Many young adults today resort to overtime work after regular hours in order to increase their income. Coffee shops, ride-hailing services, online sales, or even additional office tasks often occupy their schedules from early morning until late at night.

Yet, a paradox emerges: at the end of the month, their accounts remain empty. This raises a critical question: does engaging in excessive overtime work truly provide financial security, or does it merely pull individuals into an exhausting cycle that perpetuates financial insufficiency?

Why Does Overtime Work Fail to Resolve Financial Shortages?

Rising Income, Rising Expenditures

A widely observed psychological phenomenon is that when income increases, people simultaneously allow expenditures to expand. Extra earnings from overtime work often translate into luxury meals, new technology purchases, or entertainment subscriptions. Ultimately, income flows in but dissipates just as quickly.

Lack of Financial Planning

Experts emphasize that the absence of structured financial management is a fundamental reason why individuals remain financially strained despite continuous overtime work. Without rigorous tracking of cash flow and systematic allocation toward savings and investments, additional income cannot guarantee sufficiency.

Overtime Work Does Not Equate to Wealth

While overtime work may provide temporary income, it generally represents an exchange of labor time for monetary return without long-term value creation. Once physical effort ceases, the income stream ceases as well.

Pitfalls of Relying Exclusively on Overtime Work

Pitfalls of Relying Exclusively on Overtime Work
  • Deterioration of health: Excessive overtime work may induce exhaustion, stress, and imbalance in daily life.
  • Loss of developmental opportunities: Continuous focus on side employment prevents individuals from enhancing core competencies or advancing professional careers.
  • Absence of passive income: Dependence solely on labor prevents the establishment of income streams that generate wealth autonomously.

The Turning Point: From Overtime Work to Intelligent Financial Management

When individuals perceive themselves as “running at full speed but standing still,” it is essential to shift perspective. Income derived from overtime work should be regarded only as an initial step. The critical determinant of financial sufficiency lies in how that income is utilized.

1. Expenditure Allocation Through the 50-20-30 Rule

The 50-20-30 framework provides structured discipline:

  • 50% of income directed to essential needs: housing, utilities, food, and transportation.
  • 20% reserved for savings and long-term investments: retirement, property acquisition, and children’s education.
  • 30% allocated to discretionary consumption: entertainment, travel, or hobbies.

Segregating funds into distinct accounts minimizes confusion. For example, transfer 20% directly into a savings account upon receiving salary, retain 50% within a primary account, and allocate the remaining 30% to a secondary account dedicated exclusively to leisure.

2. Mortgage Repayments Not Exceeding 28% of Income

Monthly repayments must not surpass 28% of total income

For individuals financing property through loans, the golden standard is clear: monthly repayments must not surpass 28% of total income. Exceeding this threshold induces excessive debt burden. Optimal strategies include selecting affordable housing, accumulating substantial down payments, and borrowing prudently.

3. Life Insurance Coverage at Least Ten Times Annual Income

To safeguard household stability, life insurance should equal or exceed ten times the annual income. For example, with a monthly income of 20 million VND (equivalent to 240 million annually), coverage should minimally reach 2.4 billion VND. Such protection ensures continuity of financial security if the primary earner becomes incapacitated.

4. Retirement Savings Constituting 15% of Income

International research indicates that post-retirement sustainability requires between 70–80% of pre-retirement income. To achieve this, individuals must allocate a minimum of 15% of income annually toward retirement funds, ideally beginning early in their careers. Delayed initiation (e.g., beginning at age 40) may necessitate contributions as high as 30%.

Conducting Overtime Work Strategically

Conducting Overtime Work Strategically

The short-term utility of overtime work is undeniable; however, to ensure enduring value:

  • Select overtime aligned with professional skills: For instance, marketing professionals should pursue freelance projects that reinforce expertise rather than unrelated manual labor.
  • Set temporal boundaries: Prevent overtime work from monopolizing life; conserve health and energy for strategic objectives.
  • Transform overtime earnings into capital: Rather than spending indiscriminately, treat additional income as “seed capital” for savings and investment.

Conclusion

Overtime work itself is not inherently problematic, but reliance on overtime alone is insufficient for financial security.

Instead of remaining trapped in the relentless cycle of exchanging time for money, individuals must cultivate personal financial management, practice systematic saving, and embrace strategic investment. Under this paradigm, income derived from overtime work transitions from a temporary wage to a foundational element in achieving financial independence.

This discussion does not dismiss the significance of overtime work; rather, it underscores that the decisive factor lies not in the quantity of hours worked, but in the transformation of that labor-derived income into sustainable assets for the future.