Most of us could use a little more money at the end of the month.
But should that be from spending less or making more money?
Both options result in you having more money to reach your goals, but they’re completely different approaches.
So, which should you be doing?
Well, it depends…
The Experts Disagree
First, let’s talk about what the experts think.
You won’t be surprised to find out that they disagree…
Grant Cardone said “you get rich connecting with opportunities that can produce and multiply money. You don’t get rich saving money… Missing opportunities is what costs people money.” Cardone goes on to talk about how managing money doesn’t make you wealthy and that this belief is one of the biggest lies believed by the Middle Class.
Similarly, Ramit Sethi (one of my favorite people!) has a chart comparing being frugal to increasing income that you can see here. His chart suggests that increasing your income is far better.
But on the other hand, in The Millionaire Next Door, Thomas J. Stanley writes that although millionaires have a high income, they have a frugal mindset and live well below their means (most are not buying and spending lavishly like we see in the movies). He argues it’s spending less and managing your money well that will make you a millionaire.
So, there you go — three pros who have different views.
Let’s be honest though — they’re both right, right? You have to make money to take care of business (e.g.: pay for school, buy a home, etc.) but if you mismanage the money you do have, you’re screwed, too.
So, what should you do? Ugh. The struggles of adulting.
What Should You Do?
Now, let’s talk about what you should do…
Here’s my advice: 1) be honest with yourself and 2) make the wisest decision for you.
This advice isn’t vague. It’s just specific to you. The truth is that everyone is different — you’re different than me and we’re both different than the next person.
For the savers –> If you’re a natural saver and you’re reading this, you may already live frugally, but finding out that your frugal-ness isn’t enough. In this case, you need to focus on making more money. Here’s a post that gives you 45 ways to more money to help you get started.
For the spenders –> If your’e a spender, you need to focus on spending less. That’s your pain point. That’s what’s hard. And you know it deep down. So, focus on spending less and managing what you do have (here’s a budgeting eBook you can download to get started).
For both –> If you’re somewhere in the middle, you need to cut back on your spending and you need to make more money. I consider myself in this category because I’m a natural spender so I need to cut back, yet I have massive student loan debt, so I need to make more.
- Related: Create A Real Life Money Plan
You need to sort through the information and decide what’s right for you. Only you know whether you’re a spender or a saver. Only you can decide what you should be doing.
There is so much information out there. Decide in your heart what’s right and go with that.
I am a natural spender. I love to shop. I know it’s the wisest decision for me to not have a credit card (I’ve never had one). Most people aren’t like this – they can use a credit card and pay it off in full monthly. But I know I’m not that way. I know myself. I listen to myself and don’t use one (despite the nasty comments I get!).
So, I cut my expenses. I don’t have cable, I live in a crappy apartment, and I don’t do a lot of traveling.
Being a spender is why I started to learn about money. I didn’t understand how I could be an attorney and in so much student loan debt. I thought I was going to be super rich. I was wrong! And because of that revelation, I’ve been on a mission to learn about money ever since (hence the finance blog and becoming a financial planner).
Since I cut my salary in half by quitting my corporate lawyer job and becoming a financial planner, I needed a way to make up the income if I ever wanted to get out of student loan debt. So, I started blogging more seriously (like taking this blogging course, which tripled my blog income).
I make money blogging, and I put toward my student loans. Without it, I would be in a huge deficit every month – like $1,000+.
Over time, I hope that I can repay my student loans (as fast as possible, actually), save and invest, and be on track financially, building wealth.
In the future, I may only focus on one of the two. We’ll see.
This is just my story, though. Yours is different. The most important advice I have to give is to know yourself and do what’s wisefor you.
Make a decision, create a plan, and move forward toward your financial goals, doing what is wisest for you.
I don’t want to leave you hanging! If you are ready to do more — whether it’s spend less or make more — here’s a list of resources to help you get started.
Resources For Making More
- 45 Ways To Make Extra Money
- 31 Blog Posts That Teach You How To Make Money On The Side
- 8 Legitimate Ways To Make Money From Home
- 10 Blogs That Teach You How To Make Money
Resources For Spending Less
- How To Radically Reduce Your Expenses
- How To Organize Your Finances In 8 Steps
- How To Get Out Of Debt
- The Real Life Money Plan
You can choose to do one or both — make more or spend less. I know that you have to focus to do either of these well, so take the time and put in the effort. I’m doing it, too, so I get it! 🙂