In football, there is sometimes a saying that “your best offense is your defense”. Does that apply to personal finance?
Well, in the case of personal finance, the “defense” would actually be the act of saving money. Yes, saving money can be a VERY important part of personal finance success. I strongly believe in it, as anybody who reads my work probably realizes by now
That being said, one thing holds true in most cases: in order to save money, you need to first make money!
So, unlike football – where your you could possibly have an inept offense yet still win by scoring on defense – money management is bit different. As we discussed in the pillars of personal finance, you need to actually make money first, before “defending” what you have by saving. Where this is going is that no matter how much many of us want to focus on saving money, sometimes we need to really think about how we spend our time when it comes to improving our net worth.
Let’s say you want to spend 1 hour clipping coupons that might save you $10 at the store. This is, of course, assuming that you would buy those things anyway – and the coupons aren’t enticing you to buy something you wouldn’t ordinarily buy. Anyway, let’s say you do this one time per week for 50 weeks out of the year. You’re effectively spending 50 hours to “earn” $500 over the course of the year.
How about if you took that 50 hours, and focused on making money? What if you started a side business, networked with others in your field or became active in small business marketing, or spent that time directly looking for a new job. Would the overall payoff be worth it?
Well, it just might be. At least, it speaks to the value of thinking beyond simply saving our way to wealth, and also focusing on making money to get there too.
Another way to look at is this: if you stopped making money, what would happen? Bad things, for most of us. Therefore, make sure you’re making money and not forgetting to work on ways to protect that income stream and/or increase it.
What Do You Think?
Between the two do you focus more on saving, or making money?
While both are of course vital, do you ever think about the basic premise that in order to save money, we need to make it first?