Which is better, spending less or earning more?

Concept of earning balance with businessman that weighs the money. Spending less or earning more?


MoneyPlus Features Team

16th November 2016 at 6:13pm

If, like me, you’re new to the world of perfecting your personal finances it can be tricky to know where to begin. There are so many blogs, articles and self-help sites dedicated to helping you hike up your savings and cut costs, it can be difficult to know where to start. And as with any subject matter there are opposing  opinions.

Within the world of personal finance prose there are two major camps of thought, as one of our favourite blogs the first million is the hardest explains;

‘The first is the camp that focuses on cutting any and all unnecessary spending out of your life in order to free up more cash to meet your goals with. The second camp focuses on maximizing your earning potential, because the more money you make, the more you’ll be able to funnel towards your financial goals.’

Two major camps of thought in the personal finance world

So, when it comes to maximising the monies you have available to you, is it best to scrimp and scrape? Or is making sure you earn to the max the way forward?

Spending Less

Ensuring you only spend as much of your income as you absolutely need to can be a tricky mind-set to master.

I myself know only too well how difficult those first few months can be where I tried so hard to save only to fall off the wagon.

Pros of penny pinching

Sticking with saving has been one of the best things I have done, it has given me a new found discipline and I can now trust myself not to splurge and sabotage my savings.

Sticking with savings is one of the best things I’ve done

Trying to spend as little of your income as possible on irrelevant items can be a great way to start to save and the best thing about saving money is that there are so many ways to do it.

Tips and Tricks

In our recent blog ‘How to nurture your new saving habits and cut the cravings’ I detailed a number of top tips to help you save more and spend less which have helped me cut my costs immensely! Here are the best of the bunch;

Rounding up

So, say you have talked yourself in to a new purchase, which you really DO need. Maybe it’s a new gym kit, or maybe it’s some new bedding to replace the scrappy old sheets you’ve had since forever.


Round up your savings

Whatever it is, try rounding up the purchase. Say the sheets cost twenty – seven pounds, pop 3 pounds into your savings account. This is a great way to save without feeling you are giving up anything in order to do it.

Crunch the numbers

Now you’re swithering on whether to buy that great pair of boots which will take your collection up to around 20 pairs. When you are in this situation just do a simple sum, work out how much you get paid an hour.

Then when you come to consider buying the boots calculate how long you would have to work in order to cover the cost. This can be a real eye opener and has saved my wardrobe from many a pointless purchase.

So those are just a couple of the tips and tricks I use on a daily basis, for more take a look at our blog on nurturing your savings habits.

Cons of cutting costs

Now for me, cutting costs and saving more has really worked. I’ve kept at it and seen some real results. But it is hard work and can leave you feeling deflated if you don’t stick to your goals and keep going. And as the first million is the hardest points out, can it go on forever?;

‘I question how sustainable it can be. What do you do when you hit your goal? Are you going to keep on living like a poor college student forever?’

When it comes to saving, they are right, you do need a clear goal.

But what happens when you reach it? Is that you done? When does the scrimping end?

My one goal: Financial Independence

For me I have one goal, to achieve financial independence.

Now that does not mean ‘living like a poor college student’ it means being smart with my money in order to not rely on it so heavily in the future. I want to reach a state where I no longer worry about money.

In one of our recent blogs, ‘How to achieve financial independence’, we spoke around the importance of saving, and that sometimes saving is simply not enough.

Which brings me on to the argument for accelerating your earnings…

Earning More

Let’s be honest, making more money is something on everyone’s mind. You want that house in the country? Better make sure you get the raise to cover it. You want three kids? You better have the pay to maintain a good lifestyle for them.

As they say, money makes the world go round, and equally makes possible or limits the plans we have for the future.

The eternal question, how do I get more money?

There are so many ways to ensure you get that raise in your current role, as retirebyforty explains;

‘…you need to invest in yourself and get good raises. Each career is different and it might take education, becoming an expert in a niche, working extra hours, and/or networking with the right people’

But there are other things you can do too to make extra money. Why not take the plunge and start a business on the side or getting a part time job? Or even sell some surplus stuff from around your home? The possibilities are endless, and if you put your mind to it making more money could become a reality.

Pros of a pay rise

One of the best things about getting that raise is that you feel you have done a good job. Self-worth goes up and as does self-confidence, and a boost to your pay packet can feel like a real reward.

People link pay rises to doing a good job

Ultimately getting more money for the job that you’re doing means you are progressing whether that be through learning new skills, finding your forte or just working as hard as you can.

Self-progression is something we all should chase and if it brings more money so much the better!

And as the first million is the hardest explains, there’s no limit to how much you can earn;

‘The best part of earning more money is that the sky’s the limit to how much you can earn. While there are only so many things you can stop spending on, there is no cap on how much money you can possibly earn or how many ways you can earn it.’

Cons of chasing the cash

Now it may seem there are no negatives to trying to earn more, but there are a couple as shocking as it may seem.

Earning more money can take a very long time, I’m sure we all know someone who works to the bone every day and doesn’t seem to ever get a raise to reflect their efforts. Making more money takes time and is not a certainty, as the first million is the hardest explains;

Earning more can take time

‘For starters, making more money takes time. Even if it’s just something on the side, building a business takes time (and sometimes money) to get going. Making more money is also less certain. While I know that canceling my TV service will mean $100/month more in my pocket, I can’t be sure that my great idea for a website will ever result in a dime of profit.’

And so, earning more can take a long time and you cannot be certain it will happen when you need it to.

So which is better?

Now, I do not profess to have all of the answers, but from my own experience I would have to say that there is no out right winner here.

It is clear there are pros and cons to both schools of thought, but imagine how strong your money making game would be if you saved as much as possible AND also tried to earn more?

For me this really is a no brainer, if you try to earn more and save more you will be able to reach your financial goals so much quicker. And I will be right there with you, as I try my hardest to reach financial independence.