You know my style by now: I don't worry about the latte factor — I don't care if you want to go out to dinner and order drinks with friends. I think these are the simple pleasures in life. And while these things cost money, my mindset is simple: I'd rather earn more than spend less. But some find this philosophy pretty difficult to fathom.
The truth about earning more money is pretty simple: it's always possible.
But earning more money is a two-sided coin. On one side, you can always earn more money, but on the other side, you have to ask yourself about the cost for doing so. There are a lot of potential costs involved with earning money — the biggest is time. But focusing on that alone is pretending that there aren't costs involved with spending less money as well — the biggest usually being time, but potentially also happiness.
Let's look at why you want to earn more, and at what cost.
Why You Should Consider Earning More Money Instead of Cutting Costs
What would you do with an extra $500, $1,000, or even $5,000 per month? Would you pay off your debt? Would you invest? Would you go on vacation? Or would you just do a few things that could make your life a little easier?
What if I told you that earning an extra $1,000 per month would only take you an hour per day. Would it be worth it then? That's 30 hours per month, or roughly $33 per hour. Is that worth it?
Now, what if you tried to do the same thing by cutting costs? First, could you even do it with your fixed expenses? If yes, could you do it without spending an hour per day at it (think cutting coupons, preparing food, grocery shopping, etc.)? If yes is still the answer, would you be as happy?
For me, making more is much more appealing than cutting more. I think it's easier as well.
What Are the Costs of Earning More Money?
Like I said earlier, I would be lying to you if I didn't highlight the costs associated with earning more money. Both cutting expenses and earning more have consequences, and here are some of the things that you should consider if you want to earn more money.
For both earning more and cutting expenses, time is one of the biggest costs. Earning more does take time. If you want to earn more at your job, you typically have to put in longer hours, volunteer for overtime, or do a special project to get promoted and make more money.
If you want to side hustle, like these college students earning $100,000 per year, you have to put in time before and after work. If you have family, you have to realize what this time commitment will mean. It could mean nights away from your family, or less quality time at home. You will likely need to have a family meeting to discuss priorities and everyone needs to buy in.
Don't think that cutting costs avoids this either. There will be a shared family sacrifice with spending less — it might mean cooking at home, or fewer extracurricular activities. It might mean less entertainment, like going to the movies. It might also mean more time devoted to finding and clipping coupons, and going to the grocery store to buy the supplies to eat at home.
Don't kid yourself, you may not immediately have the skill set to jump right in and earn an extra $1,000 per month by only putting in an hour per day. It takes time to hone your skills, whether at work or while hustling on the side.
Most people don't start seeing decent earnings until a few months to a few years after they start. Earning more money should be viewed as a long-term commitment, along with improving your skill set to make yourself able to earn more in less time.
Network and Support
What impact will your decision to earn more money have on your support network? How will your family and friends react? Will you be able to see them as much or spend time with them?
These are costs that you will face, and they may be fixed costs that you can't overcome. Sometimes your family simply won't support or allow you to be away. Sometimes the costs aren't worth it — such as having to pay for extra day-care expenses.
Finally, I'm not going to sugarcoat it: in some cases, you just have to move. Sometimes, you just can't earn more living in a small town. If you have an online hustle or business, you may be able to, but if you want to further your career, you're typically going to have to move. This could mean moving to where your company's headquarters is located, or it could mean moving for another job.
The truth is, as an average, living in certain cities will boost your income. New York, Washington DC, Boston, Chicago, Minneapolis, Dallas, Houston, Seattle, San Francisco, Los Angeles, and San Diego all come to mind. What sets these cities apart from the rest of the country? Lots of jobs and lots of employers.
It's a Choice of Priorities
So, to break it down, the truth about earning more money is that it's a choice of priorities.
A reader reached out telling me why she couldn't start investing:
That spending money to invest will take away money I need right now to pay for groceries plus some discretionary spending like going out with friends.
My response: I promise that you can earn more. For her situation, she is a freelance writer. Simply writing one or two more articles per month would give her an extra $500 or more! That's just a couple hours of work, for a whole month.
An extra $500 per month? That could max her IRA this year plus some! That could really help her financial future.
Nobody is going to help you but yourself — there is no loan for retirement or your future.
Share with me what's holding you back from earning more money. Are there other costs, or are some costs simply too high right now?