How many articles do you think exist about saving money? If you Google it, you get 125,000,000 different results. That’s pretty crazy when you think about it. I mean, it’s just saving money. Are there really 125,000,000 different ways to do it?
Understanding your personal finances, as a whole, is pretty simple: Income – Expenses = Savings.
But there are also thousands (maybe millions) of variations on how to do it.
You have to forge your own financial path and decide what works best for you.
Boosting Your Income
The first part of the equation is income. If you want to save more (or spend more), you can boost your income.
I live my financial life in this camp. If I want to buy something, I figure out ways to earn more. If I don’t think I’m saving enough, I earn more. I live my financial life always thinking about how I can earn the next thing I want to buy.
And boosting your income is very possible: everybody can side hustle. Everybody can earn an extra $100 per month if they wanted to.
If you don’t want to struggle, cut, and live frugally, build a financial path around income.
Cutting Your Expenses
However, there is another side of the equation: expenses. If you want to save more, you can always spend less.
Millions of people enjoy living frugally, by minimizing expenses, looking for deals, cutting coupons, and more.
There is nothing wrong with this. In fact, you could even think about it as boosting your income, because in the end, it does boost your savings.
But this isn’t my cup of tea. I don’t want to spend 1 hour researching the best deal on my next purchase. I’d rather spend 1 hour more working and earn $100, and use that money that save it.
But even people who earn more or focus on income also cut expenses sometimes. It’s still a great way to balance the equation.
Deciding On Your Life
The goal here is that you have to forge your own financial path. What works for me doesn’t necessarily work for you. What Suze Orman or Dave Ramsey recommend may not work for everybody.
I’m actually a big believer in finding financial balance. I don’t think that you have to fall into the “Earn More” or “Save More” camp. I don’t sweat the small stuff like coffee in the morning or eating out for dinner, but I focus on expenses big time when it comes to buying a car or expensive electronics.
When you’re forging your financial path through life, you also have to decide on what your non-financial life is going to look like. Then build your financial life around that.
How do you balance your financial life?
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.