Even If You’re Broke: Income Limit Revisited

After writing my article about setting an Income Limit as a part of developing a healthy relationship with money and taking to a lot of readers who were facing financial difficulties, I realized that some big questions had been left unanswered:

What if we’re broke? Or in massive debt? Or are experiencing some other variety of great financial distress? How the heck is setting an income limit going to help me.

All of these are fair. After all, if our bank account is empty, we have no job, and our prospects of getting one don’t look so good, the though of setting an income limit seems pretty silly.

But I think it all depends on what money problem we’re focusing on.

2 Types of Money Troubles

If you’re in a financially critical situation and you’re worried about where your next meal is coming from, your top priority is almost certainly to get your hands on some money – fast.

From such a situation, it’s incredibly challenging to stop for a moment, zoom out, and look at the 2 financial challenges we’re actually battling: The concrete one, having money for food, rent, and other survival-level needs – and the psychological one, or what not having some certain amount of money means to us.

I would argue that, in most situations, the psychological trauma of feeling like a failure, feeling trapped, helpless, like a loser, etcetera is more damaging than even the apparent survival threats. I base that on that fact that out of all the unemployment stories I’ve read, not one of them mentions suicidal depression as a result of being stuck out in the cold.

It might not be glamorous, but there is almost always a way to meet our survival needs – at least if we’re living in a city.

The psychological aspect is the kicker. The evidence is clear.

If the unemployment stories don’t move you, then maybe the science will: Numerous studies have shown that people would rather make more money than their peers than earn less than them, even if in the 2nd case they earn more in absolute terms.

To clarify: Our friend SomeGuy would rather earn $30,000 if all his peers were paid $20,000 than earn $60,000 if all his peers were earning $75,000. Twice as much is less desirable when we’re getting less than the rest.

Understandable, from an evolutionary point of view, unhealthy from a modern psychological one.

My point is simple – our attitude towards money is, for the majority of the developed world, more important than the money itself.

So how can the income limit help – even if we have nothing?

The income limit is actually just a tool – it’s not the goal. It’s a tool designed to get us to think in concrete terms about how much we want/need to be happy. It’s about removing that target always drifting away from us saying, “but you could be earning even more…and more…AND MORE.”

Because if we don’t know what’s enough, we’ll never be satisfied. We’ll always feel like we don’t have enough. And that goes for whether we have $0 or $1 million –  at least when it comes to the psychological aspect of money.

If you’re at or close to zero, it can also be empowering. If we’re able to figure out exactly what it is we’re shooting for – not “$10,000/month so I can do whatever I want, whenever I want, wherever I want,” but “earn $400/month towards my goal of studying French in Paris for 2 years” – or whatever it is.

Then every step will feel like progress, instead of that “well, I still don’t have enough so I’m still a failure.”

The reality is, that if you’re in a difficult financial situation, getting out of it will not be fast well over 99% of the time. That’s the unpopular reality. We’ve got to give ourselves concrete milestones to work towards – that’s how we’re able to keep hope alive, not succumb to despair, and keep striving to change our situation.

So no, the income limit won’t put food on your table, you’ll need a different technique for that. But if you spend some time to really define what it is you’re after, then you can start working methodically towards getting it.

When I finally got my voice back after 2.5 years of not talking and my body was in good enough shape to do amazing things like hold a knife and fork, I was finally able to make good on my goal of traveling the world. It took a long time. It was painful. But having that concrete goal – and others – helped me do the things I needed to in order to recover.

And I’ll be honest – the “how” is rarely clear or obvious. It’s rarely something we can find in an advice book – despite the case study of the gal who goes from the street to the penthouse in 6 months because she pulled off some business miracle. Real life, for most of us, doesn’t work like that and we can’t count on the big, windfall payday.

What we can do, is count on ourselves – if we make the effort to put ourselves in a position to succeed. That means working on our relationship with money – even if we don’t have any right now. The income limit is my favorite technique for this, but ultimately it’s more important that you do it than what technique you use.

What’s more, you’ll find that other people are much more willing to lend a hand when you’re taking action towards a tangible goal. And that can eliminate a decent amount of that isolated feeling that often comes with financial strife. But it has to be a serious, doable, and very tangible, and you’ve gotta display the fact that you’re getting it done anyway.

As you probably know, I’m not at all a fan of the idea that “we can do anything we put our minds to.” The next line is too often, “if you take my $97/month money making course,” or some such garbage. But everyone can do this. And if you’re really hurting, it’s more important than ever that you do so.

Best of luck! And feel free to hit me on my contact form if there’s anything you’d like to discuss further.

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AJ Walton

AJ Walton will show you how to travel the world on your budget, how to make money on the road, and why you don't have to live the way others expect. Get the free guide: 101 Ways To Make Money While Traveling

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