Hello Steemians,
Recently I had a chat with a friend in regards to my Money Challenge, she laughed it off because apparently she was already good with money, she told me that once she managed to live with 100€ for a whole month for transport and food (we live in Portugal so it's tight but doable), I then asked her a question "What about when you make 1000€, are you able to save 900€ ?" This question stayed unanswered to this day.
But it really got me thinking because the ability to save money is really not related to your income and I think this is something that people need to get into their head.
Where I work everyone earn the same salary, they calculate it regarding the language you speak and as well your level in the company, my company has a very rigid grid. But whenever I speak with my co-workers I can differentiate 2 types of people: the people that think we are well underpaid because by the 15th of each month they have no money left and the people who save more than half their salary each month.
Because my company is providing housing to everyone it's really not because of the rent that would differ between 2 people.
How come 2 people having the same housing situation and the same money each month can finish the month and have finances that are polar opposite ?
Instant Gratification
I talked about it in my previous article;
In short it's the desire to experience pleasure immediately regardless of what could happen in the future, it's wanting things and wanting them now.
It affects many area of life like dieting, relationships, health and much more, and it greatly affects your ability to manage money, basically to save money you need to spend less money than what you earn and this is a challenge (the majority of people lives paycheck to paycheck).
Have you ever heard about the Marshmallow test ?
It's cute when it's children but we're not children and the marshmallow is really our money
People mistakenly believe that if they make more money they will then be able to save, they look for another job, try desperately to get a promotion but once they do, nothing changes, because if you don't manage your instant gratification problem you will always use all the money available to you whether you make 1000€ or 10000€.
Check this article about rappers going broke, former millionaires now broke! It's not how much money you will make, it's how much you will not spend buying foolish stuff.
When you give in to Instant gratification earning more money will never help you save more money.
You are probably thinking I am repeating myself but I believe it is so important to realise that money is not the problem, your bad habits are.
How do you fix this mess
Well it's not going to be easy or fast, I mean spending your money is easier than making it and saving it, but saving it is more pleasurable than spending it on the long term (remember the kid with 2 marshmallows was the happiest)
Realise that there was a before you (the big spender) and an after you (the big saver), and give yourself the time to change.
Instant Gratification is a habit and as such a new habit can be learned instead. (I really advise you to read the Power of Habit by Charles Duhigg) It will teach you everything you need to know about forming new habits.
Identify behaviours, situations where you always give in to rewarding yourself. Look at your expenses (January challenge anyone ??!!) and select 1 situation that you will work on and work on one at a time.
Make a plan for each behaviour, the author of this book have a condensed "plan" explaining in details how to form new habits so do start from there.
After the 21 days period needed to set the new behaviour, select another situation where you identify instant gratification and so on until you don't spend your money without thinking of the purchase.
I hope you found this article helpful and made you aware of your own behaviour, please try to be attentive to yourself and the choices you make. once you identify you are giving in to instant gratification it's the first step to stop and change for the better.
Thanks for reading me.
Elise