Another technique is to set up a selection of different current accounts and have money transferred into them when you get paid and then you will know that there is enough money allocated to everything and you will not run out. You can also have a spare account for items that you do not pay for regularly like school uniform, car MOT, Christmas etc, which just builds up to be there for when you need it.
However you do it, you will need to start by getting together all of your documents such as bank statements etc and looking at them closely to find out what you normally pay out and when and what money you have coming in. Note down everything that you have to pay for and whether you can afford these things and then what you have left for everything else. You also need to note things which you pay less regularly and then you will know where you are at currently. You can then look at where you can start to cut down if you need to.
Will it Work?
Whether it will work will depend on you. Firstly, you will need to pick a technique that you think will suit you the best. You will also need to be disciplined and make sure that when you do spend money that you ask yourself whether it is within the budget that you have set and whether you can afford it. It can feel like a real chore and you may not like it. Having to cut back on things can also feel like you are being punished. It is important to therefore work hard on staying motivated so that you remember why you are doing it, what you are trying to achieve from it and therefore this will hopefully make you remember why this will all be worthwhile in the end.
If you want to go on holiday then you will need to find the money to pay for it. This will be difficult for some people to do. If you have some savings, then you will be able to use those or you might decide that you want to borrow the money in order to afford to go. However, you may decide that you would like to save up. If that is the case, then you will need to have a strategy to do this so that you are sure that you will have enough money by the time that you need it.
Work Out How Much You Need
To start with you will need an idea of how much money you will need for the holiday. You may have an exact plan and therefore be able to calculate exactly how much it will cost you. On the other hand you may have very little idea. It is a good idea though, to put together some sort of plan so that you can calculate roughly how much this will cost you. You should be able to do this online by checking out the cost of travel, accommodation, food & drink and entertainment. There may be other things that you will want to pay for as well, such as new luggage, clothes etc so make sure that you include these as well.
Split it by Month
It is good idea to them take that amount of money and divide it by the number of months there are until you plan to go on holiday. If you are not sure when you are going then this might help you to work it out. You can then start to get an idea of how much money you will need to find every month to save up towards your holiday.
Study Your Finances
Next you will need to have a careful look at your financial situation so that you can work out what the best thing is to do with regards to your money. It might be that you normally have extra money available each month and you will be able to use this to save up enough. However, it might be that this is not the case and you will need to come up with a plan as to what to do.
Set up a Direct Debit
It is wise to set up a direct debit, to make sure that your money gets transferred into a savings account just after you get paid. It is a good idea to make sure that you do this because otherwise, if you do not, you may accidently save the money because you can see that it is there in your current account.
Monitor Spending Closely
You will need to start to monitor your spending really carefully. You will need to make sure that you still have enough money left, after you have put some in your savings account, to pay for everything that you need. This will include all of your bills, repayments, contracts, any other direct debits that you are committed to and food, transport and things like that. It is a good idea to work out how much money you need for all of these things and whether you will have enough. It might be that you can pay less for some of these things by switching providers etc so compare prices. You may also be able to cut down your spending on luxury items in order to get more money.
Consider Ways to Earn More
If you still do not have enough money available or you want some extra money so that you can buy some luxury items then you may need to find some ways to earn more money. You might want to find some extra work, such as freelance work so that you can do this or perhaps sell things that you have to raise some money. There are different things that you could try.