Benjamin Franklin famously joked:
There’s only two certainties in life: Death, and taxes.
Benjamin Franklin
He was half right.
Yes, we will all one day meet our makers. But before that, it’s not just taxes we will have to pay.
The two certainties of life (updated) Death… and bills
From the day we are born until the day we day, we humans use up resources. We shelter, we eat, we drink, we buy games consoles, we wear designer shoes, we travel the world. And all of this consumption costs money.
When we are young, our parents pay our bills. We can’t fend for ourself. And then one day, the apron strings are cut. All the goodies we received with no effort other than a cute, gurgling smile disappear. We must pay our own way.
Expenses are the way of the world, and they’re unavoidable.
Worse! – Life has a habit of letting those bills multiply.
Whilst our ancestors only worried about the basic human necessities, we are different. There is an absolute abundance of stuff for us to buy and consume. Goods and services that were the realm of science fiction only a hundred years ago are common place. And businesses, investors and creatives are always on the hunt for more things they can sell us.
I want you to understand that spending money is inevitable, because everything about mastering money, and becoming financially free depends on you remembering that you are born to buy.
Until we die, we will always have bills
Oh, you may call them costs, or expenses, or disbursements, or charges, or outgoings. But make no mistake, these bills are always going to keep coming. Every day, every week, every year. More and more bills for the rest of your life. Even funerals cost money…
Frugal people try to limit their expenses. But I’ve not yet heard of a frugal person who has found a way to get their payments to zero. Bartering is still spending because you are giving your assets to someone else in exchange for something you want.
Extravagant people can’t help but buy more and more. They want the best champagne, the best caviar and the best toiler roll.
But, whether you are scrooge levels of tight or the most wild generous person on earth, there will always be more costs.
Wait! I thought the best things in life were free.
I don’t want to burst your bubble, but even free stuff costs. Imagine for a moment, you are taking a pleasant stroll beside a picturesque lake. You inhale the sweet air and say to yourself – this is the life. Who needs to spend money to be happy?
At first glance, there seem to be no bills to pay during this sweet moment with nature (except perhaps the bill of shame for this lady’s choice of pantaloons).
But wait…
- How did you get there? By car – you paid petrol. By rail – you paid for a ticket. By foot – you paid for your shoes.
- Are you naked? If not, you paid for those clothes.
- Are you healthy? If you are, you paid for the nutritious food, quality healthcare and the gym membership that keeps you fit.
- Where are you sleeping tonight? In a hotel, or your home, or a tent you bought online.
Even the simple act of breathing in and out was brought to you by spending in the past.
Surely there are other things guaranteed in life beyond death and bills?
There’s really nothing else you can count on to be guaranteed in life.
How about income? Only if somebody chooses to pay you? Or happiness? Nope – even the most basic life necessities cost money. You wouldn’t be happy without a safe place to sleep and clean water to drink. Those things cost money!
Wait – what about taxes? Aren’t they guaranteed? Wasn’t Marx right all along. Of course he was! But taxes are yet another kind of bill. You pay taxes only if your lucky enough to earn money from somewhere.
There’s an easy way to test to prove the certainty of bills. Simply try not to spend any money from now on. Have a go. It’s like a diet for your purse.
First, cancel all those subscriptions for TV, Music and Streaming. Then, watch as your cupboards go bare, the electricity is switched off, and a debt collector arrives at your door. Wasn’t too fun, was it?
Bills are not a tap you can turn off.
By the way, if you do think of any other certainties in life, you can let me know about them in the comments.
Does it matter that I will always have bills?
‘So what?’, you may be asking. What do I care if I have bills? Everyone has expenses. I’ll deal with it. After all, I already have to deal with the fact that I will die one day. I don’t put any effort into that.
But that’s not true, is it? You do plenty of things to put off your inevitable demise. From basics like eating and drinking to stop you from conking out, to looking both ways before crossing the road to avoid a traffic collision, through to getting your health checked out if you feel sick. Unless you have a death wish, you spend a portion of every day making sure you stay alive and hopefully happy.
Are you putting the same effort in to dealing with your bills? Are you making sure you do the right things as they pile up?
Most of us have only one answer to the issue of inevitable bills. We work.
We work, and work, and work.
Most adults follow this exact pattern every day of their lives. Wake Up, Work, Spend, Sleep, Repeat. An endless cycle. With only weekends and holidays to break up the pattern.
We spend what we earn, and the next week we do the same again.
Some people even spend MORE than they earn. The next week they are trying to pay off this weeks bills AND last weeks bills. And so the cycle continues.
I believe there is another way. A way to tame your finances and break the pattern of earn, spend, repeat.
We believe that it is possible to be financially free.
When I become financially free is that an end to bills?
Bad news. No. The bills will keep coming. They are inevitable. They cannot be completely halted.
But… working all your life to pay those bills is not inevitable. And… the size, shape and frequency of those bills is also not inevitable. You have many choices if you are prepared to make a little effort to explore them.
A person who is financially free does not need to work to pay their bills. A financially free person uses their assets to pay their bills.
Calculate your monthly expenses
Now you understand that bills are inevitable, it’s time you worked out how much you are spending each month on expenses.
At this stage, keep it simple. We don’t need every single line item down to the penny. In fact, that much detail will be distracting.
Be brave! Open up your bank statements and credit card bills, blow the dust off them, and make a quick list of your outgoings.
You’re going to need your expense position throughout your journey to financial freedom, so you better at least have an estimate of the number.
So add up your rent payments, your Netflix subscription, your food shop and that bill for car repairs. Get to a total of all your outgoings.
There’s a couple of thing to exclude from your outgoings to get a more accurate expense calculation.
Money to reduce debt – that payment to pay the minimum on your credit card bill. That’s not an expense. The expense was buying the stuff on the credit card in the past. If you’re paying interest though, that’s an expense.
Money moved into a savings or investment account. This is still your money even though you’ve transferred it from one account to another. Any money you get to keep is not an expense.
There’s a much more detailed list of what expenses to include or exclude. But for now, let’s take your calculated expenses.
Congratulations. You know bills are a certainty and you now know how much your expense were this month.
Wouldn’t you like to taste financial freedom?
If you’ve accepted that bills are inevitable, now’s the time to consider if you want to work all your life to pay them?
Explore BlueSkyMoney.com to find more of the answers to financial freedom.
Key takeaways:
- There’s only two certainties in life: Death, and bills.
- When you become financially free, your assets pay your bills.
Key actions
- Calculate your monthly expenses
What’s next?
It’s time to learn about the Financial Dependence Formula.
Bonus:
If you ever feel alone, and wonder if you’re the only person in the world who has to keep on paying bills, LunchMoney Lewis is on hand to reassure you that those bills keep coming.