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Income & Thrift: The Two Strategies to Improving Your Finances

Income & Thrift: The Two Strategies to Improving Your Finances

    Every newspaper has ran a story about how to improve your finances in the past few weeks. The same goes for every news show — and most online media as well. No matter the source, though, every tip or trick falls into one of two categories: increasing your income or decreasing your spending. Basically everything you can do to improve your financial situation boils down to one of these two strategies: refinancing your mortgage is just a way to reduce the amount you’re paying on housing. Selling stuff on eBay that you don’t need is just a way to increase your income.

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    The Trouble With Time

    Most people have the same issue with these issues: time. It takes time to be thrifty and it takes time to have a second job. There are thousands of ways to cut costs — quite a few of them amount to doing something yourself rather than paying for, like cooking at home or mowing your own lawn. And while there are many ways to build up passive income, even those ‘passive’ streams require some effort on your part — advertising, maintenance and such. In general, you have to trade time for money. That means we have to manage our time as part of managing our money.

    On the surface, it seems like finding the time to cut expenses would be easier than finding the time to make more money. After all, if I was to cut out one hour in front of the computer a day, I would have all sorts of time to spend on projects that would save me money. I could make my own cleaning supplies or clip coupons or walk to the store instead of driving. But there is a limit to how much money a person can save. It is theoretically possible to get your expenses down to zero, although I don’t know anyone who has actually done it. But at that point, you would have to spend all of your time saving money — you wouldn’t have any time to earn money.

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    In contrast, it is possible to buy time if you have the money — if you’ve increased your income. You can outsource a significant chunk of your task list: hire a maid or an assistant or someone to handle whatever task you don’t have time to deal with. That approach can get expensive to the point of being painful, but it’s easier to increase your income than save money you don’t have. At least in theory, increasing your income can get you further financially than simple thrift.

    The Balanced Approach

    In practice, however, just chasing income isn’t enough to straighten out your finances. Instead, it’s a question of just how much you can earn and just how much you can save. Taking a look at those numbers can show that, at least in the short-term, it’s far more practical to take a combined approach. To decide just how to balance your own efforts, you’ll need to know how much you earn in an hour. Whether you’re thinking about taking on some overtime at your day job, picking up cash freelancing or even selling plasma, your hourly rate will help you decide just what thrifty tips actually make sense for you.

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    You can generally estimate how much a particular thrifty tip is likely to save you: going to the library to borrow books instead of buying them will save you the cost of a book, for instance. You can also estimate how long that task is likely to take you: going to the library might be a couple of minutes out of your way on the drive home and you’ll need a few minutes to browse, rather than the seconds required to purchase a book on Amazon. That means you can easily calculate what your hourly savings is. Those savings methods that save you more money than you can earn in an hour? Those are low-hanging fruit — actions that are valuable than working for the same amount of time. But those savings methods that don’t save you that much — less than what you can earn in an hour — well, they just aren’t worth it in most cases. If you can earn more money by working during the time you could have been making your own soap from scratch, it makes sense just to pick up the soap at the local Wal-Mart and move on.

    It’s possible to make the calculations far more complicated, of course: you can factor in the distance you might have to travel for certain savings, the costs of working and so on, but that sort of calculation takes time. Time, as we have established, is money.

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    Your Thoughts on the Matter

    There are a lot of bloggers who have made their support for either increasing income or decreasing spending quite clear (Get Rich Slowly, I Will Teach You To Be Rich and The Simple Dollar all come to mind as blogs that have discussed the matter). No matter whether people say that there should be a balance between the two strategies, most folks wind up prioritizing one over the other. I know I have — I generally find earning more money to be a better use of my time than extreme frugality — but I’m interested in which approach you feel more comfortable with and why. Please let us know which technique you favor in the comments!

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    Last Updated on March 31, 2020

    Is Procrastination Bad? The Truth About Procrastination Revealed

    Is Procrastination Bad? The Truth About Procrastination Revealed

    Procrastination is very literally the opposite of productivity. To produce something is to pull it forward, while to procrastinate is to push it forward — to tomorrow, to next week, or ultimately to never.

    Procrastination fills us with shame — we curse ourselves for our laziness, our inability to focus on the task at hand, our tendency to be easily led into easier and more immediate gratifications. And with good reason: for the most part, time spent procrastinating is time spent not doing things that are, in some way or other, important to us.

    There is a positive side to procrastination, but it’s important not to confuse procrastination at its best with everyday garden-variety procrastination.

    Sometimes — sometimes! — procrastination gives us the time we need to sort through a thorny issue or to generate ideas. In those rare instances, we should embrace procrastination — even as we push it away the rest of the time.

