How To Stop Living A Financially Ordinary Life
At every moment in life, we are each on a financial journey.
In the beginning, life was good. We were born and we enjoyed the dependence on our parents or guardians.
We never really had to worry too about a thing. I see this in the life of our kids today.
Then gradually we start to grow up and seek our own way.
We become curious about the world and start to have life experiences.
School life, parties, relationships, holidays etc. We love ‘em all and we’re having a great time.
We cruise through the rebellious stages of our lives as we seek what is out there.
The idea of making our own money becomes a thing and naturally, we’re wired to seek jobs through school.
Life becomes about finishing school and getting a job so that we can start to make our own money.
The lucky ones among us find a job and with that comes the need to spend money too.
Like learning to drive a new car, we make mistakes along the way and try to balance earning an income with managing expenses.
Bank overdrafts become a thing and the concept of borrowed money never quite sinks in.
Gradually, we dip in and dip out thanks to the ease of access to borrowed money when we want it.
Next comes the first credit card and we are excited about building up our credit scores for that future house we dream about.
The idea of spending on credit starts to become the norm, after all, all our friends are doing it.
Next, we begin to benchmark our debts to our friends… “James has a £10k balance…surely anything below £10k is ‘ok debt’?!”
£10k becomes the new normal. We begin carrying credit card balances from one month to the other.
Notice what’s happened here?
The dependence we had with our parents has been shifted to debt.
And if we are not careful, we’ll rely on the State and others in retirement too.
I call this ‘the reliance trap’.
Welcome to the Financially ordinary life.
The life where the ultimate goal is to make income just about cover expenses each month if we’re lucky.
Are you living a financially ordinary life?
If so, nothing to be embarrassed about.
I’m writing this post because usually, what we talk about are BIG GOALS that seem like dream lands far far away for most people.
We usually talk about Financial Independence and Life Design, which are amazing goals…
But here is the thing, most people can barely survive from one month to another let alone have £1,000 in savings.
Since this is the case, it means something is either broken or many people are asleep financially and need to wake up.
You see, the measure of your financial intelligence is your ability to manage cash flow.
This has nothing to do with whether you have a degree or not and in most cases, has nothing to do with what type of job you have.
It does have a lot to do with your money blueprint, which is one of the reasons many spend more than they earn.
Remember that journey I told you about?
It carries on way beyond Financial Solvency, which is the stage at which we are merely meeting out expenses each month.
The complete stages of the money journey look something like this:
1. Financial Dependence – The stage where you depend on your parents or guardians.
2. Financial Solvency – The stage we covered above where your income barely covers your expenses and you have debt exposure. a.k.a the Financially Ordinary Life.
This is the stage where most people are and remain for the rest of their lives, and then possibly creep back to financial dependence on the State and other people.
3. Financial Stability – The stage at which you have 3 to 6 months of expenses saved for emergencies.
4. Financial Debt Freedom – The stage at which you have a plan and take steps to become debt free. For some, this might include mortgage freedom.
5. Financial Security – The stage at which you have 1 – 5 years worth of expenses saved up. You can take a sabbatical and still survive. More power to you!
6. Financial Independence – The stage at which income from your investments covers your monthly expenses. Or Circa 25 years worth of living expenses saved.
You never really have to work if you choose not to for years at least.
7. Financial Freedom – The stage where your investments cover your big dreams and give you a lifestyle boost.
8. Financial Abundance – This final stage is where you have enough investment income or net worth such that you cannot spend it all even if you tried.
I’d like you to pause for a minute, imagine and consider these questions:
- What stage are you on that journey? And why do you think that is? Be honest to yourself.
- Which stage would truly be a big dream come true for you? Something big you can aspire for gradually.
Before we dive into how you can stop living a financially ordinary life, I’d like to reassure you that wherever you are in life right now is OK!
There is nothing to be embarrassed or ashamed of. I have personally found on my journey that this acceptance lifts a massive burden away.
If you’re going to build your way forward, you’ll have to start where you are right now.
Understanding and embracing where you are now is a triumph on its own.
A lot of people hide their heads in the sand and don’t want to admit how bad things might be.
The other reassurance I wanted to give you is that goals such as Financial Independence are possible.
You don’t have to suffer whilst on that journey. Restraint and fun aren’t mutually exclusive. That’s very important to remember.
The hard truth is that you need more than earning, saving and investing to achieve it.
To get good things in life usually require a real trade-off.
I told you more about this when we considered how to achieve Financial Independence in your 30s.
Now that you have some idea where you are on the journey, let us explore some ideas on how to stop living a financially ordinary life:
Change Your Money Mindset
I’m gonna let you in on a little secret.
Many years ago, in the period I call the decade of darkness, I used to clean a paper factory.
I’d walk around, clean and collect every single thing off the floors.
Many people would talk to each other around the factory and no one ever noticed who I was.
