Would there be any benefits if I thought of saving money as a source of income? The similarities are not exactly obvious between the two but there are actually a few advantages of doing so. Let’s think together here and see what we come up with.
Why It Makes Sense to Think Of Saving Money as Making Money
- Although you can argue on which is more effective to building wealth, saving money is really just the same as making money. If I have to buy a TV and I get a good deal by saving $400. Mathematically, it works out the same as getting a $400 windfall.
- Doing so forces you to focus on what is most important, the bottom line. It doesn’t matter whether you saved money, made money or spent money because all you care about is incoming and outgoing of wealth.
- It puts a higher emphasis on saving money because people who budget will have to log down how much they saved as a source of income, forcing them to think about those activities when they do their budget analysis.
Why It Makes No Sense
- Most of the money saving tips are really about spending less money. While it may let you keep more cash in the bank, the most effective way to keep all your money is not to use it in the beginning. Creating a link between saving and making money does nothing to keep you from spending it.
- You might end up buying more things because it puts way too much emphasis on the savings that you made. It might make you feel that you are actually making the money that you save. In a push to increase the amount of earnings, you may end up spending more money.
After listing out the pros and cons, I feel that if you have the discipline, you can make this work in your favor. However, if you do not, then you will likely end up buying more things. The important point to remember is that keeping the most money ultimately what we are after, whether it’s money saved or money made.
The idea just popped into my head so I just started writing it down in a form of a blog post as a way to brainstorm. What do you think of this idea? Is it doable and are there any advantages or disadvantges other than the ones I’ve listed?