Secret to winning the personal finance game? Earn more, spend less.

It is easier to earn more money than it is to accumulate wealth. The only way to build up wealth is to make sure that, regardless of your income, you keep spending less and trying to earn more, Hamm says.

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    A man pulls out his credit card to make a purchase at a shop in June 2013. If you keep spending more money when your income increases, you will never get ahead, Hamm says.
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I believe it is far easier to earn more money than it is to accumulate wealth, in America at least.

72% of Americans would find it somewhat difficult or very difficult to pay that month’s bills if they lost their job today. In simplest terms, that simple fact means that it’s the norm to spend everything that you bring in and not accumulate anything.

Add to that the fact that the average American household income is above $50,000 a year and you have a recipe for a society in which an awful lot of people are spending an awful lot of money without accumulating very much at all.

You can come up with countless theories on why that is. My belief is that modern American society is simply consumption oriented, and when you live in a society that revolves around consumption as a positive value, it’s hard to choose not to consume and it’s hard to find value in saving money.

As I said at the start, I believe it is far easier to earn more money than it is to accumulate wealth, in America at least.

Many times on The Simple Dollar, I’ve talked about the concept of “the gap.” “The gap” refers to the difference between the amount we bring in and the amount we spend each month.

For someone living paycheck to paycheck, that gap is zero. If you’re accumulating credit card debt, that gap is negative.

The real serious challenge of personal finance is to make that gap big and positive. It’s to spend significantly less than we earn and to bank the rest.

Without some focus on spending less, a person will never get ahead. They will never achieve financial independendence.

Some people will point to earning more as the solution to the problem. Earning more is one piece of the puzzle, of course, but in a society oriented toward consumption, it’s far from the end of the road. Earning more without any regard for spending in a society like our own leads straight to spending more.

If your spending grows and shrinks to match your income, you will never get ahead.

The only way to succeed at the personal finance game is to make it your personal aim to make your “gap” as big as possible.

How do you do that? You work on two goals at once.

First, you work to earn more. You focus on making moves in the workplace and in your free time that will maximize your income after expenses. Remember, if you’re traveling to and from work, that’s a work expense. If you have to buy supplies for work or continually have to pay for training for wor, those are work expenses. You need to focus on whatever steps you need to take to maximize your income after those expenses.

At the same time, you need to spend less. Not less than you earn – that’s a given. You need to always strive to spend less period. Whenever a dollar exits your pocket, you need to give that dollar some thought. Did it exit your pocket for a good reason? Is there a better way when it comes to whatever that expense is?

Do both of those things and you’ll have yourself a “gap.” Maintain that gap and use that money to eliminate debts, then use it to start investing.

That is the only sure-fire way to start building wealth as a private citizen in this country. It’s the type of hard work and focus that America was built on.

The real challenge of personal finance is to separate your spending from your income and keep your spending low regardless of what your income does. If you can succeed at that challenge, you’ll succeed at everything else.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on

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