What's More Important: Earning More or Spending Less? #284

obviously we're going to debate it. But when it comes to individuals, we are, oh yeah, we're definitely gonna debate it. But we almost as riveting as one of those presidential debates we had a couple of months back, which we're not at all. It'll be just as chaotic. But that's that's the thing. It's not a debate because I think a lot of times we tend to think of one of those over the other, Right, Like we kind of have a natural sort of default that we that we

out to. And that's the whole point of this episode is that we're going to challenge folks to kind of get out of that framework of thinking. Right, We're we're gonna try to expand people's mental boundaries a little bit, and hopefully that will mean that individuals out there will will be able to save more because we're gonna encourage them to think about something like this in a way that they haven't before. So I'm really looking forward to this one. Yeah, I feel like this is a question.

It's almost like an existential question in the personal finance community. And where you come down in this debate tells a lot about you. And because it does kind of coming down to personality to certain extent, right, sure, we're gonna talk about that too in this episode. It's just kind of a fascinating topic. And so keep listening because because Matt and I have just a lot of thoughts on this topic and and which one you should prioritize, um

and what that looks like then in your life. But Matt, before we get to that, I want to let you know that my oldest daughter, Selma, she's seven, she's been saving up money for for quite a while based on the work that she does around the house. She typically earns three dollars a week. And the thing is, the thing that she wanted to buy was a smart watch. And what Yeah, and so Emily and I neither of us have smart watches. So she is now the first member of our family to have a smart watch. It

fortunately is not Internet connected. Okay, that's what I was gonna ask me. Next she able to like text with you or so, you know, like kind of do a little phone call from a risk kind of thing, like a Dick Tracy thing. No, no, it's not not quite that advance, but you know, she she can play some games. And actually the cool thing is it does kind of push kids in the direction of getting outside and running around, So that's kind of cool, like some physical activities, counts

the steps, Yeah, yeah, stuff like that. But we learned a lot in this process of getting her this smart watch, and one we learned that she can set a golden stick to it, which was really cool. We got encouraging her in that direction, like, hey, it's going to take you a while to say about for this thing, but you can do it, and she finally got there. But when we were at the store buying the watch, we actually saw it was on sale and we thought she

had the money. But when we when we got home, it turned out she was a few dollars short, so she actually had like thirty six dollars and so yeah, We're like, uh, we were just trying to decide what do we give her the watch? Even though she doesn't have the money. We bought it with arm money right at the store. And so we actually, uh quickly taught her another personal finance lesson about debt and contracts. Did

you put her? You put her on a payment plan remaining four dollars exactly exactly, So I coerced her essentially into helping me wash standilize some of this is actually a terrible deal. I didn't set her up on a payday lone, but but we did say we we literally had her sign a contract saying that, you know, the next time she earned money for mature that that money was going directly to mom and dad and going to bank. It is not money that you're gonna be able to

see exactly daddy's money. And then she also had to help me, um, you know, wash and vacuum out of the cars, and so that that was just kind of a way that we could say, you know, like mommy and Daddy messed up on that one. We thought you had enough and you didn't, um, and that's that's our fault. But at the same time, there's something that has to be done if you don't have all the money that's required to buy this watch. And so yeah, it was

kind of interesting to walk through that with her. Also shows that I'm not always buttoned up on money or my kids money. Like I'm doing my best out there, but sometimes we screw up. Um, But there are always ways to help teach your kids about money and even when you mess up, even when you don't do it nice. Man,

That's that's super cool. I think it's really cool that she was able to set a goal like that and continue to work towards that because I think with you know, with our kids at this age, at least for for us, that's the biggest sort of hurdle is to you know, for them to maintain that focus, for them to continue working towards a specific goal, not getting sidetracked by some of the other things that kind of pop up that they say they now one instead it's like, well, if

you do this, that's gonna really you know, set you back a few weeks, maybe a couple of months, where you won't be able to get that that bigger item. I know, like every kind of keeps talking about like smartphones, like I phone, She's like, Dad, your phone's it's it's pretty magic, you know, just like how things pop up there.

