This statement is a financial fallacy because it suggests that cutting out one expense, like a gym membership, can fund all other spending habits. While it is true that eliminating unnecessary costs can help free up money in your budget, it won’t completely fund your entire lifestyle, especially if your spending exceeds your income. Also, a gym membership could provide long-term health benefits which might end up saving you on healthcare costs in the future.
It’s easy to understand why people fall into this misconstrued thinking. Gym memberships are typical examples of fixed monthly expenses that people could judge as extraneous or optional, thus an easy target for budget cuts during frugal times. Under a tight budget, reducing any cost may feel like a victory or proof of good financial planning.
An appropriate financial practice would be to consistently track your income and expenses, create and adhere to a balanced budget, minimize unnecessary expenditures, and save for the future. This includes an understanding of your needs versus wants, prioritizing essential expenses, and saving or investing the extra funds diligently.
“Your Money or Your Life” by Vicki Robin and Joe Dominguez. Book Link Explores the relationship between people’s spending habits and their fulfillment.
“The Total Money Makeover” by Dave Ramsey. Book Link Provides a comprehensive guide on managing personal finances and debunking money myths.
“The Psychology of Money” by Morgan Housel. Book Link. Examines the economic fallacies and misconceptions that people often have.
“The Millionaire Next Door” by Thomas J. Stanley and William D. Danko. Book Link. Discusses the common economic behaviors of individuals who successfully accumulate wealth, and challenges misconceptions about wealth and financial planning.