Will your salary ever be enough?

The author of ‘Practical Steps to Financial Freedom and Independence,’ Usiere Uko, writes that earning more may not be the solution to financial difficulties

There is one question on the lips of most employees towards the end of the month, from the civil service up to banks, telecoms, multinational companies and anywhere employees are found – “Has the salary entered our account?” This has been upgraded to “have you received the alert.” The similarity does not end there. All workers have another thing in common – the salary is not enough. It has never been enough, it is not enough now and chances are it will never be enough. Generations of workers come and go but the quest remains the same.

Climbing the salary ladder

When I joined the job market in the early nineties, my monthly salary was in the three figures bracket. I had to save up for months to buy my first mattress. Over the years, for many workers, this has grown to six and seven figures and for a few at the top, eight figures. Wherever you happen to fall in the digits spectrum, we all seem to have something in common – it is not enough. We want more. Someone joked that the moment the label ‘salary’ is placed on any amount of money, it automatically becomes insufficient. It takes on a mysterious quality of vanishing without trace before the next pay day.

Many employees have the habit of spending more than they earn, perpetually owing irrespective of series of pay increases. Bank officers swoop on ‘high net worth’ employees like predators, offering mouth watering loans with no collateral except domiciliation of salaries with the bank, so that they can make deductions from source. For many, by the time the bank is done, a six to seven figures monthly salary shrinks to four to five figures after deductions. Some banks are merciful – they peg maximum deductions to a percentage of net pay, typically 50 per cent. Others don’t care a hoot. They can pocket everything if it comes to that. Even for those that don’t owe, their take home salary hardly takes them home. It abandons them three quarters of the way home, somewhere around 20th of each month. Someone has labelled it twenty-hungry. For some, pay day is not a happy day. Most of the money has been spent before it was earned, another reminder that more money is needed.

More money is not the answer

Many have come to the conclusion that more money is the answer, that if they can get a salary increase or a better job, their financial struggles will be over. History has proved over and over again that more money is not the answer. As a matter of fact, more money can become a problem. We all have a comfort zone when it comes to handling money. There is a way we habitually handle money whenever it comes into our hands. It is habitual. It happens without thinking. This is known as money reflex. For most, when extra money comes into their hands, the reflex is to spend. They have a wish list somewhere in their head and the moment extra money shows up, they go shopping. We always find our way to our financial comfort zone. That is why a saver will always save no matter how low the pay while a spender will always spend and give excuses why they cannot save.

Most people increase spending when income goes up. Expenses always grow to catch up or exceed income depending on their financial comfort zone. This is known as Murphy’s law of expenditure. Enough seems like a goal on wheels – the more you draw closer, the more it moves back like a mirage in the desert. The proverbial ends stubbornly refuse to meet. With this system of spending, more money generates more expenses, and for one that spends above his income, more money translates to more debt.

Gate of paradise

When I started my career in the early nineties, my monthly salary was less than six hundred naira. I had some classmates from the university working in oil companies then who were paying about N25,000 monthly in taxes. That was almost four times my annual salary. I was simply blown away. It seemed out of this world to me. I was not bold enough to ask what their salary was, if taxes alone were almost 50 times my salary. To those of us standing on the outside looking in, they had finally made it to El Dorado. I truly believed these guys were at the gates of paradise. All their troubles were over and all their prayers had been answered. Life could not get any better than that. There was no way they could have money problems. When they complained about their huge tax bills, I felt they were being insensitive. If they hated paying so much in taxes, I was more than willing to trade places with them!

I made it my life dream to work for an oil company. I left the steel industry and gradually made my way to the oil industry. I finally made it to paradise. However, I was shocked at what I saw. I did not see any difference with where I came from apart from the outward affluence. Folks were more broke than where I came from. The chorus at month end was still the same. Salary here was same as salary elsewhere – not enough and everyone wanted more.

He that is faithful in little

If you cannot manage your current income, you will not be able to manage more income. More money simply magnifies our money habits and amplifies the results. If you habitually save and invest, more money will translate to more savings and investment. If you consume all you earn (eating with ten fingers), more money will generate more expenses with nothing to show except outside affluence without a solid asset base. If you spend more than you earn, more money means more debts.

It is a question of mindset, how you relate to money. If you do not change, you will keep producing the same result. If you do not convert your current income to assets (which put money in your pocket), money will continue to come in one way and depart many ways never to return. You will forever chase the mirage hoping ends will meet someday.