Why Money Doesn’t Solve Money Problems

why money doesn't solve money problemsThe raise you are hoping to get is not going to fix your financial squeeze.

I mean even if you were making what your boss is making, it will not fix your financial squeeze.

There is a famous principle called Parkinson’s Law that essentially says 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 often behavioral problems.

And behavioral problems 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 by asking God for help and then begin 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. I think when we are honest with ourselves, we can see that a lot of our NEEDS are really just screaming, yelling, panicky WANTS.

1 Timothy 6:8 is what I am striving for, how about you?

But godliness with contentment is great gain. For we brought nothing into the world, and we can take nothing out of it.  8 But if we have food and clothing, we will be content with that.”

51 Comments
  1. Budgetman

    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. Lynnae @ Being Frugal

    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. bob

    @Budgetman
    Yea,
    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. RV

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

    Good post.

  5. Millionster

    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. Dana

    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. Lisa

    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.

    • John

      I agree with Lisa. If you are barely making ends meet then I think more money is a better solution. That statement that is made is generalized and not true of everyone. On the other hand if your problem is money going out and you are making more enough to make ends meet then you might have a point.

    • Regina

      Yes, much too generalized. (See detailed reply below.)

  8. Lisa H.

    One situation in which more money would be a help is when one spouse loses a job. Then the inability to pay bills is truly due to a shortfall in income, not to spending above one’s means. On the plus side, when I am employed again (please let that day be soon), we’ve learned many ways to live as frugally as possible.

    • Janell

      I agree with you Lisa. I lost my job last month and am trying to find ways to do more with less income. Best wishes to you on your search for a job. I pray you find one soon.

    • Shan

      I disagree. A job loss at some point in everyone’s career is pretty much a given – either due to layoff, short-term disability, having to help a sick family member, etc. Having an emergency fund ahead of time can be a great help for this. And not maxing out what you can afford on 2 incomes as far as home loans, car loans, etc. As long as you are making above poverty level on 1 income you can survive, you can have a roof over your head and food to eat. Not saying it would be pleasant, but you could get through it.
      When the spouse that is out of work does get a job do you say Oh thank God we made it past that, now we can go back to previous spending? Or do you say, wow we really need an emergency fund, let’s cut back some expenses to save more in case this ever happens again. I think most people would just go back to previous spending and the article is correct – more money doesn’t solve money problems, it will just be a huge crisis again next time something happens.
      I am not saying I have it all figured out and have a big emergency fund myself, I am just saying that I agree with the article (unless someone is living at poverty level of course).

  9. Terry Tramell

    When my husband and I were first married money was not a problem. I never knew much about his business but when he lost it, boy did I learn fast. After a long time of selling off everything we owned and left for a new country we finally put the past behind us. This seems way out there for most of you. And it is. We started watching every cent that we had and working on the future realigning on God as our savior. Many im rivals seemed to happen and we soon learned a huge leson that money was never our problem. After years of penny pinching we are still pushing forward and know now what is real. God

  10. Donna Smith

    I like the principle however when you have cut everything out except things you are unable to like housing and you have cut your housing already, the need to raise the amount incoming is still a real one. If I spent less I would be going to the food pantry and actually have done so many times. Sometimes you really do need to make more in this high priced world.

    • Regina

      I agree with Donna 100 percent!! Our family is VERY frugal, and more income is what we are seeking, and believing God for.

      For many people though, more money will not solve their problems, agreed.

  11. Raka

    Dear Bob,

    I want to congratulate you for yet another great article, so Congratulations! I always enjoy reading your blog, as it provides insights into money matters that not many people around me would be comfortable speaking openly about.
    This article reminds me how very much I enjoy reading your blog!

    Bless,
    Raka

  12. Very good post! Only when we are content with little will we learn to do better with more. Otherwise, more income means more spending. I wish we had learned this earlier when our income was higher.

