A quick caveat here: this is written for most of us who have had lots of consumer debt, not those who find themselves with tons of debt through no fault of their own.
You can bet that the raise you are hoping to get is not going to fix your financial squeeze.
I mean even if you were making what your boss is making, it will not fix your financial squeeze.
There is a famous principle called Parkinson’s Law that essentially says that expenses rise to meet income. So if you are having a hard time paying your bills or making a dent in your mountain of debt, more money is likely NOT your answer.
I know it may sound like this is bad news, but really this is great news.
This is because money problems (difficulty paying bills, paying off debt, getting into debt, difficulty saving) are most often caused by behavioral problems.
And behavioral problems can NOT be solved with money.
People seem to think that they can make their problems go away with more money, but really it just covers them up. This is apparent with all of the millionaires who file for bankruptcy.
They have more money than most people can dream of, yet they also have a spending problem that is far stronger than their income.
How do you fix behavioral problems?
Well, you start by asking God for help and then begin just doing one small thing at a time. It is a lot easier to update your house by working on one room at a time than by tearing up every room all at once.
You can start by learning to not spend more than you make.
There are practical things that can be done to help out, but I think nothing will be more valuable than just taking a long hard look at where your money is going and asking yourself, “do I really need this?”.
We say we NEED all this stuff to survive and yet 100 years ago most of it didn’t even exist (see Richer than Rockefeller for more).
I think when we are honest with ourselves, we can see that a lot of our NEEDS are really just screaming, yelling, panicky WANTS.
1 Timothy 6:8 puts things in perspective…
“6 But godliness with contentment is great gain. 7 For we brought nothing into the world, and we can take nothing out of it. 8 But if we have food and clothing, we will be content with that.”
I have a long way to go as I try to fight off my panicky wants daily, but that is what I am aiming for.
What about you?
Update 1-4-18: We have gotten a few upset comments from folks who have loads of medical debt or other non-consumer debt and I just want to be clear that is a different animal than what we are talking about in this article. This is directed towards most of us who struggle with controlling our temptation for more and more leading to loads of debt.
In fact, I feel that it’s a good indicator that you’ve got a problem if you feel that all your money woes will go away if you could make more money.
My wife and I were unfortunately a case study in this principle. We went through ten years of “prosperity” where in that time I nearly tripled what I was making and now I make what many would consider a very large salary.
But, living beyond our means all those years has put us in a rough spot now and we will be penny-pinching for the next 10 years instead of enjoying our increase and building our net worth.
Lynnae @ Being Frugal says
What you say is so true. My husband and I are bad examples of this principle, too. When we were first married, we lived on peanuts (or so it seemed). When our income increased, so did our spending, and we’re really no better off.
Now we’re changing our habits. I guess we needed to learn the hard way.
I seem to hear the same story over and over again – why can’t people catch on to this principle earlier on in life? Like Lynnae said, we all just LOVE to learn the hard way 🙂
Third-World Country? How many World’s exist?
Thank you for this insightful remark. I have always been deeply saddened by the way rich countries of the western world belittle poor countries. I come from Africa, and despite our issues and problems, I have seen more humility and thirst for God from my people. The resilience of my people is amazing!
Despite the people’s modest means, they share the little they have and care for one another as a community. What a difference from the western world!
Moreover, we learn the basic principle of saving and living below our means…which allow most people to enjoy a peaceful retirement because we are not taught to live on credit. Thus, we are so diligent with what we earn.
And I have seen people around me in the U.S who can barely make ends meet and live in bondage while earning a 6-figure income. Seems to me that’s “third world in reverse”…How can people earning the least and living in “misery” can save out of their meager income, provide for their families, yet actually retire and enjoy retirement.
This mindset has got to change! This is why most immigrants coming to rich countries are wiser because they come from a country with maybe less opportunities and no temptations to live on credit. So, they can make so much out of their earnings in America.
All this to say that the mindset of “third-world country” is condescending and patronizing. It erects rich countries as superior to others.
You want to see a church on fire for God, go to a poorer country! They are not as distracted by all the riches and pursuit of riches that plague rich cultures…yet breading more discontentment.
Because they don’t have much, they are yearning for Heaven where all their tears will be wiped away and where they can enjoy and behold all of God’s glory and riches. A far cry from the congregations I see here…where most Christians even doubt of the existence of heaven and hell and are blatantly blind, oblivious or in denial of the raging spiritual war going on. The devil is succeeding at putting people in a spiritual coma and get them all concerned and absorbed with the conquest of things that consumerism breeds.
