Increase Your Income vs Reduce Your Expenses. Which is Better?
Imagine being able to afford a vacation every now and then, changing your wardrobe as often as possible, and buying your dream car at a whim. So cool, right? We all want our income to help us do that.
On the other hand, we’d also like our responsibilities reduced or even completely taken off our shoulders. Who wouldn’t love to receive regular checks without having to put in the extra work?
Economic experts agree that earning more money doesn’t guarantee financial freedom. They might be right because many people would naturally find themselves in a bigger web of responsibilities once they receive an income upgrade.
Some people believe money has an aura of its own which just attracts a new lifestyle that was absent before it showed up.
For people like that, more money translates to a more recent car model, a bigger apartment, more exotic restaurant visits, and so on. And before long, they find out all their money is tied down in liabilities. They hardly have enough funds saved up to invest in viable opportunities that grow their assets or net worth.
Increasing one’s income, if we’ll face the fact, may not be something that’s immediately realizable. You may need to acquire more skills, negotiate that promotion at work, expand your business to see more digits in your bank balance.
As per expenses, some can’t be avoided or reduced, e.g, household needs, transportation, healthcare bills, food, utilities, etc. This means that you can’t fully control all your income nor expenses at every point, else everybody would be doing it.
However, one thing that is possible is to take a sincere look at your list of expenses and see where you can tone things down.
The goal is to ensure there are no leakages with your money. Instead, any “extra” money is going into your savings for the sake of rainy days and to harness future opportunities to generate wealth.
So, while working hard to jerk up your income, make sure you’re only spending on what you have to, not everything you want to. This would help you prepare for when more money comes, to guard against ‘impulse buying or spending’ which quickly sends most people back to square one. You wouldn’t want that!