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Earn more or spend less?

Extra income isn't always possible. Controlling your spending usually is. And why not try for both?

By Donna_Freedman Oct 16, 2012 2:49PM

Logo: Pay check stub showing taxes withheld (Comstock, Comstock, Getty Images)A blogger named Edward Antrobus recently took out after a popular PF belief: that it's always better to earn more than to spend less.

Maybe so. But is it always possible? And are the two mutually exclusive?

"Why not try to earn more and spend less? . . . Besides, if you don't take action to control your spending, then lifestyle inflation can easily eat up all your income gains, if not outpace them," Antrobus wrote in a post on his eponymous blog.

But that's not the only reason the self-described "personal finance contrarian" was feeling so cranky.  

Earning more income sounds great but isn't necessarily simple, he notes:

  • Not everyone can get a raise.
  • Depending on your circumstances, a second job isn't always possible.
  • The Internet-related "alternate income streams" extolled by countless PF bloggers may not pan out. (Antrobus tried marketing taco seasonings through his food blog. It didn't go well.)

"If making more money was as easy as the 'make more money' crowd claimed, a lot more people would be making more money," he says.

I agree. Maybe you can't take on extra work due to family, illness, personal issues or simply because you live in a place where there is no extra work. In that case, focusing on wise use of available income can get you through rough financial times.

That's not to say your circumstances won't change. For example, job training might help you find a better-paying position, or the law could catch up with a deadbeat spouse about those child-support payments. Until things do change, keep your wallet in your pocket.

Minding your pennies

And maybe afterward, too: Like Antrobus, I think you should aim for both higher income and frugality, because the former doesn't cancel the need for the latter.

As he noted, lifestyle inflation can easily swallow up any pay raises. If you earn more, you can certainly afford to be less careful, but becoming a spendthrift isn't wise. After all, your circumstances could change again.

Sam Walton was famous for picking up dropped coins and driving an old pickup. He could have afforded to do things differently, but he saw no reason to change.

I'm no Sam Walton, but I'm doing much better than I was right after the two-year divorce process. Yet I continue to pick up coins (although I donate them at the end of the year) and when I still owned a car it was an older (i.e., a paid-off) model.

These days I can afford to attend professional conferences, visit my dad on the other side of the country, go to midnight movies with a friend or do whatever I really want to do. That's not solely because my income has risen -- it's because I'm cautious about how and where I use those dollars. I don't intend to let "extra" money cloud my judgment.

Personal finance isn't one-size-fits-all, so you have to do what works best for you. But there's truth in that old saying, "Mind your pennies and the dollars will mind themselves." Plenty of wealthy celebrities and sports figures end up in serious money straits because they stopped minding their money at all.

More on MSN Money:
Oct 17, 2012 12:09PM
I think it depends on how much energy you have. Do you feel like working 2 jobs? I don't. When I was younger and didn't have a family, it was easy to do but now - I'm tired! I'd rather spend less and keep my expenses low rather than earn more.
Oct 16, 2012 3:57PM
Personally, I get tired of the suggestions that I should just earn more. I already work a full-time job and blog... despite severe depression and chronic fatigue.

I don't have the time, energy or inclination to go out and find things to sell on eBay. I don't even have the time to really focus on getting my blog to make as much money as it probably could. Similarly, my husband's health problems mean he can't just go out and find leaves to rake or whatever.

People forget that not everyone is healthy enough for a job, let alone two. Or they forget that not everyone lives in an area where there are job opportunities.

Yes, "earn more" is something people should at least consider. But it's frustrating when people fail to understand that it's not always possible or a good idea. When people keep suggesting/insisting that there are options out there, there's the implication that it's somehow your fault if you can't do it.

Oct 23, 2012 8:14PM
I think to each his/her own.  I do a bit of both--cut back on what I don't need and started a part time business.  But it took years of starting several businesses before one actually started to generate money.  At least you can control what you spend and any extra money you earn is a plus. There are tons of articles that say "just do this on the side to make more money!" It's not always so easy.
Oct 17, 2012 10:14AM
Depends what you want from life. People don't get to be rich just by saving, but remember the more you earn, the more the government will steal from you to support those to lazy or stupid to earn.
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Donna Freedman's Frugal Nation blog is for readers who want to live cheaply -- whether due to necessity or a lifestyle choice. It explores living sustainably and making life more meaningful at the same time.


Donna Freedman

Donna Freedman, a writer based in Anchorage, Alaska, writes the Frugal Nation blog for MSN Money. She won regional and national prizes during an 18-year newspaper career and earned a college degree in midlife without taking out student loans. Donna also writes about the frugal life for her own site, Surviving and Thriving.