“It’s not how much money you make, it’s how you spend it.”

My father has said this so many times that I associate the phrase entirely with him…even if it’s been said by countless other folks.

Perhaps because I heard it so many times, or just because I was young, I never really contemplated what it meant. Fast forward a couple of decades and the implication hits home as I compare my incoming and outgoing expense reports. I suppose it is somewhat natural for most of us to either live at, or slightly above, our means (a budget will generally swell to fill the revenue it’s granted). Yet, it can be so disheartening to see most, if not all, of your hard-earned cash disappear at the end of the month without a trace.

I suspect that’s why people across the United States, young and old, are attempting to live leaner, more functional and fiscally conscientious lives, as discussed in the initial post in this series. In the new American dream, currency is becoming a means to more time, rather than more possessions.

The Money We Make

The manner in which Americans, and millennials particularly, are earning currency seems to be changing. While many continue to procure employment by large companies, more and more folks are cobbling together incomes from various smaller jobs (often referred to as “gigs”), either because there is a lack of employment in their geographical or professional field, or because it fits their schedule or lifestyle better. As company dynamics and economics evolve, sometimes corporate needs call for a more flexible worker who can come and go as needed, or work remotely online.

One interesting aspect in this changing game of cash flow juggling is the phenomenon of “scaling income.” This means that income is generated from a product (usually electronic) or marketing campaign that can be “scaled,” i.e. increased in size or reach so as to escalate revenues (as opposed to the time-for-money exchange that most of us are used to).

Increasing numbers of savvy people appear to be trying their hand at strategies such as affiliate marketing or designing products, while many others are earning profits from training programs, courses, and e-books designed to train people to become successful marketers. Although it’s generally accepted that only a small percentage of affiliate marketing startups actually see success, thousands of people attempt it every year. (I, myself, know very little about affiliate marketing, but  I like to follow Malan Darras’s You Tube channel just for his unique perspective on the subject.)

Of course, maintaining one’s income with “gig’s” or online arrangements typically means that an individual is essentially a small business owner. Therefore, more people are having to become intimately involved with issues such as taxation, insurance, and retirement savings (items typically handled by an employer in days of yore). It will be interesting to observe how this influx of small businesses changes the markets, as well as government policy.

The Money We Spend

Our shopping habits are evolving in this new economy as well. This adjustment is definitely influenced most by millennial spending mannerisms, but it is a pattern that can be seen in all generations. As described in this Forbes article, discretionary spending is slowing down just a bit in the United States, most notably by millennials (though, this may change as millennials buy houses and start families, also mentioned in the article). Folks all over the country seem to be experiencing a need or want to downsize homes and possessions, either for aesthetic or economic reasons, and no doubt influenced by the latest minimalism and decluttering trends. This also means that people are making a concerted attempt to bring no more (or very little) clutter into the home.

Other characteristics of millennial spending are guiding the market, as well as influencing other generations. These inclinations include using social media as a shopping guide and using mobile devices as the primary way to locate, research, and purchase products, as outlined in this Entrepreneur article. Retailers are having to adapt to this new, “hands off” approach to marketing and distributing products by sustaining brand social media accounts and creating beautiful and functional websites. Millennials, particularly, are also very concerned about cost, as the Entrepreneur article eludes to as well. With increased competition in regards to price, both online and physical retailers are having to cut overhead and operate on leaner budgets in order to compete, while also maintaining online operations.

In summary, the new way to make money is on one’s own schedule, and, with any luck, by one’s own rules.  Work can be done anywhere and performed at almost anytime. Our spending is becoming less dictated by what we desire, and more so by what we require. 

*To read more about my take one the new American dream, you may see part 2 here, and the initial article here.

Thanks for stopping by, and stay cozy!