Can money buy “Happiness”? Does more money equal more problems? Questions like these have been asked and answered for generations and all have had different perspectives about money and how much is too much.
But the one thing hidden in plain sight that most people don’t seem to realize is, it doesn’t matter how much money you need to have as long as you are living the life you want to live. Surely if you have certain desires and goals in life that depend on your financial position then yes, knowing how much money you will need will be most important.
Money was once a means of exchange for the basic commodities of life, food, shelter, clothing. Hence it was a means of survival for a better life. That said, money was a “virtue” when it was new.
In the era where technology, fashion, housing, automotive have seen phenomenal success, money has turned from providing just a better life for people to making people dream about having not just a better life but a life that has everything that they could ever want.
As spending money for fulfilling needs is given importance, saving and investing money for the future should also be important. To learn about how and where to invest check out our other articles on the stock market and investments that go in-depth.
The most common way to budget your expenses has been given by the most famous and simple rule, 50-30-20. The idea is that every paycheque you receive should be broken down as, 50% for needs, 30% for wants, and 20% for savings and investments. This rule gives a balanced perspective on how one should spend their money. It fulfills the needs, justifies enough for wants, and incurs a discipline of saving and investing.
The way one can play around with the 50-30-20 rule is that anyone who can save more shall save more than 20% and not follow the rule blindly. When possible expenses for needs can be reduced. One thing to keep in mind is to never increase the percentage for wants unless your ability to spend exceeds your needs significantly as this mistake is made by people who fall in the middle-class category, who stretch their budget and buy things they can’t afford to buy and fall in a debt trap.
Having debt can hamper the savings of even wealthy individuals. The temptation of buying expensive things on “EMI” has made middle-class people extremely poor financial decision-makers. Just because one has the ability to may a small amount monthly doesn’t mean it won’t them in the long term. Many surveys say that many people who have loans don’t the interest rate they are paying and the exact month their loan is ending.
Based on the above-discussed topics, it clearly proves that managing your money will give you the freedom to do more with your money and incur a discipline that will be carried forward for a lifetime. However, one can never live the life they want to live and have a bright future until they are satisfied with where they are in the present.