Friday, February 6, 2009

Does Money Solve Our Money Problems?

Ever wonder why money problems don't just leave and fade away even if we earn higher and work harder. There's just enough bills to take money away. And this cycle is really frustrating. Been in the same boat? Or still on that boat?

Well it only tells us one thing... Money doesn't solve money problems it just give us more power to spend.

This is what happens to almost all of us:

1. Graduate from college
2. Get a job
3. Enjoy independence
4. Get married
5. Increase income with 2 incomes combined - bliss!
6. Buy home and car
7. Children start to come
8. Promotion - higher income
9. Send children to school
10. Go back to school for masteral then phd for higher income
11. Promotion
12. Get a part-time job
13. Spend more
14. Try to save for retirement
15. Retire

But still... money is not enough. Why?

Capacity to earn and spend

I've observed that most Filipinos after graduating and getting a job and having the capacity to earn for the first time, they tend to invest a lot on improving themselves. They buy nice clothes, gadgets, car, expensive vacations, socializing and just getting by until the next pay day come. And there's the typical "help little sis or bro to graduate". This cycle goes on and on until one realizes that it is a rat race.

Debts are increasing

With increasing income, things become more desirable too. We tend to get bigger and nicer homes, chic cars, gadgets, expensive vacations, etc. but still have the basic bills to pay plus the children to send to school if you are married.


When you are promoted, get a higher post in your company or in your community, you have to maintain the glamour that goes with it. You gain friends of the same status with a higher type of lifestyle. Since you belong there, you just can't let yourself behind your friends. So to keep yourself in pace with your community, you adopt to their lifestyle. Even if the things you use and the activities you do aren't really on your priority.

Saving and investing becomes difficult

With so much to maintain in our own life like our lifestyle, sending the kids to good schools if married, and paying bills. Saving and investing went down the list of our priorities because we are just earning to get by.

Thus, more money doesn't really solve money problems. It is on how we spend. To reach financial freedom and save a hefty retirement requires a lot of sacrifice and focus. We need to establish first a set of strong income streams so we can enjoy the good things in life and to avoid incurring more debts.

All these come to our realization in a hard way. Good thing I've realized it when I'm still single and in my twenties coz there is still a lot of time to catch up. After all, i didn't regret everything I've done to experience life. Everything is worth it though. Now, it's time to focus on achieving my financial goal for the length of my life :)


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