Being Frugal vs Earning More to get to financial independence

If you’ve spent any amount of time looking into the idea of financial independence, then you know that there are two ways to achieve your FI goals. You can either earn more or spend less to increase your savings rate and propel you to your FI number.

In this community, there is a constant debate about whether you should focus on earning more or spending less to reach FI. Some advocate for being more frugal to reach your savings goals. Others suggest that you focus on increasing your income to boost your savings. Today, we will discuss both options and which might be the best path to pursue.

Being FrugalBeing Frugal vs Earning More

Although the word frugal can often come with some negative connotations, choosing to live on a budget can accelerate your path to FI. Lower living expenses allow you to free up money to invest in your future through a rental property or the stock market.

When you are mindful of what you spend, it is possible to eliminate purchases that aren’t providing value in your life. After all, why should you spend your hard-earned money if a purchase isn’t providing value? A big part of understanding how you spend your money is also to look at what is a want vs a need.

You can cut your expenses in a variety of ways. Let’s take a look at a few examples below:

  • Try house hacking to downsize your housing expenses.
  • Learn to cook while trimming your food budget.
  • Biking to work to cut your transportation costs.
  • Choosing to grow a garden to minimize your grocery bill.
  • Selling items that don’t bring value to your life.
  • Going to the library instead of purchasing your next novel.
  • Buying large purchases, like cars, secondhand to avoid depreciation costs.

All of these are perfectly reasonable ways to optimize your expenses and trim your budget. However, some can take their frugality to an extreme level. For example, some advocate for skipping showers, becoming a freegan, and leaving the heater off at all times to save money.

Earning More

On the flip side of the equation, many focus on earning more. With a higher income, the idea is that savings for FIRE becomes easier.

You could increase your income in a variety of ways, including the following:

  • Building a real estate portfolio to provide an income.
  • You could start a side hustle to bring in extra cash.
  • You can negotiate for a raise at work.
  • A career switch could bring an increase in income.

Each of these strategies can help you increase your income. However, many people take this to an extreme. There are only so many hours in the day. We each have to spend those 24 hours on what makes life worth living. If you work too many extreme hours, then it is highly likely that you could experience burnout at some point. Plus, the cost to your physical and mental well-being may not be worth the reward.

Which is better?

Being Frugal vs. Earning More. What is more important? On your path to financial independence, both frugality and earning more will come in handy. Overall, the best option between these two is a balance that suits your lifestyle.

Don’t allow deprive yourself of the good things in life by working too much on cutting your budget. Make sure to spend money on the things that add value to your life. If you are tempted to focus all your effort on earning more money, remember that you must enjoy the journey to FI. Although it might be accelerated slightly by earning more money, you shouldn’t sacrifice your relationships and hobbies now in order to race to FI.

The most important metric on your journey to FI is your savings rate, not how much money you bring in or how many pennies you can save in your budget. If you want to increase your savings rate, then you’ll need to either increase your income or decrease your expenditures. Instead of going too far in one direction or the other, you should build aspects of both into your life.


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