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Sometimes, it feels so hard to explain which one to focus more – earning more vs spending less.

They are strategies to building wealth; offensive and defensive strategies, having their own merits and potential drawbacks.

But they’re equally important. Which one to focus more depends on your personal circumstances and goals.

Let us see some advantages and disadvantages of earning more versus spending less from various perspectives.

It’s to provide insights of both the strategies and help you pick the one to focus more in your pursuit of financial stability and prosperity.

The Significance of Earning More

Income is the base of wealth. Income can be earned or passive. Income is correlated with financial security.

People with higher income with proper money mindset can build wealth faster; creating potential for more income opportunities.

The author of Rich Dad Poor Dad book said, “It is not how much money you make, but how much money you keep”.

I don’t agree him. People in low income cannot save like higher income earners. It’ll be cruel to tell it to people in poverty.

You can’t expect a security guard to save like a doctor. It will be realistic only once both of their basic needs are met.

This means low income people should work on increasing their income through following strategies:

Investing in education & professional growth.
Leveraging their acquired skills and passions.
Building successful business or side hustles.
Build potentials for multiple income streams.

People of high income need to put their excess income to works. In the process, they can watch their financial habits and mindset.

The Importance of Spending Less

In other words, this can be living below your means. If increasing income is an offense, spending less is a defense.

This defensive strategy is only for middle and high income people. There is a limit to reducing expense.

There is nothing as living below means for people in poverty. They are in poverty because their income cannot meet basic needs.

Spending less is the least of focus for them. It will be the improvement in their earning capabilities, they can get out of poverty.

If you are in a middle income or high income bracket, you have a freedom to choose which to focus more. But in long-run, living below your means will win.

Nu.100 in your pocket will be valuable than Nu.100 of your earnings. The earning is subjected to tax.

One popular tactic to ensuring you live below your means is by having a systemic budgeting.

You can start with a 50-30-20 rule. 50% for your needs, 30% for wants & then 20% for saving or investing.

Ap Dave Ramsey said it the best, “budget is telling your money where to go instead of wondering where it went”.

You can be defensive by saving and avoiding excessive debts. Saving is for short-term financial needs, not for building wealth.

Striking the Sustainable Balance

Financial success is balancing earning more and spending less. Being an extremist on either of the strategies will be disastrous.

If you save everything, life will be so boring. And if you spend everything without saving a cheltrum, you’ll be stressed when you need it.

Living below means and saving for rainy days is a smart move. Give your attention equal to both immediate desires and long-term aspirations.

When they are balanced right, you can optimize your financial decisions and work on other goals, priorities, and values.

Conclusion – It’ll Depend on You

In the debate between earning more and spending less, both aspects are important in achieving financial stability and prosperity.

Earning more gives opportunities, financial security, and also risk-taking capability for entrepreneurial success.

Spending less allows you to exercise financial discipline, manage debts, and do savings for future needs.

It is very important to balance earning more and spending less to build financial resources for your life priorities and goals.

However, perfect balance is actually an idealistic pursuit. Once the basic needs are met, you can focus according to situations, priorities, and aspirations.

There will be limit to reducing expense just like your earning capabilities. How long you can work for that extra earning?

Money is not an existential reward – something you get just for existing. You must work to earn. But saving is better than working for it!

So, how do you balance efforts for earning more and spending less in your life? Share us in the comment.