It’s not just those on modest means who say it. We’re all prone to spend more than we should.
Financial author and speaker Jason Butler says, in his experience, it’s our everyday spending habits that are chiefly to blame.
“A good discipline is to commit to investing more whenever our income increases”.
In practice though, it’s all too easy to justify spending that extra money on something else.
“People spend more when their pay rises, or if they get a bonus, or if they get an inheritance… they seem to sort of think “they’re worth it”, they give themselves a story”.
People develop stories based on emotion, and then use logic to justify their spending.
So, what if you ARE being smart about your spending, and still want to invest more money?
Your only option then, says Jason Butler, is to look at your income.
“People often don’t look at their job and say, “can I afford this job?” Because the other equation of spending, assuming you’ve got that under control or you can’t reduce it, is the
earning! And a lot of people haven’t actually thought to themselves, what job can I afford?”
In other words: what is your desired lifestyle, including making provision for your future self, and what is the right job for that?
Forget whether you’ve got the ability, skill, or capability to do that job, work out what you need after tax to live a full life!
Once you’ve worked that figure out, you can then say “OK, if this isn’t producing that income for me, can I do a side hustle? Is there another way of earning additional income? Could I let out a room in my house? Could I upskill myself in my current role – I might like where I work, but do I need to go on a course, do I need to get some more experience, do I need to work a bit later and do extra projects? Or do I need to actually move job and go somewhere else?”
Putting enough money for investing away regularly is essential if you want to be comfortable in retirement.
Whatever it is that’s stopping you doing that, you need to address it without delay.