Our Thinking of Money Matters is Way Too Complicated

by David Ning · 12 comments

money management is way too complicated

One morning while I was saying something to my wife, I realized that perhaps the way we think about wealth is way too complicated.  It happened when I was telling her that for the first month in a long time, I spent more money than I made.  We were going through the list of expenses for June when I said “It’s just simple.  You save money when you make more than you use.

Money management is just as easy as that isn’t it?  Make more in a given time period than you spend and you will be ahead.  No complications, no 101 list of ways to do this and that, no messy calculators and no need to use complex software.

Make more than you spend

I wasn’t even thinking too much about it when I made the statement, which meant that I knew this golden and simple fact all along.  As a PF blogger, I am guilty of complicating the personal finance subject all the time.  I think about another 45 ways to save that extra dollar, 32 ways to invest in the next stock and find the next 87 ways to motivate myself to make more money.  I let all these minor issues cloud the main focus, which is really to just make more money than I spend.

With about 150 personal finance blogs, 15 PF magazines out there and tons more ways to read about money matters, it is so easy to get consumed in the little things that we forget about what’s the most important.

Today, I want to alert and remind everyone of something we all know about money managment.

Make more money than we spend.  It’s as easy as that.

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{ 12 comments… read them below or add one }

Calvin July 1, 2008 at 10:19 pm

Hmm… Thanks for the article. I need to think about whether I spend too much time thinking and complicating my finances too.

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magnesium July 2, 2008 at 6:09 am

Calvin, I am going to do the same ;)

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Invest Money Lab July 2, 2008 at 8:36 am

Hi Calvin, I totally agree with you. There are 2 ways to accummulate wealth, control spending or make more money. I prefer the later ;-)

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Kiwikid October 11, 2012 at 2:26 pm

The problem with making more money is that expenses usually rise to meet the increase. So, if that is the case you are in fact no better off.

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Joe @ Simple Debt-Free Finance July 2, 2008 at 9:17 am

Great Post David.

I believe this is an important corollary to another oft forgotten tenet of Personal Finance: Spend less than we make.

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Calvin July 2, 2008 at 9:19 am

magnesium and Invest Money Lab: Hopefully the three of us will be rich. :) If that happens we can thank MoneyNing later.

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marci July 2, 2008 at 6:57 pm

I’ll have to partially disagree with you on semantics…You stated: “I let all these minor issues cloud the main focus, which is really to just make more money than I spend.”

Like Joe above, I prefer to think of it as “Spend less than I make”….

I think looking at it this way puts the focus on spending less, instead of on needing to make more money :) And I’m all about not spending, and not on making more money… :)

Good post. And yes, it IS just that simple.

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ioana July 4, 2008 at 7:28 am

As a financial neophyte, I have to say…

DUH.

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Sara July 5, 2008 at 3:04 pm
Witty Artist May 17, 2011 at 2:38 am

Nice and simple way of seeing things. You’re right: we’re too busy and focused on the problem (how to make more money, how to save more etc) instead of focus on the actual solution and just take action.

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Darrius R August 11, 2012 at 7:35 am

You are absolutely right. And, to profit in the stock market, simply “buy low and sell high”. :) Most of us, myself included, just have to work hard to get there…and hopefully have some fun while we’re at it.

Spend less than you’ve spent, and make more than you’ve made.

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Theora55 February 17, 2013 at 9:32 am

Spend less than you make, pay attention to your expenses, work more to make more, are all great advice, especially when you’re young.

If you have savings, and you should, and if you have a retirement plan, and you should, esp. as you get past 30, you should also spend at least a little time making sure that your assets are invested well and safely, and that you have optimized your tax situation.

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