I pray for the church of America because I have seen what a play field it is for the devil deceiving the Christians to not care about others, get into outstanding debt, increase the divorce rate, raise entitled children who think the world revolves around them and everyone is so enthralled into the pursuit of “happiness”, and mind you, that doesn’t involve God’s will for their lives.
Didn’t the Lord Jesus say that it will be harder for a rich to get into God’s kingdom? We can’t serve 2 masters. Our own greediness has led us to get into a financial mess that we spend years even decades to get out of (that is if we even try to make the necessary sacrifices and adjustments), making us completely distracted, hopeless and inefficient in supporting the church spread the Gospel.
We are all equal in God’s eyes, and maybe God takes even greater pleasure in the worship of a suffering and desperate people eager to see God. The Bible even says that the Lord is close the brokenhearted.
Sorry for the long essay, but I had to say this. Let’s pray for the whole world. Let’s not get divided by categorizations. The precious blood of the Lord Jesus shed for us all.
I tried to tell my ADD that my behavioral problems are not money related but it rarely ever listens. it’s too busy bouncing off the walls. ^_^
I think you’re right, having more money does not make money problems go away, nor does it hide poor money management skills. It merely elevates you to another level of problems.
If you’ve ever watched TLC’s Til Debt Do Us Part, you’ll realize that at some points the financial planner in the show tells the couple they need to go out and “Make More Money” to solve their financial woes. Although I agree if you’re living and spending frivolously and that is the pure cause of your money problems then money probably won’t solve your problem but if you’re living just above the poverty line and not spending anything more than the basics and “just” cover the bills money is likely to make you more comfortable if you make more of it and know how to manage it. I find your statement too generalized.
I agree with Lisa. If you are barely making ends meet then I think more money is a better solution. That statement that is made is generalized and not true of everyone. On the other hand if your problem is money going out and you are making more enough to make ends meet then you might have a point.
Yes, much too generalized. (See detailed reply below.)
Terry Tramell says
When my husband and I were first married money was not a problem. I never knew much about his business but when he lost it, boy did I learn fast. After a long time of selling off everything we owned and left for a new country we finally put the past behind us. This seems way out there for most of you. And it is. We started watching every cent that we had and working on the future realigning on God as our savior. Many im rivals seemed to happen and we soon learned a huge leson that money was never our problem. After years of penny pinching we are still pushing forward and know now what is real. God
Donna Smith says
I like the principle however when you have cut everything out except things you are unable to like housing and you have cut your housing already, the need to raise the amount incoming is still a real one. If I spent less I would be going to the food pantry and actually have done so many times. Sometimes you really do need to make more in this high priced world.
I agree with Donna 100 percent!! Our family is VERY frugal, and more income is what we are seeking, and believing God for.
For many people though, more money will not solve their problems, agreed.
I agree with you Lisa. I lost my job last month and am trying to find ways to do more with less income. Best wishes to you on your search for a job. I pray you find one soon.
I disagree. A job loss at some point in everyone’s career is pretty much a given – either due to layoff, short-term disability, having to help a sick family member, etc. Having an emergency fund ahead of time can be a great help for this. And not maxing out what you can afford on 2 incomes as far as home loans, car loans, etc. As long as you are making above poverty level on 1 income you can survive, you can have a roof over your head and food to eat. Not saying it would be pleasant, but you could get through it.
When the spouse that is out of work does get a job do you say Oh thank God we made it past that, now we can go back to previous spending? Or do you say, wow we really need an emergency fund, let’s cut back some expenses to save more in case this ever happens again. I think most people would just go back to previous spending and the article is correct – more money doesn’t solve money problems, it will just be a huge crisis again next time something happens.
I am not saying I have it all figured out and have a big emergency fund myself, I am just saying that I agree with the article (unless someone is living at poverty level of course).
I want to congratulate you for yet another great article, so Congratulations! I always enjoy reading your blog, as it provides insights into money matters that not many people around me would be comfortable speaking openly about.
This article reminds me how very much I enjoy reading your blog!
Heather @ My Overflowing Cup says
Very good post! Only when we are content with little will we learn to do better with more. Otherwise, more income means more spending. I wish we had learned this earlier when our income was higher.
