To challenge a perennial axiom is a daunting task and yet I will do my best to shed some discussion on one here. Since many of us were young we have have been told that the key to financial independence and a secure future is saving. Through frugality, we are led to believe, you will have a blanket of security should some circumstances outside of your control lead you to lose your job or face significant personal adversity in whatever way that manifests. My intent in this article will not be to discourage savings, as I think it is important and has its place. In conjunction with that I am also not seeking to endorse materialistic hedonism. My goal here is to establish that focusing on savings and utilizing your time budgeting and calculating what you can cut out is a paradigm of restriction. Everyone has a finite amount of time in each day and the autonomy to allocate that time as they see fit. So what I propose is that instead of focusing on saving, take a new approach…. focus on more ways to earn.

The majority of individuals spent a great deal of time in the paradigm of restriction. They tell themselves they can’t afford that certain car they want or that vacation they have been pining after. They don’t dine out with colleagues or friends because they are trying to save and they don’t sign up for that personal training session because it just isn’t in budget. The troubling reality, however, is that instead of trying to figure out how to afford that vacation, which would give that person a higher positive utility, they instead sink into defeatism and spend their spare time in front of a T.V. or a computer screen, ambling away their free time. Now let me be clear when I say, “figure out how to afford the vacation”. I am not advocating that people go into debt and spend recklessly so that they can have everything that they want. That would irrefutably lead to a much greater negative utility down the line. What I am saying is that individuals should try harder and spend more of their free time trying to come up with productive ways to make a side-income.
Find ways to develop and leverage skills that you have. Although the vast majority of young adults often struggle to come with ways at generating side-income, this often stems from a lack of genuine attempts at initiative or due to ego limiting your prospects. Are you educated? Think about becoming a tutor. Did you ever play sports? Think about becoming a youth coach. Are you good with computers? Think about contacting friends, relatives or colleagues and leveraging that experience to help them out. Change your mindset from, “I can’t afford that vacation” to “I can afford that vacation if I am able to make an extra $400 a week for the next two months”. With that you have to mentally strong too and if you can’t reach that supplementary goal you have to put off gratification until you can. Individuals who work on generating more outside income to facilitate their ability to do things they enjoy and purchase things they want end up in a win-win situation.
The benefits, however, of developing or leveraging your skills for side-income go even further then helping you get more of the things you want in life. It is also a better investment strategy. Take option 1: Middle class family lives frugally and the head of house dutifully saves as much as possible for a rainy day and then goes about living his life. Now say his company is downsizing and he losses his job. He has his savings but he is burning through them fast to keep his standard of living and ultimately is likely going to need to tighten the belt even more to try and push through tell he can find another similar job. Option 2 is a middle class individual who makes the same amount, has the same job, but on his weekends and free time he took up freelance writing. It started slow but eventually he got into a few publications related to his field and now makes around $1000 a month in supplementary income from his publications. While option 1 might initially have more money (or not depending on spending habits of option 2), option 2 is clearly in a better position. Because he invested in himself and developing his writing, he now has a stream of income that he can either a) try and grow and turn into a full time position or b) provide support while he is searching for a new opportunity. Option 2 has also nurtured a more diverse skill set and so he is better situated to pull in his next job position then option 1.

You don’t get some badge of honor for operating in the paradigm of restriction. Don’t let society or your peers convince you that the only way to a happy and secure life is by being the most conservative. Happiness stems not from conformity, but from setting goals and realizing them. So put money in your 401k or get a Roth IRA, being smart with your money is still important. But instead of agonizing over your next set of cuts for your budget next year, think about how you can make more.
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