10 Challenges That Money Can Cause… And How To Overcome Them!
Money problems are the most common cause of friction in relationships, not having enough of it, having too much of it, or spending it in a way your partner doesn’t agree with. These are not the only challenges money can cause…
In this article I will be showing you all the ways that money can be a huge obstacle for you and your family if you are not careful or if you don’t take preventative measures to avoid them… But don’t worry, I will also be providing ways to help avoid these financial pitfalls.
The Problems That A Lack Of Money Can Cause…
#1. Having Different Ideas On How To Spend Money
It is not uncommon for partners to have different priorities when it comes to spending money, but if those differences can’t be resolved then that is when it becomes a problem.
Let’s say one of you is more financially conservative then the other, the conservative is not going to like seeing the indulgent spender impulse buying clothes or knick-knacks.
If you feel like this might be your situation, then it would be best to talk to your partner about how the money should be spent and try to reach a compromise or create a budget that allows for some discretionary spending but not too much, that way both sides are happy.
#2. Comparing How Much You Have To How Much Others Have
The vast majority of people use the people closest to them as a reference to figure out their place in the world. For some, seeing yourself lacking behind your friends financially can cause self-esteem issues or subconsciously give you a chip on your should when it comes to money.
For others, seeing yourself well ahead of your peers can give you a self-esteem boost. Both of these are equally unhealthy.
Why? Because you are tying your self-worth to other people, which means you are tying it to something that you have no control over.
Instead of playing the comparison game with other people, only play it with yourself. Ask yourself if you are doing better than you were last year, last month or even yesterday. If the numbers aren’t showing growth, then you can always double your effort to make more money and have pride in your work ethic.
#3. Not Having Equal Responsibility For The Bills
If one partner is paying for everything and the other is paying for nothing, then this can create a power struggle where the one who pays for everything claims control over the other because they pay for everything.
This is very unhealthy for the relationship. For the controller because there is a lot of pressure on them since they are solely responsible for keeping everyone afloat.
And for the supported because they are dependent on the other for their lifestyle so they may feel they have no choice but to give in to the other’s demands.
The solution to this is to evenly split the responsibility between yourselves.
This takes the pressure off the primary payer and gives some of the control back to the other partner, that way there is no power struggle or friction between both parties.
But what if one has to stay home in order to raise the children or take care of elderly/sick family members. Well in that case if the bill payer tries to exert their will over you, then you must remind them of what you are bringing to the table.
Tell them that it would be very uncomfortable for them to have to pay for everything in addition to paying for child or elder care services if you weren’t around to provide it.
It’s not manipulative to remind your partner of your role, how you are helping, and how you inherently have an equal say in matters because it is a partnership not a dictatorship.
#4. Having / Dealing With Debt
Debt is a big thing to overcome if you have a lot of it. Firstly, you need to learn how to control your spending habits in such a way that you are not using your credit cards every month because you run out of money til the next paycheck.
Secondly, you need to learn how to pay down your debt. If you cannot pay more than minimum payments, then you might be saddled with this debt for life and it will only grow over time.
Obviously this causes problems because debt is like a big growing monster that always on your back, it will wear you down and it can make life very difficult because you get turned down for loans and you can’t afford things like medical bills or repairs because all your income is already assigned with debt.
The way to overcome this financial obstacle is to pay down your debt as soon as possible whenever you find yourself accumulating it. Even if you have to not spend money in other places, always pay down your debts as soon as possible, clip coupons and eat at home if you have to.
Just pay it down at all costs.
#5. Money Secrets
I know a lot of people who keep their finances secret from their families, this is extremely unhealthy.
For example (this actually happened in my family growing up), let’s say one partner is in a car accident and then tries to call their insurance to make a claim, well if there is no communication between partners then they might find out at the worst possible time that they are uninsured because the other partner decided that they couldn’t afford to pay for insurance and didn’t tell anyone about cancelling their coverage.
While this is an extreme example, it is also common for couples to have secret bank accounts unknown to each other. What is the purpose of this?
Well maybe that partner wants to have a discretionary spending fund, or maybe they are saving up in case the relationship goes south. It could also be that they want to make it seem like they don’t have a lot of money so that the other partner can pay for most of the expenses.
