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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 September 17, 2020

    5 Practical Ways to Get Over a Mental Block

    5 Practical Ways to Get Over a Mental Block

    There’s nothing quite like a state of “flow” when you’re working. The rare moments when your inspiration aligns with your motivation likely lead to some of your most creative work. Plus, it feels great to actually check a task or project off the list so you can move on to the next thing. Meanwhile, a mental block — its opposite — can cause work to feel laborious and uninspired. Forget creativity when you have a mental block — it makes it difficult even to start working on what you need to do.

    A mental block can manifest in several ways. Perhaps your imposter syndrome is squelching your creative ideas, for instance, or you’re overwhelmed by the breadth of a project and its impending deadline. Maybe you’re just tired or stressed.

    Either way, having a mental block feels like being trapped in your own head, and it can seriously dampen your ability to think outside the box. The problem is, you’re so locked into your own perspective that you don’t see more innovative approaches to your problems.[1]

    Luckily, jumping over these mental hurdles is simpler than you think. You just need the right strategies to get your flow back.

    Try these five practical ways to overcome a mental block.

    1. Break Your Project Down

    A few years ago, I was working on changing a company product that I believed would hugely benefit our customers. Sounds great, right?

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    As inspired as I was to make people’s lives easier, though, the sheer magnitude of the task at hand felt overwhelming. Every morning, I cracked open my laptop to work and felt totally paralyzed. I loved the idea, yes, but actualizing it felt risky. What if it didn’t turn out the way I pictured in my mind? More importantly, where would I even begin?

    A former colleague gave me great advice over coffee:

    Change how you think. Start by breaking the big project down into small tasks.

    When a major project overwhelms you, you only see the entire forest instead of the individual trees. And as you stare it down, you start to feel discouraged by your own lack of progress, thus slowing you down further.

    Breaking down a massive task into smaller chunks makes the work feel more manageable. You’ll have multiple clear places to start and end with, which will lend a motivating sense of productivity and mastery to your process. Learn more about it here: The Motivation Flowchart: The Mental Process of Successful People

    Think of it as accumulating small wins. When you realize you’re more capable than you have once thought, you’ll develop the momentum and confidence needed to get your big job done little by little.[2]

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    2. Change Up Your Scenery

    Of course, there’s a time and place for sitting down to get things done. But if you’re experiencing a mental block, switching up your surroundings can make a big difference in your output.

    Have you ever noticed how your environment directly impacts your performance and mood?

    Your brain associates your physical surroundings with certain feelings and activities. So, if you feel mentally stuck, your mind may need some new sensory stimuli.

    During this time in your life, it may not be possible to set up shop at a cafe or move from your cubicle to a conference room, so you may need to think outside the box. If you’re working remotely in a home office, try going to your dining table or couch. If the weather cooperates, sit outside for a bit with your computer or take a walk around the block.

    You can also simply rearrange your workspace. Not sure where to begin? Try decluttering. Some studies show that an organized desk enhances productivity.[3]

    The point is to stimulate your brain with new sounds and sights. You may find a much-needed dose of inspiration when you work while breathing in the fresh air, listening to city sounds, or staying in the comfort of your own living space.

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    3. Do an Unrelated Activity

    When it comes to productivity, a bit of distraction isn’t always a bad thing. That’s especially true if your chosen distraction helps you get things done in the long run.

    Have you realized how your most creative thoughts tend to bubble up when you’re, say, lying in bed or taking a shower? In their research of the “incubation period,” scientists have discovered that people’s best ideas seem to surface when they aren’t actively trying to solve a problem.[4]

    In a 2010 study, participants needed to look for a roommate or new employee based on the profiles that the researchers gave. The people who had a brief “incubation period” — in this case, working on an anagram — consistently made better choices than those who spent more time weighing their options.

    If you can’t seem to prime your brain for a project, try doing something completely unrelated to work, such as washing your dishes, working out, or calling a friend. Some experts say finding another low-stake project to work on can help jump-start the creative part of your brain and activate your flow.[5]

    The key is to allow your unconscious mind to do its best work: eliciting the new knowledge your conscious mind may be ignoring or suppressing.[6]

    4. Be Physical

    Feeling antsy? When your mind won’t seem to settle into a state of flow, it may help to swap out your mental activity for a physical one and see how it impacts your perspective.

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    While any physical activity is beneficial for your body — and getting up to move can serve as a helpful form of distraction — certain forms of exercise can more directly impact the mind. To be specific, relaxing, flow-based exercises like dance, yoga, or tai chi can create a gentle sense of momentum in your body, which can prime your brain for the same state.

    Stress-reducing activities may also be necessary. Meditating or taking slow, deep breaths will also calm your nervous system if you’re feeling overwhelmed. Evidence shows that the logical, creative part of your brain essentially shuts off when you’re stressed.[7]

    On the flip side, when your mind and body are relaxed, you can think more clearly, be more creative, and focus for longer periods — all of which will help you overcome a mental block.

    5. Don’t Force It

    It can be frustrating to fight against your own mind. If your mental block won’t go away after some effort, it may be time to take a break. Forcing creative thoughts only adds to your stress levels, which in turn inhibits your ability to think creatively. And if you sit and stare at a project for too long, you’ll not only waste valuable time but also begin to associate this specific work with frustration and produce work you’re not proud of.

    “I know that forcing something is not going to create anything beyond mediocre, so I step aside and work on a different project until it hits me,” the artist Ben Skinner said about his creative process.[8]

    If your work isn’t time-sensitive, then it may make sense to step away for a while to focus on something else, be it an administrative task that requires less creativity or a project that you feel motivated to work on.

    When the time is right, you’ll find your way back to the original task with a fresh, creative perspective (hopefully).

    More on Getting Rid of a Mental Block

    Featured photo credit: Jonas Leupe via unsplash.com

    Reference

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