    Why We Procrastinate After All?

    We procrastinate for a number of reasons, some better than others. One reason we procrastinate is that, while we know what we want to do, we need time to let the ideas “ferment” before we are ready to sit down and put them into action.

    Some might call this “creative faffing”; I call it, following copywriter Ray Del Savio’s lead, “concepting”.[1]

    Whatever you choose to call it, it’s the time spent dreaming up what you want to say or do, weighing ideas in your mind, following false leads and tearing off on mental wild goose chases, and generally thinking things through.

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    To the outside observer, concepting looks like… well, like nothing much at all. Maybe you’re leaning back in your chair, feet up, staring at the wall or ceiling, or laying in bed apparently dozing, or looking out over the skyline or feeding pigeons in the park or fiddling with the Japanese vinyl toys that stand watch over your desk.

    If ideas are the lifeblood of your work, you have to make time for concepting, and you have to overcome the sensation— often overpowering in our work-obsessed culture — that faffing, however creative, is not work.

    Is Procrastination Bad?

    Yes it is.

    Don’t fool yourself into thinking that you’re “concepting” when in fact you’re just not sure what you’re supposed to be doing.

    Spending an hour staring at the wall while thinking up the perfect tagline for a marketing campaign is creative faffing; staring at the wall for an hour because you don’t know how to come up with a tagline, or don’t know the product you’re marketing well enough to come up with one, is just wasting time.

    Lack of definition is perhaps the biggest friend of your procrastination demons. When we’re not sure what to do — whether because we haven’t planned thoroughly enough, we haven’t specified the scope of what we hope to accomplish in the immediate present, or we lack important information, skills, or resources to get the job done.

    It’s easy to get distracted or to trick ourselves into spinning our wheels doing nothing. It takes our mind off the uncomfortable sensation of failing to make progress on something important.

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    The answer to this is in planning and scheduling. Rather than giving yourself an unspecified length of time to perform an unspecified task (“Let’s see, I guess I’ll work on that spreadsheet for a while”) give yourself a limited amount of time to work on a clearly defined task (“Now I’ll enter the figures from last months sales report into the spreadsheet for an hour”).

    Giving yourself a deadline, even an artificial one, helps build a sense of urgency and also offers the promise of time to “screw around” later, once more important things are done.

    For larger projects, planning plays a huge role in whether or not you’ll spend too much time procrastinating to reach the end reasonably quickly.

    A good plan not only lists the steps you have to take to reach the end, but takes into account the resources, knowledge and inputs from other people you’re going to need to perform those steps.

    Instead of futzing around doing nothing because you don’t have last month’s sales report, getting the report should be a step in the project.

    Otherwise, you’ll spend time cooling your heels, justifying your lack of action as necessary: you aren’t wasting time because you want to, but because you have to.

    How Bad Procrastination Can Be

    Our mind can often trick us into procrastinating, often to the point that we don’t realize we’re procrastinating at all.

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    After all, we have lots and lots of things to do; if we’re working on something, aren’t we being productive – even if the one big thing we need to work on doesn’t get done?

    One way this plays out is that we scan our to-do list, skipping over the big challenging projects in favor of the short, easy projects. At the end of the day, we feel very productive: we’ve crossed twelve things off our list!

    That big project we didn’t work on gets put onto the next day’s list, and when the same thing happens, it gets moved forward again. And again.

    Big tasks often present us with the problem above – we aren’t sure what to do exactly, so we look for other ways to occupy ourselves.

    In many cases too, big tasks aren’t really tasks at all; they’re aggregates of many smaller tasks. If something’s sitting on your list for a long time, each day getting skipped over in favor of more immediately doable tasks, it’s probably not very well thought out.

    You’re actively resisting it because you don’t really know what it is. Try to break it down into a set of small tasks, something more like the tasks you are doing in place of the one big task you aren’t doing.

    More consequences of procrastination can be found in this article: 8 Dreadful Effects of Procrastination That Can Destroy Your Life

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    Procrastination, a Technical Failure

    Procrastination is, more often than not, a sign of a technical failure, not a moral failure.

    It’s not because we’re bad people that we procrastinate. Most times, procrastination serves as a symptom of something more fundamentally wrong with the tasks we’ve set ourselves.

    It’s important to keep an eye on our procrastinating tendencies, to ask ourselves whenever we notice ourselves pushing things forward what it is about the task we’ve set ourselves that simply isn’t working for us.

    Learn more about how to fix your procrastination problem here: What Is Procrastination and How to Stop It (The Complete Guide)

    Featured photo credit: chuttersnap via unsplash.com

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