Achieving A Better Money Mindset On 'How To Money'

On this episode of How To Money, Matt and Joel debate whether or not it’s more important to earn more money or spend less when it comes to saving. For the guys, it’s all about balance. Earning more has a lot of advantages: There’s basically no limit, except your own imagination and effort, to how much income you can bring in. It also offers the opportunity for personal growth, since earning more money usually correlates to having more skills, a more robust network, or an advanced degree. Plus, it leads to an “abundance mentality,” a feeling where there is enough out there for everybody and all it takes is some effort to get some for yourself. But without spending less money, you can earn more and more every year and still always feel like you’re catching up.

Similarly, prioritizing spending less can turn us into penny-pinchers who are too focused on the future to have any fun in the present. It’s important to check for recurring expenses that can be cut without too much pain, or make a strategic decision to save a big chunk of money, like downsizing from two cars to one. But if we make every single purchase an agonizing judgment call, we miss out on a lot of the enjoyment that money is supposed to bring us. It can give us a “scarcity mindset,” which makes us feel like there’s never enough and we could lose what we do have at any time. Again, this can be helpful to an extent, leading us to be more creative and persistent about finding income streams or business opportunities – but if we’re willing to drive miles out of our way to save a few cents on gas, we’re devaluing our time over our pennies. And while pennies can be earned, there’s no getting our time back. 

Personality comes into play here, too. Matt and Joel always point out that personal finance is personal for a reason: What works for one person might not work for another, because we have different goals, lifestyles, and responsibilities. If a big expense, like a medical bill, were to fall on you today, what’s the first thing you think of to pay it? Are you thinking of ways to make more money, or are you thinking of expenses to cut? If you’re more likely to cut costs, take some time to think about ways to earn more instead – and vice versa – to “build those money muscles.” The goal is a healthy relationship with money, where we can build a comfortable future while still enjoying our present, and like so many things in life, that requires balance. Hear all this great information and more on this episode of How To Money.

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