Should We Earn More or Spend Less?

Did you ever come to a point of asking yourself where did your money goes?

Many of us are working on at least two jobs just to earn more. Not to mention some investment activities and side hustles that we have to get an additional income. But despite all of these, there may come a time when we need to ask ourselves, what am I doing wrong?

I’m sure many can relate to this situation. Let me share with you some useful tips in order to minimize spending and increase our savings.

I am an advocate of earning more or not relying on one source of income for I believe that the more sources of income we have, the better our life would be. One the other hand, I realized that no matter how big our income is, yet we don’t know how to minimize our spending, it is like collecting water in a pail with a hole.

Our Effort is Insignificant Unless We Learn to Spend Less

My salary has a notable increase in 2021 after I was promoted with 5 salary grades in my regular job. It was a whopping 85% increase or almost double than my previous salary. It would have been a good development in my career and more disposable income.

But the problem is my expenses also increased significantly. Some expenses were due to expectations from close relatives who would think that because I was promoted, I already have a very high salary and they can come to me whenever they wanted and I will give them money.

Additionally, my children started to became lenient in their spending habits. They would buy things out of control and they would come to me whenever they are short of money. The utilities also increased because they weren’t so mindful of the things they are using such as leaving the lights even when no one is using or forgetting to turn off the electric fan which keeps running for hours when no one is around.

The frequent eating out and food deliveries also contributed to the increased in expenses.

The result – I ran out of cash and I almost failed to pay the utilities.

Expenses Review and Budget Restructuring

Don’t wait for things to go wrong before doing the expenses review and budget restructuring. Though if you have experienced being out of cash due to higher expenses than what you earn, this is a good start for you.

Many people are caught in the cycle of earning, spending and paying debt. What could be the reason? Simple. We spend more than we earn. I am sharing this video that it can be helpful in identifying the reasons why we spend more than we earn and probably enlighten us to make the right decision that will help us reach our financial goals.

Video Credits: The Humble Penny

Review Our Expenses

Starting today, let's make a list of expenses. It is very timely as we are starting a new month. It doesn’t matter how small or big the expense. Example, milk tea, a new phone, a new bag, new clothes, a bag of laundry powder, bread, shampoo, conditioner, etc.

Classify them as to needs or wants. We can fold the paper in half then we can write all the "NEEDS" on the first half and all the "WANTS" on the second half. From there, we can track every single penny that we spend our money to. At the end of the month, we will be able to tell where our money goes.

Our next step would to analyze what we can do to minimize our expenses. This can be done by creating a budget.

Create a Budget

Having a plan on what to do with our money is a must. We need to identify our priorities. I have written about creation of budget and sticking into it here:

Suggested Reading: Save More With a Small Income

Cut Unnecessary Expenditures

There are many things that we usually buy that we don't really need such as extended warranties, gym membership and cable subscriptions. It's about time to take a look into these and decided which we could give up.

Buy Quality

When trying to save, it does not mean that we should not shop for the things that we need or want. But we can opt to buy quality items that could serve us longer.

Be In Control

I mentioned about those people, relatives or not that are expecting too much from us. People whom we couldn't say NO and would end up taking advantage of the situation.

We could shell out some cash if we have excess money. But what usually happen is that even we only have enough, we are afraid to say no because we don't want to hurt their feelings in one way or another.

It's about time that we slowly train these people that we cannot always give what they need. Saying no is not being selfish but necessary for our own wellbeing.

On the final thought...

Living and having only what we need is called minimalism. Not only that it will save us money but it will also save us time and effort on organizing. It's good if we could get away with having too many stuff that we don't need.

Disclaimer:

The content of this post is not for promotional intent rather for informational purposes only and should not be considered as a financial advice. Similarly, the opinions I have shared are of my own and does not in any way represent the organization I am currently connected with.

Special Thanks:

I would like to extend my thanks to my sponsors, namely: @Talecharm @Unity @Micontingsabit @JLoberiza . I wish you more success with read.cash as well as with other projects you currently have.

Written for read.cash by Sharon S. Lopez (Cinderella) All rights reserved 2022

Date Published: July 02, 2022