I agree with Lisa. I think you are painting with a pretty broad brush here. For a lot of people this may be true. For people like my husband and me we have been dealing with some pretty tough circumstances. First he lost his job about 2 years ago but fortunately did find a new one relatively quickly. Last year and the beginning of this year have been overwhelming. His mother ended up in the hospital and then a nursing home and then within 3 months passed away. Right after that my father ended up in the hospital then a nursing home and died in February. Right after my father went into the nursing home I lost my job. I just started a new one last month. I collected unemployment for about 10 months. Both of our cars are part of that big GM recall so we’ve had to juggle getting them to a dealer for repairs (mine actually broke down) and dealing with renting a car. My husband ended up in the emergency room back in March and had to be admitted to the hospital for emergency surgery. He has had a couple more procedures and hospital stays (he’s doing well now). Yes we have insurance but we still have deductibles, co-pays and other out-of pocket expenses. Did I mention our garage door opener came crashing down last fall and we had to replace both the garage door and opener. I am not fishing for sympathy or wallowing in self-pity. We are both working now and making some headway. Just please don’t generalize. There are some situations beyond people’s control where having more money would be a huge blessing.
I don’t see how Bob is making a generalization. At the beginning of the blog he said money problems are often due to behavioral problems, so he was speaking to that particular group. If it was not a problem, Dave Ramsey would not be so successful. My heart pours out to all of you. May God bless you, your families and see you through a triumphant victory over your circumstances.
Kalen @ MoneyMiniBlog says
I can attest to this being true. My wife and I were in the most debt when we made the most money. We actually make less now than we used to, but we are completely debt free now. We used to be over $20,000 in consumer debt. It really is about your behavioral habits. It’s the same for building wealth. Great article, Bob!
I agree with James, that Bob is not generalizing but speaking about those specifically with behavioral problems when it comes to money.
I do believe that there are spiritual attacks on strong Christian who do actively manage money wisely (a dear friend of mine is a victim of such attacks at the moment).
However, I think the majority of Americans are in debt due to behavioral problems, and not due to lacking money. I am very thankful to see the testimony of others in their early years of marriage and how they wish they had been wiser with their money then. My husband and I are in our first two years of marriage and we are actively putting principles found in this article to use in managing our money. We went through Dave Ramsey’s FPU course and it was such a God send. While we make less than $25,000 a year and are both still in school, we are not in debt and we are building up our emergency fund (VERY slowly, but it’s happening!).
Thanks, Bob, for this great post and for sharing the Bible verse. I want to write it down and put it on my wall as encouragement that it is okay that I am not living as luxuriously as others around me. 🙂
James Salmons says
This post comes very close to reflecting the reason I got into teaching personal finance about 30 years ago after getting my own money affairs in order. I discovered a principle that is largely ignored but is the basis for any financial success in my opinion.
Success with money begins with getting in control of your spending and other financial affairs. Most people can’t do it because they do not know how. Of course, as some comments suggest, there can be events like massive health issues that overwhelm us, but mostly increased income just evaporates because people have no idea how to manage their money effectively.
You can use the old envelope system to help or many other approaches, but once you get in control of your money it is relatively easy to pay off debt, establish an emergency fund, and do the other things that lead to success.
I have been an IRS tax collector for more than 25 years (a Senior tax collector) and thus most of my “clients” owe hundreds of thousands of dollars in income taxes. The majority of these folks are self employed and earn a very good income ($250,000 and up). I can truly tell you that easily 95% of these folks are in debt to the government (and usually to many other creditors) because they live way beyond their means. I’m astonished that these folks earn SO MUCH and yet have ALMOST NOTHING to show for it.
In just a few minutes I will be knocking on the front door of an “Investment Advisor” who owes nearly $700,000 in income tax which has compounded by filing balance due tax returns every year since 2007. More than likely, when I get a financial statement from him, it will show he earned $300,000 last year but he has no equity in anything.
Solomon said it well in Proverbs 22:7 – “The borrower becomes the lender’s (or the Government’s) SLAVE.” I prefer God’s way which can be found in Hebrews 13:5 -“Let your way of life be FREE from the love of money, being content with what you have…”
You think about that.
Charmaine Riley says
This advice is great, and I had problems in my past spending too much money. But with
prayer you can determine what goals are important in life.
Allison P. says
I just learned that God provides for us what we need for each season of our lives and when we think we need more we are telling God He is not a good provider because He hasn’t provided enough for us. 3 points: 1. God is our provider and creator He knows what is best for each of us. 2. It is just a season. We must understand that each stage of our lives are seasonal good or bad. Sometimes we are going through something very challenging and we think we will never get through, then we do. That season has ended and it is time to move on. 3. We must always maintain an intimate relationship with our caring, sharing, loving Father so we can be aware of what season we are in and except it, grow in it, learn from it, and draw closer to Him. So instead of focusing on the “not enough” we ask God what His purpose for this season is so that we can see clearly where He is leading us and what He is preparing us for in the next season of our lives.
I strongly believe all the challenges we face in life are just distractions from what God truly has purposed for each of us and therefore It really isn’t about money it is about the character God is developing within you!
