5 Lessons About Money Since Graduating
Photo by Fabian Blank on Unsplash
When I first started work, one of the things I was most perplexed by was that at the end of the month a sum of money dropped into my bank account. Come rain or shine, that money would be there.
It was confusing because I’d just come from a life of having barely any money. I worked a part-time job at Uni and had my mum and dad to rely on at Uni. I didn’t have much to work with every month but back then, I didn’t need much.
I would pre-drink quite extensively to mean I wouldn’t have to spend much at the pubs / clubs. I would barely ever eat out. I was always aware of how much money I had because I was living within a very finite amount.
When work came around, my lifestyle was the same, well actually I had less going out the door and I had a lot more coming in.
Here’s what it taught me.
1. Money Rules the World, Sort Of
Money is a weird thing. It’s quite odd that we trade pieces of paper and digits in a bank account for things. It’s perhaps weirder that if you don’t have enough stacks of paper or digits in your bank account then you can end up having a bit of a crap time.
Money in a way does rule the world.
There is a fine balance between not having enough and having too much and most people fall on the side of feeling like they don’t have enough.
Most things in life come with a price tag. Not the important things but the things that house your important things do. Your friends and family for example will live in a house that costs money. Your health, which is very important, costs money, to eat and exercise right. Your pets, very important, they need healthcare and a nice place to be.
So whilst money won’t buy you relationships or the important things in life, money does look after your important things.
2. It Doesn’t Buy Happiness
Money makes us happy up until a point. I can’t imagine you’d be very happy living in a total shit hole with no way of escaping. Equally, I don’t think you’d be that much happier living in a mansion compared to a nice flat.
A car can be worth £500,000 or £5,000 it still gets you from a to b. A £500 car though, that will probably not do a great job of getting you from a to b.
And that’s the thing with money. There is a sweetspot. It’s different for different people but mostly it’s about having enough to have the things you want but not go overboard.
3. You Can Spend it all Your Money and Feel No Different
I remember one month I spent my whole pay cheque. I was living at home at the time so it was quite a lot of money to blow. Sitting here now I can’t for the life of me remember what I spent it on.
I do remember telling someone, as if it was some dirty little secret, and thinking that I felt absolutely no different. Sometimes we idolise big purchases, hold off on spending a large sum of money through fear of it making us feel different.
It doesn’t make you feel any different. It’s just digits in a bank account. They go up when you save, down when you don’t.
Also the fact that I can’t remember what I spent it on probably gives you an idea of how much you remember your big purchases.
4. Getting into Good Habits Early Helps
I read something somewhere that said how you spend your first pay cheque is how you spend every pay. I sort of agree with that. Obviously because of that one pay cheque I blew. But in the main it’s true.
It’s easy to put money away if it’s something you’ve always done. You don’t need to be good at saving to be a saver, you just need to save. Some people call it ‘paying yourself first’ but essentially it’s allocating ‘x’ amount of your salary to go into a pot that you don’t touch.
It will differ depending on your goals but you could easily save 10–20% of your pay cheque as soon as you get paid if you put some effort in. In fact, it doesn’t take much effort at all, just set up a direct debit to come out of your current account into your savings account on the day you get paid.
If you’ve got less in your current account you spend less. That’s because it takes more effort to go into your savings, transfer the amount you want to spend then it does to not buy the thing you were going to. Or at least that’s the case for me.
Good habits are easy to get into when you first start getting paid because your University days were pretty penniless. The amount of money that goes into your account that first month will feel like you’ve won the lottery. If you maintain that outlook i.e. you’re getting paid lots and you can afford to save a lot too, then you’ll find saving easy.
5. Enough Isn’t That Much Money
If you really think about how much you need to live a decent, happy life, it’s not that much. Don’t get me wrong, it’s quite a bit of money but if your outgoings are minimal, then you don’t need that much.
A warm home, some nice food and a bit of good TV. That’s not that expensive. It’s when you add in numerous nights out, bottles of booze, takeaway after takeaway that you end up out of pocket.
If I’ve learnt anything about money it’s that you don’t need much to be happy. There are millionaires around the world that are totally miserable. You need enough to fulfil the lifestyle you want but not too much that it makes you miserable.