If you are a typical college graduate earning $50,000 a year, your best bang for your buck will not be quitting Starbucks, or buying a cheaper car, or being more thrifty.
Imagine that this $50,000/yr grad is an accountant named Joe.
Joe will get a lot more value spending 5 hours on the weekend studying for his CPA exam to increase his career and income trajectory instead of trying to fix a toilet DIY or focusing so much on spending less money on coffee.
If you spend a lot of money at coffee shops, like $200/month, yes, that is a lot of money.
But if Joe systematically focuses on prepping for the CPA exam, after 1+ years, you'll be a CPA and earning around at least ~$70k starting.
Compare the two:
- You stop going to Starbucks and save $1,200
- You focus on your income and get your CPA and earn an additional $20,000 (and once you're well into your career, at least an additional $100k)
That is why often focusing too much on your spending as opposed to your income can be a problem. Of course, we should all be careful about our spending, but... budgeting won't make you wealthy. High income combined with a good savings rate will.
Submitted February 13, 2019 at 06:16PM by zapproximator http://bit.ly/2TOANJu
