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Earn More Money! Why Spending Less Isn’t the Only Answer

Most personal finance advice focuses on spending less, but finding ways to earn more money can help you reach your financial goals faster. Here’s why.

Often, the best solution to money worries is to earn more money.

Last night, I spent a couple hours catching up on reader emails. Inevitably, about a third of the emails I receive are from people in their twenties or thirties who are either stuck under mountains of debt or who simply don’t earn enough yet to keep up with the cost of life.

Spending Less Only Goes So Far

If you have been reading personal finance books and blogs for a while, you’ll have come across plenty of advice on frugality—how to live on less and save money on everything you buy. It’s there for a good reason; it’s smart to be frugal and not pay full price for everything.

But frugality has its limits.

REACHING YOUR EXPENSE FLOOR

It’s possible to eliminate unnecessary expenses and save money by comparison shopping, clipping coupons, negotiating, or buying used — but you can only trim so much fat before you start cutting away the meat.

Sooner or later you’re going to hit what I call your expense floor. It’s the amount of money you need to live at your minimum comfortable level. Once you hit your expense floor, you can’t practically cut your expenses any further.

Everybody’s expense floor is different. Yours will depend on things like:

  • Where you live.
  • How much debt you have.
  • What you’re willing to sacrifice and what you aren’t.

The last one is tricky. Personal finance gurus love to advocate SACRIFICE. They’ll say you should sell your car and take the bus to work. Or that as long as you’re in debt, you should never take a vacation or go out to eat again. Now, I’m not saying you should indulge in a week in Paris or regular meals at Morton’s when you can’t afford it. But I AM saying this: Allow yourself to enjoy life while you work on your financial goals. Within reason.

Why? Because if you don’t give yourself little indulgences on a routine basis, eventually you may break down and sabotage your progress by blowing your money on something big.

There are a lot of great studies out there showing that willpower is like a muscle, and that willpower can be depleted.

This applies when you attempt to run a few miles, work uninterrupted for several hours, stick to a diet, or resist spending money on a regular basis.

(Also, I shouldn’t need to point out, that when you reach your expense floor, life won’t be much FUN. I mean, you don’t need to be rich to enjoy life, but nobody WANTS to sweat every penny month in and month out.)

How then, do you continue to find more money to save or put towards debt if you’ve cut your expenses all the way to the floor?

You earn more money.

This is the conclusion I came to several years ago.

Example: How I Started to Earn More

Here’s my story. (Cue the wavy lines and flashback music.)

It was the Spring of 2006 — and the consequences of my early-adulthood financial fatuity were approaching their most severe. I had been out of college for three years, but my choices of both major and initial career (sociology/journalism) weren’t exactly helping my finances.

I had managed to leverage my editorial skills to trade my magazine job for one writing marketing copy — a move that got me a sorely-needed extra $5,000 a year in salary.

Not enough.

So at 24, I swallowed my pride and moved back in with my mom and dad.

Still not enough.

I didn’t have to pay for rent or food. My only necessary monthly expenses were gas and car insurance (plus all the minimum debt payments). Of course, I wanted SOME money to have a little fun each month, but the fact was that I barely had enough to cover my debt payments, let alone accelerate my repayment progress.

I could’ve cut out every penny of “fun” spending—the occasional dinner and drinks with friends—but I simply wasn’t able to completely cut this out (because I knew from experience, overexerting my will day in and day out only led me to later screw up in an even bigger way.)

I had reached my expense floor. I couldn’t (or, at least, wasn’t willing) to cut my expenses any more.

Still, I HAD to do something about my debt…I didn’t want to be in debt forever.

THE DECISION

That month, I made the decision that would change my life…the decision to earn more money. I was sick of being in debt. I had cut expenses all I could. Then, I decided to figure out how.

I wrote down the three ways I knew to earn more money:

  • Get a raise or higher paying job.
  • Get a second job or freelance.
  • Start a business.

Eventually, I would do all three, but I started by getting a second job.

I don’t necessarily think that a second job/freelancing is easiest of the three ways to earn more money, but it’s absolutely the one you can make happen the fastest.

  • If you’re willing to do crappy jobs for low pay, you can find part-time work.
  • If you have marketable skills, you can freelance.

