I was watching an episode of Property Virgins on HGTV, and this particular couple was looking to buy a home. I can’t remember what their initial budget was, but the husband was willing to max out the budget, whilst the wife was more comfortable with staying way under it. The husband in reinforcing his point to max out his budget, made the statement ” the reason why we make money is to spend it.”
I thought about it for a minute and realised that it is partially true, if taken in a specific context. Well, at least it is for me. To get the material things that I need and occasionally want, I have to pay for them. And in order to pay for them I need to have money. And to get money, I have to work.
However, that statement can also be taken in another context. Suppose he meant it from the angle of “I have this money, so I could as well spend it?” There are lots of people who have that mentality. They are content to work, get paid and practically live pay cheque to pay cheque by choice. They do not save any, but they spend it all everything else.
People often equate their ability to purchase items with their perceived status. If they can not afford to buy something, the believe that their neighbours or work colleagues might get the wrong idea and start looking at them differently. The neighbour bought a new car, so they buy a new car; the workmate walked in with a new bag, so they need to get a new bag etc. What ever happened to buying what you need and want and not wanting what someone has?
For example, I’m the only person in my department who does not have a smart phone. Some of my colleagues have been trying to convince me to buy a smart phone and get rid of my trusty candy bar Nokia. I’m just not interested. Getting a smart phone would require buying a new phone and enrolling in a monthly data/ internet plan with a one year contract. I could probably do it, but it would mean that I would have to reduce my little savings and for me, that is not an option.
Whilst I agree that we make money to spend it on what we need, I think that it calls for a level of discipline. Living pay cheque to pay cheque should not be a willing choice. Avoid living like that, if you can. Always leave some “wiggle room”, because if you run into difficulty, you should not pulling out your hair trying to deal with it.