I feel like she's kind of starting to prime the pump a little bit, maybe trying to get kid and I used to the idea of her having a phone, but she has no idea how expensive those things are. But but if she's really interested in it, like, that's something we can talk through, you know, it's it's whatever it is that you can get your kid to latch onto the idea of saving money to achieve the goal. Um, I think almost anything is fair game to teach that lesson,

but I am not willing to go there yet. But but yeah, you mean get her a smartphone and already for that right so oh yeah, yeah, you know that's years down the road. I think that those are that though, and that's fine. I mean, different folks have different priorities, and it just depends on what you're trying to teach your kids. But yeah, that's not something that we're willing to do just yet. Well, I think that's yeah, that

that comes down to more than money. It doesn't matter if someone saves up enough money to buy that, it's just we're not allowing that in our house for kids her age right now, because fame too much of a distraction at that point. But but yeah, I agree. Anyway, you can incentivize your kid and kind of help them see how saving their money, uh, instead of buying the

shiny object that's right in front of their face. How how saving their money can lead to buying something that's more meaningful and and something they're actually going to get more enjoyment out of. Because yeah, I mean, especially as a kid, it's really easy to piddle your money away here or there. Um. And as parents, we have a responsibility, I think, to help our kids figure out what it looks like to set longer goals into achieve those things by consistently saving um. And it's kind of fun to

see the fruits of those efforts. To Speaking of fruit, Matt, let's get to the beer and that we're having another show today or transition for everybody out there. This one's called Bad Bunny Pie. It's by tripping animals, and there are a bunch of different fruits in this one. There's BlackBerry, cherry, peach um, and then there's a couple of things graham, cracker, vanilla, and milk sugar. So this one should be interesting. Man, looking forward to having this one on the show with

you today. But for now, let's get onto the subject at hand. We're asking a question today what's more important earning more or spending less? And there are two parts of the equation when you're looking to to save more money, Matt, right, But which one of these deserves more of our focus?

Depending on your personality you mentioned personality earlier on, you might find it easier to hone in on making more money without too much concern for being frugal, and other listeners will They're all about give me more tips to increase my ability to live frugally, but they rarely give much thought to how they can increase their earnings in the coming years. Not surprisingly, Matt, you and I are are going to discuss the importance of both of these

areas in our financial lives today on the show. We'll talk about how to think about earning more and living frugally and finding a solid balance of incorporating both of these into our lives. Yeah, I mean, you know, it's perfectly understandable too that we might tend to to turn our focus towards like mostly one or the other. Even folks who strive to find balance in all aspects of their lives, they're gonna lean a little more towards one,

you know, possibly to the detriment of the other. Um And and that's where I think the real problem lies, and that's we all have natural talents and abilities that allow us to be better at certain things naturally, you know, But we need to make sure that we are looking at both sides of the equation. So that means, you know, the highway journer out there who was earning six figures straight out of college, they should be looking at ways that they could be spending less and leading maybe a

less consumption focused lifestyle. But then for the frugal employee who's been earning the same wage for the you know, the past five years, they should look to ways that they can begin to contribute more at work maybe and find ways to grow their income. There is likely room for a lot of growth by looking at the entire equation, you know, looking at you know, what it is you're

bringing in, what's going out. Like. Both of those things have an impact on the amount of money that you are able to save, and we want to make sure that we're looking at both of them. All right, so let's kind of cover both distinctively, and let's first talk about earning more and some of the advantages that come into play in your life when you focus a little bit more on that aspect instead of the saving more aspect. Let's say you're someone who works in sales, or you're

an entrepreneur who owns your own business. The great thing about earning more, well, it can feel like the sky is the limit and there aren't really any obstacles to keep you from earning a ridiculous salary or just putting in a little bit more time and effort in order to score a whole lot more income really easily. There aren't necessarily a ton of folks in this position, but it can be really attractive to people that are to be able to squeeze more money out of your day

job because it just feels so easy. Yeah, it can be really exciting if there's no ceiling, right, there's no limit on what you can earn. And let's talk about your ability to to meet your means. You know, although making more doesn't directly correlate to greater financial freedom, it can, you know, uh, but look no further than a lot of winners right to see that a drastic rise and income won't fix all of your money woes. Yeah, there

have been shows dedicated to that, right. Yeah, but if you can earn more, like, you can definitely meet your means uh much more easily. And not only are you able to cover the basics, right, but you also now have the ability to enjoy other experiences and other things in life that are limited to those who can afford to to pay for those things, you know. I'm thinking of, Like, say, if you have big dreams to travel the world, Well, it costs a certain amount of money to travel the world,

