why increasing income is not the best way to increase saving?

June 28, 2010

Based on my own experience and interactions with many people, every time people want to have more saving, they are trying to increase their income or trying to come up with an idea of a side income.

While it’s not wrong, it’s just simply tough.

Let’s start with a very basic equation:

SAVING = income – EXPENSES

As usual, a graph helps us to visualize the issue:

This picture shows that there are toooooo many ways and tooooo easy  for us to spend money while it is so tough to add/increase income.

But the danger for human (especially for me) is it is easy to write but soooo difficult to do……

notes: i posted before how to select which post to be reduced (versus just cut everything)