How to properly handle too much money

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unitive_mystic

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I see a lot of advice on what we should do when we are having problems with making enough money. However, what do we do when we make too much money?

(this scenario isn’t real, it’s made up because I want to know what someone would do if they were in the situation and need to know if my idea of handling it is a good one)

Lets say I live on a farm where I’m mostly self sustainable when it comes to food, water, electricity ect. but I still keep a source of income so I can maintain the farm, vehicles, and pretty much anything my farm can’t provide. It all seems okay until my off farm income is reaching double the amount I need per year and I realize I don’t need my farm anymore because at this point I can retire and me and my family can run away to a tropical paradise and not worry about anything anymore. So instead of making a somewhat okay income and still being able to save money because of the farm, I now don’t need the farm. This is problematic, because keeping a farm that needs a lot of work and we don’t need is making it harder on my family for no reason, if we sell the farm and move into an effortless life we end up hoarding all the wealth and becoming materialistic. On top of all this I don’t want to move off the land and retire even though it could be the easier route.

Here is my solution: If you are making more than double the amount you need per year, don’t change or upgrade your lifestyle unless you have to, instead get the extra half of your income and divided up and invest into things that are necessary such as: new car, more land, airplane (they are very useful in some parts of Alaska) or boat. If you still have extra money, take out an extra few thousand per year to hopefully have a good amount for your family to take over and I guess the rest can be donated, whatever that amount could be.

With my idea I was hoping to be able to keep a simple lifestyle without making any materialistic upgrades but instead making upgrades that would make my life easier to simplify. Also doing as much as possible to give to the church and the poor. Does anybody think there is a better way to handle this situation in this scenario?
 
One of the things that happens is budget creep. If you’re starting off making it on $20k a year, and you upgrade to a $30k/year job… unless you’re very disciplined, you’re not likely to save $10k/year. If you work your $30k/year job, and then get a $60k/year job… you’re not going to be saving either $30k or $40k/year, either, unless you’re very disciplined!

We all think, “Gosh, if I just made $x, I’d be rich!” But then you see friends/people who actually do make $x, or more than $x, and they’re heavily in debt because they don’t manage it correctly. So whether $x is $40k or $4M, the same thing holds true, just at a different scale… except at one level, you’re splurging on iPhones, and at another level, you’re splurging on private islands. 😉

Our needs and wants also change as we get older. What we’re able to live on as individuals isn’t how we budget when we’re dating. What we spend when we’re dating isn’t what we spend when we marry and merge households and incomes. When we have children, those are additional expenditures that we have to decide on— do we drop to a 1-income family, and have a SAH parent, or do we continue to maintain 2 incomes, but have large chunks of the second income go into daycare, if there’s no family or friends to help out?

I have friends who farm. They basically get 2 paychecks per year. And all of their expenses for the year comes off the top. If the rain’s not right, or the freeze freezes too late— that affects them drastically. If we’re in a five-year drought, that affects them as well. So I probably wouldn’t use farmers as my best example— I’d probably go for some sort of a steady, predictable desk job.

You buy a new car when the economy is rough and the used car lots are picked over and people hold onto their vehicles longer. You buy a used car when the economy is good and people are getting rid of perfectly good low-mileage cars. You buy a house when you plan on being in the same area for the next 10, 20, 30 years. You rent a house when you plan on leaving your area in 2-5 years, and you don’t want to have your money tied up in real estate-- you want to be able to leave with 30 days’ notice.
 
You get your education while you can. A degree is a key that unlocks doors, so make sure of what door you want to unlock, and make sure it doesn’t require a proportionately too-expensive key. You date chastely so that you don’t have kids out of wedlock.

You learn the difference between needs and wants-- reading library books rather than buying them, borrowing videos rather than buying or renting them, abstaining from expensive vacations, cooking instead of dining out, not spending too much on clothes or hobbies. You save aggressively so that you have the funds to do what you want to do, when opportunity presents itself, but you also give charitably. You pay down debt aggressively and get out from under it when it does happen.

You always have a plan, even though that plan might change. You know where you want to be in 5 years, and you’re working towards that goal. You look at the last year in review, and you see how you’ve made it towards those goals. You act decisively, because you’re not drifting through life-- you want to accomplish x, y, and z. X, y, and z may change with time… maybe x isn’t as important as you thought it was… but doors will open that you hadn’t expected, and because you worked hard, you’ll be in a good situation to pivot onto this new opportunity.

At least, that’s how things have gone for us. If I had a crystal ball 25 years ago, I would have sworn it was broken… where I am now isn’t what I had planned for myself back in the day. But it’s pretty darn nice, and I’m grateful for the opportunity I have and the people around me that I share it with. 💙
 
Find well-established, reliable Catholic charities and give it away. There are South Sudanese - refugees in their own country - who are dying for lack of drinkable water, for but one example. Compared to that, many other worthy causes pale by comparison.
 