you know. Uh. And even aside from experiences and big expenses like that, what if you have big goals or big dreams to be able to give away a large amount of your money, Well, you have to earn that in much money in order to be able to give it away. And so the ability to earn more money uh is going to be able to allow you to do some of these bigger things like this. Yeah, Yeah,

for sure. I think another really important advantage an important thing to mention when we're talking about earning more and how that is good for our personal finances, is it offers us opportunity for personal growth. Often it's a lot of personal development that goes into the ability to earn more. And when you're growing as a person and your skills are increasing, it can be a boon to your long term ability to continue to earn more if that's what you want to do. You can't really just decide to

start earning more. Yeah, you actually have to put in the work. It's not one of those things you can kind of conjure up while you're sitting on your butt. And but then as you put in the work to learn and develop these new skills and talents in your life, you'll you'll likely discover that you have some newfound freedom over the type of work that you get to do. Yeah.

I do think it's interesting how like these different skills, whether it's skills or the networks we create, the communities, or even just the experiences that we gain, oftentimes lend themselves to making more money. It's sort of like this perpetual thing, you know. Uh, and so I yeah, I totally agree with that, man. Yeah, it can be enriching

on a personal level and then also on a monetary level. Yeah. Absolutely. Um, And we can't really talk about earning more without touching on the abundance mindset, or the abundance mentality as Stephen Covey calls it in his book UH Seven Habits of Highly Effective People. Stephen, he talks about how the abundance mindset flows out of a deep inner sense of personal worth and security. It's the paradigm that there is plenty

out there and enough to spare for everybody. It results in the sharing of prestige, recognition of profits, of decision making, and it opens possibilities, options, alternatives, and creativity. On one hand, it's a great way to think, in a great way to kind of UH approach the world. You know, it's the optimistic approach to your money that you can always

learn more. But at the same time, we know that if you subscribe to that way of thinking without considering some potential problems, UH, that could also leave you in a in a tough spot. That's true, and that's what we want to talk about more is there are some drawbacks if we focus too hard on just the the earning more so out of the equation. And yeah, that's not a joke. There actually are drawbacks to focusing too much on earning more. I think people are like, what,

what are you talking about? What's the drawback and earning more money? Well, we'll get to our thoughts on that right after this break. Al Right, we are back and we're kind of having a debate here about which is more important, right earning more or spending less money? And we're talking about earning more money right now. We talked about the advantages, you know, the pros, but let's talk

about some of the drawbacks. You know, there are certainly a few instances where earning more is gonna fall short. And one of those is when you have someone who is overly optimistic. You know, we kind of touched on this just before the break. I'm talking about me. I am kind of overly optimistic. Do you have that abundance mindsetul?

I call it a preponderance of abundance. The thing is that, like, here's the problem is when someone feels like that they can always earn more regardless of how they spend their money. The ability to earn more isn't always going to be guaranteed. It's not always going to be an option for for everybody in particular too. I think this mindset it gets more fraught as you are climbing the corporate ladder, and you know where each wrung equals a boost and pay uh.

And as we've seen during the pandemic, there are very few jobs that are guaranteed to always be there. And so to think that, well, I can always earn more, I can always kind of out earn my dumb spending. That's that's not a great way to think about things. Yeah, you're not planning for contingencies and for potential worst case scenarios when you're always banking on the fact that you can earn more, and at some point that catches up to you, whether it's a furlough situation or you know,

an early retirement situation, or something happens at home. You just have to be around more hours. You can't work as many hours as you used to. They're just all sorts of things that can happen. So the earning more side of the equation is great until it's not great anymore for so many people. Yeah, another disadvantage of you know, focusing too much on the earning more side of things.

It can lead to over working, really can. It can lead to a lifestyle where people find themselves working way too much before they know what their entire identity is wrapped up in their work and their performance and relationships can fall by the wayside. Even and Matt, you mentioned the corporate ladder and the climbing the wrongs. You can get into mentality where that's the next greatest thing is

getting that next promotion, is getting that next race. But there's just really no end in sight, Like the next one isn't as fulfilling as you hoped it would be, And so then you look to the next promotion as the thing that will finally get you where you want to go. Earning more is great, but doing so at the expense of striking a solid balance, it's just not

good for your mental state or for your financial life. Yeah, and a quick practical note as well, when you earn more money and guess what, you pay more income tax that uh, you know, and this isn't a reason to avoid earning more money altogether. You can maybe try to put a positive spin on it. Maybe you can play some mental tricks, try to view, you know, paying taxes as a sign of success obviously, but maybe you can think of it too as your ability to build up

