Occasionally someone will need some extra attention in getting started with the YNAB system and we’ll work with them through either YNAB Coaching, the forums, or sometimes just with a few quick emails.
90% of the time the ranting is something like:
I’ve written extensively when it comes to living within your means. For the most part, when it’s mentioned, people think one way:
Living within your means.
When perhaps they should be thinking another way:
Living within your means.
I’d like us to start thinking about the more enjoyable part of this platitude. Would you rather figure out a way to save $50, or make $50? And then the next obvious question is of course, “Why not do both?”
Too often when the realities of your budget are staring you in the face, you turn toward the left and start hacking away at expenses (come on guys, let’s be realistic, you will need to buy clothes eventually) until you’re left sitting at home watching re-runs of Silver Spoons, analyzing the poor spending habits of Edward Stratton III — and it’s Friday night.
Let’s turn to the right and focus on increasing your means.
This glance right happened to me during the summer of 2004. As a result, I decided I’d sell mine and Julie’s budgeting system to the world. Hopefully the story has a happy ending.
There’s a relationship, honestly, between the amount of income, both in the short- and long-term, and the upfront time required to make things happen. I slaved away at the keyboard to create the following professionally-designed-publish-quality visual representation:
You can see that a large upfront investment of time may do very little for income now, but can have a huge impact on future income. Examples may include furthering your education, networking, building your career or starting a side business.
A small upfront time investment can yield a significant short-term increase to your means, but does not have the cumulative power of long-term investing in other income sources (which is why the Future line’s area is filled). Examples of short-term bursts to your means may include selling stuff, working overtime, or picking up odd jobs.
FMF over at FreeMoneyFinance has a phenomenal list of ways to increase your means in his Guide to Making Money. My two favorites include:
Oh and, let’s not forget the best way to increase your means: Invest and eventually live off the earnings.
Being frugal is all well and good, and I enjoy the Frugal Fight as much as the next guy, but I suppose I enjoy the task of increasing my means even more. After all, there’s a lot more to life than Silver Spoons.
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This is The Wallet. My name is Jesse Mecham, founder of YNAB. Here I focus on the YNAB methodology, software, personal finance, and more.
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[...] of You Need a Budget reminds us that living within your means is a two-part equation. If you’re tired of being frugal or don’t see a way to be frugaler (not a word, I [...]
Curt
June 23, 2008
Great article. I think very one should try to turn something they love into a side business. The best way to protect yourself from a lay-off is to ‘get your own customers’. Self education is one of the best investments a person can make. The average household has 30% excessive spending, which means that a budget can save the average family 10-15k per year – all with a little education.
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