Cutting subscriptions and eating out less won’t make you wealthy: CA shares financial advice on what to do instead

Cutting expenses is often the first piece of financial advice people hear when they want to build wealth. Cancel subscriptions, eat out less and shop less, the thinking goes. But CA Nitin Kaushik believes there is a limit to how far this approach can take you. In a post on X, he explained why saving money is important but increasing income and investing those savings can have a much bigger impact on long-term wealth creation.

Cutting expenses has a limit

CA Nitin Kaushik took to X and shared “3 reasons cutting expenses alone won’t make you wealthy.” According to Kaushik, saving money absolutely matters. However, there comes a point when cutting another Rs 500 from your monthly expenses may not make a meaningful difference to your financial situation.

“There is a floor to what you can cut. There is no real ceiling to what you can earn,” he wrote. People can cancel subscriptions, eat out less, shop less and potentially save another Rs 5,000 to Rs 10,000 every month. Kaushik said all of these steps are useful, but they have a limit. Eventually, there may be little left to cut without affecting your quality of life.

Earning more can change the equation

Unlike expenses, income does not have the same fixed limitation, according to Kaushik. He pointed to several ways people could potentially increase their earning capacity, including getting a promotion, developing a valuable skill, creating a second income stream or pursuing a better business opportunity. These changes, he suggested, can have a much more significant effect on a person’s financial equation than repeatedly cutting small expenses. Kaushik also warned that extreme frugality can come with hidden costs.

When saving money costs you time

Trying to save every possible rupee can sometimes mean spending valuable time doing things yourself. Kaushik gave the example of saving Rs 2,000 by spending three hours every weekend handling everything yourself. On paper, that may look like a financially smart decision. But those three hours could instead be spent learning a valuable skill, building a business, taking on freelance work, spending time with family or simply resting.

The point is not that people should stop being careful with money. Rather, Kaushik argues that time also has value, and cutting expenses should not come at the expense of opportunities to increase future income.

Not every expense needs to disappear

Kaushik said the objective should not be to eliminate every expense. “The goal is to spend intentionally, not punish yourself for spending,” he wrote. That means distinguishing between unnecessary spending and expenses that genuinely improve your quality of life. Cutting waste can free up money, but constantly depriving yourself is not necessarily the same as building wealth.

For Kaushik, saving is only one part of the equation. “Saving protects your money. Investing gives it a chance to grow,” he wrote.

Why simply saving cash may not be enough

Kaushik also highlighted the effect of inflation over the long term. He used the example of someone saving Rs 25,000 every month and simply accumulating the money as cash. While this approach protects the capital from being spent, inflation gradually reduces what that money can buy. Investing introduces risk, Kaushik acknowledged, but it also gives money the potential to grow through compounding over time. This is why he believes wealth creation eventually requires more than simply reducing expenses.

Kaushik’s wealth-building formula

Kaushik summarised his approach to wealth creation with a simple sequence: Earn more - Save more - Invest wisely - Compound. Cutting expenses can be a useful starting point. It can help people understand where their money is going and create room for saving and investing.

But Kaushik cautioned against spending an entire lifetime becoming better at spending less. At some point, he said, the more important question becomes: “How can I make my money work harder?” He ended his post by asking his followers to consider which stage they are currently in: “cutting, earning or investing?”