About Your Spending

Spending less allows you to set the stage for wealth accumulation

Ken Green
4 min readSep 19, 2020


I’ve written about the GAP in previous articles:

GAP = Earned Income — Expenses — Taxes

One of the variables in the equation is “Expenses”.

When it comes to building wealth and achieving financial independence, we often focus more on Earned Income. We’re constantly looking for ways to earn more. As a result, we pay little attention to the other variables.

While all the variables in the equation are important, the easiest place to start is with your expenses. The reason for this is that cutting your expenses will give you immediate results and momentum.

Reducing your expenses may require you to make lifestyle changes. However, when you make a lifestyle change, it’s much easier to stick to it if you see results right away. For this reason, you get a great boost of momentum that can last for a long time.

Not only does spending less put more money in your hands almost immediately, but it also comes with benefits.

Here are five benefits of spending less:

1. It Saves you taxes

If you want to grow your wealth based on the equation we looked at above, you can either make more money or cut back on your expenses and taxes.

What happens when you make more money, particularly in a country like Canada?

Your guess is as good as mine…

You pay more taxes! Hikes!

When you make more money, you also increase another variable in the equation. And with a marginal tax rate system, you pay more taxes as your income bracket increases.

But, if you focus on spending less instead of earning more, you keep the full amount that you saved. And you don’t have to pay additional taxes.

2. You appreciate your money more by spending less

Spending less gives you a deeper appreciation of the money you spend.

All of a sudden, you start to appreciate all the little things you’ve ignored in the past. When you adjust to a…



Ken Green

Ken is a Chartered Professional Accountant practicing in Canada. He provides tax, personal, and business financial services. https://linktr.ee/KenGreenca