  13. Suzie

    I agree with Lisa. I think you are painting with a pretty broad brush here. For a lot of people this may be true. For people like my husband and me we have been dealing with some pretty tough circumstances. First he lost his job about 2 years ago but fortunately did find a new one relatively quickly. Last year and the beginning of this year have been overwhelming. His mother ended up in the hospital and then a nursing home and then within 3 months passed away. Right after that my father ended up in the hospital then a nursing home and died in February. Right after my father went into the nursing home I lost my job. I just started a new one last month. I collected unemployment for about 10 months. Both of our cars are part of that big GM recall so we’ve had to juggle getting them to a dealer for repairs (mine actually broke down) and dealing with renting a car. My husband ended up in the emergency room back in March and had to be admitted to the hospital for emergency surgery. He has had a couple more procedures and hospital stays (he’s doing well now). Yes we have insurance but we still have deductibles, co-pays and other out-of pocket expenses. Did I mention our garage door opener came crashing down last fall and we had to replace both the garage door and opener. I am not fishing for sympathy or wallowing in self-pity. We are both working now and making some headway. Just please don’t generalize. There are some situations beyond people’s control where having more money would be a huge blessing.

  14. Sunganani

    Living within your means is a good starting point. I am learning that as your family grows, so do your expenses…duh. So there comes a time when you need to increase your means…challenging article.

  15. James

    I don’t see how Bob is making a generalization. At the beginning of the blog he said money problems are often due to behavioral problems, so he was speaking to that particular group. If it was not a problem, Dave Ramsey would not be so successful. My heart pours out to all of you. May God bless you, your families and see you through a triumphant victory over your circumstances.

  16. Kalen @ MoneyMiniBlog

    I can attest to this being true. My wife and I were in the most debt when we made the most money. We actually make less now than we used to, but we are completely debt free now. We used to be over $20,000 in consumer debt. It really is about your behavioral habits. It’s the same for building wealth. Great article, Bob!

  17. sarahbeth

    I agree with James, that Bob is not generalizing but speaking about those specifically with behavioral problems when it comes to money.
    I do believe that there are spiritual attacks on strong Christian who do actively manage money wisely (a dear friend of mine is a victim of such attacks at the moment).

    However, I think the majority of Americans are in debt due to behavioral problems, and not due to lacking money. I am very thankful to see the testimony of others in their early years of marriage and how they wish they had been wiser with their money then. My husband and I are in our first two years of marriage and we are actively putting principles found in this article to use in managing our money. We went through Dave Ramsey’s FPU course and it was such a God send. While we make less than $25,000 a year and are both still in school, we are not in debt and we are building up our emergency fund (VERY slowly, but it’s happening!).

    Thanks, Bob, for this great post and for sharing the Bible verse. I want to write it down and put it on my wall as encouragement that it is okay that I am not living as luxuriously as others around me. 🙂

  18. Jake

    I agree with most of this, except in the case of student loan debt. This has crippled my ability to truly enjoy life, due to the fact that I put too much emphasis on getting a “good education.”

    I believe that we need to teach our kids about being self sufficient. That, while a degree is a great tool, if that tool takes over 15 years to pay off…you would be far better off capitalizing your raw talents.

    I’ve learned this the hard way. True, my degree has gotten me decent jobs, but at what price?? I now and living paycheck to paycheck. paying off loans and for the other necessities in life…gas, rent, food….and the rare trip to see my family for the holidays.

    • Warren Grantham

      Jake, I thank God daily for people like you who are bound and determined to not allow their children to blindly go off the college cliff without first counting the costs. I am nearly 60 years old, still paying off college debts–granted I got a late finish on my education. But it is precisely because of the stress brought on by student loans that I am in the process of creating a MINISTRY dedicated to helping fellow Christians get out from under the COMPOUNDING INTEREST (not the loans themselves). I knew exactly what I was getting into when I took the loans and made plans around paying them back. But others aren’t so lucky. They are being terribly affected by the compounding interest payments that are mushrooming $15,000 loans into $25,000 worth of debt. Again, God bless you as you bring light in your own family.
      Pastor Warren G

  19. James Salmons

    This post comes very close to reflecting the reason I got into teaching personal finance about 30 years ago after getting my own money affairs in order. I discovered a principle that is largely ignored but is the basis for any financial success in my opinion.

