Earn or Save? The False Dichotomy

Several bloggers have chimed in on this already, but since it made its way into yahell news and a friend asked my opinion, I figured I'd rage about comment on it here.

Ramit Sethi had a recent article in The New York Times which essentially dissed thrift and exalted earning. It's a classic argument. Unfortunately, it's a false dichotomy.

It is possible to both save and earn more. I would argue that done in conjunction, earning more and cutting back and therefore saving more are the double whammy of personal finance. Kind of a no-brainer, eh?

I don't mean to make you panic here, but I also have a really radical "other" option. Ready? It's possible to be *gasp* satisfied with what you currently earn. Shut your mouth! This is America, heifer! More is better! Go big or go home!

Alright then. I'll go home. Well, after I've griped some more.

Sethi's article touches on something pretty significant that he probably didn't intend. Take a gander at this portion of the article which notes a series of cut backs in spending:

Not bad. $400 saved. But at what cost? Each morning, Jack has to decide if can buy that latte. He has to consciously cancel his cable. He has to decide if he can afford that dinner out. On and on -- and he has to do this every month.

OH. MY. GOD. THE COST! The cost! Migrant farm workers don't have to suffer like this; why should Jack? He has to be cognizant of his decisions EVERY. SINGLE. MONTH? He can't just walk around in a stupor, spending money on stupid shit he doesn't need? You mean, it's just too much of a hassle to be conscious? To ask if something has genuine value before Jack plunks a dollar down? To pay attention to his actions? I mean, imagine the horror if Jack were to grow a soul and started asking really complicated questions, such as, "Do I want to spend money on this latte when I'm not sure if the farmers were paid a fair wage?" What about, "Is this disposable cup really necessary? I mean, I did order this coffee to drink inside the shop."

Well, crap on a spatula! That's just too much to handle. Go ahead and shut that brain off, Jack! Being fully awake and present is just far too much to ask of a human being. Well, maybe a human being with a rather outsized and damaging sense of entitlement, to be more accurate.

Sethi continues with

Cutting back may be easier for the first month. But it's likely unsustainable. After all, there's a limit to how much you can save. But there's no limit to how much you can earn.

Of course. Behaving in the world as if you are actually an alive, breathing, thinking human being is completely unsustainable. Behavior change? Totally unrealistic. Jump in that Hummer, wolf down that CAFO meat, buy that tech gagdet mined on the blood and broken bodies of women, and carry on! No need to change a thing! That's just unsustainable.

Seriously, dude? Seriously? Seriously.

And secondly? Of course there is a limit to what you can earn. There are only so many hours in a day, so many people willing to buy what you're selling, so much energy you have to expend, and (hopefully) so many boundaries you're willing cross. Regardless of what faux spirituality folks like to spew, the material world has limits. Sometimes, it's a good idea to respect them. When we don't, horrible crap happens (see: climate change).

Further, can we please all stop talking about earning more as if it's some effortless joy ride that takes absolutely no time? Sethi's right. You'll have no problem finding someone who will pay top dollar for whatever you're selling, because we outsource virtually every aspect of our lives. But don't forget that you have to do the preliminary (sometimes constant) unpaid work of hustling for clients, maintaining those relationships and actually doing the work. Your reward? Less time to do with as you please and a portion of your earnings will be given to Uncle Sam to be spent in ways that will infuriate you.

The beauty of investing money you've saved from downshifting? It's not taxed and more often than not, you don't have to hand over massive chunks of your life (AKA time) to get it. It's usually a two-second decision that goes a little something like this: OMG! Look at that totally adorable Princess Kneesa ewok doll! My mom threw mine away when I was a kid. Damn her! (Seriously, she did. And I totally want that doll.) Wait, what? Oh fortheloveofallthat'sholy, you don't need a silly stuffed animal. Go read a library book, you dork.

Bam! Done. No hustling, taxing or time needed.

I argue that more than likely, the process of earning money is already taking up the vast majority of your life. Does it really deserve more? Research shows that the more we earn, the more we spend. Will you fall into that trap as well if you focus all your efforts on earning more? What does it say about us if being cognizant of our spending behavior is simply too taxing?

I'm not suggesting that earning extra money is a bad thing. Or that downshifting is always easy. It's just that earning more money is not some effortless panacea that will cure all that ails. Nor is cutting back on spending the only way to gain financial independence. There is no dichotomy. You can do both and blend the best of both worlds.

Personally, I find that I have more than I need and downshifting/living frugally has given me a greater awareness of my actions, helped me to live in better alignment with my values and has made the process of earning more as I age and move up in my career all that more valuable, because I'm not wasting money on silly crap. (Well, not as much, anyway.) Turns out, behaving like the conscious living instead of the living dead is more than just sustainable; it's the key to being a decent human.