Money doesn’t solve money problems

What do I mean? I mean that the raise you are hoping to get is not going to fix your financial squeeze. I mean if you were making what your boss is making, it will not fix your financial squeeze. There is a famous principle that expenses rise to meet income, so if you are having a hard time paying your bills or making a dent in your mountain of debt money is NOT your answer.

I know it may sound like this is bad news, but really this is great news. This is because money problems (difficulty paying bills, paying off debt, getting into debt, difficulty saving) are really behavioral problems. Since they are behavioral problems they can NOT be solved with money.

People seem to think that they can make their problems go away with more money, but really it just covers them up. This is apparent with all of the millionaires who file for bankruptcy. They have more money than most people can dream of, yet they also have a spending problem that is far stronger than their income.

How do you fix behavioral problems? Well, you start just doing one small thing at a time. It is a lot easier to update your house by working on one room at a time than by tearing up every room all at once. You can start by learning to not spend more than you make.

There are practical things that can be done to help out, but I think nothing will be more valuable than just taking a long hard look at where your money is going and asking yourself, “do I really need this?”

We say we NEED all this stuff to survive and yet 100 years ago most of it didn’t even exist yet. I think when we are honest with ourselves we can see that a lot of our NEEDS are really just screaming, yelling, panicky WANTS.

It is a tough pill to swallow. Go visit a third-world nation and swallowing it will become much easier.


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  1. Amen brother!

    In fact, I feel that it’s a good indicator that you’ve got a problem if you feel that all your money woes will go away if you could make more money.

    My wife and I were unfortunately a case study in this principle. We went through ten years of “prosperity” where in that time I nearly tripled what I was making and now I make what many would consider a very large salary.

    But, living beyond our means all those years has put us in a rough spot now and we will be penny-pinching for the next 10 years instead of enjoying our increase and building our net worth.

  2. What you say is so true. My husband and I are bad examples of this principle, too. When we were first married, we lived on peanuts (or so it seemed). When our income increased, so did our spending, and we’re really no better off.

    Now we’re changing our habits. I guess we needed to learn the hard way.

  3. @Budgetman
    I seem to hear the same story over and over again – why can’t people catch on to this principle earlier on in life? Like Lynnae said, we all just LOVE to learn the hard way :)

  4. Third-World Country? How many World’s exist?

    Good post.

  5. I tried to tell my ADD that my behavioral problems are not money related but it rarely ever listens. it’s too busy bouncing off the walls. ^_^

  6. I think you’re right, having more money does not make money problems go away, nor does it hide poor money management skills. It merely elevates you to another level of problems.

  7. If you’ve ever watched TLC’s Til Debt Do Us Part, you’ll realize that at some points the financial planner in the show tells the couple they need to go out and “Make More Money” to solve their financial woes. Although I agree if you’re living and spending frivolously and that is the pure cause of your money problems then money probably won’t solve your problem but if you’re living just above the poverty line and not spending anything more than the basics and “just” cover the bills money is likely to make you more comfortable if you make more of it and know how to manage it. I find your statement too generalized.

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