What would you do if you won the biggest lottery prize ever recorded? Winning the lottery is something a lot of people dream of. Perhaps it is because they believe such a big score would lead to financial contentment. They would never have to worry about paying the bills again. They could travel, afford a nice house, and even stop working.
Truth be told, financial contentment is not found in a bank account. It has nothing to do with how much money you have at your disposal. Financial contentment is a state of mind. And guess what? It doesn’t have to be a perpetual dream. Anyone can achieve financial contentment by combining sound financial principles, a good strategy, and a willingness to do whatever it takes to implement both.
Just remember that money doesn’t guarantee happiness. There are a lot of very wealthy people who live discontented lives. Some of the wealthiest people in the world are also the most miserable. By the same token, some of the poorest people in the world are the most contented.
Budgeting Is the Foundation
How you spend your money largely determines your level of financial contentment. Likewise, budgeting is the foundation of any strategy designed to achieve it. You will never be truly contented until you are capable of controlling how you spend. That is what budgets are for.
Unfortunately, too many people treat budgeting like so many slot games on your typical gambling website. They have no plan. They exercise little control. All they do is pull the handle and wait for the symbols to drop. When the payoff doesn’t come, they pull the handle again.
Budgeting works because it removes the element of chance. If you know exactly how much money you have coming in as opposed to what you have going out, you always know your financial standing. You don’t have to guess. You don’t have to spin the reels and hope you finish the month in the black.
A budget is a spending plan. It is a record of your income versus your expenses. By developing a budget and sticking to it, you set the stage for controlling how you spend every pound you earn.
Choose Saving Over Credit Cards
A good sign that you lack financial contentment is the frequency with which you use credit cards. In fairness, credit cards serve a valuable purpose in the modern financial world. But if you are using them because you just cannot wait to buy things, it is a good sign you are financially discontent.
The way around that is to choose to save instead. Maybe you want a new 72-inch television. There is nothing wrong with that. But rather than running right out and putting it on a credit card, try putting money into a savings account. Set aside the same amount you would otherwise spend on monthly credit card payments. Hold off buying the TV until you save enough in the account.
Choosing to save instead of using credit cards does two things. First, it saves you money in the long run by eliminating credit card interest. Second, it organically causes you to step back and evaluate your needs.
You could save for that new TV for six months and then when you finally have enough money in the bank, decide you really don’t need it after all. You are happy with your current TV. Guess what? You just achieved financial contentedness – at least as it relates to that purchase.
Eliminate Your Debt
Another thing you can do to encourage financial contentedness is to eliminate your debt. Many of us live with more debt than we really should carry. Furthermore, it is mostly unnecessary. Past generations lived their entire lives without heavy debt loads before the advent of credit cards and personal loans.
Eliminating debt gives you a sense of accomplishment. It also takes a lot of pressure off your shoulders. That goes a long way toward helping you experience contentedness. When you are no longer burdened by a mountain of debt, you feel a satisfying sense of freedom. And if you are like most people, you will be in no hurry to go back into debt. You find yourself content to be free.
Again, fairness dictates acknowledging a certain amount of debt required by modern living. If you want to buy a house, for example, it is not likely you will ever be able to afford a monthly rental payment and still save enough to pay cash for a house. A mortgage is your only option.
You might consider mortgage debt a necessity of modern life. That’s fine. But there’s no need to unnecessarily saddle yourself with additional debt. You can pay cash for a used car instead of taking on a new car loan. You can limit your use of credit cards and revolving lines of credit. You can live within your means if you want to, which leads us to the final point.
Don’t Spend More Than You Make
A common component among people who lack financial contentment is the bad habit of spending more than they make. This is known as living outside your means. The solution is not winning the lottery or finding a new job. As long as you do not control your spending habits, you are never going to catch up.
Living within your means is a choice. By the way, it’s a choice anyone can make. You can learn to not spend more than you make. It may be difficult to do, but it’s not impossible. Once you master living within your means, financial contentment suddenly gets a lot easier.
When you live within your means, you have to be creative about certain things. You have to learn how to stretch your resources as far as they will go. You have to learn to fix things rather than throwing them away. But through it all, you learn an element of self-sufficiency that only adds to your contentment.
For many people, financial contentment is only a dream. It becomes a perpetual dream because they believe the only way to achieve it is to win the lottery. That is unfortunate because financial contentment doesn’t have to be a dream. It is very achievable if you are willing to take the right steps.