I would call that hoarding money. We should not be putting that much money away we cannot take it with us when we die find a good charity and donate to it
 
To what extent are we required to give money? How much money can we save before it becomes greedy?
 
To be completly honest with you I have no idea how much is classed as too much as I’ve never had that problem however the bible mentions money and greed so frequently that it may possibly be mention more often than adultery
 
So let’s say my family can live on 30k per year, it’s sort of a minimalist and simple lifestyle but it can happen. Then I make 70k per year. I should donate 40k per year? I’m not against that, I just don’t know if that’s good in terms of not saving at least a small portion to improving certain aspects of my personal life when I need to.
 
Maybe if you have that high of a paying job you can just work less so you don’t make that much
 
Prudence allows, even requires that you care for and plan for your loved ones. The test is when we confront the income left over once all foreseeable debts and liabilities are accounted for.

Denying the self so that others may benefit - even remain alive - is always a good thing. It is a substantial part of the definition of love.
 
Put away for retirement.
People are living longer, and there’s no way to tell how healthy or disabled you’ll be during that time.
 
It is acceptable to be wealthy and to spend money. It is fine for one to indulge in nice things if one can afford to do so. If you have large sums of money, then that is fine. However, if you spend money recklessly and on pointless things, then that is an issue. If you buy a car worth $100,000, then if you can afford it, then it might be acceptable. If you then buy another worth $100,000, then that is not acceptable. Remember to save money for retirement and for your children’s education.

Make sure you have an appropriate amount of money to live comfortably. This is not an issue. Donate the rest to the poor, or think about giving a certain amount to the Catholic Church every year.

God Bless!
 
As someone who used to make a lot of money, I increased my lifestyle somewhat (leased a new car because I wanted one that was reliable/under warranty), and saved the rest because I already had health issues in my late thirties. In my forties, my health spiraled out of control and I had to live for five years on my savings while having to pay astronomical health insurance, co-insurance, deductibles, and co-pays. Prescription medication wasn’t fully covered, so I had to pay out of pocket for most of that while still paying all of my household bills. I sold my house and moved to a crime-ridden area of Jersey City to save money on rent. I went through about two hundred thousand dollars over five years before I could get disability. If I hadn’t received a disability pension I would now be broke. I moved to Canada (where I’m from) because of the much lower health care costs. As a result, I’m able to stretch my disability pension to cover most of my expenses, and have enough left in the bank for major items (e.g., car repairs, replacing dead computer, etc.). Although my disability just covers my expenses, I donate monthly to a local charity for homeless youth. Be sure to save for a very rainy day and donate what you think you can afford.
 
unitive_mystic said:
I should give all of my surplus?
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Let’s go back to basics: Love one another.

Giving from your surplus means that you first take care of all your own needs and wants, and then, if there is any money left over, you help those in need. It’s not clear to me that this shows love. It’s more like a contract.

That is probably not how you would treat a family member or a friend. If your brother or your neighbor needed some food, you might find a way to give him something, even if you barely had enough for yourself. That is love.
 
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What counts as living “comfortably”? Some people need a 3,000 sqft house with a swimming pool and flat screen tv’s before they are “comfortable” with their lifestyle while others would consider a 1,000 sqft house with very little money spent on entertainment and they still consider their lifestyle “comfortable”.

To me, as long as my family isn’t struggling to get food, shelter and some entertainment we are comfortable.
 
unitive_mystic said:
What counts as living “comfortably”?
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I don’t think anyone can give you a one size fits all answer or a specific dollar amount. Depends on too many factors. Ultimately, I think you have to rely on your conscience to determine when you’re becoming too materialistic.
 
unitive_mystic said:
Maybe if you have that high of a paying job you can just work less so you don’t make that much
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Most high paying jobs don’t offer that option. If a hospital is hiring for a surgeon at 500,000 grand a year, they’re paying for someone to be readily available full time, not someone who is going work occasionally.
 
And also, imagine all the good you do by being a surgeon.

If you only helped ten people in a month with your skill, rather than helping 100 people in a month, because you “were afraid of making too much money”— that would be just as wrong.

Rather than money being a bad thing by itself, it’s the disproportionate love of money that causes people to err. When you love money more than your customers, or your clients, or the public, or your family, or your whatever— that’s when you run into problems.

The widow’s mite shows that a few cents from a poor person is more valuable in God’s eyes than a gazillion dollars from a billionaire. But that doesn’t mean that people don’t appreciate donations of a gazillion dollars from billionaires— but you do have to be careful that the causes you pick are ones that God would appreciate. 🙂
 
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