Undoubtedly, frugality can be a powerful tool that can help you start digging out of a financial hole. Every time you make a choice to cut your spending, you’re directly leaving more money behind in your bank account. It’s an immediate effect, too.
That’s money you can use to pay off debt, buff up an emergency fund, improve your retirement savings, or pretty much anything else you can imagine. The best part is that frugality is accessible to everyone. There’s virtually no one reading this site that cannot afford to trim their spending in some way.
No matter how effective frugality is, though, it has limitations. There’s only so much of a difference you can make using frugal tactics, and if you want to continue to improve your financial situation, you have to turn your eye to generating more income.
While improving your income is an incredibly powerful tool as well, it also has drawbacks. There are only so many hours in a day, for one. For another, many avenues for improving your income don’t see immediate returns.
I think it’s worthwhile for everyone who’s serious about improving their financial state to spend at least some of their time and energy improving their income generation. However, the exact method you use depends a lot on what your needs are.
For example, if you’re in a situation where immediate income is really needed, a part time job is probably the best option. You can, of course, also sell off extra items around your home to make ends meet very quickly, but aside from that, gainful employment is the quickest way to get cash on the table.
The benefit of a part time job is really clear. It gets you a paycheck, usually at a pretty fast rate. if you are worried about making ends meet for the next few months, this is the best method for getting that cash in hand.
The drawbacks are numerous, though. Over the long run, a minimum wage job isn’t going to be the most productive use of your time. Also, it’s going to demand an investment of time and energy immediately, and the amount you make from a part time job directly correlates to the time and energy you invest in it.
I’d only use the part time job route if you need some very quick additional cash to start your turnaround and make it through some tough months right now.
If you’re not on the precipice of financial doom, though, there are a couple additional options to consider.
One path is to maximize your current career trajectory. Whatever path you’re on, invest in that path. Build relationships at work, both in your workplace and outside of it. Put in plenty of extra effort to put extra polish on your work projects. When you’re idle, find productive things to do. Seek additional training or education in your spare time.
The catch here is that the return is rarely immediate. Sure, it can help to shore up your job security a bit, but it rarely leads to quick raises and promotions and job opportunities. You can spend years building up your networking and your professional accomplishments and not see a dime of return during that period. Eventually, you will (virtually always) see some sort of positive return for the time and energy you’ve put in, but it’s certainly rare for it to be immediate.
I usually view this path as the best option for people who are strongly comfortable with and happy with their current career trajectory.
For others, building a side business or a second career is a good option. With freelancing opportunities, you can often start to build an income on the side while you still work at your primary job.
This is something of a middle ground between a part time job and career advancement. You can usually earn a little bit using this path, but many side businesses tend to have a slow build. You earn just a bit during the first months, then it gradually increases as you continually contribute effort to it. Sometimes, it grows into your main career.
The correct path here really depends on your life situation. In any case, I think any financially wise person who is not already in a position of full financial independence should be following one of these paths. If you’re not investing extra time and energy into increasing your income and securing your financial life, then you’re simply guaranteeing yourself a longer path to the prosperity you dream of.