Five years ago I was in the “spend less” crowd. I was maxed out at my day job. I was only 24 and I knew that I was making the most money I’d ever make in the position I was in. That was about $20,000 per year.
My then-husband earned more than I did but we still weren’t that well off. Heck, at that point paying for babysitting took up the majority of my paycheck. We also had a mortgage with a pretty high interest rate that ate up another quarter of our take home pay.
Discouraged by the idea that we would ever be in the position to bring in more money I focused on keeping costs low. I held onto my money tight. Buying something because “I felt” like buying it wasn’t an occurrence that happened. Every single dollar was accounted for.
Then when I got divorced I was working two day jobs to try and earn more. Out of desperation I knew I had to make the make-money-online-thing work. My expenses couldn’t have gotten any lower than what they were.
You Can Only Lower Your Expenses So Much
Getting a grip on your finances is extremely important. That’s why I’m so grateful that I had to learn how to make a dollar stretch and that I was engrained with a love of money management at an early age. (I caught the PF bug at about 20.)
So while I definitely believe that lowering your expenses and knowing where every dollar is going is the first to step to creating a good financial life it’s only a small portion of the equation.
You can only lower your expenses by so much but the amount of money you earn is virtually unlimited. If you’re in one of these situations your time is going to be better spent trying to earn more money.
You Cut Your Expenses and are Still Living Paycheck to Paycheck
If you’re cutting your expenses as far back as possible and are still living paycheck to paycheck you’re stuck. Your expenses can only be lowered so much and if you’re still left with nothing to save you will never get ahead.
There’s a huge limit to what you can do on the spending less side. Like I said above, you can only lower your expenses so much.
You’re Not Making Progress on Your Financial Goals
Maybe you’ve built up a comfortable emergency fund but are now feeling stuck. You’re not exactly living paycheck to paycheck but you can’t gain any traction on your financial goals. Those goals could be paying off debt, saving for retirement, or another savings goal.
Either way if you’re expenses are already optimized you’ve proven that you’re not going to get anywhere at the rate you’re going.
Your income is not capped. If you’re willing to start a side business or work for a promotion or raise you can make more money.
Take it from me. I made $11.50 per hour two years ago and had to work two day jobs to gain financial traction. I’m a community college dropout, I have no certifications, and no special experience. I’m just your average person. Know that if I can do it, you can too.
Take advantage of the opportunities around you and capitalize on your skills. Try an online job. Freelance. Start a low cost home based business. Ask for a promotion at work. Switch jobs. Make yourself valuable.
(You can find a list of all the online jobs and ways to make money I’ve covered on this page.)
Being Good with Money Doesn’t Always Mean Scrimping
I know there’s a lot of buzz around frugality and rightfully so. Paying close attention to the way you spend your money is the first part of the financial responsibility equation – spend your money in a way that is valuable to YOU.
The second part of the equation is to actually earn enough of money to not be stressed out all the time.
I’m well aware of the fact that money doesn’t buy happiness. I also know from personal experience how incredibly hard it is to try and get by on a low income. Living paycheck to paycheck can be a recipe for serious depression.
If you have an income problem and it’s a major source of stress for you then make a decision today to change that. Spend an hour every single day working toward earning more money. One hour a day is not a huge amount of time but it can make a drastic change in your life!