Do you earn more than you spend? How does your money mindset impact your thinking about earning more vs. spending less?
One of the most common pieces of money advice is to spend less than you earn. Living within your means is, indeed, the foundation for successful finances. However, the phrase has always bothered me a little bit. And, really, it's more about the mindset than anything else. Rather than talk about spending less, I like to think about earning more.
Proactive Approach to Finances
If you turn around the famous bit of advice, you end up with this: Earn more than you spend. I like that better. It sounds more proactive. Is it really that different than “spend less than you earn”? Probably not. But, to me, it represents a subtle difference in the money mindset.
If you are focused on spending less, you set yourself up to run into limits. Eventually, you reach a point at which you simply can't cut anymore. By definition, you are limited by how much you can cut out of your budget. Once you hit that limit, the implication is that you can't do anything more. You're stuck. The result can easily be financial helplessness.
Now, try thinking about the idea of earning more than you spend. Is there are a limit to how much you can earn? If you truly expand your creativity and think about possible side hustles, part-time jobs or other types of income, you will realize that there isn't a cap on how much you can earn. The implication, when you turn around the phrase, is that you can do more to seize control of your financial future. It may be a small change in the way you talk about your financial situation, but, for your money mindset, it can make a big difference.
Prioritize Your Time
You do need to be careful, though. Even though a mindset that allows you to think of money as something that you can earn can be a great help to your financial situation, you don't want to get too caught up in money as an end itself. While cultivating multiple streams of income can be a good way to ensure that you live within your means, becoming too focused on making money can encourage you to lose sight of other important people in your life.
There needs to be some sort of balance between your earning, and the way you spend time with people who are important to you. Of course, you can figure out what you are doing with your time. Is your “time with family” really spent watching TV?
If you are like most Americans who spend four hours a day watching TV, you could switch things up to spend two hours of true quality time with your family, and still have two hours to work on your endeavors to earn more.
Part of the earning more mindset is looking at the ROI you have on your time and improving that, emotionally and financially. Take a look at how you view money and consider how you are spending your time. Then, determine whether or not you could benefit by focusing less on cutting a few dollars each week in spending, and focusing more on activities that can increase your income.