    Success with money begins with getting in control of your spending and other financial affairs. Most people can’t do it because they do not know how. Of course, as some comments suggest, there can be events like massive health issues that overwhelm us, but mostly increased income just evaporates because people have no idea how to manage their money effectively.

    You can use the old envelope system to help or many other approaches, but once you get in control of your money it is relatively easy to pay off debt, establish an emergency fund, and do the other things that lead to success.

  20. vinodh

    Hi,
    credit cards are one of the main reason for woes.
    credit cards force us to spend more than we earn.
    regards
    vinodh

  21. Norman

    I have been an IRS tax collector for more than 25 years (a Senior tax collector) and thus most of my “clients” owe hundreds of thousands of dollars in income taxes. The majority of these folks are self employed and earn a very good income ($250,000 and up). I can truly tell you that easily 95% of these folks are in debt to the government (and usually to many other creditors) because they live way beyond their means. I’m astonished that these folks earn SO MUCH and yet have ALMOST NOTHING to show for it.

    In just a few minutes I will be knocking on the front door of an “Investment Advisor” who owes nearly $700,000 in income tax which has compounded by filing balance due tax returns every year since 2007. More than likely, when I get a financial statement from him, it will show he earned $300,000 last year but he has no equity in anything.

    Solomon said it well in Proverbs 22:7 – “The borrower becomes the lender’s (or the Government’s) SLAVE.” I prefer God’s way which can be found in Hebrews 13:5 -“Let your way of life be FREE from the love of money, being content with what you have…”

    You think about that.

  22. Charmaine Riley

    This advice is great, and I had problems in my past spending too much money. But with
    prayer you can determine what goals are important in life.

  23. Allison P.

    I just learned that God provides for us what we need for each season of our lives and when we think we need more we are telling God He is not a good provider because He hasn’t provided enough for us. 3 points: 1. God is our provider and creator He knows what is best for each of us. 2. It is just a season. We must understand that each stage of our lives are seasonal good or bad. Sometimes we are going through something very challenging and we think we will never get through, then we do. That season has ended and it is time to move on. 3. We must always maintain an intimate relationship with our caring, sharing, loving Father so we can be aware of what season we are in and except it, grow in it, learn from it, and draw closer to Him. So instead of focusing on the “not enough” we ask God what His purpose for this season is so that we can see clearly where He is leading us and what He is preparing us for in the next season of our lives.
    I strongly believe all the challenges we face in life are just distractions from what God truly has purposed for each of us and therefore It really isn’t about money it is about the character God is developing within you!

  24. Megan H

    I completely agree! I have recently started blogging about many ways that people and families can save money. I lost my job a year ago and felt financially defeated but as always The Lord takes care of his children. Although money has been tight we have never gone without the essentials and had we watched our spending all along we would be much better off than we are now. Each time my husband and I received a raise our spending rose as well. Had we been penny pinching and saving all along I could be enjoying this time as a stay at home mother much more instead of searching for some way to bring in a secondary income just for the purpose of having extra savings. Like others have said, sometimes we just have to learn the hard way.

    • James Salmons

      Megan, you have touched on the very problem that prevents most people from ever succeeding with money. You observed how whenever you got an increase in income it just evaporated into increased spending.

      This happens to almost everyone. I heard one lady talk about reaching one million dollars a year and not having more to show than when she worked as a waitress.

      This was the very issue that got me started teaching financial principles, helping people learn how to get in control of their money. Without learning this no one can succeed to any extent.

      There are different ways to do it, but the primary rule is to find some way to allocate your income for its intended use in set amounts that don’t change unless you choose to change them., even if it is nothing more than the old envelope system.

      Wishing you continued success with your money.

  25. Okocha Samuel

    wow, wisdom all the way. Thanks guys

  26. Simon Wells

    Thanks for a great article. There are many people in this world who are paying the price for impatience. No matter what your financial status is, i stick to a golden rule;
    If you can’t afford something then you don’t have it, but if you can afford it ask yourself one question;
    Do i really need it ?
    After all this isn’t rocket science is it.
    There is always a marked difference between self made millionaires and those that inherited;
    The first group do not waste anything, when the next group usually have no sense of value of money and end up broke within 5 years of inheriting.
    That is no coincidence and people with money problems who think more of it will solve their issues should consider points like this.

