The question many PF bloggers debate over. I always thought it made for interesting conversation. Usually those in the “save more, spend less” camp argue for simplicity and minimalism. Do things yourself, save money while doing so. Those in the “earn more, spend more” group say that they are going to earn more to be able to afford the little luxuries in life. What side do you fall on?
Save More, Spend Less
This is the group I mostly identify with. It seems like I have been concerned with saving as much money as possible my whole life, and to spend responsibly. I am planning on writing a post on it, but since my dad lost his job twice when I was fairly young, I realized that money is limited and thus must be used in the best way possible. This means not spending it on silly things that we don’t need. Finding ways to cut expenses was always fun for me; analyzing my budget and crunching numbers was a routine activity. I always want to make sure I get the most bang for my buck.
There are quite a few people who ask why. When you leave this earth, you can’t take your money with you. What sense is there in scrutinizing every purchase you make? It’s honestly just been ingrained in me from a young age, and it’s the only thing I’ve known. I am working on getting better at this, because I do believe that you should be allowed to spend on fun things sometimes. I shouldn’t feel the need to punish myself for buying ice cream, but it happens. I have some feeling of regret 85% of the time I go shopping. Then I come home, look around, and ponder how much money I’ve spent on all the things that surround me. It’s not a great way to view things, and R is constantly telling me not to beat myself up over it so much. I do have more than enough in the bank in case something happened, but it never feels like enough. I always want more! It is easy to see why I fall on this side of the debate – I enjoy having money in the bank more than having fun sometimes. Again, something I definitely need to work on.
Earn More, Spend More
What happens if you feel like you’ve cut back as much as you’re comfortable with, though? That’s where earning more and thus being able to spend more comes into play. You might really enjoy cable, daily coffee stops, or a certain expensive hobby. You don’t want to give these things up. Instead of cutting back, you decide to find a way to earn more to cover these costs. I never used to identify with this group simply because the idea of earning more mostly revolved around receiving a raise or a promotion. Neither of these seemed too plausible to me after graduating college. I knew I’d be making an entry-level salary for a while until I could prove myself and climb the ladder.
However, since reading PF blogs, it is clear there are a wide variety of ways to earn more. You can monetize your site, become a freelancer, do tasks virtually online for a few bucks, have a little side business like dog walking or house-sitting, or earn passive income with investing. The opportunities are endless, and it has really opened my eyes to having multiple streams of income. If you can do it, why not?! More power to you. This is definitely looking like something I want to pursue, though my motives are a bit different.
Earn More, Eliminate Debt
There are several bloggers out there using their extra income to pay down debt instead of spending it in the traditional sense. I think this is a terrific idea, and one I am particularly fond of. I don’t have many things in life that I am unwilling to cut back on, but I can totally get behind paying my student loans down faster with whatever extra money may come my way. While I can cut expenses and put the difference toward debt, there’s only so much you can cut. If you choose to earn more, the sky is the limit. Earning more is not always an easy option, and it may take time to build up, but I think that is time well spent!
I asked R and his response was the same – he would like to earn more to cover more of his student loan payments. I love it when our goals align, especially our financial ones :). He is well on his way to doing this. When we first started dating, he was working at a grocery store not making much more than minimum wage. He graduated to an office position that was unfortunately seasonal, but the overtime made it worth it in their busy season. Now, he gets overtime every week and works around 50+ hours. He says that the paycheck is worth it since it’s always taking us further to our end goal of being free from our student loans.
Are you a save more, spend less kind of person, or do you believe in earning more to cover the costs of things you enjoy? Or are you with those who wish to pay down their debt quicker, who save more in the end?