In my case, I became a Starbucks barista. I’d work 8-5, hop in my car and battle rush hour traffic to work 6-10 serving coffee 3-4 nights a week. Then I’d do a six or eight hour shift on Saturdays. That brought in an extra $800 or so a month (net).

That was good, but I wanted to get out of debt AND move out from under my parents’ roof. It wasn’t enough.

In a couple months, I found a new day job that paid $6,000 a year more. I took it.

I continued to work at Starbucks, although with the new job’s location, I now had to sit in 45 minutes of even worse rush hour traffic to get between the two. But in less than six months, I had gone from earning $34,000 to over $52,000 a year, putting well over an extra $1,000 in my pocket—and towards my debt—each month.

Was it easy? Hell no. But I was making progress.

Just a few months later, I got lucky. My previous employer created a new position and thought highly enough of me to ask me to apply. Ultimately, they offered me more money to come back in a slightly different and more challenging role. The result was an $8,000-a-year raise plus bonuses. So now, in less than a year, I had more than doubled my income.

While all of was happening, I started MoneyUnder30.com.

Back then, this blog wasn’t much. I posted a couple crappy, wandering posts, let the site sit idle for several months, then wrote a bit more. But in early 2007, I started to find a rhythm with blogging. Some of my posts did well in the search engines, and rising traffic levels gave me motivation to keep going.

I watched and learned from other growing blogs like Get Rich Slowly, Consumerism Commentary, and I Will Teach You To Be Rich, and I kept at it, a little at a time.

Eventually, I started to earn some money from the site, too.

It started slow—a hundred dollars here, a couple hundred more there. A year later my site was earning over a thousand dollars a month. Another year, and my site was grossing the equivalent of a modest salary. Today, I earn more from my blog than I do from my job.

I’m NOT saying this to brag about my blog’s success, but to show you that in five years, I increased my annual income about 500%. As a result, I was able to pay off some $80,000 debt in just a few years. (Not to mention afford to get married, move into a house, and start a family.)

Had I NOT increased my income, or not done it so dramatically, I would probably:

  • Still be in debt.
  • Not have emergency savings of any kind.
  • Not have been able to afford a home, have a baby, or even have gotten married.

So there you have it. If you’re tired of cutting expenses and getting nowhere, make the decision to earn more money today. If you’re willing to do what it takes, this hands down the best way to get out of debt or reach your savings goals faster. I know because it worked for me.

If you’re ready to take the next steps, read these posts on why you need a side hustle, how to overcome your excuses for not earning more and how to find a side hustle idea and earn your first extra dollar. Or, you may want to read up on how to negotiate anything — even if you’re shy or afraid for tips on asking the boss for a raise!

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About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.

Comments

  1. Absolutely right and well said.

    A lot of people hide behind their job and income as an excuse for their situation. Few actually take the same risks and work as hard as you.

    Most are content to stay in their own situation and complain.

    PS… How does your blog pull in revenue when you have no ads?

  2. Nice article.

    I wonder if maybe you’ve ever wrote about getting out of the cycle of excessive saving and not enjoying life b/c of it.

    I have a somewhat unique situation where I have no debts but I save religiously, to the point of wondering if I’m shortchanging a life of fun. I can’t seem to break out of this cycle of skimping on the “now” in order to invest that extra money and generate a return on it in the future. I max out my yearly 401 & IRA contributions and still throw most of my leftover funds into mutual funds.

    I know it won’t generate sympathy amongst other commenters, but I can’t break my fear that if I don’t save all I can now (while I’m unmarried, childless, and houseless) I won’t have enough for later!

    • Colin,

      I agree 100% with you. I have 0 debt but I really wonder if I should think twice about enjoying a few more things while I am young.

      I question a lot of purchases and I save a lot. But All I hear from my parents and other websites is KEEP SAVING AS MUCH AS YOU CAN

      • You need to figure out what you’re comfortable with.

        I, personally, could save a bit less. We fully fund my 401(k), 2 Roth IRAs, and my wife and I have pensions. I don’t need all of that, but it makes us comfortable knowing we will, for sure, be secure in retirement and have a good possibility of retiring early.

        I’m willing to sacrifice a little more now in order to enjoy a lot more later.

      • Colin, I definitely understand your situation.
        I have my monthly expenses covered no problem and no debt, but I have that hard-core SAVE mentality. So, I sat down and budgeted my liquid savings. I considered: emergency savings, this year’s IRA contribution, buying new furniture, new car down payment. Putting specific numbers on my savings goals was helpful so I could say, “ok I have enough for that sofa now” instead of just obsessively thinking, save more towards it.

