Which one is more effective. ..lowering your costs of living a decent life or generating more income? I have the costs of renting a separate room and having good food and better transport to work which is are a bit higher than those who skimp on these. I want to know from the experts. Would it make me richer if I cut those costs or if I seek to increase my current income ? Please feel free to help me get to my financial goals.
Invest...then let the added income help payoff current debt. After the debt is gone, the incom,e keeps coming.
However some reasoning I have seen and feels logical is as follows:
If you reduce your expenses by $X, you have saved $X.
If you increase your income by $X, you have generated $X - taxes - value of time worked to earn that money - any other factors.
So in terms of low-lying fruit (what is easiest/quickest to accomplish) cutting expenses AND THEN SAVING THE DIFFERENCE is what I would recommend doing first.
My wife and I put this into practice.
We use a newer cell carrier and pay $40 month for the both of us on smart phone plans (unlimited text/data). We only have internet from our ISP, no home phone or cable ($50). We have no car payments.
Our only other significant monthly obligations are water and electricity.
Thanks for your valuable reply and advice Bradley!!!!..............Keep me posted if you find more ways to save money!!!
Cash flow trumps all else, since it keeps coming even after it assists you in paying off the other debt.
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