This is a guest post from Robert Farrington at The College Investor, a personal finance site dedicated to helping young adults get out of student loan debt and start investing. He reached out because he is a friend and knows I have a lot on my plate. If you’d like to write something here in September, I’d greatly appreciate it! Take it away, Robert!
I’m going to come right out and say it – I’m not frugal. In fact, I have spent a lot of time designing my life to support my non-frugal lifestyle. If I told you my income and expenses, I think that you would be shocked. And when I read frugal blogs, it gets me down sometimes.
So, I want to come right out and say it – there is another option to frugality and I’m here to help you with it. And you don’t have to make that much more either.
Two Schools of Thought
There are two schools of thought in personal finance – save more and budget, and earn more and invest. I’m in the second school of though – earn more and invest.
You probably know bloggers and friends in both schools of thought. In the frugality school, there are bloggers like Kathleen and Joe from Retire by 40. In the earn more and invest school, there are bloggers like myself and Ramit from I Will Teach You To Be Rich.
The Trouble With Frugality
The trouble with frugality is that it can seriously impact your lifestyle. You can’t do this – you can’t buy that. Extreme frugality scares me. I was watching a show on TLC last week called Extreme Cheapskates. It was just sad. There is no reason that people should live like that – bare house, cinderblock and plywood furniture, backlog of repairs – just miserable.
While I don’t think that you should go out and buy $50,000 cars and 70” flat screen TVs, I do believe that you should invest in things that make your life easier. For example, we recently had our first child. We bought 2 Diaper Genies, one for downstairs and one for upstairs. The frugal individual wouldn’t even buy one. We also bought two swings for the little one – one for the family room and one for the bedroom – since he sleeps best in the swing, so that was a great investment. But the frugal individual wouldn’t have done it.
The Struggle of Earning More
I don’t just want to bash frugality – earning more can be a struggle too. I’m able to go out and buy the things I want to and don’t have to worry about being frugal because I’ve made the choice to earn more instead of sweating the small stuff.
When I talk about earning more, people scoff at me – I work…I don’t have time to earn more. That’s B.S. It can be a struggle, but there are some simple things that you can do overnight to earn more.
First, you just have to be smart about earning more. Do you want free and easy money? Check out my friend Kyle at The Penny Hoarder. Each week, he shares super simple ways that you can earn extra money. Just doing a quick tally, if you did one activity a week from his site, you could have made yourself an extra $1,000 last month.
Second, you can put more time and effort into the big things in life. Making more money depends on being successful at a few life changing moments – your first job offer and salary negotiation, subsequent salary negotiations, big purchases, etc.
Finally, you can hustle. I’ve worked various side gigs my whole life, and they have helped support my lifestyle. I work 40-50 hours per week, and still manage a side business and other income streams. It is possible, but you just have to put your mind to it.
So, now you’ve seen both extremes – the frugal spender who doesn’t do anything, and the hustler that works every waking minute. The both have huge drawbacks, don’t they? But I want you to consider this – every young millionaire I’ve interviewed has made their money by hustling, not by being frugal.
So, don’t be frugal, but don’t beat yourself up on working either – find balance. I want you to do this quick action plan today and balance both out:
- Write down anything you were going to buy this month. Excluding food and gas, I want you to buy it all online using a site like Ebates. You will instantly save at least 1%, but maybe up to 5% depending on where you shop.
- I want you to go and earn an extra $100 doing anything this month. It can be by entering deals like at The Penny Hoarder. It could be by freelancing. It could be by doing odd jobs on Amazon’s Mechanical Turk while you watch TV at night. Whatever you choose, go make more.
What’s Your Decision?
Do you see why balance is a key factor. Now you’ve tackled it from both sides of the equation. Life doesn’t have to suck. You don’t need to think the income on your budget is a finite number – you can increase it, just as you can decrease your expenses.
The choice is simply yours. Do you want to have a penny pinching existence or do you want to work a little harder to pay for the things you want? There is no right or wrong answer – simply a choice.
Note from Kathleen: I loved this post, even though Robert decided to take a controversial stance here at Frugal Portland. My financial life didn’t change until I started hustling for extra money. You can do it, too!