the country that you know makes your business possible. That makes your job or your salary company you work for, that makes that possible. But the thing is, like these are are all a few things to keep in mind when we're we're weighing between earning more and spending less money. But now, Joel, we've talked about earning more money, let's talk about spending less. This is the second part of

the equation. Yes, it is all right, Matt, And you just mentioned taxes, and that's an important consideration because when you are earning more, let's say you do get a a twenty dollar raise, right, that'd be that'd be a lot sounds dope, that'd be awesome, But like you said, you do have to pay taxes on that, and so really when it comes into your life, that could mean something more like uh, fourteen thousand dollar race or maybe even less, depending on you know what your tax rate

is in your state and federal tax rate. But when you spend less, one of the greatest things is you get a dollar for dollar return. Taxes don't enter into the equation. And you Ben Franklin, really smart founding father said beware of little expenses. A small league will sink a great ship. Like how true is that? Right? I mean, spending less in small situations can sometimes feel like a

like a burden. Why should I be sweating the small stuff, you might ask yourself when you're looking specifically at the spending side. But too many small expenses, they really do add up and they create a major problem for us. So while earning more is I think a great pursuit, at least to a certain extent, spending less is simultaneously crucial. So let's touch on some of the other advantages that

come into our lives when we focus specifically on that. Right. Well, First, by spending less, not only are you able to invest that money now, but if you're able to maintain that discipline of keeping your consumption in check, that is an expense that you don't have to worry about later on down the road in retirement. Right, That's how you kind

of get this sort of double benefits. By not spending money now, you're able to then save that money, but also down the road, that's not an expense that hopefully you'll have to revisit. Uh. And so your prioritization of spending less just truly does impact your ability to save more and you know, to be more prepared for your

future just by needing and consuming less. But take that example, thought kind of flip it right to say you're going to consume more now, Well, that's money that you can't save, that's money that you're not going to invest, So that money isn't growing for you for the long term. And guess what if you get used to spending that money now and that's something you're also going to maintain in

the long term. Not only do you have less money for yourself in the future, but you also have more expenses, and so that would be maybe how instead of it being this double benefit, it's a double double whammy. Definitely a double whammy if you, yeah, decide to up your expenditures spend less right now, because yeah, it's gonna wreck the whole equation. Your days of watching game shows on TV while you pretended to be homesick from school are

coming back to you. Oh man. So the girls are actually off of school one day recently and they went up to visit my grandma and they ended up watching Some Prices right with her. I mean, like, that's the best game show of all time. It's a classic, and my girls know it now. Like even when Drew carry at the hell man he rocks. All right, let's talk more about spending less and why it's so important. It's such an important part of the equation, and spending less

provide immediate gratification. You know, when we're talking about earning more, usually you gotta put in some serious time in order to reap the rewards um and to be able to increase your pay. You might have to get an advanced degree or learn new skills in order to get that raise, or you might have to put in more hours on the job site to increase your earnings. But when it comes to saving more, you can reap the benefits almost instantaneously.

By avoiding some of the normal purchase patterns who exhibited before, you'll start saving money now. The same is true for other ways that we can spend less. They don't typically require too much time or effort in order to reap those rewards. And especially when we're talking about recurring bills, Matt, that we can cut out of our lives or at least minimize right by by finding a cheaper service that brief effort provides an immediate reward, and a reward that

can last for a whole lot of time. Yeah, the ability man for you to make an immediate change to your money, the amount of money that you're able to save. You can't really replicate that when it comes to earning more, but when it comes to you know, cutting your expenses, like that's something literally today, you can immediately see more money in your account by not spending that money, right,

like cutting your own hair exactly. You know people are into it, right, I've actually thought about not even cutting my own hair. I'm thinking about kind of continuing the whole pandemic long hair thing. When you think about that, keep going, man, all right, we'll revisit that in a few months and see how terrible things work. I want you to go like fabio length or something. Uh if only.

