One debate about living frugally is whether to concentrate on saving money by frugal living or whether to spend that same time concentrating on earning a higher income. Both sides of the debate have valid points. Here are just a few.
There is only so much you can save. While you can save a significant amount of money by frugal living, at some point you reach an end. You can live off of the grid, raising your own food and clothing but at some point, there is no more to save. In comparison, income is limitless, at least in theory. You can continue making more and more and increase your income.
The issue of taxes. Earning more money will put you into a higher tax bracket, and therefore you will be giving more and more of your income away. Of course there are things such as tax shelters to off set this, but for the average person who is looking at an increase of income, the amount of tax taken out may be substantial. Forty percent of $1,000 taken out leaves you with $600. In comparison, you aren’t taxed on your money twice, so if you save $1,000 by living frugally, that savings is yours in total.
Frugal living can take up a lot of time and energy that distracts from making ends meet. You can sometimes get caught in a cycle of trying to keep your head above water all of the time. There is no time to enjoy life or be independent of debt. Earning a little extra can give you the cushion that you need and relieve that stress and focus on what comes next. In comparison, frugal living can also provide a cushion. Being able to live below your means can give you the opportunity to take some risks that may pay off in a higher income and less debt.
An income can disappear quickly, as so many people have recently learned. Frugal living practices can help soften the blow. If you have been living frugally then you already know how to get by with less and may be more willing to cut back even more in order to support the things you need, such as your home. In comparison, an income is still needed to pay the bills, and the higher the income the quicker you may be able to recover.
For me, I think the two sides have to live hand in hand. There has to be a minimal income that is earned to fit your lifestyle and values. Then frugal living and good stewardship of that income can provide much, Someone who wants to have the freedom to jet set to Europe is different from someone who wants the freedom to be a stay at home parent. Many people with high incomes are still very frugal, and many low income earners are spendthrifts.
What do you think?
You can read more articles by Mary Ann Romans when you click here
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