Saving Money vs Making Money

[briandownie]

Wow what a lot of great responses and I have to say I won't disagree with any of them.

It really isn't black and white, earning is good and saving is good. Earnings are taxable and savings are not.

I agree that there should be a good balance between the two, I also belive that there is far more to life than money and that our free time is valuable.

The way I feel about it is really directed at how much effort I have to put forth to make a difference in my life. My savings potential is limited, my income potential is unlimited. I really wonder if I can put forth the same effort and make considerably more than I can save?

I also think that having more disposable income would put me in a better position to help other people...family, friends, charitable organizations.

I think it was Oprah that said "when you have enough money so you don't need to worry about it any more you can focus on the things in life that are really important."

Thanks for all the great responses, I really enjoy this forum I'm glad I found it.

Brian

[Drac]

There is a said in my country that says: It is not richer the one that spends the most, but the one that saves more.
This is quite true. It doesn't matter how much money you make, you always feel that thing will be better if you earned just a little bit more. In other words, it is very easy to increase your level of spending, and it requires far less effort than increasing your income.
I will agree that you obtain the best results by doing both, saving and making more money; but we usually have more control on saving, and the results are short term. You can work very hard, but you don't have control to decide when your next promotion will come.

[elessar78]

It's the concepts of playing offense (creating money) or defense (saving). You HAVE to do both. How you spend your time is a matter of personal preference, so there isn't a one-size fits all for all people.

I went to a lecture given by a priest in college and his main point was that you give TIME to the things you LOVE. So what is it that you love? He wasn't talking about the time that most of us spend at work which is required, but the time you have discretion over. TIME is a finite resource. Mine breaks down easily: Family and soccer (playing and coaching). And if you press me, video games. It's my mindless retreat.

Could I give up some (not all) time with family and playing soccer to make more money? Sure. But it's not worth it, yet.

It's a little warm and fuzzy for this forum, but I think there's a lot of truth to it.

[disneysteve]

Could I give up some (not all) time with family and playing soccer to make more money? Sure. But it's not worth it, yet.

Exactly. Yes, I could make more money by working more hours. I choose, however, not to do so. I don't need the additional money. I'd much rather have time with my family, time volunteering at my temple, time relaxing, time to travel, etc.

[wincrasher]

There is an old saying - you can't buy happiness, but you sure can rent it!

In my case, I have better luck finding ways to make more money. Like all things, you have to find some balance between work, rest and play. I don't put alot of my efforts in pinching pennies. What I look for in savings is general waste, competitive pricing on the big items.

I do agree that if you make more, you can spend more. Sounds like alot more fun to be making $20k a month and spending that, then making $10k a month and spending that. It's a good problem to have! But really that is a matter of being in control of yourself. It's no reason to simply not even try to make more money.

[elessar78]

I do and I don't have a problem saving.

I don't have a problem saving because it's the first thing I do. Money automatically gets drafted out of my bank account into retirment accounts and savings accounts.

I do have a problem saving as much as I can because unexpected things that fall outside "normal spending" eat into our savings. The good thing is that savings outpace expenditure.

I haven't given us a "raise" in 5 years? Every pay increase has gone to increasing our retirement contributions or savings rate. Even with the arrival of our first child, we chose to reduce our spending and scrimp rather than increase our budget.

There is a term called "hedonic adaptation"... basically new things give us pleasure but the amount of pleasure derived diminishes the longer we have that object. It's true for new homes, new cars, new clothes. So for me, I don't chase the rush of new stuff.

[scfr]

That said, I think BOTH are important. I've seen diet used as an analogy in these discussions. You can work out or just eat better, but doing both will yield far better results than just focusing on one over the other. Penny-wise AND pound-wise, so to speak.

"The Net Worth Workout" by Susan Feitelberg lays out 4 quadrants of wealth (financial health) and compares them to physical health:

Earning = Metabolism
Spending = Calorie Intake
Saving = Strength Training
Investing = Cardio Fitness

To get in the best possible shape, you have to pay attention to all 4. We all have areas where we are naturally stronger, so we may have to put more effort in to our weaker areas.