        I realized that I had my goals either covered, or on par for when I planned to make each purchase or investment. It’s easy(for some)to get caught up in saving all you can. But you should know what you are actually saving towards. This way you know how much extra spending money you can afford yourself and not feel guilty about splurge purchases that you have the money for.

        • Thanks.

          While I’m not quite in the same situation as the OP, your comment is still one of the most helpful things I’ve read in the last few hours.

    • Sometimes it helps if you have a pot of money that is “fun money.” For me my credit card reward points plus some money I got for Christmas from my grandparents bought my new TV. I had looked into getting a TV a year ago, but decided it wasn’t worth it, I was just too cheap. But when the money comes from “free” sources, it doesn’t feel quite the same spending it.

  3. I looooove this. Especially that you now make more on your blog than you do with your job — that’s amazing and so inspirational, good for you!!! I really like the tone of your writing….very easy to read and friendly. Thanks for the happy reading.
    Kathryn

  4. Definitely a big fan of creating extra streams of income. Thanks for inspiring your readers even more.

  5. This is so true. You can try to save as much as you can, but you need the money coming in and not just try to protect all that you got.

  6. David Weliver says:

    Thanks for the positive feedback so far–glad this post seems to resonate.

    Tom, the quick answer is I do have ads on some older posts that mostly get seen by search engine traffic, but the majority of my revenue comes from just a few pages with financial products on them from which I earn a commission. It’s a better model than display advertising because I can control what products are promoted and I don’t bother regular readers with ads, but provide a service to those that are looking for particular products and services. If more readers are interested, I’m happy to share more down the road in a future post…

    Colin and Adam, I’ll consider your point about “oversaving” for a future article too. Admittedly, that’s never been my problem, but I know plenty who have it. (If either of you want to share more about your situation—drop me an email via the contact page.

  7. The Oil Barron In Training says:

    A big point that you hit on was your choice of major in college. Something that I see a lot is people going to grad school for majors that do not have a large demand or strong earning potential. I know that we are told to find something that you love, but it is more of an investment than that. You don’t choose a stock because the company is cool, you choose it for earning potential. You have to look at education the same way. Now, within the relam of these careers, like law, medicine, banking, engineering, you can find something you like.

    If you major in sociology or photography, you can’t expect a high chance of landing a high paying job. That’s just life. There are those one in a million stories of people who land an amazing job making 100k a month as a photographer, but for every one of them, there are 100,000 more who did not. You have to play the odds and plan. There is a reason why doctor, lawyers, engineers, and investment bankers make a lot of money … It’s not easy, its not fun, there is a big demand, and a short supply. It’s supply and demand. So if you are looking to increase your income, going back to grad school is a good idea if you pick the right subject.

    • You might want to leave law out of your list…there has been a *ton* of press about how law school is only a good idea if you are a top student at a high-ranked law school. For everyone else, many end up both unemployed AND $150,000 in debt.

      Both of my parents are attorneys, not for money but because they love law and justice – so if that is someone’s motivation, go for it. I am just saying it’s not as lucrative as some people think.

      • Marie,
        I, too, am the child of 2 lawyers who do it because they love to help their clients. My father is a bankruptcy lawyer and my mother is a public defender. People are always shocked when I say something about how my parents couldn’t help to pay a lot of my college expenses (they are always like “but BOTH of your parents are lawyers” then I have to explain that their clients have no money…). My parents love what they do and are incredibly smart and passionate, but they got a late start to their careers (which a lot of people also don’t realize that unless you want to work yourself to death in a corporate law firm there’s no big paying jobs immediately after law school) and they help people who are poor. Even when my mother was employed full-time as a public defender her salary was less than a first-year teacher’s. So just backing you up on that point that it’s not as lucrative as most people think.

