Money Mindset: Earn More or Spend Less?

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 discuss 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 from “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 where 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 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. When you turn around the phrase, the implication 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 you can earn can greatly help your financial situation, you don't want to get too caught up in money as an end. 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 earnings 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?

Like most Americans who spend four hours a day watching TV, you could switch things up to spend two hours of 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.

10 thoughts on “Money Mindset: Earn More or Spend Less?”

  1. Mike - Saving Money Today

    I couldn’t agree more. I’d much rather increase my income so I can still have the things I enjoy, rather than cutting all my expenses and living like a monk.

  2. Well Heeled Blog

    It’s both! Doesn’t have to be one or the other. There’s a ceiling for most of us on how much we can make, and there’s a floor for most of us on how much we can cut (or how much we want to cut and still maintain a certain standard of life).

    1. For me, it’s more of the mindset you’re in. Yes, you need to trim the unimportant expenses from your budget, and you can do this while earning more. But, to me, there can be an unhealthy focus on cut, cut, cut, and it can lead to a feeling of deprivation because you can get to the point of helplessness. If you want something, and you can’t afford it, take action and earn more.

  3. This is the essence of “laws of attraction”. The one thing I do not agree with you is that it is a small change… I think it is a big change. Once a person define things in a positive way (negative example: “I need to reduce my debt”, positive example: “I need to get another $20k”), he creates cognitive connections in his brain to reach that goal. If he defines it negatively, the cognitive connections marking what the “bad” things as a goal.

    Anyway, excellent post and hopefully many of your readers will adopt this approach. Happy thanksgiving 🙂

    1. I agree, Assaf! Try to frame things as positively as possible — and in a way that encourages you to take action. You want to make things happen, not let things happen to you!

  4. The thing with constantly looking for ways to spend less that I think trips up some people is that they forget their time is worth something. If you spend 3 hours in line to get a free sandwich, was it really worth it? If instead, as you suggest, you frame it as earn more, you’re forcing yourself to be smarter with your decisions — spend 3 hours to save $7 on lunch or work an extra hour and make 3 times much?

    1. Great point! Too many people discount the value of their time. Most of us really could be smarter about the way we do things.

  5. I do feel a mixed approach is best. I have a vert low spending lifestyle and this allows me to be without the stress of having to attain a certain large amount of money month on month. If I am earning well I do tend to spend a little more but nothing is fixed and everything can be stripped away to the basics again in a moments notice. I just find life easier that way.

    1. The simpler you are willing to live, the easier it is to live within your means! And, honestly, your lifestyle appeals to me quite a bit. I like the idea of having few things and few fixed expenses, and being able to travel where you want to enjoy life’s experiences.

  6. I agree. even if they’re both just about the same idea, having a positive and proactive mindset can definitely change that attitude.

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