When trying to address a mountain of debt and/or budgeting issues, the first piece of advice people are given is to drastically cut expenses.
It makes sense….to a certain extent. The spending categories that usually go away are restaurants, vacation, clothes, entertainment and anything considered as “non-essential”.
Unfortunately, there is an actual dollar limit to nickel and diming. At one point, you won’t be able to lower or cut your expenses anymore. You will still need a roof over your head, food in your plate, heating when it is minus 20° (Celsius) outside etc…
Being a total hermit will also reach its limit. Most human beings are social creatures. We need to interact with other people and have some fun in the process.
When you are tired of nickel and diming and/or if it is still not enough to put you in the black, it is time to do the next best thing: earn more money.
Unlike cutting expenses, there is technically no limit as to how much one can make. The limits are the ones you decide to put.
Instead of taking a second or a third job, you might be better off finding a higher paying one. But if you have to take a second job, so be it! You may also review your current position and pick-up extra hours; ask for a raise or a promotion (with a pay increase).
Earning more can also be your ticket to saving more and reaching your goals. If cutting your expenses only allows you to pay for your bills, it is not enough for the long-term.
When I came to Canada, I was either underemployed -thus underpaid- or unemployed -thus not paid- during 3 years. I understood fairly quickly I had to make more money, not only to pay for my bills but also to get ahead.
Merely cutting expenses wasn’t doing it for me. I actually felt like I was kept in a limiting “poverty mindset”.
I am definitely in favour of earning more and controlled spending, rather than constant nickel and diming.