  27. Natalie

    My husband and I were married a year ago and finances have been an ongoing stress of our relationship. We are trying to pay off student debt (both of us went to a private university) as well as some other debt (car loan, credit cars). We have set a frugal budget, but are consistently going over the budget. I am having a hard time deciding if the problem is our spending habits, or if the budget we set is really realistic. Either way we keep brainstorming ways we can make more money, thinking that it will solve our problem. I think your point in this article was a good reminder. Furthermore, I think it also draws out the question of who we put our hope in. Are we putting our hope in money, wanting it to solve our problems, or are we putting it in God who has already richly provided for us. Thanks for your insight.

  28. EDGAR OMOREGBEE

    Thank you, this article is a good start for me, that will ensure I am prepared for good stewardship when a raise does come due to changing my financial behaviour now.

    • Lauren (SeedTime Editor)

      Glad to hear it, Edgar!

  29. Joy

    Sometimes we do need a paradigm shift when it comes to money management. However, there are times when more money is the answer to financial difficulty.

    In Dave Ramsey’s Total Money Makeover, he says this:

    “If your budget is too tight to get the Debt Snowball rolling, you need to do something to increase income…I don’t like the idea of working one hundred hours per week, but sometimes extreme situations require extreme solutions. Temporarily, just for a manageable period of time, the extra job or overtime may be your solution.”

  30. Frank

    Money only exploits who you already are including your skills and mindset.
    The small mismanagement behavior becomes larger with more money.
    Thanks Bob for all the true and Godly wisdom for our benefit.
    Blessings, Frank P

    • Bob

      You are welcome Frank!

  31. Davy Siwila

    Let us put God first in all our daily undertakings because he is our provider because even if we have money, when we do NOT have the word of God in our mind and heart, we shall never be at peace..

    Davy

    • Lauren (SeedTime Editor)

      Thanks for the comment, Davy – you are exactly right.

  32. Jennifer Honnah-Sesay

    Very good article on great comments. I call God so many names even my financial adviser! A close relationship with God always sets us on the right tracks. He uses people like Bob as a motivator and teacher to set us on track for financial education. Glory be to God as since reading Bob’s I have began making changes to my spending habits. I never knew I could save about 50% of what I earned. The lord is a good God, always making g provisions. I have stopped impulsive shopping and now get to used my stuff that has been tucked away for many years. Thanks

    • Bob

      Thanks for the encouragement Jennifer! And He is good!

  33. Brynn Greene

    This is just what I needed to hear! My husband and I definitely have a behavioral problem. I think we are living on the same budget that we had when we were newlyweds! Doing whatever we want conservatively. That appeared to be working til a new house, and two babies and a dog came along! Now we are feeling it! Thanks for bringing it back to prayer. Since I started praying about finances and getting out of debt more, I definitely an starting to see a change, though we have a long way to go!

    • Bob

      Awesome to hear about the progress!

    • Deb

      Bob and your many friends, thank you all, I’m encouraged and humbled. I’m probably older than all of you and my circumstances not unusual. Life can throw us many curves so don’t be discouraged. My husband and I have always worked hard and made a living wage. When I look back I think a second income is expensive. A second car, work wardroe, eating out, trying to keep up a home and trying to enjoy each other and the children makes life crazy. Additionally by the time you’re grandparents, you may have to raise one of them. His behavior was erratic and I spent hours dealing wit his behavior, running to the school, and driving him to school when he got kicked off the bus. LOL All that said, we have no regrets. The dear boy graduates high school in May. But we have debt. Our sweet grandsons parents did not hel financially and we have a large beautiful home we should probably sell. But God has never failed us. It’s hard because we thought we’d be on a different place financially. But this wonderful boy was worth it. Thank you again Bob for joining us on our journey.