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Why do so many personal-finance sites focus on spending LESS?

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I’m in the middle of my private Earn1k course this week before announcing something next week.

I was doing a live webcast last night and I was trying to make a point, but I wasn’t sure how to say it.

It seems like 98% of personal-finance material (blogs, magazines, books) focus on spending LESS — keeping a budget, saying “no, no, no” to lattes, jeans, and vacations.


Why don’t they cover earning more, or negotiating, or increasing your responsibilities at work, or understanding the psychology of your own behavior, or all the other things besides cutting down on spending?

I’m trying to formulate 3 crisp answers.

So, what do you think? Why is the vast majority of personal-finance material focused on cutting down on spending?

[Also: No video office hours tonight. Too swamped on something else. Check out my YouTube videos if you miss me screaming at people.]

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  1. It’s a reassuring message. When you go frugal you feel like you’re making an effort (by restricting yourself), but you don’t really go outside your comfort zone (by addressing why you aren’t making any more money and taking action). Basically they are encouraging readers to do more of the same, and of course readers will agree. When you make bold statements and tell people they aren’t doing the right thing, you take the risk of angering or alienating your readership – and people who hate you won’t buy your books.

  2. 1. Because controlling your spending is a foundational step towards understanding how to maintain your wealth. E.g. the lottery winner effect, no use having a million dollars if you don’t know how to use it. Earning more should happen on the basis of you having a better grasp of financial control.
    2. Because it appeals to our fears of action and failure. It focuses on something we can control rather than what would be more effective but risky.
    3. Because the philosophy of frugality is flawed. It is about ‘not dying penniless in a ditch’ hoarding scarce resources rather than ‘how can I live my life the best I can’.

  3. Stacy McKenna Seip Link to this comment

    Because it’s easy to apply to *everyone* (except those of us already not smoking and drinking lattes…), whereas the things people have to learn or analyze about themselves and how they could earn more, and why they aren’t, are hard and not easily generalized in a meaningful way. Additionally, it’s easy to *describe*, unlike some of those things that would get people to a place where they can earn more. It’s easy to talk about in a way people understand.

    • I like that. Advice on cutting back seems applicable to everyone, since we all spend something. Yet, by the very nature of its broad applicability, it’s often not as useful as more targeted advice.

  4. Because going from the mindset of saving money to the mindset of obtaining value is not an easy journey.

    Been there.

    • Can you say more, MC? What do you mean? And if you have any specific examples, I bet others would love to hear them. I know I would.

  5. The reasons I’ve always heard given are the ones related to tax rates.

    If I save $1, I have $1 to spend.

    To earn an extra $1, I need to earn $1.67 less 40% taxes = $1.

    (Personally, I’d like both. Lose the unconscious spending and save $1, and earn more and get $1, now I have $2 to spend on something I actually want rather than ‘where did that $1 go?’.)

    Really, though, I think there are other reasons. One is that many people don’t think they CAN earn any more. Telling a single mother who’s working a full-time and part-time minimum wage job that they can negotiate a raise is going to get you a scowl or injured look in response.

    Most ‘save money’ advice seems geared toward people closer to that situation than to the young professional. Who’s your target audience? Who’s your *actual* audience?

  6. 1. availability and draw of credit. – too many live outside their present means. we (people in general) see it as a way to obtain items and bail ourselves out of immediate trouble, not focusing on the long term effect.

    2. we are creatures of habit – break the bad habits and then create good ones. (ex. cut out the caffiene and save $5 a day, put it in the pickle jar and then you have $150 saved up.) even though, if you are already stretched in the budget, that money is swallowed up as another financial band-aid. I quit smoking to use the money to join a gym only to find out there was no money to put aside at the end of the month.

    3. we (people in general) are lazy and want the easy way. – a fast buck earned is a fast buck spent. My daughter has her own business and I make her set back 10% for tithes, 20% for business expenses and another 20% for her savings account. Then she can spend the rest of her earnings. If I just gave her money, she’d spend it in a trice. Now, that she’s spending HER money, that she WORKED for, she’s much more thoughtful about how she spends it.

  7. Hi, Ramit. I enjoy your work, and wish I focused more on sharing what I know about personal finance with the world.

    I learned from Your Money or Your Life that for most people, most of the time, spending less is easier than earning more. I found that to work for us, and it was a key step in retiring at 34 instead of in our 50s. Unfortunately, most people conclude that they must limit spending to a predefined budget, and find that difficult to make work. I don’t set budgets.

    Budgets don’t work because there’s no such thing as a typical month. I also learned that from Your Money or Your Life. For this reason, we never budgeted, but instead, tracked our expenses, looked for wasteful expenses, then eliminated them. We asked ourselves the question, “Do I value this expenditure?” When we answered “No”, we stopped spending that expenditure. We made a quantum leap when we decided that we didn’t value living in an expensive city like Toronto any more.

    Now, fortunately for us, when we reduced our expenses, we had an active profit each month, which we turned into passive income generating assets, and the compounding effect took care of the rest. Some families can’t do this. Even after eliminating expenditures they don’t value, they still run on an active deficit each month. These families need help to start earning more money, which usually demands an investment they already can’t afford.

    At the same time, Rich Dad, Poor Dad has pointed our attention to the tendency of families to spend more as they earn more. As a result, earning more does not translate to increased active monthly profit (nor reduced active monthly deficit), meaning that it does not lead to increased passive income and more financial freedom.

    I would conclude from all this that first focusing on spending less leads to better results than first focusing on earning more.

  8. I’d say Guilt. Everyone loves to feel guilty because it’s a passive emotion. You know you shouldn’t buy x over y, so that’s the burden you carry around in your mind. If someone says ‘You really shouldn’t do that thing you know you do’ then they can very quickly become an authority figure to you, because they know best.

  9. It’s easy to write a blog about spending less. there is no challenge with comic up with content for frugality.

  10. I think it’s a reflection of the mindset of a limited amount of money that most people have (as MC alluded to). If someone buys into that it’s simple to say “here’s how to keep what you have instead of struggling to take more from others (no one deserves more anyways)” or “everyone else is spending less so you’ll earn less; you need to spend less too”. It’s a lot harder to change people’s view to “here’s how you can unlock untapped potential to contribute something new and be rewarded for it” or “what people spend doesn’t matter, it’s the actions of ordinary people like you that create true wealth”. In the end the writers may be falling into the same trap – “I can’t contribute enough value to change the way people think so I might as well offer meaningless tactics that play into their current fears”.

    It’s partly thanks to your blog that I changed my mindset, so you’re on the right track 🙂