Need to boost your cash flow? Parnasa worries casting a cloud over your summer vacation?
Allow me to share a surefire way to put more money in your pocket this very month – ninety-eight-and-three-quarters percent guaranteed
- It’s not an info product teaching you how to make piles of money online
- It’s not a segula that involves donations and the tombs of tzaddikim
- It’s not a pirated copy of Bank Robbery for Dummies
What is it?
This tip comes courtesy of David Litke, a financial coach from Gush Etzion, Israel. I subscribe to David’s budgeting tips via email and one particular email he sent really hit home with me.
He called it:
What’s More Effective? To Make More or Spend Less?
Immediately, I wanted to rename it:
How to Have More Money in the Bank – Guaranteed!
(The marketer in me just won’t quit thinking of what our audience wants to hear, rather than what we want to tell them!)
Here’s what David had to say in his email:
Should You Aim to Make More Money or to Spend Less Money?
“This question often comes up in our budgeting lifetime.
What will bring me more value in the long run?
Should I look for more work (or a better job), or should I concentrate on spending less?
I usually tell people that learning to spend less, i.e., decreasing expenses, is a better method in the long run for achieving financial responsibility and stability. We can cite four reasons for this.
- Human nature is such that if we make more money, we will spend more money. No matter how hard we try, the extra money earned from a better job will likely mean we’ll just spend more, especially in the absence of any effort to reduce expenses.
- More money earned is more money taxed. You’ll never see all of the money you’ve earned. But money saved is 100% saved. You will benefit from every agora not spent, and no one can take that away from you.
- The benefit of spending less is its own immediate reward. The saved money sitting in your pocket or account is here, now, in the present. You need not wait even a second to get your hands on that money. But new money earned on the job will take its time getting to you, until payday at the earliest.
- Deciding to spend less will help develop good habits – responsibility, frugality and fiscal planning, for starters. These habits can then serve us well in many facets of life.
Of course, if it’s possible to spend less and earn more, that’s great. But we refer you again to the first of our four points. For most of us — if we make more, we’ll just spend more.”
Thanks to David Litke for letting me share that wisdom.
Show Me the Parnasa!
David’s point definitely rang true for me. I have been working for 10 years to increase my earnings to keep up my family’s growing expenses. And I agree with David that it’s a losing battle (at least for those of us in the lower-to-middle income brackets).
The more we earn, the more we spend.
I’ve noticed that the most successful business deals of my life have coincided to huge spikes in my spending. Sometimes I found myself in serious debt within weeks of a significant windfall.
So maybe I earned more, but I don’t have that money anymore and I have barely a clue where it went.
Another point – it’s so true that just because you earned money, it doesn’t mean you have it when you need it. Whether you have your own business or are employed, very often it takes weeks or months before your hard-earned money enters your bank account. In my old translation business, my high-level corporate and government clients expected me to wait 60-90 days for payment!
By then, the money is long spent.
And what’s the point of making a parnasa if you still don’t have a parnasa?
The fact remains that making money is (usually) hard work, while holding on to your money is (usually) much easier to do.
In other words, the only sure-fire way to have more money is to pay closer attention to what you spend!
Notice, I didn’t say to “spend less.” Obviously spending less is what makes this work. But that’s not my main focus. My theory is that if I just pay attention to what I’m spending my money on, it has to stop disappearing in a puff of smoke.
I’m expecting that if I just keep track of how I spend my money, my expenses will naturally go down.
Less spending = more parnasa. It’s that simple.
Debt, The Magic Dragon
I realize that for some people responsible household budgeting comes naturally.
But for the rest of us, it’s as intimidating as scaling a mountain range with our bare hands.
It’s as terrifying as venturing into the den of a fire-breathing dragon.
It’s as appealing as cleaning out the cupboard under our kitchen sink.
In other words, we avoid it – at all costs.
And yet I’m getting ready to look the debt dragon right in the eye over the next few months and, G-d willing, to slay him.
If this is something you’d like to hear more about on this blog, please say so in the comments.