Gain Perspective and Increase Your Finances

In blog number 14 I discussed how the pursuit of materialistic items makes you poorer; items are not a wealth status. 

Gaining perspective helps you increase your finances. Here are three key concepts that fall under perspective: 

  • Keep up with what you want to be, not the Jones, 
  • Redesign your idea of normality, and 
  • Save your pay increases 

 

Keeping Up With The Jones

Living outside your means (spending more than you earn) is an easy way to get into debt. We often live outside our means as we want to be seen to have the nicest belongings, or because our next door neighbours, The Jones, have those items...and so must we. 

As we move more to a social media focused world, "The Jones" are not only our next door neighbours, but people we see on Twitter, Instagram, Snapchat and Facebook. Their posts show them on chilled holidays, or with nice possessions, or head over heels in love with their spouses or in the fanciest restaurants etc. The list is endless on ways people flaunt their supposed status. We obviously want to keep up, purchasing the latest gadgets, dinning at the newest establishments, flying to exotic places. This costs money, and the funny thing is, the majority of online status's are fake. We are trying to keep up with an image people portray of themselves, rather than the reality of who they are, or who we are. 

People's online presence versus their physical presence are very very different. Spotify's 2014 study on gender and musical tastes illustrated that both men and women rated Katy Perry, Bruno Mars, Rhianna, Justin Timberlake and Drake in their top 12 Spotify selections. However, the artists that got the most Facebook likes by men above Katy Perry were Bob Marley, Kanye West, Kendrick Lamar and Wiz Khalifa. The exterior person I am on social media, loving Kanye West's music, does not reflect that I actually listen to Katy Perry "Roar" on repeat. 

The above example is silly, but epitomises how we portray ourselves online versus how we act behind closed doors. 

If you want to save money (and increase your self esteem), stop trying to keep up with other people's ideas of #happiness.

 

What is Normality?

What you set as normal, and what you accept as normal, becomes normal.

If your normal is spending your salary in a Mayfair club on a Thursday night on champagne binges, holidaying 5 times a year in exclusive hotels, or continually buying the latest "Go Pro Something", it will be difficult to save money. 

There are bankers in the city who earn 5 times the amount I do, but they are up to their eyeballs in debt. Why? The above is normal.  

As with the "Jones", from the outside these people are the idea of successful; behind the beautiful exterior they are worn out shells of humans with a lifestyle they can't maintain.

If you want to save money, set a lower threshold as normal; cooking 4 meals a week, instead of eating out every night or going for a run in the park 2 days a week, instead of going to classes, would save you money, and could easily be set as your new normal. 

 

Pay Increases

Sometimes to get a wage increase we have to increase the number of hours we work. We chain ourselves to our desk and see the pay check growing at the end of the month. However, in the process, small things begin to slip; you used to make, and take into work, your own lunch, eat breakfast at home after your run round the park and cycle to work. 

Now, you don't have time to have breakfast at home, so you grab breakfast on route into work from your local coffee shop. You have to be in super early now as well; you're tired and the bus or tube is a far better alternative to the bike. Your lunch break is spent in another overpriced coffee shop choosing an overpriced sandwich and the run round the park has been upgraded to a gym membership, because you can now. 

The problem with the above, is that your wage increase has been matched by your lifestyle increase. People complain that they can't save money despite the wage increase. With every wage increase, you're upgrading your life a little bit more each time. All these upgrades cost money. 

Try at your next pay rise to save half the amount of your wage increase (preferably in a pension). Use the other half on the latest i-something you have been looking to buy / saving for for a while. That way you don't feel deprived, can buy the latest "i- thing" but at the same time you're putting money aside for savings. 

 

Summary

Perception is a very powerful thing. 

Comparing ourselves to ideals, others and an over-inflated definition of normality leads to a less fulfilled and higher cost life. 

Saving is easy if we remember what is important; having health, family and friends and basic human requirements (roof over our heads, food etc), rather than an Instagram account filled with expensive hotels, restaurants or goods is the definition of success. 

Following the three principles, whilst reminding yourself of the above is an easy and cost effective way to improve your finances. 

Photo from the beautiful unsplash.com

SavingsWee Scot Finance