“Is Not to Lose It”

We focus so much on making money that we stop to think about all the things we do to lose money. The equation of having a lot of money is simple, income minus expenses equal what’s left. If we increase the income we should have more money left, right? That is not always the case. With more money we are able to give in on the temptations to spend, simply because now we can compared to before when it wasn’t financially possible. The more we keep spending the stronger the habit becomes and habits are not easy to break.

Let’s focus a bit less on the income and look more at the expenses. What are those sources where we “lose” money? What you classify as losing money in this context depends on your definition and it has different levels of what you get back from the money “lost”.

The most exact definition of losing money is to have money falling out of your pocket on the street. The money is gone and you get absolutely nothing back, however, you will make someone else happy that day. Living in a digitalized world, where even our money has become digitalized, this is less of a risk compared to 20 years ago.

The next step of losing money without getting anything back is the extra fee for not paying your bills on time. This is money that could have and should have been invested in something more purposeful. Laziness is in fact one of our most expensive behaviors and a big contributor when we “forgot” to pay.

Another way to indirectly throw away money is fast loans which practically increases the interest rate with the level of how easy it is to get the loan. The average effective annual interest rate of these kind of loans in Sweden is around 700% and after doing a quick research I also found horror stories of an effective annual interest rate of 23 707% which even is not the highest reported rate.

Money lost can also depend on what we buy and where we buy it. Do we buy clothes in the expensive shops, do we just take the first best tomato we see in the supermarket? There are many different prices for the same product and are we trying to fill the need or are we willing to pay extra just for the brand?

Excessive shopping is something most of us are guilty of. Look around in your home, how many things could you live well without? For each one of those purchases we could’ve contributed to our riches instead.

How many times do you go to the gym per week? Or do you even go once per month? Gyms might have more sponsors than charities. We do have good intentions but the time or motivation is not always there. If we don’t go let’s just cancel the gym card and keep that money for ourselves. Gym is not the only point I want to make, take a look at your fixed expenses to see what you’re actually paying for, are there any services you no longer need?

There are many ways to lose money so let’s spend less time chasing after more money and focus a bit more on keeping the money we actually earn.

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