Megan H says
I completely agree! I have recently started blogging about many ways that people and families can save money. I lost my job a year ago and felt financially defeated but as always The Lord takes care of his children. Although money has been tight we have never gone without the essentials and had we watched our spending all along we would be much better off than we are now. Each time my husband and I received a raise our spending rose as well. Had we been penny pinching and saving all along I could be enjoying this time as a stay at home mother much more instead of searching for some way to bring in a secondary income just for the purpose of having extra savings. Like others have said, sometimes we just have to learn the hard way.
James Salmons says
Megan, you have touched on the very problem that prevents most people from ever succeeding with money. You observed how whenever you got an increase in income it just evaporated into increased spending.
This happens to almost everyone. I heard one lady talk about reaching one million dollars a year and not having more to show than when she worked as a waitress.
This was the very issue that got me started teaching financial principles, helping people learn how to get in control of their money. Without learning this no one can succeed to any extent.
There are different ways to do it, but the primary rule is to find some way to allocate your income for its intended use in set amounts that don’t change unless you choose to change them., even if it is nothing more than the old envelope system.
Wishing you continued success with your money.
Warren Grantham says
Jake, I thank God daily for people like you who are bound and determined to not allow their children to blindly go off the college cliff without first counting the costs. I am nearly 60 years old, still paying off college debts–granted I got a late finish on my education. But it is precisely because of the stress brought on by student loans that I am in the process of creating a MINISTRY dedicated to helping fellow Christians get out from under the COMPOUNDING INTEREST (not the loans themselves). I knew exactly what I was getting into when I took the loans and made plans around paying them back. But others aren’t so lucky. They are being terribly affected by the compounding interest payments that are mushrooming $15,000 loans into $25,000 worth of debt. Again, God bless you as you bring light in your own family.
Pastor Warren G
Okocha Samuel says
wow, wisdom all the way. Thanks guys
Simon Wells says
Thanks for a great article. There are many people in this world who are paying the price for impatience. No matter what your financial status is, i stick to a golden rule;
If you can’t afford something then you don’t have it, but if you can afford it ask yourself one question;
Do i really need it ?
After all this isn’t rocket science is it.
There is always a marked difference between self made millionaires and those that inherited;
The first group do not waste anything, when the next group usually have no sense of value of money and end up broke within 5 years of inheriting.
That is no coincidence and people with money problems who think more of it will solve their issues should consider points like this.
My husband and I were married a year ago and finances have been an ongoing stress of our relationship. We are trying to pay off student debt (both of us went to a private university) as well as some other debt (car loan, credit cars). We have set a frugal budget, but are consistently going over the budget. I am having a hard time deciding if the problem is our spending habits, or if the budget we set is really realistic. Either way we keep brainstorming ways we can make more money, thinking that it will solve our problem. I think your point in this article was a good reminder. Furthermore, I think it also draws out the question of who we put our hope in. Are we putting our hope in money, wanting it to solve our problems, or are we putting it in God who has already richly provided for us. Thanks for your insight.
EDGAR OMOREGBEE says
Thank you, this article is a good start for me, that will ensure I am prepared for good stewardship when a raise does come due to changing my financial behaviour now.
Lauren (SeedTime Editor) says
Glad to hear it, Edgar!
Sometimes we do need a paradigm shift when it comes to money management. However, there are times when more money is the answer to financial difficulty.
In Dave Ramsey’s Total Money Makeover, he says this:
“If your budget is too tight to get the Debt Snowball rolling, you need to do something to increase income…I don’t like the idea of working one hundred hours per week, but sometimes extreme situations require extreme solutions. Temporarily, just for a manageable period of time, the extra job or overtime may be your solution.”
Money only exploits who you already are including your skills and mindset.
The small mismanagement behavior becomes larger with more money.
Thanks Bob for all the true and Godly wisdom for our benefit.
Blessings, Frank P
You are welcome Frank!
Davy Siwila says
Let us put God first in all our daily undertakings because he is our provider because even if we have money, when we do NOT have the word of God in our mind and heart, we shall never be at peace..
Lauren (SeedTime Editor) says
Thanks for the comment, Davy – you are exactly right.
Jennifer Honnah-Sesay says
Very good article on great comments. I call God so many names even my financial adviser! A close relationship with God always sets us on the right tracks. He uses people like Bob as a motivator and teacher to set us on track for financial education. Glory be to God as since reading Bob’s I have began making changes to my spending habits. I never knew I could save about 50% of what I earned. The lord is a good God, always making g provisions. I have stopped impulsive shopping and now get to used my stuff that has been tucked away for many years. Thanks
Thanks for the encouragement Jennifer! And He is good!