In many marriages, the spouses may choose different areas to focus on, and as long as their strong areas complement each other, that can work very nicely.

Personally, my strongest areas are controlling spending & saving. Earning, which I'm just okay at, is my husband's strongest area. He's pretty good at saving, just okay at controlling spending. Investing is the area where we both are weakest, so from time to time I have to remind myself to pay attention to it, and it definitely could be better.

[frugal_deal]

Well , I say both depending on difference in the criteria.

Lets say if you make $20 per hour vs If you spend one hour finding a good deal saving $2 dollars. I would say spend $2 extra and make more effort to make money

But whatever the case is having proper budget and saving certain amount for emergencies and future planning will always keep us worry free now and in the future.

[maat55]

I disagree. There is a lot more to life than earning more money. I work about 35 hours/week. I could very easily work more hours. All I have to do is say the word and my partner would be more than happy to extend my hours. There are also other things I could be doing to earn additional income outside of my job. But I have no desire to work any more than I already do. My job is mentally draining most days and I'm exhausted by the time I come home. I want time to relax. I want time to spend with my family. I want time to volunteer at my synagogue. I want time to travel. Sure, I could be earning more money but it wouldn't be worth the sacrifice at all.

I agree, I would long hours to provide necessities, but not luxuries.

[disneysteve]

Lets say if you make $20 per hour vs If you spend one hour finding a good deal saving $2 dollars. I would say spend $2 extra and make more effort to make money

I agree with this in theory. The Tightwad Gazette talked about this concept - figuring out your hourly "wage" for doing things such as baking bread or doing crafts or whatever. Sometimes, it makes more sense to do it yourself. Other times it makes more sense not to.

Of course, this also depends on your ability to find extra work at the higher rate. As I said, I could easily extend my office hours and pick up at least a couple hundred dollars more per week. Not everybody is in that situation, though. Most people have set hours on their jobs and can't just decide to start working more and earning more. They'd have to do something independently or find a second job elsewhere and that isn't nearly as easy.

[bjl584]

I would have to argue that I have more immediate and direct control when it comes to saving money as opposed to making money. Saving is easy; All that I have to do is say no to purchasing some product or service. Making money requires effort, sometimes significant effort. Not that I don't want to make money, but as a starting point at least to a healthy financial profile, I would start with saving money first. Then move on to making money once my finances are in order.

[briandownie]

I know people that work ridicoulus hours and are always chasing the next dollar. I was sort of in that position at one time. I find it far easier and probably more profitable to save and invest. People tend to spend up to their income anyway so the net result is usually not much different between the two.

I like your reply. Saving is great and investing your savings is earning without spending ridiculous amounts of time trying to earn money. Passive income is my favorite kind of income for sure!

Brian

[SimplySaving]

My husband works and I am a stay at home mom. I consider his job to make the money and my job to save the money. I work hard at clipping coupons, making weekly grocery lists, and searching for the best possible deal before I buy anything. This has been a really good balance for us. And honestly, even if we were millionaires I think I would still shop at Aldi's. I can't imagine myself ever being the kind of person to just throw money out the window when I know it's possible to get things much cheaper. Why pay more? To me, it's about being a good steward of what God has given us.

[Scanner]

Don't forget there is an intangible at work here - your income/job/career is an "asset."

Your ability to save really isn't one.

If you don't believe me, walk into the local bank and ask for a loan and tell them, "Well, I don't have a job or any means to earn money, but I am a great saver! I'm a Savings Professor at saving advice! "

[snshijuptr]

If financial independence/retirement is your goal, then saving money is more important. For every $1 you reduce your expenses per year, that means one more $1 in your savings. In addition, this means $25 less that you need to have in your savings in order to be financially independent (if you are following the 4% withdrawal rule). So if you can reduce your expenses from $100,000 a year to $99,000 per year, you go from needing $2,500,000 to retire to needing $2,475,000. So you need $25,000 less and are putting away $10,000 more per year. Alternatively if you earn $10,000 more a year, you still need the same $2,500,000.