Goodness I love this topic. This question always brings some strong opinions and great insight. We're going to figure out if the average person should focus on spending less money or making more of it today!
Before we get started – I already want to throw out that I get that each one is important. You can always find the sarcastic person (which I totally understand) in the room when they use “Both.” as an answer to this question.
*Golf clap* I get it. However, I want to know what you all think is MORE important for the scope of your financial life. 🙂
Here are the arguments for both sides:
Spending less money is more important.
“You have to learn how to spend less! It's the pillar of good personal finance habits. What good is making a bunch of money if you spend it all? Someone who makes $1,000,000 per year and blows it all is just as poor as someone who makes $10,000 per year and blows it all”.
Making more money is more important.
“The more you make, the more you can make it work for you! It's much easier to build real wealth if you have more numbers to play with. You can invest more and take full advantage of compounding interest over the course of your life”.
Here's what I think:
As someone who has paid off $40,000 of student loans, saved a year's salary to quit my job, and has gone from $4,500 per month in income to over $10,000…I feel like I have some fairly well-rounded experience to answer this question at 28 years old.
Want to know how I make $10,000+ online every month? Check out my latest income report!
Learning how to spend less and actually develop the discipline to freaking do it is FAR more important than making more money. I don't actually think it's very close honestly.
From personal experience I can tell you this: more money doesn't always help. As passionate as I am about being smart with my money, I promise that a higher incomes are earmarked with wanting to buy more cool crap. I'll explain shortly why even I struggle with that from time to time.
When you have money, it's not always easy to figure out what to do with it (I know…what a problem to have). But more importantly, it's hard to avoid the consistent blitz of advertising that wants to rip it out of your bank accounts because you can act on it.
If I didn't know how to save, I'd be screwed.
I like buying stuff for my wife. She'd be totally cool if I didn't do it, but I LOVE getting her nice things for no reason. I want her to have the nice house, yacht, Rolex, Lexus, purses etc. etc. etc. In my heart of hearts, I have no interest in being a minimalist for the rest of my life.
But I recognize saving for what it is – a means to an end.
It wouldn't be totally out of the question for us to go finance two new BMW's and get some [email protected]$$ apartment in downtown Houston. We could pretend to be rich for a while, but the reality is that we would just look rich.
The discipline that my wife and I have both developed is paying off in spades. We live on less than she makes every month and aren't even touching the money that's coming in from my business. There's a real possibility that we will put away $70,000-100,000 over the next 12 months (I can hear the collective gasp from PF bloggers that hope I don't hold it as cash haha!).
Focus on saving and spending at the same time, but master saving in the process.
Saving money isn't sexy. It's not impressive to your friends because they can't see your money and it's not socially acceptable to talk about it. Nobody actually cares what percentage of your pay goes into savings.
But just like everything else in life – you shouldn't care what anyone thinks anyways. 🙂