Brynn Greene says
This is just what I needed to hear! My husband and I definitely have a behavioral problem. I think we are living on the same budget that we had when we were newlyweds! Doing whatever we want conservatively. That appeared to be working til a new house, and two babies and a dog came along! Now we are feeling it! Thanks for bringing it back to prayer. Since I started praying about finances and getting out of debt more, I definitely an starting to see a change, though we have a long way to go!
Awesome to hear about the progress!
Bob and your many friends, thank you all, I’m encouraged and humbled. I’m probably older than all of you and my circumstances not unusual. Life can throw us many curves so don’t be discouraged. My husband and I have always worked hard and made a living wage. When I look back I think a second income is expensive. A second car, work wardroe, eating out, trying to keep up a home and trying to enjoy each other and the children makes life crazy. Additionally by the time you’re grandparents, you may have to raise one of them. His behavior was erratic and I spent hours dealing wit his behavior, running to the school, and driving him to school when he got kicked off the bus. LOL All that said, we have no regrets. The dear boy graduates high school in May. But we have debt. Our sweet grandsons parents did not hel financially and we have a large beautiful home we should probably sell. But God has never failed us. It’s hard because we thought we’d be on a different place financially. But this wonderful boy was worth it. Thank you again Bob for joining us on our journey.
I love your writing since I found you.
Nowadays it’s not food and clothes to worry about but a roof over our heads in the UK. Here in the UK housing has become unaffordable either to rent or buy. Minimum wage is £7.20 and the average house price is £350k – rent is on average £1500 per month for a flat. It’s terrifying! I wish the Bible said something about housing too.
My dream is to earn enough from my blog to rent a place to live and move out from my Mum’s house and I’m 60 in five years. Yet we still need to give to the church and outreach to bring in the final harvest before Christ returns.
Lauren (SeedTime Editor) says
Thanks for the note, Alison! God bless you as you work on your blog!
Great points shared Bob. Thanks for the information. It’s rather unfortunate that most people believe they should work longer hours or work an extra one or two jobs to make more money to cover expenses; the problem itself they have not identified to arrive at the right solution. The following two verses of the Scripture you quoted (i.e. 1 Timothy 6:9,10) emphasise the injury caused from the desire to make more money instead of simplifying one’s life. All this is done at the expense of the real needs: family, wife, children, one’s sleep and health.
I like the observation you made that most of the “needs” didn’t exist over a century ago. I’m keeping that in mind.
It’s good you made two references to the Bible. Though an “old” book, it is still relevant today.
I admire your frankness in the conclusion about how you’re making changes as well to achieve an aim.
Lauren (SeedTime Editor) says
Thanks for the comment, Ama!
Love the perspective, but unfortunately if you live in an area that has high rent, real estate, long commutes to your job that require frequent vehicle expenses among the other expenses that continue to pop up….i.e. new roof, HVAC etc…. plus constant medical expenses due to your spouse who used to contribute to the income can no longer work. I can go on and on Bob, but sometimes life happens and no matter what you try to cut back it just still is not enough to get by. So yes, you do have to take on a second job just to stay afloat, but still cannot decrease the accumulated debt. It’s a tough vicious cycle……
Carmen Fraser-King says
Thankyou so much for your work Bob, and for being generous enough to share what you’ve learnt with the world
What a great article! Thank you for this! It helps a lot with my perspective & it is based on Biblical principles 🙂
Amy Marlatt says
I loved this article! Its so easy to get in to a rut, having trouble making ends meet….changing perspective is definitely something i need to do, i always think “Well if i had more money things would be better” “will i EVER be caught up on my bills?” feeling hopeless about ever being caught up…but if i have the strength to look within myself, and change some of my spending habits and work on small amounts over time, just seems a little bit more manageable.
Thanks so much for this Bob!
P.S love how you quoted scripture, its good to remember what the best reference for any problem under the sun says about money….
Thanks for sharing with us all these informative tips
Been really helpful and I’ll try it out myself to see how it goes.
Keep up the great work always!
Not saying that I don’t overspend at times on mere wants, but medical bills are a major problem for my family. We’ve hit our annual out-of-pocket maximum of $10k in four of the past six years. With out-of-network providers frequently in the in-network hospitals, we’re actually responsible for more than the out-of-pocket maximum. In the past 10 years we’ve paid $142k in medical bills, and over $25k of than is still on our credit cards at 18%-28% interest. Prior to 2012, our out-of-pocket maximum was $4500, but Obamacare and the Cadillac tax caused my employer to increase the out-of-pocket maximum to 10k to avoid extra taxes.