      • The BEST financial decision I’ve made so far is not going to law school. For as long as I could remember, it was a dream to go to law school, I loved learning about the law and the thought of using law to right wrongs was inspiring. I made the poor decision of majoring in political science since I was so adamant about law school. I worked full-time while in undergrad so I decided to go to grad school to increase my chances of acceptance, plus there isn’t much you can do with a poly sci degree. Once I finished my MPA (public administration), I was looking at roughly $45,000 in student loan debt. Though I was accepted into 2 law schools (3rd tier), I knew it was not in my best financial interest to go. I did not want to graduate with over $100,000 in loans from law school alone, especially if I want to buy a house, get married, or start a family in the future. With my car loan, student loans, and other small bills I am currently at right over $65,000 in debt. I’ve been working a second job for the past 3 months and plan to keep it until I can see a significant decrease in my debt. I just turned 29, I only wisheI had my epiphany a few years ago.

  8. I like that you were able to get real about your situation and take action by moving back in with your parents and getting a 2nd job. Both decisions take guts that a lot of people simply wouldn’t do so they carry on digging themselves in a hole.

    Some people who are in debt are so intimidated (or embarrassed) by their situation that they don’t even go to their bank for a consolidation loan, but they turn to alternative lenders and even payday loan companies.

    There’s nothing wrong with asking for help, and then taking action to improve your situation (even if it’s uncomfortable for a few years).

  9. Very thought-provoking post. I like your new style of lower quantity – higher quality posts and the fact that it’s more personal.

    As far as reaching a “saving floor” goes, I’ve used the analogy of running. You can run at a constant rate, but only for so long. Breaking up the run into sprints among jogs feels more efficient, and knowing that the sprint has an end approaching, you have the drive to keep going so you can really enjoy the restful jog. With spending/saving, you can be extremely frugal with a time-goal in mind (your post about dedicating a single day of the week to not spending a penny comes to mind here), and once that time-goal is reached you can relax a bit. I feel that this is fundamentally different from saving for a larger purchase. There are no dollar ammounts suggested, rather lifestyle choices. So you save like mad for a 2 weeks straight, then take a couple of days where you indulge a bit – maybe buy a snack from the vending machine one of those days, or buy lunch instead of brown-bagging it. Keeping it about lifestyle changes rather than the actual dollar really goes a long way….. for me at least.

  10. Very inspiring story and just what I needed to read today. Thank you!

  11. I wholeheartedly agree with this post! It’s not just about saving money, but also about creating wealth. And I’d be interested to learn more about how you grew the blog and increased revenue.

  12. I love this post! I recently took on a second job a few nights a week in order to allow me to save more money. My day job pays the bills, gives me some spending money, and allows me to save a small amount for emergencies, but I simply do not earn enough to put away some serious cash. Working two jobs is hard at times, but I am very happy with my decision – even more so since reading about your experience.

  13. Awesome post! I agree with everything that you said.

    Pretty inspiring to all of the work you put in (2nd job and starting this blog). Your success is well deserved.

  14. BabyDaddy says:

    David, I love the attitude! I feel exactly the same way. My career for the last four years has been in medical device sales where success is entirely self-driven. For the last year and a half, I have been on 100% commission, which, to many of my friends, was unfathomable! (“So if you don’t work, you don’t make anything?” “What? You don’t get 3 weeks of vacation?”) The bet on myself has paid off in spades with 20% increases in salary every year compared to the 2-3% cost of living increases that my friends lobby for. And, as you mentioned, if I want to earn more and sock more away for retirement, I know that I just need to get out there, work harder, and plan more efficiently.

  15. Nice flow and great read… but begs the question, again, what is the revenue generating model … I would love to learn more since I’m in the middle of launching my own financial blog.

    Thanks!

  16. I’ve been an avid financial blog reader for a while now- and this is something just about every successsful one says.

    Sure, cutting out unnecessary expenses is great- but like you said, you can only do that so much!

    At home point you have to start earning extra money to really get ahead. Especially since nobody everyone wants to be able to live it up someday!

  17. I would also love to know more about the blogging money-making process!! I wouldn’t have a clue how that works….

  18. Great post!

    I’ve been toying with the idea of getting a 2nd job in addition to my full-time for a while. Yesterday I finally decided to buckle down and apply to a handful of evening, night, and weekend jobs that will hopefully add a good amount to my monthly income.

    Your post also got me thinking about my current job and what I can do to improve my pay here as well. I’ve laid out a 3-month plan that will coincide with my 2 year anniversary at this company. My progress over the next 3 months should, if I follow my plan closely enough, allow me to request a decent raise. I plan on making myself an absolutely indispensable employee!

