Spend less or Earn more

Should I focus on spending less or earning more?

Posted on March 19, 2019

Becoming wealthier is on most people’s minds, and the best way to go about it is a confusing and widely-debated topic. Some people argue that small savings can lead to a big difference, whilst others argue you deserve to spend your money on yourself and you should start to focus on making more of it. Who is right?


Saving Money

The first step to understanding if you are saving enough is to calculate your savings rate: the percentage of the money you save from your earnings. Above 10% is the minimum that most financial advisors would recommend, but many early retirement proponents are arguing that we should be aiming for around 30 to 50% in order to build up enough wealth so we can retire early.


There are many different ways to increase this number. Firstly, the largest bills should be addressed. Rent and mortgage payments are the largest outgoings for most people, and often these are larger than they need to be. Perhaps moving to a slightly more rural area, or downsizing to a smaller place are two ways that could lead to huge yearly savings.

On top of this, eating out in restaurants, clothes shopping and new cars are all luxuries that should be addressed according to money saving experts. Being able to change your mindset to be more thoughtful and cautious of your decisions is important; to separate what you want and what you need. Whilst there is a minimum amount of savings that is universally sensible, but how extreme you take the cutbacks will depend on your personality. If some of these luxuries are too difficult to avoid or they are simply what makes you happy and are the reason you work hard, then earning more may be the center of your focus

Earning More

Earning more is desired by most of us, and requires more creativity and motivation than saving. For example, focusing on your career by going above and beyond to impress your boss, reading about the industry in your spare time, working extra hours and making it clear that you are aiming for promotion is a great way to increase your salary.


Passive income is also great to increase earnings. Companies such as AirBnB allow us to rent out a spare bedroom to guests for lucrative rates, particularly during the holiday seasons. If guests in your house aren’t for you, then renting out a parking space or garage that could be hired for parking a boat or general storage.


Using the previously mentioned savings for investments is also a popular technique. This means that not only are you earning effortless passive income on top of your work earnings but the more you save from the previous step leads to greater investment and greater returns.


Popular methods of investing are in the share market and forex trading. Online stock trading to purchase and sell stocks has provided great opportunities to investors over the past two decades, making returns much larger than bonds and savings accounts can offer. Mashreq Neo offers an award-winning trading platform with one of UAE’s best trading apps.


With a lot of political events occurring worldwide in 2019, there is potentially a great opportunity to use the volatile forex rates to your advantage. Forex trading is usually described as more challenging than stock trading but can provide much higher and faster returns. Having diversified and well-researched forex investments in your portfolio could be a great way to supplement your earnings.