I received some predictable feedback from yesterday's post. In it, I talked about the reality that for every dollar we add to our monthly budget, there's one less dollar to spend on something else. Specifically, I used an example of a family considering a new house that would cost $1,300/month MORE than their current house. Therefore, they would need to sacrifice $1,300 worth of something from their budget to make the numbers work.
The rebuttal: "Just make more money." Four people sent me some version of this, saying you don't necessarily have to give up anything, just increase your income!
There are a few problems with this approach. First, it's not always that easy. If it were that easy, chances are you would have already done it. Deciding to drastically increase your standard of living isn't a natural trigger for a meaningful income increase. As such, purchase decisions predicated upon having to quickly increase income are fraught with risk. What if you can't increase income? What if there's not enough margin? What if it doesn't go as planned?
Here's the bigger problem. Let's say you CAN increase your income commensurately with the increased budget. At what cost? Okay, so you raised your standard of living, and if you work x hours more per week or take on y additional clients, you can cover the gap. There's a real cost to that. The cost of time, stress, sanity, and general margin.
As an example, I know a guy who owns a house bigger than most of us will ever even see. It's as beautiful as beautiful gets. His family loves it....but they love it without him. Their standard of living has increased with his income; he's in a never-ending race to make enough money to provide a standard of living he doesn't actually get to enjoy. This is another example of standard of living not equating to quality of life.
There's nothing wrong with making more money, but when we make financial decisions predicated on that being a need, we're ratcheting up the pressure, stress, tension, and time commitment required to produce the necessary outcome. I don't advise you to do that.
What's the answer, then? Whatever you do, make sure your financial decisions fit within the current construct of your life, not some imaginary version where everything shifts in your favor. Know you can make the proper sacrifices and adjustments. Then, if your income increases, it's a double win. But please, please, please don't sign yourself up for more pressure just to pay for your own materialistic desires. The juice isn't worth the squeeze.
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