Whatever the reason is, this is very unethical and shows an unwillingness to have good faith in the relationship, honesty and open communication is the best policy here. You should completely feel comfortable enough with your partner to discuss finances with them without judgement, if not then what is the point of the partnership then?
Now for the other side of the coin…
How Having More Money Can Lead To Having More Problems
Yes believe it or not, even the rich have their own set of money problems, they just come in a different flavor so to speak.
Here are some you might not know about so you can be prepared once you are making your millions…
#1. Much Higher Taxes
Income taxes increase as you earn more money, so even though you are making a ton of cash, a good chunk of it is going to be sent to the government.
Here are some figures so you can get an idea of what the rich pay in taxes.
Single filers start at 10% from $0 — $19,400 a year.
If you are making more than that then it jumps to 12% until you hit $39,475, where it increases to 22% (big jump).
It keeps increasing but I will spare you the rest and just give you the rate at which it caps.
If you are making any amount of money over $510,301 a year, then get ready to give 37% of that money to uncle sam.
But don’t despair, if you have a good accountant, there are ways to avoid such heavy taxation. You will learn that once you reach a certain level of income, it becomes more about how you can keep your money instead of increasing it.
This is how huge companies are able to give $0 dollars for taxes in April, because they can afford a dream team of tax lawyers, the rest of us have to pay unfortunately.
#2. Lifestyle Inflation
When you make more money, it is natural to feel an urge to spend more money, after all why have that money burning a hole when you can just use it to buy what you want since you can afford it now.
The problem with this is that you can always find more and more expensive things to waste your money on so no amount of money in the world is going to satisfy you if you get your fulfillment from owning material things.
Even the millionaires can live paycheck to paycheck, even taking on enormous amounts of debt to fuel their lifestyles.
This is how celebrities like Nicholas Cage ended up completely broke after buying mansion after mansion. Nothing will ever be enough if you are chasing a high that comes from buying expensive things.
Expensive habits can ruin your life just as easily as alcohol or drug addiction, it’s known to drive people to suicide once they realize they can’t afford the things they once used to or even that their wealth isn’t growing in such a way as to allow them the continuously buy bigger and more luxurious things,
The solution to this is to live well below your means, so that you are not constantly on the edge of financial ruin.
Yes, it might feel good in the short term to have fancy things, but all material things wear down and fade. Debt doesn’t, in fact it gets stronger over time.
So make sure there is a good amount of financial cushioning for yourself in case you need it.
#3. You Now Have A Target Painted On Your Back
People who make a substantial amount of money become targets for scammers because you have what they want and you have a lot of it.
If it is discovered that you have a large fortune, expect to see long lost relatives, and people who come into your life offering services at an astronomical price.
When you are rich you must be very vigilant of scams and other clever ways people and institutions try to siphon money from you.
Which brings me to my next point…
#4. You Will Need An Army Of Financial Advisers
All that money needs to be protected and decisions about it need to be carefully thought through,
You can’t manage a huge estate on your own, the responsibility will need to be spread amongst people who are qualified to watch over it.
You need to make sure it is getting saved properly, invested efficiently, and taxed in a way that’s not killing your expenses.
You also need accountants who will inform you if your wealth is growing or shrinking, and what needs to be cut because it is taking up too many resources.
It’s also such a headache to hire these people and to make sure they are qualified and trust-worthy enough to look over your fortune.
#5. Are Your Friends Really Your Friends? And Does Your Partner Love You… Or Your Money?
If you don’t find “the one” before you gain your wealth then it will be significantly harder to do it afterwards because you don’t ever really know if they love you for you, or for your money.
Same thing applies to your friends. If you have life long friends, congratulations! keep them. If you don’t then it’s the same problem as the above.
The way rich people get around this is they associate with people at their level, it’s not that they think they are better than people with less income, it’s that they run into social problems.
You might think your friend from high school is one that’ll stick around forever but what if they are jealous of your vast fortune? It might even make them feel inferior to you since society places so much value on money instead of immeasurable things like kindness or good manners.
Another good way to handle this kind of thing is to not get specific about how much money you have, if you just say “I have to enough to live comfortably” and don’t flaunt it, then they can convince themselves in their head that they aren’t so different from you.
Not having enough money is definitely tough, no doubt about it, but having a lot of money also comes with it’s own set of problems and it isn’t what everybody thinks it is.
Originally published at https://forgefinancialfreedom.com on October 6, 2019.