There are several reasons why your neighbors have more money than you. As you glance out your window and hear their conversations, you may ask yourself, what’s their secret? For the most part, you may earn roughly the same amount of income, yet they can do and buy much more than you. Well, you can stop scratching your head. Here are seven reasons why your neighbors have more money than you.
Table of contents:
- they don't live off plastic
- they know where to find deals
- they pay themselves first
- they don't hire out
- they have a clear budget
- they aren’t trying to keep up with others
- they have multiple income streams
1 They Don't Live off Plastic
If you’re wondering why your neighbors have more money than you, the answer might have a lot to do with credit card debt. If you have several credit cards that are maxed out, all of your disposable income might go toward paying off these balances. But if your neighbors use cash and don't carry a lot of debt, this frees up money for home improvements, vacations, new electronics and reaching financial goals.
2 They Know Where to Find Deals
The fact that your neighbors can do more may have nothing to do with income — they might know where to look for the best prices. Some of the most frugal people never shop without a coupon, and they only go to retail stores when an item is on sale or clearance. This might be a tedious way to shop, but it's also a way to save a lot of money in the long run.
3 They Pay Themselves First
A car repair or a home repair can cost thousands of dollars. And if your neighbors seem to always have cash for unexpected expenses, chances are that they are paying themselves first. This is the simplest way to build an emergency fund. They might deposit 10% of their check into savings, and save free money they receive, such as a work bonus, gift money or a tax refund.
4 They Don't Hire out
Understandably, you're busy. Therefore, it might be easier to hire someone for your yard work or housekeeping. But there's a price to convenience, and if you add up how much you pay every month for conveniences, this might explain why there's little money in your savings account.
5 They Have a Clear Budget
You might feel that budgeting is a hassle. But even if you earn good money, a budget can help assess what's coming in and what's going out each month. You can evaluate areas where you're spending too much, and cut back on expenses to free up cash for saving or paying off debt. If your neighbors seem to have their finances on track, they're probably living with a weekly or monthly budget.
6 They Aren’t Trying to Keep up with Others
Your neighbors are probably not worried about having the best car, house or electronics. This doesn't mean that they can't afford these things, but they would rather put money in savings and watch their account grow. Ask yourself an honest question, do I try to keep up with the Joneses? If so, you might spend a lot of money each year trying to uphold an image.
7 They Have Multiple Income Streams
If your neighbors have more money than you, they might have multiple income streams. Some people use income from a full-time job to pay household expenses, and income from a side business for extra expenses, such as building a savings account or taking a vacation. If you're living paycheck to paycheck, consider other ways to earn money. Maybe get a part-time job, or start a home-based business.
At the end of the day, it doesn't matter whether your neighbor earns more or less than you. Evaluate your own income and spending habits, and then determine where you can make adjustments. This could potentially free up cash for paying off debt, or give you the opportunity to increase contributions to your savings account. What are other reasons why your neighbors may have more money than you?
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