Have you ever felt like your income falls short of supplying all your needs? When payday comes around, you might see it come and go since you have already divvied it up to pay for different expenses. It can be frustrating to juggle monthly bills and other financial responsibilities while inflation rises, and wage growth trails behind. You might find yourself thinking of ways to increase your income. But believe it or not, earning extra money is not always the right way to solve discrepancies in your budget.
The truth is that regardless of the income you are earning, there will be instances when you still feel like your salary is insufficient. Even individuals with six-figure incomes sometimes admit that their paycheck falls short of their real needs.
Increasing your income is not always the solution
If both low and high-earners feel like their income is not enough, then you know that no matter how much you earn, it will not solve your financial problems.
A recent survey by Gallup revealed that 56% of Americans say price increases are causing them financial issues. This number has continued to increase in the past year—it was previously 49% in January and 56% in November 2021. Lower-income households were more likely to be experiencing moderate or severe financial hardship, but the number of middle-income and upper-income Americans struggling has also risen—17 percentage points and 12 percentage points respectively.
While you may feel like adding more money into your monthly cash inflow might help, you will need to deal with some sacrifices along the way. Let’s go over some examples.
- You sacrifice your time. Unless you can effectively set up a passive income business, you need to take into consideration the time needed to invest in that additional work. You will be sacrificing whatever free time you have with your family and even yourself if you work longer hours.
- You sacrifice your physical body. Work, regardless of what type it is, will take its toll on your body. Earning additional money could help you overcome financial hardships, but it could also be at the expense of your health.
- You sacrifice your relationships. When you increase your income, you will likely have to sacrifice close relationships to some degree. Even if you provide for your family, your presence is needed in their lives. Failure to make that happen can lead to the downfall of your relationship with the ones you love.
These sacrifices can all lead to stress that can hurt your life in other ways. You may be saving your financial life but at what cost?
We are not implying that increasing your monthly cash is a bad idea. It is still good in a lot of ways, because you are being proactive about building your wealth. However, it is important to point out that doing so is usually not enough. While there may be cases where earning more is the solution, it is oftentimes partnered with something else.
5 ways to change your mindset about your paycheck falling short
In most cases, the problems lie in the financial habits you implement in your life. If you know that certain actions are the issue, you should check which mindsets might be influencing you to act in a detrimental way.
If you don’t believe in the power of the mind, you should at least try it before totally dismissing the idea There are scientific experiments that prove your thoughts can manifest themselves in the physical world. In the 1990s, researcher Dr. Masaru Emoto conducted several experiments to observe the physical effect words, music, prayer and environment could have on crystalline structures on water.
In one of the experiments, Dr. Emoto filled two containers with water and taped positive words on one and negative words on the other. His observations showed that the water in the container with the positive words formed symmetrical and aesthetically pleasing crystals. On the other hand, the water in the container with negative words was disfigured.
Having said that, you need to understand that if your income is not enough, you should focus on changing your mindset about money. That may be the primary reason you are dissatisfied with your finances.
Here are five common mindsets you need to change in order to improve your financial situation.
- Focusing on what you don’t have. We are all consumed with the need to acquire something new. This is why retail therapy is a real thing – albeit quite a dangerous stress buster. Although it feels good to know that we can buy anything we want, it can also make us focus on what we don’t have. That mentality can begin to convince you that your income is not enough. But you can change that by making sure you appreciate what you already have.
- Upgrading your lifestyle after a paycheck raise. Another mindset that you should change is immediately upgrading your lifestyle as your income increases. The typical American spending habit is not just overspending. It is also the habit of raising the standard of living according to the income bracket. While there is nothing wrong with that, it removes the breathing space that should have been there to keep you from thinking that your income is not enough. In some cases, we even exceed the upgrade to go beyond the actual increase in income. That puts us in a situation that can lead to debt accumulation.
- Failing to search for alternatives. When you go shopping, do you see only what is at eye level or do you look below the racks to search for low-price items? If you are the former, you most likely fail to search for the cheaper alternatives. There is always a more inexpensive way to do things. In some cases, it involves learning new skills. And you could be amazed at how good it feels to nab a bargain.
- Keeping an eye on our neighbors. If you constantly compare your life with your neighbors, you will never be satisfied with what you have. This can give you an inferiority complex. It is important to stop this mentality and focus on what you need – not what your neighbors have.
- Cutting off the wrong expenses. Cutting back on your expenses can help but only if you cut back on the right ones. Some people think that completely removing entertainment expenses will help them save money, but it could also bring a feeling of deprivation. Be wise about what you cut out of your budget so that you won’t feel like you are being punished.
Evidently, it all boils down to how you budget your money. Depending on where you live, you may be able to live on a $30,000 per year income by implementing the right spending habits. That will keep you from overspending – regardless of how much money you take home every month.
When your income is not enough, you should look at your budget and see where your expenses are going. This can help you determine which money mistakes you are making now so that you can avoid them in the future.