More income vs. less expense?
When you look at personal finance writers, you are usually going to find people who fall into one of two categories. 1) Those who emphasize increasing income with side hustles or asking for raises. 2) Those who emphasize reducing expenses by eating at home and foregoing the daily latte. It’s not true of every blog and podcast out there, but if you look at the majority of them, you’ll find they lean one way or the other.
People are the same way. Often, we either feel more comfortable reining in what we spend or ‘dream big’ and look for the side hustle or career breakthrough that will shoot our income through the roof and let us leave money worries behind forever.
Team Spend Less
Folks on team ‘spend less’ cite millionaire sports heroes who have declared bankruptcy and the fact that most lotto winners who cashed in to the tune of millions are broke again within just a few years. (True. You can look it up.) Obviously, they point out, all the money in the world won’t fix your problems if you can’t control your spending. So there!
Team Dream Big
On the other hand, team ‘dream big’ points out, you can only reduce your expenses so much, but your income can increase infinitely. Plus, while you’re trying to save $0.07 per serving by soaking your own dried beans instead of splurging on that outrageously overpriced can of beans, your life gets smaller and smaller. That’s no way to live. Mic drop.
Yup. And Yup.
Like most things in life, both are right and both are also a bit wrong. (Imagine that! Nuance. A life lesson that can’t be contained in a 10 second sound byte. Hm, who’da thunk?)
So here’s the short version. No, you can’t save enough to put yourself on sound financial footing if you make $15K a year and have 5 kids. It’s just not gonna happen. But if you ignore the saving side entirely, no amount of money will ever be enough. Just like your income can always increase, so can you always manage to find more things to spend your money on.
The trick – and this is the part that no one can do for you , you’ve got to do it for yourself – is to find that balance, an then stretch yourself just a bit beyond your comfort zone in the area that makes you uncomfortable.
Out of the comfort Zone
I’m naturally a minimalist. I don’t like wasting things and I am NOT a stylish person. So I just don’t spend a lot of money. Interestingly, I sometimes push myself to spend more. I don’t want my life to become small and stunted because I’m trying to save a few pennies. So I try to think about what really matters to me and spend on that. For me, that’s travel. So I make a point to travel, but I also figure out what does and doesn’t matter to me about travel. Fancy restaurants? Not so much. I hit the grocery stores and have myself a picnic on the grass. But yeah, I’ll spend a bit more on a larger AirBNB so my three kids don’t drive me crazy in a tiny studio. (Trust me, it works out better for all of us that way.)
On the other hand, I LOVE side hustles. I have owned rental real estate, worked on the side as a real estate agent, run a blog, taught private language classes, and created an online class. My advice here is to find something you enjoy doing anyway, and then maximize your income from it. Do you love dogs? How about doing dog walks in the summer or even pet sitting for owners who are out of town? Maybe you are into reading. How about doing indexing on the side? And if you are open for some teaching after you step out of your classroom, you can make awesome money teaching private group classes. (Click the links if you want to know more details.)
Like anything in personal finance, it comes down not just to knowing the facts and the numbers, but to knowing yourself. So if you are a spender, try one little way to cut expenses. No one is asking you to go all out. Or if your know deep down that you really need to increase your income, start trying on side hustles to find one you enjoy so much you’d do it for free. Because neither team ‘spend less’ nor team ‘dream big’ can win this game alone.
