3 tips for deciding whether to spend your free time trying to save or earn more money

Suppose you have one hour at your disposal. What do you do in that time? Do you use it to whip up a meal at home, thereby saving you the $20 you would otherwise have spent eating at a restaurant? Do you take a long bus ride home and save the $15 you would have spent on a cab ride?

Or do you instead put in an extra hour at work in hopes that it will contribute to a higher bonus or increment at the end of the year? Do you spend that time working on a side gig to earn a bit of spare cash?

Guess what, money isn't the only precious commodity in Singapore-time is arguably even more precious, judging by the growing number of people who value work-life balance over salary. If you've pledged to improve your financial situation, should you use your time to save or earn more money? Here are some tips that can help you decide.

If your career has potential, invest extra time in upgrading yourself

Getting ahead in your career often requires the investment of extra time-and no, we don't mean you need to spend more time wayanging in front of the boss till all hours of the night just so he thinks you're working hard. If you really want to master your chosen job, that could mean attending skills upgrading seminars, reading up on relevant topics or even just grinding away at achieving those sales targets later into the evening.

But not every career deserves all that extra effort. As a general rule of thumb, if your career offers potential for growth, then you have a good reason to invest that extra time in upgrading yourself. It may not pay off immediately, but a few years from now you'll be glad you did it.

For instance, rookie real estate agents often drop out because they don't manage to close any sales for the first couple of months. But those who really dig in and survive the first few months can find themselves with a pretty lucrative career. If you're in that situation, it would make sense to invest your time in working on your career.

On the other hand, if what passes as your career is really just a job with little potential for growth, or you've reached a plateau, it might make more sense to work on lowering your expenses, rather than throwing more time into that line of work.

If you're reaching a plateau in your career but you like your job, then work on cutting your expenses

At some point in our lives (and that point might be very far away for younger workers), you might reach the stage where you have to accept that you've pretty much reached a plateau in your career. That's not necessarily a bad thing, and doesn't mean your income will stop growing incrementally. Nor does it mean you should stop learning.

But when you've reached that stage, it could be time to start working on reducing your expenses. Many PMETs who get retrenched find it difficult to survive when they realise they can't completely replace their previous salaries, yet they have gotten so used to their luxurious lifestyles that they can't cope with downsizing.

Of course, if you've reached a plateau but are dissatisfied with your career, you'll need to invest more time into upgrading your skills to place yourself on a new path. But those who've reached the top and are happy about it should definitely spend some time thinking about whether they really need to spend so much each month.

If a side gig would help you build useful skills, spend time on that instead

A side gig doesn't have to mean you're hawking Tiger Beer at night (although if that's what you're good at, more power to you). For many employees in Singapore, a side gig could mean offering private tuition on the side, selling products on platforms like Qoo10 or doing freelance work.

So how do you know whether you should spend that extra time trying to expand your side gig, or save money instead? Other than how much you earn in your side job, it helps to also consider whether your side gig is helping you build useful and relevant skills in your career.

If you're a graphic designer and apart from working for your company also freelance outside of work, everything you do as a freelancer contributes to your portfolio and sharpens your skills, so it might be a better idea to take on more jobs than to spend hours trying to save a few bucks here and there.

On the other hand, if you moonlight as a private tutor while your day job is in accounting and you don't want to become a full-time tutor, taking on more kids doesn't have that much value beyond the money it earns you.

In that case, instead of spending every second of your free time breathing down kids' necks and forcing them to pore over assessment books, it would probably make sense to allocate some time to doing things for yourself and cut costs, such as by doing your own housework instead of paying someone else to do it, cooking your own meals or taking public transport.

This article appeared first in MoneySmart.

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