This post was originally published on May 13, 2009. Now that I’m a stay-at-home mom, this post is truer than ever for me. I needed a reminder of why my priority will always be finding ways to cut our spending instead of increasing our income. I thought I’d share it with you, too.
When you’re working to save money or get out of debt, there are two main ways to do it: spend less and earn more. When you’re struggling to make ends meet, the solution is to cut your spending or find a way to increase your income or some balance of both.
I’ve always favored the spend less approach on my blog and in my life. I’m not a big fan of Dave Ramsey’s advice to go to extreme measures to increase your income. I’d rather work hard to cut spending than pick up a second job or extra hours to increase our income. Here’s why:
My time is worth more than money.
If we took on night jobs or weekend jobs, we could speed up our debt repayment and savings. But at what cost? We’d lose our only real quality time together, our only time to relax and recharge. As I said yesterday, frugality is about improving my quality of life. Working nonstop isn’t what I think about when I think about my best life.
Being short on time can cost money.
When you’re constantly rushing around, you’re more likely to cling to convenience. From picking up take out at the end of a night shift to paying more in childcare to cover your long hours to skipping money-saving habits like menu planning and coupon clipping because you don’t have time, rushing around can get expensive.
Higher income leads to more spending.
Obviously, the point of frugality is to avoid increasing expenses as income increases. But the harder you’re working to bring in that extra income, the harder it can be to tell yourself, “No.”
Even if you can avoid spending money on unnecessary things, there are some natural upgrades that come along with a better income: home ownership, vacations, little luxuries. If you put more of your focus on earning than saving, it’s likely that those little upgrades will add up to a lot of extra spending. By focusing on saving instead of earning, we’re living comfortably without being tempted to splurge to much. As our income naturally increases and we continue to spend less than we make, we’ll find a way to fit these upgrades into our budget.
What about you? Would you rather spend less or earn more?
Once again, you’re right on the money. And it’s refreshing to see that already, as a young couple, you’re valuing your time together, which of course is priceless. Years ago, before kids, I switched to the third shift at work since it paid quite a bit more in order to pay off debt and add more to our savings for a house. We were fortunate in a sense that we’d decided early on that we wouldn’t rely on my paycheck to paybills since I knew once the kiddos arrived I’d prefer to be home with them, but knowing I could pay off the debt sooner and have more $$$ in the bank was a big draw. It only lasted 3 months before I went back to days. Granted, I did put a dent in the debt, but I was so MISERABLE.
Sounds like you and your hubby are on the right track, both in the money department and in the marriage department.
I think Ramsey’s advice to get a second job is best used for people who are struggling to pay their bills and put food on the table. If they’re so heavily in debt that they really don’t have anything left over to save, then to me it makes sense to temporarily get a second job until they can catch up a little more.
Beyond that, though, I agree with you. Time is valuable! Why work so dang hard if you can’t enjoy your life?
We’ve reduced our spending so much that I’m kinda to the point where I don’t want to cut back any further. We *could* if we had to, but why? It’s not like we’re spending like crazy.
I’m trying to increase my blog income since that would be easier than cutting back at this point.
Great post, as usual!
Kacie’s last blog post..We’re debt-free!!!
This post is great timing for me! Just recently my salary got cut 15%. My husband and I have always been “savers” instead of “spenders,” but there’s only so many cuts we can make. I’m still thinking about picking up some extra hours to make up the 15% difference. Not sure if it’s worth it or not?
I’d rather spend less. I think it’s been proven, the more you make, the more you spend. If you’re accustomed to spending less, the times when you do earn a little extra will just be a bonus, rather than a neccesity.
Carla’s last blog post..Yummo
Kacie – I do agree that when you can’t make ends meet, you have to do what you have to do to pay the rent and put food on the table. If that means working more, then so be it. I’m talking about the people that just want to save/get out of debt faster. There are only so many hours in the day! I’m all for working hard, but sometimes you have to take a break!
Anne – I’m sorry to hear about your salary cut. :( It’s a tough call. If I were you, I’d look at the budget and make sure you can still make ends meet with the lower salary. See how much you can cut without really noticing (i.e. by clipping coupons to save on groceries, cutting services you don’t need/use, etc.) If you’ve made all the cuts you can and it’s not enough or you don’t have ANY money left over for savings at the end, I’d consider looking for a way to bring in extra income, but don’t go overboard! Give yourself some time to relax, enjoy life, and breathe!
Definitely spend less. I am a stay-at-home mother of 3. If I continued my poor spending habits, I was going to have to get a job. I gave up my career to with my kids. I cleaned up our finances in less than a year. It’s important for me to be with the kids. Granted they are in school now, but trust me during the teen years – they need you more!
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Hmm. For me, it’s not cut and dried. Everyone has a kind of spending threshold where it is hard or impossible to cut spending any lower. But if you’re living a lifestyle with some luxuries then it’s much more feasible. Right now, I am aiming for earning more because I’m young and my day job schedule allows for me to make money doing other things as well. Earning less right now would severely reduce the amount I’m able to save. But I am hoping to get a job in the next year that would give me more normal hours and my weekends back, which will almost certainly involve a pay cut – the catch will be how much $ I’m willing to exchange for time.
Going to work to earn more now days is not an easy option anyway. It is a war zone out there for jobs- anxiety -job stress. Then the clothes, gas and meals away from home (even if you brown bag). Personally unless you just really love what you do -just a JOB will drain you emotionally and physically.
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This a great post. I’m glad I found you (through EEMUSINGS by the way!).
Yes, I do agree with you. That’s how I feel.
BUT, at the same time, it’s hard…because for instance, I’d like to have a nicer place to live. I’m sick of living like a College student still at 30 years of age looking for cheap apartments, etc. I’d like to have a condo or a town house at least! But these are about $500 MORE per month (at least) than the cheap stuff I can get. Unfortunately, I am single and not a fan of roommates (again, did that enough in my College days). So for me it’s a question I’m struggling with very hard right now. Should I continue to pay for a cheap, small place to save to pay off my (enormous) student loan debt? (yes, obviously right?)….OR should I spend the extra money for a nicer place and try to increase my income to supplement. The hard thing is that even I do increase my income, I think to myself “that’s money that should be going to the loans, and not rent”….
I can’t win!
I completely agree! and this is why I was never a huge fan of Dave Ramsey, bc he pretty much asks that you give up your life until your debt is paid off.
I guess in dire situations, then dire circumstances are needed, but I’m fine enjoying my time AND my little family in exchange for forgoing a nice dinner out.