You’ve heard it before; more money brings more problems.
When you’re young or paying off debts, you’re probably in a state of mind where you respond to that statement with an eye roll and by saying “yeah right.”
Eventually, you start working, you make some money, and you start saving. When you have dollars, more people start crawling into your life: everyone from Uncle Sam to your old college friend to a representative calling from Citi Bank with an exclusive promotion. In those moments, you start to realize that having some money can translate to problems.
Money problems aren’t reserved for the rich, in fact, they might be more impactful when you have modest savings. So you’re not a bad person for feeling financial pressure as you make more money. It’s normal, and being aware of these risks can keep you from losing the money you’ve earned.
1. Your Income Is Getting Taxed
I would tell anyone to have taxes withheld from their income, even from a young age, even if they only anticipate receiving a couple of thousand dollars a year. Of course, everyone knows their income is going to be taxed (unless you live in one of the states that don’t tax their income), but reality hits you in the face when you watch your paycheck dwindle.
But we all know taxes are inevitable, so why is this such a problem? Well, now budgeting becomes a game. The amount your company says you’ll receive, your actual salary, isn’t what gets deposited into the bank. When you factor in taxes, insurance, and retirement savings, it can feel like you only see half of the money you earn. This makes every attempt to take your money more frustrating and painful.
2. You Need to Determine How to Invest
Congratulations, you’ve covered all of your necessities. Now, you have a little bit of money left over. While there’s the temptation to spend it, there’s also an angel on your shoulder encouraging you to save it. Likely, you’ve heard to invest your money because it can earn interest and hopefully allow you to retire one day. So you need to come up with a plan, and the burden likely falls on your own shoulders.
If you’re lucky your company will have a 401K or some type of retirement plan, and that can be an easy choice for investing, especially if there’s employee match. If you’re left to make your own decisions, the number of options can be very intimidating. You can look at “high” yield savings accounts, stocks, or trendy cryptocurrency. Usually, the safest routes take a lot of time to see the reward, but the ones promising the fastest reward tend to have the highest risk.
3. Businesses Start To Target You
As you get older, your lifestyle begins to change and you fall into stereotypes of adulthood. This can include buying a home, having control over your finances, or owning a car. Once you prove you can make these types of moves, you’ve also proven you’re a suitable customer. One day you’ll get your mail and realize you’re digging through credit card advertisements and fliers for home security systems.
In one regard, this should be a badge of honor; companies know you’re valuable. More than that, it’s just annoying. Solicitations are getting really crafty, and under the pile of pre-approvals and ads, you have real bills to pay and documents to sign. If you overlook one thing, you’ll be at fault, not “Sleeptight Home Security.”
4. You Suddenly Have More Friends
There’s an idea that when you have a lot of money, you suddenly get super popular. This might be true if you win the lottery or star in a movie, but the average Joe won’t be so cool. However, you will start getting invitations to go out more. Not because you’re more interesting or people like you more; it’s because you can pay the bill. People want to go out with others who can afford to participate in activities, and if you’re paying your share, you’ll become a suitable guest.
Now, you need to make decisions that will either impact your savings or your relationships. As you get older and take on more responsibilities, your life becomes an endless list of decisions. This means you’ll need to prioritize your personal wellbeing or you’ll need to decline some fun activities so you can focus on long-term goals. Eventually, these decisions will benefit you, but in the moment they can be quite painful.
5. You Can’t Maintain Your Lifestyle
Once you have a constant stream of money, you’re going to want to improve the quality of your life. It’s hard to keep working and never take advantage of your earnings, but you need to pace yourself. Before you double the size of your apartment or upgrade to a smartphone, make sure you can sustain this lifestyle.
Of course, you can’t deny yourself of everything, but it gets very expensive to keep up with trends. This will slow your progress when saving for a big expense, and it will be very damaging if you lose your income. At that point, you won’t just lose your upgraded quality of life, you’ll also need to compromise or accrue debt to get necessities.
6. Time Becomes More Valuable
When you’re young, it feels like you can spend your days pursuing hobbies or just lounging around. Now, those boring days sound like a dream, and a lot of your time is used to earn money or acquire skills. Conceivably, your time now has a price on it. When people tell you to wait or waste your time, it can feel like they’re devaluing you as a person.
Alternately, this might be one of the areas where you decide to splurge. Saving yourself some time can be worth an upgraded cost while wasting time can be an expensive decision. This can improve the quality of your life when you learn to decline events you won’t enjoy or bypass hassles with premium experiences. It also becomes painful when people feel they’re the center of the universe and your time isn’t important.
Some Problems Are Good Problems
You might not be broke, in fact, some people would say you’re doing well. This doesn’t mean you’re immune to money problems. Once you start to have a little bit in your savings, you need to protect it. So, you’re going to encounter some complications along the way.
This also proves you’re a work in progress, but you’re progressing in the right direction. In many regards, the start of your career and financial growth can be the most painful time. You’re making a lot of changes, and it can take a lot of effort to keep moving in the right direction.
When you see someone coming after your money or your success, pat yourself in the back. Then, keep working to improve your financial situation. Recognize that any type of progress comes with its own set of problems. When you gain wealth, you absorb some money problems, but it also gives you some power; it’s your responsibility to use this power to keep growing rather than party it away.
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