I was pretty much insignificant and only known as a number on the payroll.
I didn’t have a salary and earned a disgraceful income by the hour.
It was definitely below £5 an hour and handed to me cash in hand.
Life was tough. I almost cry when I think of those days today.
Not only was money extremely tough, but life was hard. Very hard and I hated a lot of it.
I never understood the point of it all and I always thought life was unfair.
Truth be told, even with my ~£5 per hour, I was more fortunate than many people globally.
But it certainly didn’t look that way in my day to day reality!
You see, deep down, there was a very tiny and faint belief that there could be more…
But I was afraid.
I was a nobody. How can little old me ever become anything significant?
I didn’t know a single person who earned £30k per annum let alone £100k+ per annum.
There was no way I could have EVER imagined one day having a “per annum” salary let alone a significant one.
So how did I go from the person you’re reading about above, to the person who was bringing in 6 figures by age 30?
And this was just from my day job alone. (I tell you this just to illustrate a point. Nothing more).
It is ALL down to having a money mindset shift.
A mindset shift is what helps you move from swimming alone against a tide to actually becoming a passenger on a desirable boat.
In practice, it worked something like this for me…
My first goal was to earn a salary. Any salary. I just wanted to be able to say that I earned a “per annum” salary.
I never ever forget that day when I got my first ever formal employment contract. My eyes dashed across the pages searching for my “per annum salary”.
Not only did I have one, but I also had a decent job title for the first time.
I’d gone from someone who didn’t have a dress code to someone who would dress formally to work in an office.
A change of environment, job type, outlook etc. Life had started looking up.
Although I was pleased to now have my annual salary, my mum would always say:
“You should never rely on earning an income from just one source. You should be enterprising”.
This was something she took away from her dad and was beginning to apply to her own life in different ways.
However, I was just so glued to this idea of earning my salary that I couldn’t possibly imagine the possibility of income from another source.
It took a very long time before I came across passive income ideas I could explore.
And even with that, where on earth do I start?!
Year after year, I’d crawl into my comfortable salary world and that was it.
One advantage I had on my side was that parallel to figuring out money etc, I loved reading and was acing exams.
This brings me to the second way to stop living a financially ordinary life.
Change What You Feed Your Mind
Money in a practical sense and all things related to doing it well were foreign.
I remember the first time I read books about life design, it felt as if someone had given me access to a secret portal.
For the first time ever, I was beginning to be exposed to new ideas and concepts.
This was really the beginning of my love for personal development.
Where are you in your life today? In the same job, you’ve been in with no progress?
When last did you learn anything new that really had the potential to improve your life?
Money management is a specialist subject. A bit like learning to become a builder, a chef or an engineer.
There is a direct link between your quest to learn about money and how wealthy you become over time.
Learning involves doing, experimenting and trying things out with your own money.
Are you new to investing or never bothered?
A commitment to reading the right investing books, for example, will set you apart from many.
Don’t just read though. Get your feet wet by applying your reading.
This really is the secret sauce to making reading work for you.
There is now a readily available source for every kind of knowledge you want to acquire.
Whether they’re courses, blogs, podcasts, books etc. You have an abundance of choice out there.
Free or paid, focus on ROI (Return On Investment). Make time!
Change Your Friends
That saying “show me your friends and I’ll tell you who you are” exists for a reason.
Plainly put, if you have mediocre friends, you too will live a mediocre life.
I’ve had a struggle with this, but through my life journey so far, I’ve had to let go of certain friends.
You might find this hard to believe, but you do outgrow some friends.
In the same that you might outgrow your job or your job might outgrow you.
If you recognise that this might be the case in your life, then it might be time to make a change.
You don’t necessarily cut them off… You just change who you spend a lot of your time with.
It’s subtle but it works!
You basically want to know people who are making things happen.
Dreamers who are pushing themselves to achieve the type of life they want.
If you hang around such people, you too will want to do more, be more and live more.
A financially ordinary life is ok, but it doesn’t demonstrate growth or maturity with money.
If you look around your life today and don’t like what you see, then it is time to change and come up with a different life plan.
Do not accept where you are today as where you will be in the future.
Doom and gloom may prevail around you, but you have to rise above that and believe a different story for your life.
Doing that though takes an active dialogue with money and a challenge to your lifestyle, habits, and goals.
Want to stop living a financially ordinary life? Make an agreement with yourself and start today.
It will take time, but remember that the battle is won each and every day.
- 7 Steps To Designing Your Financial Life
- Why Saving Money Should Be Prioritised Over Investing
- Does Making Money Less Real Change Our Behaviour?
- 6 Ways To Start Attracting More Money To Yourself
Do you fear that your financial life situation will never change? Have you accepted it? If so, why? If not, what are you doing differently?
Do please share this post if you found it useful, and remember, in all things be thankful and Seek Joy.