And also, man, there's maybe the obvious advantage of spending less money, which is participating less in consumption and consumerism. By doing that, we are able to bring less junk into our lives, which you know then takes up less space in our homes um that we didn't have to organize. And then that has a ripple effect too, because that's that's less stuff that we have to maintain and then keep up with. If we get serious about spending less, it really does have this domino effect, which I think

can create more mental sanity, greater happiness. Eventually, I think this should lead us to to look to the things and honestly, namely the people around us that can provide us, you know, real meaning, real satisfaction, instead of looking to all the stuff that we order online, you know, even maybe some of the larger purchases we make, like whether

it be cars or homes. It's weird to think that that's saving more money, uh, specifically by spending less can have an impact at that deep of a level that it really can. Yeah, it's not literally just that it helps your bottom line, but we think it's a better way to live by by cutting your spending and living more frugally. If we approach spending less from from a healthy place and we're able to cut back, you and I both agree that that the things that are meaningful

begin to shine even more brightly. Um that that our attention gets focused in the right direction when we're focused less on bringing more things in our lives and buying more stuff. Yeah, totally. And the beginning to shine because we have more mental light to shine on those things, not because they are uh inherently less valuable before. But if we devote less attention and energy and of our our time towards those things, uh, they do wane, right.

And when we have more time, more mental space to invest in those people and those things, uh, you know, the better our lives are gonna be. Yeah. And so these are some of the I guess the advantages to spending less. But we're gonna awesome. Make sure that we get to the drawbacks of spending less and what we think, you know, the ultimate solution is, and we'll get to that right after the break. All right, now we're back to the break. Let's keep talking about spending less versus

earning more? Do it? Interesting topic and we've got more ground to cover here. And interestingly enough, it seems like the idea of spending less, like can that ever cross a threshold? Can that ever become something that's bad if we put too much focus on that in our lives? Um And a lot of people in the personal finance community would say no, Like their frugality is you can always cut back a little bit more, you can always tighten the belt. Yeah, a lot of people say frugality

is always good no matter what we would say. I disagree yeah, would we would say that there are limits to fruit the ability for frugality to pay dividends, and so yeah, let's talk about the drawbacks spending less. In the example that we give every week, we have a craft beer on the show, and the reason we have that is because we're prioritizing craft beer. We're prioritizing some things in life now, we're not only saving for the future.

And folks could say, uh, well, guys, you could be a little more frugal by eliminating that from your budget. But you know what, for you and me, it's not worth it. Like that's something that we're going to include, uh, because it's important to us. And what would we gain by cutting it out? Just uh, we'd be a few a few more bucks a few more bucks there, and a lot more of a bummer and not get to drink the stuff that we are are super interested in

trying exactly. Yeah, And so there are certainly things, you know, in specific ways to focus on where you can cut back things where it's not moving the needle. But if you are cutting back in areas that kind of really hurt, then yeah, you and I, we we feel that could have a seriously like negative impact, right right, So, okay, if we focus too much on spending less, it can

be easy to develop a scarcity mindset, right. This is by one of the downsides of focusing too hard on that one side of the equation and living with that belief can cause us to relate to money poorly overall, just have a bad relationship with it. Oftentimes, people that focus too hard in this direction determined that they have

to hoard money when it comes along. They become penny pinchers, maybe a stereotype of someone who handles money well, but basically someone that doesn't have any joy that accompanies the what should come along with having a financial margin in their lives. Yeah, and this is how having uh scarcy mindset, how it can be viewed negatively, right Yeah. Yeah, And there certainly are a lot of negative associations with the

scarcity mindset. But actually, you know, on episode one eighteen, Matt, we talked with Christy Chen and I thought she had some really interesting things to share about what's been positive for her in having a scarcity mindset. And she um grew up actually incredibly poor in China, and then her family moved to Canada and she was still really bore, But that scarcity mindset. She credits it in her ability to develop persepearance and adaptability, and I think it's really cool.

Like who am I to disagree with Christy Shann who retired in her early thirties. So I think that a scarcity mindset, while it can be really harmful and it can lead to that penny pinching in ay to to find any joy when it comes to your life in regards to personal finances. Yeah, that Gallum lifestyle exactly. There's also an element to which, you know, you can have a healthy scarcity mindset, and so yeah, I think that's

something that's okay to pursue. It's really all about balance when it comes to how we view cutting back on our spending. Yeah. And in addition to that too, I mean that scarcity mindset can like really anchor you to reality, right, Like, I mean one of the things that it was able to cause her to do was just to be Christie, right.

