Here’s the big mistake among many who are gainfully employed but who face debt problems. “If only I had more money, all my financial worries would disappear,” they tell themselves, thinking about money as some sort of magic bullet rather than as a dynamic tool that needs mastering and maintenance. Truth is, for many with this mindset, more income solves nothing since the root cause of the financial difficulty isn’t about the amount of dollars being earned, it’s about how those dollars are being allocated and spent.
Growing numbers of affluent families in Canada and the U.S. are having trouble making ends meet.
Take the example of a couple who can’t make ends meet despite a $400,000-a-year household income.
My analysis is simple: money is relative. Or to revive an old cliché, the more one makes the more one spends.
I have to say that I don’t hold a lot of sympathy for the Chicago couple’s $10,000 annual shortfall.
It’s all about getting a grip, starting with the simple question: Can you afford your lifestyle?
Above all, high, medium, and low wage earners alike should be setting monthly budgets and sticking to them.