Do you think is it better to spend your time learning how to save money or make money? In other words, which would you choose – save $50 now or invest $100 (in time and/or money) to potentially earn more in the future? While both are important, it is far more valuable to spend your time learning new skills to make more money, than it is to spend hours trying to save money for a one-time, limited purpose. Said differently, there are limits to how much you can save, but there are no limits to how much money you can earn. Also, saving money tends to be harder for many people since it feels restricting and not as fun. I’ve tried both methods and want to share top lessons learned and solutions to help you focus on investing your time and money in the right resources.
Lessons Learned When Saving Money:
#1 – Less than minimum wage – When I left my consulting career, I decided to spend time learning how to use coupons better to save money. I spent hours scouring through the Sunday ads, clipping coupons, figuring out how I was going to combine and stack deals at the right stores to save the most money. A few weeks in, I realized that I was spending about three hours a week on prepping and driving to at least three different stores a week. On average, I estimate that I would save maybe $10 – $15 a week, which was NOT worth the amount of time that I put in when you figure this is less than minimum wage:
- $10 saved divided by 3 hours = $3.33 per hour
#2 – Expenses incurred – When trying to catch all these great deals, I was also incurring costs of gasoline when driving about 15 miles per week. With my car’s gas mileage and average gasoline prices, I estimate that I spent about $1.87 on gasoline.
Following the same example, you need to decrease the initial savings by the costs to get the true (net) savings:
- $10 saved – $1.87 costs = $8.13 net savings
#3 – Savings – Costs = NOT WORTH IT – Now it seems even more pathetic when you realize I didn’t really save $3.33 per hour on couponing. I actually “made” significantly less than that.
- $8.13 saved divided by 3 hours = $2.71 per hour
Once I realized that saving $10 per week was not worth it, I decided to re-focus my attention on investing in books, training, and courses to start my business and make money (and create passive income). Now, if you have credit card debt, car loans, and other non-mortgage debt, then certainly look to do whatever you can to save money and cut expenses to eliminate the debt and interest sooner. However, if you’re frustrated and feeling like there’s never any money left at the end of the month, make sure you are focusing on the right things and investing time and money that will make a significant difference in your future earnings.
*How this applies to business: While this example is from a personal finance perspective, this same lesson can be applied to running your business. Often, many will only look at the sales numbers coming in, but don’t look at all the costs of doing business. After calculating both, if you’re not happy with the net profits, then you need to adjust the price or costs.
If you’re now convinced that you want to spend more time and energy focused on how to earn more money and have your money work for you, here are solutions and resources to help you earn more money:
7 Solutions to Earning More Money:
- Take a class – If you’re in an industry that is saturated or if you want to expand your current skill sets, take a class to learn a new skill or become an expert by building on your current knowledge. These can be in-person at the local community colleges (which often have evening and weekend classes, and one-time seminars) and online courses.
- Buy books – If you learn better by reading and absorbing information, buy books to help you learn new skills, develop better habits, become more productive, and expand your current thinking.
- Check out my favorites on the Resources page, including The Top Distinctions between Millionaires and the Middle Class. Author Keith Cameron Smith states that “most millionaires he knows read one book a week, yet the middle class thinks learning ended with school.”
- Start a business – you can do this part-time, on the side, and freelance by using the skills that you already have.
- Examples: Upwork & Fivrr – you can post your skills or reply to job postings for skills that you currently have. Skills can include proofreading, doing graphics design, helping with Excel files, writing articles, researching, etc. You can also check out Wyzant to tutor someone in skills that you already have, including reading, math, and foreign language.
- Do speaking engagements – get paid for speaking on topics that you’re already an expert in. Professional organizations, community colleges, and conferences are always in need of good speakers, especially those who have monthly meetings and luncheons. If you’ve written a book or have been featured and quoted in the media, that can be extremely attractive and increase your chances of being paid as a speaker.
- Example: If building a relationship with the media seems unobtainable and you don’t know how to get the right publicity, consider investing in a publicity coach. Selena Soo is a brand and publicity coach who has taught many entrepreneurs how to connect with the right influencers to get featured in magazines and on TV.
- Learn how to invest – learn how to invest money in mutual funds, stocks, 401k, etc. to make your money work for you, considering inflation and compounding interest.
- Example: If you’ve always wanted to get into the stock market but don’t have a lot of money (or risk tolerance), I highly recommend looking into Stockpile. They allow you to buy fractional shares of 1,000+ stocks and ETFs, including Apple, Google, Amazon. This is perfect for beginning investors and kids – start small by watching how $1 or $5 invested in your favorite company grows!
- Get into real estate – If you prefer a more tangible way to see how your money is growing, real estate can a great way to build a portfolio and have monthly rental income.
- Example: If you’re new to this industry and don’t know where to start, one of the best teachers out there who walks you step-by-step with numbers and easy-to-understand examples is Coach Carson. He covers everything from learning the best investing strategy, hacking your housing to live for free, running the numbers for cash flow, and much more.
- Invest in Coaching– if you don’t know where to start, need to talk through all the ideas swimming in your head, and the accountability that comes with working with a live person, then invest in a coach or other professional who can help you gain the knowledge and skills to earn more in your business. If hiring a coach at $1,000 for a three-month program can teach you skills to double your rates for existing and future clients, that can be well worth the investment.
- Example: Hire a business and financial coach to help you learn the business and financial skills to run a business, especially if you jumped in and realize that you don’t know what you don’t know, and feel like you’re flying blind. Or if you are scared to ask for the sale and don’t know how to close a deal, hire a sales coach. A great resource who provides sales coaching and quick tips via videos to her email list is Elyse Archer.
In trying both methods of saving money vs. making money, it’s a lot more fun and valuable to spend an hour reading a book and learning new skills. Ask yourself today, “What is the one skill that if I can become absolutely excellent at could significantly (double) my income?” When you figure out that answer, focus on that one skill.