One of the most talked about principles in personal finance is living within your means. Basically, don’t spend more than you make. While the principle is solid in concept, many people don’t follow it or have trouble keeping up with it. As a personal finance writer, I have spoken about how to cut your expenses over and over again. After some time, I feel like a broken record. Cut your grocery bill, cut your gas bill, cut your utilities, cut your cell phone bill. Cut this, that, and everything else. When I was first in debt, I thought all I needed to do was cut my expenses. I was living above my means, so why not cut my expenses? It is the first step to becoming debt free.
What about afterwards? What happens when you actually cut your expenses? Will it free up enough money to allow you to pay off all your debt or retire? Probably not. Cutting your expenses will only get you so far. You can only cut so much before you are eating just beans and rice and washing everything you own with one bar of soap. I have no issues with those who want to make their own food or hygiene products, but if you only focus on one side of the equation, you missing the other half. How do you grow your wealth?
Wealth is Earned Through More Income
You see so many sites just talking about cutting expenses. Why is that? I think it’s because cutting expenses is something everyone can do. Are we afraid to show people how to make more money? Do we think they won’t want to hear our harsh reality check? Well, we are not afraid to talk about it here on Sprout Wealth. That is how whole spiel. We talk about strategies to make your money grow. Earning extra income is a cornerstone of our concept. We could show you 1,001 ways to reduce your expenses, but those are finite. You can only drop by so much. We want to show you how to grow your wealth. We want to provide you with ways to make more money.
You can’t cut your way to wealth. Wealth creation is two-fold. You have to live below your means and make more money. There are so many ways to earn more. The issue is most don’t think they can earn more or don’t want to put in the work associated with doing it. Sorry to be harsh, but earning more requires creativity, discipline, willingness to succeed, and a couple more traits. You can’t just hope for more money and it show up. You have to go hustle for it.
The people who earn more typically do so because they put themselves in demand. They seek out the opportunities and don’t wait for them to arrive. They learn how to grow their money organically and passively. They learn techniques to have their money make more money. That is how you become wealthy. Your money needs to work for you, you don’t need to work for it.
Always Focus on Both Sides of the Equation
Wealth = Increased Income + Reduced Expenses
Remember, income comes in a variety of ways. You can earn it through human capital, such as working, but you can also earn it through investing. If you want to learn more about the basics of investing, then check out our top 5 books for beginner investors. You can’t get to wealth without focusing on both reducing your expenses, but also growing your income. It just won’t happen. A plus nothing does not equal C. A+B does. It is a simple equation and it works for many. If you aren’t sure how you can grow your income, then just follow Sprout Wealth. We provide you with different ways and show you how to start investing. We aren’t trying to make it difficult for your to create wealth. Our hope is more can become wealthy and have a lifestyle they want. We will just focus on the income portion and leave the expenses to someone else. I know I would rather take an extra hour earning more than not taking a shower for a couple of days just to lessen my water bill by a few cents.