Most people who read personal finance blogs are keenly interested in ways to make more money. I get it. Everyone wants to make more money. But occasionally, it’s smart to stop and ask yourself why you want to bring in more bucks. Few people, myself included, do this.
There is nothing wrong with trying to achieve more. But it’s important to understand what’s behind that drive. Life is a lot more fun when you do things because you want to do rather than because you think you have to.
You may think you have to make more and you could be right. But you could find that your situation is more solid than you realized. So how do you know if you are making enough money or not? Here are 9 sure-fire signals that can help:
9. You Have No Consumer Debt
Debt is a four-letter word in more ways than one. Some debt might be OK – like having a mortgage. But mostly debt is a warning sign that something is off kilter. Other than having a mortgage, if you are debt-free, chances are high that you earn enough money. Good start.
8. Growing Savings
If you notice that your bank balance is the same or somewhat higher at the end of the month than at the beginning of the month, you are doing something right. Namely, you are living within your means. That’s a strong signal that your income is sufficient.
7. Autopay Bills
If you have to borrow from Paul in order to pay Robert each month you probably won’t be able to put your bills on automatic. That’s a shame because autopay saves tons of time and money. It’s pure magic.
So my experience tells me that if you are able to put all your bills on autopay without worrying about being overdrawn, it’s a strong indicator that you are doing just fine and don’t need to worry about earning more.
6. Notice you are Spending More
Have you ever noticed that as you earn more, you tend to spend more? I have seen this phenomenon play out over my entire professional career and personal life. It’s unavoidable.
If kept within reason, there is nothing wrong with spending more money. If you are successful and are able to afford to elevate your lifestyle, I say, enjoy.
If you notice that you are spending a little more this year than last – and you haven’t gone into debt or invaded your savings or investments to do so, it’s a good sign that you are earning enough money.
5. Saving More than you Planned
Let’s say you plan to save $1000 a month and you put that away religiously. On top of that, at the end of the month you always throw a little more in your savings/investment accounts. That’s a very strong indication that your income is not a problem. Rejoice. Life is good.
4. Emergency Fund
Having enough emergency money set aside isn’t a marker for sufficient income by itself. But taken together with one of the other signs I mention in this post it’s a very positive gauge. This is especially true if you hardly ever have to dip into that account and when you do, it’s for a real emergency.
3. You Never Say “If only I had more money I could….”
If you are living the life you want are able to achieve the things that are really important to you, it’s a good sign. Obviously we all dream of owning a vacation home in Manhattan and a piloting a private Lear Jet (or is that just me?). But dreams are different from burning desires. If you have no unmet burning desires because you are living them, lack of income is not your problem.
2. Don’t invest recklessly
People who don’t earn enough often invest wildly in the hopes of making up for their short-fall by scoring big on long-shots. Of course this is a losing strategy and it creates huge problems for most people who go this route. People who earn enough money never take undue risk because they don’t need to.
1. Help Others
The number one sign that you earn enough is that you help others willingly and you don’t go without. This includes going the extra mile for people you care about (when appropriate) and of course supporting charities. If you do these things without depriving yourself or your family, it means you earn plenty.
As you can see, earning enough is all relative. “Enough” for you might not be enough for your neighbor. Who cares?
But remember, just because you earn enough now, it doesn’t mean that you should sit back and let life roll by. Revisit your financial plan. If things are exactly as you want them, enjoy. But if the possibility of retiring earlier or better, or helping other people in a greater way is appealing, it might make sense to amend your road map and make changes to your savings/spending/investment plan.
If you don’t earn enough now, there are plenty of ways to remedy the situation. Get a part-time side gig, cut your spending or do both. Life is way too short to live. a non-abundant experience.
Do you earn enough? How do you know?