Was it allowed her to be really resourceful and it allowed her to kind of, you know, think outside of the box in ways that she could save money well, and actually for her so much of her childhood it was it was out of necessity, that she developed that scarcity mindset, that there was an actual scarcity for her, for her family. Um, and so she had to get creative. And in some of our lives that might be true, there might actually be a scarcity, there might not be enough.

But but for most people it's a scarcity mindset. It's not actually having a scarcity of resources, right. Yeah, So by choosing to, you know, focus on how we could spend less a lot of times, Like one of the disabey images is that could lead to a lack of focus on the big picture. You know, like a focus on frugality can lead, like you said, to sort of like a penny pinching mindset. Uh, that is focused on the small things at the expense of the big things

in life. You know. This is when you know, we might cut off our nose to despite our face, Like and so we do this by say, driving two extra miles or maybe twenty extra miles in order to save two cents a gallon on gas. Uh. This is when we devalue our time by over prioritizing saving a few bucks here and there. We forget that money is a tool to help us to achieve the important goals that we have for ourselves into doing so. Uh, you know,

we can take the joy out of the journey. And so you know, while we do look too, you know, two different ways that we can save more money. It is important to remember why it is that you're doing so, don't lose sight of that big picture. Yeah. Another important thing to to relax when it comes to the spending less side of the equation is that you can only cut so much, right, there comes a point that saving more money isn't possible if you're already living a rice

and being kind of life. How how can you cut back even more? Basically, if we just rice, just rice, or just beans, no, no way. I love the rice, I'm gonna cut the beans. Only get the rice. But that's like part of a balanced diet, right, the rice and the beans. If you just have one, it's not very healthy. Something about the combination of the two. I think there's a wallop of nutrients and both rice and beans,

right exactly. But if you're already living a lifestyle that's so frugal that it could be classified as a rice and beans kind of lifestyle, there's just not much more you can cut in order to increase your savings, and so looking to earning more is is really important, and you're being shortsighted if you're not looking in that direction. I think to mount just a quick warning, I think this can be used as an excuse for people to not save more. Oh, I just can't cut back anymore.

And and that is sometimes true for some people, but for a lot of us, there are ways we can cut which haven't been thoughtful or I would say enough, right, strategic enough. Yeah, I would say for most people they can cut back, yes, completely, And if folks say that they can't, it is more of an actual excuse, not because that's the reality that they're they're facing. Right. Yeah, you and I we talked recently about like ditching a car in your life, and and that's the kind of

thing where it's strategic. It's not easy to go from two cars to one car, right, That's not a simple thing to do, but it is possible for a lot of people, and it's one of those things where you can typically cut that out. But there is also the reality, right that exists when you're focusing on this side of the equation that cutting past a certain point provides diminishing returns, and it can make money feel like a drudgery. And

and that's not what we're about either. We don't want you to live a lifestyle where you're looking at every single cent that comes in or goes out. We want you to have more freedom and a healthier relationship with money that doesn't involve cutting to the bare bones. And by the way, I'm totally fine with people looking at every single cent that comes in and out. It's just the matter of like having to make a judgment calls every single sinse Yeah exactly, I'm all about tracking it

to the Pennyboddy. I know you are another thing. Man. In an attempt to save more, you can also end up cheaping out on other things. You know, you might turn down, uh, you know, incredible opportunities to be with people or maybe to go see a for and getting

married because of attempts to save more money. I'm thinking about an instance recently when Kate, now we're thinking about going on a trip, and it looked like I was gonna be able to save money by contacting the lady directly, and guess what we lost out on the place because I was looking to save like another ten percent. Bummer, Uh, that's that's an example that came back to bite me

and something that Kate reminded me of recently. And this isn't to say that like sometimes we don't have to make hard decisions, but you know, I think we can have some big regrets over money we were unwilling to spend if it means missing out on, you know, some

possibly really important milestones. It makes me think of the there's this guy that we kind of ran across on Reddit that we heard about who eventually he lost his girlfriend for not spending money to go on a trip with her, I think, to maybe see her parents something like that. That's but I feel like that's one of the ultimate frugal versus cheaps. And that's why we we always talk about that is because there is more to consider than just the bottom line right then, than just

the dollar amount. There are things that you have to weigh, and that's honestly, what can be so tricky when it comes to personal finances. Yeah, like the feelings of the person closest to you and whether or not they're still gonna be cool with you if you don't go on the trip with them, And those are important things to consider and and yes, but those relational dynamics are so crucial to you know, the happiness that we experience in

