Beyond the Budget | When Frugality Reaches Its Limits, Making More Makes Sense

We’ve all heard the saying: “Live below your means.” Cooking at home, making coffee at home, and looking for deals — these are all hallmarks of financial responsibility. But what if the relentless pursuit of frugality starts to backfire? Here’s why, after a certain point of optimizing your expenses, focusing on making more money might be a smarter financial move.

Photo by Towfiqu barbhuiya on Unsplash

Law of Diminishing Returns

There’s a natural limit to how much you can cut from your expenses. Let’s say you’re serious about saving and you’ve already cut out all the easy stuff: no more daily lattes, home cooked meals instead of eating out, and cancelling unused subscriptions, etc. These initial cuts can make a significant dent in your spending.

But what happens after you’ve picked all the low-hanging fruit? Here’s where things get tricky. You can’t eliminate essential expenses like rent, utilities, groceries, and transportation without significantly impacting your quality of life. Are you willing to get a roommate or downgrade to a smaller, less comfortable apartment to save a few hundred dollars a month? Can you…