Recently, I received an email from a reader. It went something like this, “We just don’t feel like we’re winning at money. Do you have any advice?”
I’m not going to include any details of the message—they are not necessary. But the sender phrased an important question, “How can we win at money?”
When most people think of winning (or succeeding) at money, they do so in terms of comparison to other people. They wonder, “Do I have as much money as others?” If so, they assume they are winning.
One problem with this approach is that looks can be deceiving. One friend may dress in nice clothes or drive a nice car, but have so much debt their net worth is below zero. Another friend may drive a modest car, but have investments well above the averages.
We never win at money by comparing our possessions with others.
In fact, we never win at life when we compare ourselves to others.
Winning at money should be defined differently.
The question we should be asking is this: Am I meeting my financial needs and spending my money in a way that is aligned with my values?
If you are, you are winning at money! The goal each of us should pursue with our finances is to meet our needs and align our spending with our passions.
How then do we win at money?
Given my definition above, here are the steps we should take to win at money:
1. Don’t see money as a competition.
One of the most joy-robbing things you can ever do is compare your income, savings, or net worth with another person. Remember, you have a 1/7,350,000,000 chance of being the wealthiest person on the planet. If you are not the wealthiest human alive, comparing your money is always going to be a losing proposition—there is always going to be somebody with more. So don’t see money as a competition with others, see it as a competition with yourself to make the most of the little bit that you have.
2. If you have food, shelter, and clothing, remind yourself you have enough money.
If money is not a competition, then what is it? Money is merely a means to expedite trade. It allows us to purchase the things we need for life—food, shelter, clothing, etc. If you are able to meet the needs of your family, it is important to remind yourself that you already have enough. Does that mean you eat at the fanciest restaurants in your town or live in the most expensive neighborhood? No, it doesn’t. But it does mean your needs are met and that is something to celebrate.
To get a sense how your income compares to your fixed costs, use a personal spending plan.
3. Don’t buy stuff you don’t need.
Most people reading this blog post earn enough money to live. Not everyone, of course, but most. One reason we struggle to get ahead financially is because we waste so much on things we don’t need. One way to win at money is to reject excessive consumerism. As an example, we chose to pursue a more minimalist life in 2008 and have saved over $150,000 from unnecessary spending since then. You can do the same.
4. Save some money.
One way or another, put some money in savings every paycheck. Even if it’s only a few dollars each pay period, find it and put it aside. You can open a savings account at your local bank or you can use online resources like Robinhood (if you’d like to invest in stocks) or Capital One Savings (if you just want the interest). I currently use all three options for personal savings.
5. Give some money.
Your money is only as valuable as what you choose to spend it on. One of the quickest ways to feel like you are winning at money is to use some to help solve problems you are passionate about solving. Again, you may only be able to give a few dollars each month, but give something, somewhere. Not only will this gift help others, it will give you a great sense of satisfaction in life and serve as a reminder that you already have enough.
6. Ask questions.
If you want to win at money, find somebody you look up to and ask as many questions as possible. Ask them how they got started making money, saving money, or investing money. Ask them what lessons shaped their decision-making over the years. And ask them about specific circumstances in your life. Most people want to help you. But when it comes to something as personal and private as money, they are not going to step into your life without an invitation.
If your goal with money is to have more than the person next to you, you’ll never be content. Additionally, if you are looking for money to provide you with happiness and security, you’ll never find enough. These are not the proper measurements to determine if you are winning at money.
Are your needs met? And are you spending your money in a way that aligns with your values? If so, you are winning. Well done.