Does how much money you make really matter?
Many people think that when you make a certain amount of money, financial independence is automatic. This couldn’t be further from the truth. A person can be a multimillionaire but still be in debt and not in a sound financial situation. It’s really one’s lifestyle that dictates a whole lot about his or her financial situation. Instead of playing the game of more, we can play the game of enough. Throughout life we must be able to determine how much is enough to live the life you want to live. Rather than blindly pursuing more, why not calculate how much your dream car, house and possibly a business will cost you. After you’ve done that, design your life and career accordingly. Your dream lifestyle likely costs less than you imagine.
Your lifestyle matters more than your salary. There are people who live comfortably on $40,000 per year or less in The Bahamas. For someone who desires more, $40,000 isn’t enough. But who is happier: someone who knows what enough is and has it, or someone who is in constant pursuit of more? Very often in this day and time with social media and modern-day classism, we try to keep up with the Joneses. Two people with the same salary can have completely different expenses, meaning that they also have completely different incomes. This means that they have designed their lives differently in terms of the sizes of their apartments or homes, the kinds of cars they drive and what they do for their leisure and entertainment. If you’re a high maintenance person, you will likely spend more money.
Most people can attest to the fact that, even after an increase in salary, their savings haven’t increased, because they have also raised their levels of spending. Setting a budget in place and sticking to one is so important, especially in the tough economic times that we are now in. At the end of the day, end of the year, the true winners are the savers and not the spenders.
It doesn’t matter how much you make. It matters how much you save on a weekly or monthly basis. It is advised that 20 percent of your monthly salary should be saved. But we also live in a real world and in The Bahamas. Saving 20 percent is very hard initially so the logic of gradually working your way there is a better option. So, starting off fresh I would say that saving 10 percent is a good starting point with the goal of slowly increasing and cutting back.
Don’t think that an increase in salary isn’t a good thing, because it is. I hope that your salary increases over time, but more importantly, I hope that your happiness and gratitude increase, whether your salary goes up or down. When our happiness is tied to money, it fluctuates with the economy. When our happiness isn’t tied to money, it is limitless.
- Quinton C. Lightbourne is a certified financial planner with the Chartered Institute of Bankers in Scotland and vice president of the Bahamas Investments & Securities Business Association (BISBA). E-mail: [email protected]