    Keep up the great posts! As a 25 year old just getting out of credit card debt, it’s nice to know that there are others out there who have experienced something similar to me and are willing to share their knowledge of how they came out of it for the better!

  19. This is definitely something I’ve been thinking about a lot. I work odd hours, but I’m well paid for it. Now I’m looking for ways to move back to a more regular schedule, but I have to accept that it will involve a pay cut…and that’s a tough pill to swallow. (It would probably also mean I would have to cut back or give up freelancing, to rub salt into the wound.)

    • Along the same lines of this post, I recently moved my work shift from 8-4:30 to 2:00-10:30pm. The hours kind of suck, but it allows me to go to school during the day. And the added bonus is I am now eligible for a 10% shift differential. When you only make 30k, the additional 3k makes a difference. Some readers might consider this as an alternative to working two jobs.

  20. Great point! Too many personal finance sites emphasize slashing expenses. That’s great to a point. But if you cant make ends meet, and have already cut back then its time to make more cash.

  21. I couldn’t agree more, too…six months ago I started putting in a couple hours a night building websites for some friends of friends’ businesses, and this year I’ll probably earn close to half of what I earn during the day doing it…it’s helped me pay down my student loans and put some money in the bank faster than I thought would be possible.

  22. I went back to school for my MBA, and it did truly help me to earn more, but only after I left my previous job for this one, so there was some time in between.

    I also started a personal finance blog of my own a couple months ago, I make very little off of it…but I enjoy keeping up with it, and eventually the hard work will pay off.

  23. After reading this post, i got motivated to get a second job. I got on craigslist, found a listing from edible arrangements for a part time position, 8am to 5pm only on Saturdays. Over my lunch break (same day), i drove to the place to apply in person and i the job was offered to me within 15min.

    • David Weliver says:

      Wow, Sarah, that’s awesome. I’m psyched the article inspired you. Way to take action!

  24. Awesome post David! I never realized blogging had such earning potential. Congrats to the success and I would also be interested in learning that additional revenue stream.

    Congrats to everyone budgeting and making strides towards a better financial future.

    I’ve recently began to save hardcore and found a way to still enjoy life or splurge a bit. In my budget I added $100 weekly for bar hopping ($400.00 month). Since I don’t hangout every single weekend, I sometime wind up with $50-$300 of “unclaimed” funds. I now have the opportunity to enjoy life or addon to savings. Enjoy the weekend all =)

  25. I wish I had figured out half of what you did when I was in my early 30s. Now in my mid to late 30s I have accidentally figured out some of what is discussed here. In my case taking a part time job not only earns me extra income, but allows me to continue in the state pension system. I had the unique opportunity to move from state service to federal service and come back into the state pension part time while being in the federal system full time. The only thing I can say is that as I approach 40 the benefits of working shift work part time starts to become a bigger sacrifice as I put off having a family in lieu of the extra income and pension time. Ultimately I will have follow your lead and find a way to market my skills part time to earn more money and flexibility with time. Great Blog!!

  26. young heart says:

    I WAS a failure. never graduated high school but i did get my GED. i also went to job corps and learned a plumbing trade, then i took up an advanced training and learned about transportation. after that my school looked out for companies that were hiring. anyway! this was back in 2006. i have been with a good company for 5yrs. i went from making 30k my first yr to making 50k my second yr. 83k my 3 third yr and can make much more. now i am still in debt from stupid mistakes. this is the year i will clear it. im still learning. money used to burn a whole in my hand. now im a saver. i will write a blog also about my life and how to keep people motivated. but first i must learn how to create it all from scratch.

  27. I agree with much of what you are writing here. I would love to earn more money, as long as it means I’m not working myself into the ground.
    I spent the last three years working two jobs. I had a wad of cash, but no free time.
    Now, I’m just working one job, and focusing more on spending less. It’s motivating to find deals that most people aren’t taking advantage of.
    For me, it’s a balance of managing spending and finding new revenue streams.

  28. David, what a story! Very compelling, very inspiring! Congratulations on being one of the wise and alert youths who was willing to do what it takes to get ahead.

  29. Leena Cho says:

    super curious after reading this kick-in-the-butt post (because it’s inspiring)..what part of your blogging generates that much money? only hosting advertisement?

  30. Thanks David! I think the same – it is always better to learn how to earn more rather than live off of less… that improves the quality of life right?!

    Enjoying your blog.