our lives. And if we are too cheap um, because we're we're so focused on spending less, we're gonna miss out and we're gonna let the people closest to us down from kind of time um. And so yeah, that is a hard balance to strike, but it's an important one to strike. And I think Matt, you know, one more downside to focusing too much on the spending less side of the equation is the extreme focus and discipline

that it takes. Willpower is finite, and constantly tracking every penny can become exhausting for people, not for some, not for you. You're kind of a prol at it. Well again, I feel like it's less the tracking, and it's it's like the constant like okay, am I going to spend

money on this? You know? And so like when you're constantly when you have this like mental fatigue because you're constantly making judgment calls like that's what's hard, or constantly saying no to like these things that could actually bring you joy, but instead you're saying no at every turn, Like I think I think that's when it specifically can

can really become exhausting. Yeah, And that's why, you know, we're fans of automating as much of your finances as you can so that there's less of a mental impact that you have to make when it comes to financial decisions. And the great thing is too, that making a couple of bigger savings decisions can cut your costs for months or years to come. Those are the best kind of savings, the ones that recur, repeat, and that are big in number.

But one of the drawbacks to only focusing on spending less is that it can be difficult to do for too long. That again shows the need for balance when it comes to holding these two intentions when we're talking about earning more and spending less, like they're both just wonderful things to do, um, but it's just really really hard to say that one is more important than the other. Yeah. So that's why not surprisingly doing both is the answer here. This is the answer to the saving more or the

spending less debate. The the easiest way to visualize this is by widening the gap and the gap between what we bring in and what goes out your month. That gap is your savings rate. And by focusing on the lever of earning more and spending less, we'll be able to develop a larger gap and we'll be able to

see the greatest return with the least amount of fatigue. Yeah, and then we're we're holding the abundance and scarcity mindsets, and like the proper tension, we're not buying in wholeheartedly to one or the other and saying no, I can always earn more, There's always there's abundance out there, um, and I'll always have enough or there's not enough. There's never enough, and I have to hoard everything that comes into my life. Neither of those are super healthy ways

to live when it comes to money. So turning both dials, the dial of earning more and of spending less in moderation is the best fit for most people. Holding both in the right esteem is going to breed the best results. But it's not always a perfect balance, right, Matt, and you talked about this at the beginning of the episode,

that our personalities do come into play here. So, Yeah, what's your take when we're talking about the sales person or the entrepreneurial type who does say, hey, I don't know, man, the earning more thing is just way way easier for me or the stream frugalide who says, give me more tips, that's the thing I'm best at. Um, how would you suggest people think about the balance given different personality types that exist in different tendencies towards towards each side of

this coin. Yeah, well, we all have different skills, right, we all have different talents, and like that's fine, Like that that's actually great because that's what makes us individual people. Some people have an incredible ability to use their talents to generate a fantastic income. That's awesome. So maybe put like eighty percent of your efforts there towards earning. But don't be one of those people who doesn't touch the

spending less style at all. You know. That's what leads to the stories we read about, uh where high income earners, where they're living paycheck to paycheck, where they they feel that they can always out earned what it is they're spending. We want to make sure that UHH, I don't know, Like, you want to focus on the things that you're truly are good at, but at the same time, don't only focus on that. Like a lot of things in life. We want to make sure that we approach that with

balance and mind. Yeah, I like that if you know your own propensity, that you're way more focused in this one direction. We'll put eight percent of your efforts there.

That's a good rule thumb, and then the other towards the things you're not naturally good at, because you're gonna need to develop some money muscles in that direction, right, And I think the same thing if you're a frugal mastermind, put your efforts there because you're obviously really good at it, but then trying to focus twenty of your efforts towards knowing your worth maybe uh to to increase your income

over time. And I think most people met are gonna probably fall somewhere more along the fifty, fifty or sixty side of the spectrum, which is great. But it is important to know yourself, know your strengths, and play to those strengths while also being cognizant that both sides of the equation are important, because if we get too far to one side to imbalanced, then it really could lead to financial hardship for us at some future point in time.

