Why Money Doesn’t Solve Money Problems

Why Money Doesn't Solve Money Problems

This post may contain affiliate links. Please see my full disclosure policy for details.

We’ve all thought it — myself included. “If only I could get that raise, then all my financial problems would be solved.” Or if you haven’t thought about that, surely you’ve said to yourself, “If I could just find an extra $200 each month, I could rest easier. I’d finally have some wiggle room in my budget.”

I’m here to tell you that, unfortunately, money is not the answer. There’s a principle called the Parkinson Law, which essentially says, “Our resources will fill up the space that we give it.” So in regards to money, this tells us that if we make $60,000/yr, and then get a raise to $65,000/yr, our expenses will gradually rise until we are in the exact same position as before. The additional money has done nothing for us.

I know this sounds contradictory. Surely if things are tight, having just a little extra will give you some breathing room.

While I don’t have hard evidence to back up this statement, I feel safe in saying that most individuals around the world have a tough time just making ends meet. Paying bills, getting rid of debt, and saving for a rainy day seem virtually impossible when the month stretches too far, and the paycheck stretches too little.

Ready for this? Your money problems have nothing to do with money. It’s a behavior problem.

This is all too apparent in the media. A few months back, Kanye West reported having money issues, and reached out to Google’s Larry Page in hopes to receive funding for a business venture (which he never received). He then went on to disclose that he had more than $53 million in debt. How does someone with an estimated net worth of $145 million struggle with money?

So how do you fix it?money-doesnt-solve-money-problems

One of the most freeing feelings is looking at your bank account at the end of the month, and having something remain. Not just breaking even. Having money left over. Rather than telling people to “live within your means”, I now tell people to “live below your means”. So what if you can afford that car? You don’t need it. You can make do with what you have.

I actually find it somewhat of a game to see how little I can spend each month. It’s exciting to me to see how much I don’t spend on things that I could easily. Rather than spending $65 per tank of gas, I now spend $25 to fill up my commuter car. Rather than spending $5/morning on a cup of coffee, I skip it altogether. Instead of grabbing a burger for $8 each day for lunch, I go to the grocery store ahead of time and see if I can make my entires weeks lunches for the same price. It’s fun to see how creative you can get.

Do you really need that?

Saving money is great, and cutting costs on everything you can will always help. But ultimately, it comes down to asking yourself, “Do I really need this?” Winter is slowly approaching, and while it would be nice to have a brand new, stylish coat, is it a need, or is it a want? Your coat from last year is in great condition, and does the job just perfectly. Consider telling yourself “no” for now to help prepare yourself for a better financial future.

We often tell ourselves that we need these items so desperately, yet 100 or even 50 years ago, many of these items didn’t even exist in the first place and people seemed to get by just fine. We need to take a step back and be completely honest with ourselves to determine whether these are wants or needs.

The bottom line

Whether you make $20,000/yr or $200,000/yr, you will never have enough. Money is always relative. Take a look at what you think you can “afford”, and then try to cut that budget by 3/4 or even half. Living below your means will always ensure that you have enough to make ends meet. It’s fine to treat yourself occasionally, but make sure that you set aside cash for these expenditures outside of you normal budget.

I promise you that this is the most liberating feeling and is worth more than any new car, or losing sleep over how you’re going to make the payment on your new $800 cell-phone.


  1. The Best Money Advice I've Ever Received | Sane Cents

    […] It all comes down to living below your means. If you make $500,000/year, but spend all $500,000 of it, why does it matter how much money you make? You’re left with a net $0. But if you make $38,000 year, but only spend $30,000 of it, you’re left with $8,000! […]

  2. 4 Ways I Disagree with Dave Ramsey | Sane Cents

    […] While retirement saving does seem to take a significant chunk out of a paycheck, I don’t know that it would make that big of a difference in paying off debts. More money, more problems. […]

  3. Financial Advice That Forever Changed My Life | Sane Cents

    […] that’s the best thing about personal finance. The principles behind it all is really simple. It’s easy to get rich, as long as you’re willing to change only a few things in your lif… — most importantly, your […]

Leave a Reply

Your email address will not be published. Required fields are marked *