Tuesday, February 22, 2011

Fixed Income Living-Saving on Expenses VS Earning Income

As I've shared on other occasions, I look forward to living on a small pension and my husband's social security.  It's fair to say those amounts will not give me a great deal of disposable income. I've talked about my attempts to build some streams of income such as selling crafts, selling stuff and attempting to begin a concierge business (which has yet to see much income at all).  I look for income from these various streams to give me some added security and greater flexibility in life choices.

Here's the thing, though. I spend at least an equal amount of energy on saving money as making money.  Given the choice, I would rather spend time saving money than creating income.

Why do I choose saving money over making money when possible?  Well, first, because its often more effective and more efficient.  When I save a dollar in one area, that's given me a full dollar of disposable income to spend elsewhere.  Were I to go out and earn that dollar as income I could lose as much as forty percent of it to social security, federal and state taxes and medicare (remember, I'm not of social security or medicare age as of yet).  and that doest include any expenses I might incur such as gas expenses or special clothing costs.

In my case at least, most of my money saving tasks can be done either in the relaxation of my home, or while I am doing the normal activities of life.  Even though I have "home based" streams of income, earning that income requires my going out and interacting with people, searching for business, marketing and the like.  Many meals (even restaurant quality meals) that I make have down time, during which I can read, relax and do the things I find most enjoyable.  Searching for discounts and deals and freebies can be done relaxing on the couch while I'm watching "MI5" on PBS.  Not only that, but I'm probably in a lounger or jammies when I do so.

Another reason I often choose savings over earning is that the results of frugality and saving money are usually visual and often immediate, or darned close.  Today I was window shopping, looking for decorating ideas to make my home more "springlike".  I've determined that winter is over, whether mother nature agrees is yet to be seen.  Once I arrived home, within an hour or so I had made decisions and been creative with what I had on hand. I managed to make my living room seasonal in a few hours, with almost no spending. The rest of the transformation will require a bit more time and effort (and a sewing machine).  The reward for my effort was then and there, both in terms of creativity and money savings. Also, by not spending money in one area, I've immediately increased my "disposable income".

Lastly, saving money often simply requires doing nothing.  By choosing to create a gourmet meal instead of going out, I expend energy instead of money. But the truth is, in many other cases I simply choose to eliminate that spending choice.  In other words, as I mentioned in a previous posting, sometimes its the things I don't do that save me money and increase income.

Everyone makes different financial choices, and some folks who are on a fixed income or retired may truly enjoy their work. I don't mean to imply that earning money is a bad thing. For those of us who work primarily out of necessity, it's good to look at all sides of the picture before stepping out into the "earning world"


  1. One of the appeals of saving money instead of just earning more to support a certain level of spending is the feeling of control.

    Money you don't spend means you control that money a while longer. You control the time required to replace that money.

    Eraning money places you under someone or something's control. Not spending the money keeps you in control. That is a good feeling.


  2. There's an old saying, that I think goes something like this: "a penny saved is a dollar earned".

    It is better to save money, than spend it, of course.