And we want people to be strong in their finances strong in their earnings and strong in how much they're able to spend, how much they're able to keep of

what they bring in. Yeah, and so maybe a little awareness exercise for folks to do is like, like you might be thinking through this and you're not totally sure like what side of the fence you would fall on, And I think a good thing to do is maybe think through, Like imagine if you got like a big medical bill or like like a massive ongoing expense that you're going to have to quickly come up with a

way to pay. Think through how it is that you would naturally think to cover that expense still your credit card? I would still you m would you think of ways to maybe cut expenses from your life or are you is your natural inclination to think of ways to earn more money. I think it's important to maybe identify whatever

your default is and certainly to pull that lever. But then at the same time, don't forget the rest of the equation, you know, like, if your natural inclination is to earn more money, well, don't forget there are some great ways that you could maybe cut some expenses from your life. Or if your natural inclination is to all right, we're slashing the budget. We're never gonna go out to

eat again. You can only cut so much from your life, and so instead maybe like kind of broaden your scope a little bit, think about ways that you could earn more money. This is one of those areas where I feel like it's just really important to know yourself. Yeah, I would say, um, if I was to run through that mental exercise, it would be that we're gonna cut and would be that we're gonna stop doing this and

stop doing that for a while. And so, yeah, I've learned that about myself over the years that I am naturally more of a frugal person and my brain goes less frequently to how can I increase my earnings? And so I've had to try to kind of push my brain in that direction. I think it's been really good. It's been healthy for me because I can tend to be one of those more like people where I'm more in on the frugal side. Um, and I'd rather be

somewhere like the spectrum. And I think it's a great exercise that can kind of help people see where they fall so that they can at least be aware of that bias and then they can kind of work towards remedying it. That's right, man, Awareness, that's the first step, It's true. All right. Let's get back to the beer that we had on this episode, Matt. This one is called Bad Bunny Pie. Uh. It's uh interesting fruited sour by the folks at Tripping Animals Brewing. So yeah, that's

actually the type of beer. It's written on the can interesting fruited sour. So it's literally a sour ale with BlackBerry, cherry, peach, graham, cracker, vanilla, and milk sugar. So this, yeah, one of those kitchen sinks hours with a lot of stuff. And what were your thoughts on this one? Well, yeah, just to clarify, it doesn't actually say interesting on the can. That's that's

the word that you like to throw in there. But but I think the reason you did it, like is by the way you just described it like kitchen sink kind of beer. It's got a lot of different flavors going on. But that doesn't mean it wasn't good, right. Uh. You know, I feel like as I was drinking, the first thing I noticed was the fruit, like right off

the bat, like cherry, but then peach like peach. It made me think of those like the old school peach ring candies that you get at like the you know, like the candy market kind of thing, you know I'm talking about. It's sitting there in the clear plastic. It's like hanging from the paper at the top. Is it chewy candy. It's covered in sugar. I could not get

past the peach flavors on this one. But at the same time that you're tasting that fruit, there is also kind of vanilla lactose kind of like milk sugar flavors going on, where it just kind of really made it creamy, like it almost kind of reminded me of the milkshake a little bit. But yeah, I thought the Graham cracker to get added a nice little touch. It just kind

of like a hint of fall time going on. So yeah, I feel like it made it kind of a proper sour for the fall, and especially because it's trying to conjure up these pie flavors, right, and what's better than having like a root pie, uh, you know, during this time of year. I'm all about it. So yeah, it was all about this beer too. I thought it was

really interesting, unique, fun and delicious. The fact that it's got vanilla, and it actually makes me think of like, uh, apple pie or not apple pie, I guess, but like cherry pie, peach pie a la mode. You know, it's sort of like when the ice cream is melted a good bit and it's kind of just like all kind of running together feeling there and at that point you gotta switch to the spoon. That's what his beer reminded me of. Yeah, man, this was dull delicious. All right. Well,

that's gonna do it for this episode. For folks that want show notes for this episode, we'll have those up on our website at how to money dot com. And so I feel like this is one of these episodes that can lend itself to conversation, you know, that this is one of these episodes that is addressing sort of like the philosophy of money or you know, in this case, like how it is that we can save more, Like

it's you're gonna do one of the two things. You're either gonna earn more, you're gonna spend less, or both at the same time exactly. And I feel that this would be a good episode to maybe let a friend know about you know, this is uh an episode. We're kind of talking about theory, like the theory of money

and how it is that we handle our money. So let a friend know who might be interested in something like this, and hopefully that sparked some conversation between the two of you and ultimately leads you both to doing smarter things with your money, no doubt. All right, man, Well until next time, then, best friends out, Best friends Out.