I have a diverse group of friends. What I love about having a diverse group is that I get to discuss a variety of topics and we have some great debates. One topic that comes up frequently in conversation is Money. This is a topic that I naturally enjoy discussing because it’s a hot topic but let’s not forget that it is still a table topic taboo in British culture. We’re all feeling the squeeze with inflation rising to 5%, pay freezes and the dream of buying a house becoming ever more distant.
Recently I went to dinner with a couple of friends that I grew up with and went to school with. After we finished our A-Levels we took different paths and 5 years on we’re discussing money or rather the lack thereof. One friend says, “When I get my pay packet everything goes towards the bills. I have nothing leftover,” my other friend chips in with, “I feel like I working to just live. I can’t have fun.” These comments are commonplace for people in my age group but also for the entire population of the UK. It’s sad to hear that my friends feel this way but it does seem to be something I’m hearing more and more. This group of friends blames the lack of a good income and argues that if they earned X amount a month that they would be more comfortable and also be able to save. Just a few months ago I heard very similar statements. Lack of money/income means that they can’t ‘afford’ to save. The difference though was that this was a group of friends earning way above the average UK graduate entry-salary (£25000). They said that if they earned X amount more a month that then they could start contributing to their pension and saving for a house.
The pattern that has emerged is that people are focused on the amount they earn and whilst earning any income is necessary to put money aside people are forgetting that this is just one part of the equation to accumulating wealth. Simply put: amassing wealth happens when people increase the gap between what they earn and what they spend. If they find themselves spending all their income on paying bills then there are three things that you need to question:
1) Am I getting the best deal from my energy providers and mortgage provider? (necessary expenses)
2) What am I spending money on? Are all these expenses essential or can I cut back somewhere?
3) Can I earn more money somehow?
As you can see from the three questions above the focus is placed on the ‘spending’ part of the equation. If the answer to question 3 is ‘no’ then it’s clear that you need to look at how your spending can be altered. How do you think when it comes to money? Do you constantly think ‘if only I had more’ or are you thinking ‘where can I cut back and start saving money?’. I guarantee that the former is one that most people relate to.
