“Don’t Use Credit Cards, Use Cash For Everything”: 30 People Debunk Frugal Hacks That Just Don’t Work

We probably all know that money won’t make you happy on its own—health, an active social life, and finding purpose in life will help you with that. However, a bigger income can boost your happiness as you find more and more financial stability… to a certain extent.

Research conducted by Daniel Kahneman and Matthew Killingsworth, arbitrated by Barbara Mellers found that happiness rises up to $100,000 per year, and then plateaus. Greater income increased the emotional well-being of those who were the unhappiest the most. However, those people who are already very happy with their lives saw their happiness grow even beyond earning $100,000 per year. 

“In the simplest terms, this suggests that for most people larger incomes are associated with greater happiness. The exception is people who are financially well-off but unhappy. For instance, if you’re rich and miserable, more money won’t help. For everyone else, more money was associated with higher happiness to somewhat varying degrees,” Killingsworth, the lead paper author and a senior fellow at Wharton, said.

According to personal finance expert Rick, there are two main strategies for building a surplus of income. The first one is increasing our income, such as "by asking for a raise, getting a higher paying job, or even a side hustle." The second approach is decreasing our expenses.

"Increasing income could be as simple as approaching one's boss and explaining why you're valuable, the extra work you provide over and above what's expected, and the current going rate for an experienced role such as yours," the expert told Bored Panda.

"If that doesn't work, there are other options. Thanks to the strong jobs market, now is a great time to dust off the resume and start looking for a higher-paying job." 

There are always good opportunities available if someone has the patience to search for them and the courage to act.

At the same time, knowing how to control your expenses can be an invaluable skill, too. Rick pointed out that part of making ends meet also means cutting expenses as well as creating and sticking to a budget.

"To start a budget, divide expenses between needs and wants. Needs are necessities that you need to live, like rent, insurance, food, etc. Wants are things that are nice to have, e.g. subscriptions, restaurants, shopping, etc.," the personal finance expert said.

"For many Americans, interest payments are also a big portion of one's budget. As a result, prioritizing paying down debt will result in instant savings (less interest to pay monthly), thereby increasing one's monthly surplus of income," he explained.

"Putting it all together, cutting back means reducing expenses and increasing income at the same time so that you can spend less than you earn and save the rest." For some more great personal finance advice, feel free to check out Rick's blog, as well as his book, 'The Financially Independent Millennial.'

It makes sense for anyone and everyone to manage their finances well. Ideally, you want to have an income that’s greater than your monthly expenses. That way, you can pay for everything that you need, slowly get rid of any debt that you might have, and even have money left over to drop into your savings account or invest where you see fit.

A good approach to managing your expenses is to sit down and create a detailed list of all of your monthly expenses. Then, be honest with yourself about where you can cut back. For instance, you might be paying for a few streaming services but never find the time or energy to actually use them. It’d be a no-brainer to (temporarily) suspend those accounts.

Or you might realize that you’re spending an incredible amount of money on sneakers you never wear or on video games you don’t even enjoy anymore. This will look different for everyone. If money is tight, you need to get rid of all the superfluous expenses first before moving on to the stuff that will really feel bad to sacrifice.

One major area where you can really cut back is food. For instance, if you’re a big fan of dining out, eating fast food, ordering takeaway, or buying tons of snacks every single day, you can save a ton by choosing to cook at home. You can make inexpensive, nutritious meals very quickly by shopping around for good deals and planning ahead.

You could, for instance, buy certain ingredients at a discount and then freeze them for future use. Meanwhile, when you’re cooking, you can make bigger batches of chili or stir-fry or chicken and broccoli with rice, and then freeze the portions for the rest of the week. This way, you’re saving your time, energy, and money.

So long as you’re focusing on nutrition, you should be perfectly fine. And it’s no sin to dine out somewhere fancy from time to time—good food is good for the soul. But it really does have to be ‘from time to time,’ not daily.