Pretty much everyone I’ve met who has a solid grip on their personal finances has some sort of vision for what the future holds for them.
Some of them simply strive for debt freedom and a decent emergency fund, then they want to stock their retirement accounts. Some would like to retire as early as possible. Others want to become genuinely wealthy for various reasons.
These goals aren’t standalone goals. They’re on something of a spectrum. I know a person who wants to retire just a bit early, but mostly wants to move on to a second act. I know another person who dreams of opening a comic book shop.
Everybody has their own specific long-term goal, and there are as many different long-term goals as there are grains of sand on the beach.
The tricky thing, though, is that the plan for achieving each one has major differences from the plans for other goals.
For example, some goals absolutely require you to have a big increase in the gap between your spending and your income. If you’re trying to get a business started in several years that requires a pretty hefty initial capital investment, you’re going to need to be kicking a lot of money into savings very quickly.
On the other hand, other goals aren’t tied to enormous career and life changes and just require steady progress. If you’re trying to achieve debt freedom but are otherwise happy with your life, you don’t need a big jump in the size of your spending gap, you just need strong routines to keep that gap at a healthy size.
In other words, some people have personal finance goals that are best achieved by focusing heavily on increasing income, while other people have personal finance goals that are best achieved by focusing heavily in decreasing unnecessary spending.
That’s not to say that either group should ignore the other approach, of course. There’s no reason for anyone to not perform well at work or to look for obvious ways to trim their spending. The difference is in where you focus your extra time and energy.
One person – let’s call her Alison – might be incredibly excited about opening a cafe in her town, but she knows she’s going to need a big influx of cash to do it as fast as possible. Alison might be well served by launching a side business or getting a second job for more income.
Another person – let’s call him David – might really enjoy the family-oriented life he has but just wants to get rid of the lingering debt quickly. david would be very well served by seeking out family activities that don’t cost much money and looking around his home for more cost-efficient ways of doing the things that are already a part of his life.
Their lives are in different places and they demand different approaches. It doesn’t make sense for David to take a second job or start a side business – it doesn’t match what he values or what his life goals are. Similarly, Alison’s energy and passion are wholly devoted to starting that cafe, so it makes sense for her to channel her energy down whatever paths will get the doors open the fastest.
Personal finance books and articles often assume that people have a particular set of goals. Some writers are writing for people like Alison, while others are writing for the Davids of the world.
Just because you’re more like “Alison” and are reading an article that describes a path for a “David” doesn’t mean that the article is wrong and that you can’t get any value from it. The same is true for a “David” reading an article written for an “Alison.”
Diving heavily into frugality and cutting spending is the right path for some people. Maximizing income and focusing on careers and business is the right path for others. There are hybrid approaches, too, of course – just like everyone has different goals, there are different mixes of approaches that work best.
The key is to look through all of the tools out there and choose the ones that work well for whatever it is you’re trying to do.
That doesn’t mean the other tools are bad. It just means that they’re not the right ones for what you’re trying to achieve.
Frankly, whenever I see a personal finance writer ranting about how useless a focus on frugality is or how stressful and unnecessary a career obsession is (and I’ve seen both), I think of a “Popular Mechanics” writer penning an article describing how pointless screwdrivers are because all of the problems he sees are solved by hammers.
Both hammers and screwdrivers are great tools, but they work best for different jobs. That doesn’t mean it’s not useful to know how to use both.
Similarly, both frugality and income improvement are great tools, but they work best in different lives. That doesn’t mean it’s not useful to know how to use both.