Imagine two people. Friends of yours. Maybe a family member.
The first person has maxed out all of their credit cards. They don’t have an extravagant lifestyle. They have a modest car and apartment. But they did opt for two bedrooms for when friends or family come to visit. The rent is higher, and with their car payment, they have to use the credit card to make ends meet. And it’s not like they went crazy with their card. I mean, when their best friend has a destination wedding, they had to go and their only choice was to put it on the card. And they had to go to that concert! Their favorite artist NEVER comes to town and they saved thousands of dollars by not having travel expenses. Every charge can be justified: the gym membership, Netflix, Uber Eats (they were too sick to make anything), Starbucks, the latest iPhone (they broke their old phone in a freak accident), etc.
Question: Would you say they had a spending problem or revenue problem?
The second person doesn’t even have a credit card. Well, they have one, but only for emergencies. They live in a basement apartment, if you can call it that. It’s more like a bathroom with a bed in it. They get around on a used bike they fixed up and public transportation. They make their own food; mostly dishes with rice, beans, or potatoes. If they’re in a hurry, they’ll splurge with Top Ramen, though they bought it in bulk and got a good deal because it was expired. They have a very old phone that is embarrassingly slow.
Question: Does this person have a spending problem or a revenue problem?
Now, you have the opportunity to give $100 per month extra, divided however you deem fair. Who will benefit from the $100 extra the most? The first person is living with a deficit, surely they need it most?
While both people have a revenue problem, the spending problem of the first person concerns you that the extra money may not help. I would argue that the spending problem needs to be addressed before they get help with the revenue.