Lowering Your Expenses vs Raising Your Income
It is commonly accepted in the financial world that you should live below your means. This basically means that you should spend less money then you make. Even though that is generally accepted there are two different ways to solve this problem.
The first idea is to simply lower your expenses and start saving your money. If you bring in $4,000 a month and spend $4,500 then you are going to run into all sorts of problems. On the other hand, if you bring in $4,000 a month and only live off of $3,000 a month you are saving $1,000 a month.
In order to spend less you have to make a list of all of your expenses and see what you can do without. It may be uncomfortable at first, but it will help you to save money and it will be a great way to live below your means.
There is another option however. In order to live below your means you simply have to spend less then you make. But what if you increase what you make? Instead of lowering your expenses you can simply look for alternative ways of building up some extra income.
This way if you are making $4,000 a month and spend $4,500 a month all you need to do is to find $1,000 worth of extra income in order to start living below your means.
You just have to remember not to raise your expenses as soon as you raise your income, which is a challenge for most people. But if you can then it will be a great way to bring you less stress financially and more security.
Which one of these methods works out the best? Well, I like the idea of raising your income because it does not limit you. But I think a combination of both strategies is probably best. Saving money is a fantastic idea, but looking for alternative income streams to raise your means is also a fantastic idea.
For more on the money saving techniques or for information on creating alternative income streams visit Shaun’s site which talks about generating extra income. This article, Lowering Your Expenses vs Raising Your Income is available for free reprint.
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