If you recall the example in <The One Skill That We Don’t Learn in School but Costs Us a Lot of Money>, I illustrated that how Rachel can easily increase the savings per month of $200 than earning $200 more. Because Rachel is like many of us, we spend on things which we don’t need, or we spend more than we should. Those expenses add up to a significant amount. If you are like Peter in the example, to optimize expenses, with a decent income, you can easily save $200 more per month. Or it could be $50 more, or it could be$500 more, depends on your current spending habits, cost of living, and earning power.

The main point is that, for most of us, saving $xx more is much easier than earning $xx more per month.

But this method does not work forever.

Here is why.

Imagine Rachel earns $6000 per month, she used to spend $5500 per month and had $500 saving at the end of the month. She buys a coffee from Starbucks every day, she takes Uber to work and back home a few times a week, she shops online impulsively and sometimes does not even wear clothes she bought. She has 1000 channels on her TV s subscription but she rarely watches TV etc. All those add up to her $5500 monthly spending.

Now, she realized that unconscious spending is harming her financial future, so she decided to optimize it. Instead of Starbucks, she makes coffee at home or takes the coffee from the office. She takes public transportation to work. She stops impulsive online shopping. She canceled her TV subscriptions as she does not need them, and many more.

At the end of the month, her monthly expenses total is $4000. Now with the same salary, she can save $1500 per month, instead of $500. Is her quality of life decreased? I don’t think so. By simply optimize the expenses, she could not only remain her standard of life but also increase her savings, which could be used in investing.

Here is how saving $xx more is much easier than earning $xx more.

But you can only go so far.

There are always things in your life that cost money but they bring you joy and comfort, the real items that define your desired quality of time. Those are the spending you should not let go of. Once you have optimized everything in your monthly expenses, you will find that saving more is difficult, maybe earning more is easier for you. The most you can save with this method is what you earn minus minimal living cost. But to further increase your savings, you need to earn more.

This is the turning point.

Once you started to realized that you can not save more, you can focus on how to increase your earning power. How much you earn, in theory, is unlimited, but how much you can save, is limited.

How To Earn More

Here you can be creative and really take your earning power into your own hands. With a salary, it is more difficult to ask for a salary increase than creating your own side hustles, or investment. Some examples of increasing your earnings:

1. Monetize Your Hobbies

Side hustles can be a hobby that you enjoy, and you can think of a way to monetize it. For example, a girl I know makes wedding bouquets on order basis. She uses her time on the weekend or after work to create more income.

2. Online Surveys

User Testing platforms and online survey platforms pay people who complete surveys or certain tasks to evaluate a website. Then they are paid for the work. It is a great way for companies to collect consumer data, and for some people to earn an extra $50 or more per month in their spare time.

3. Creating Contents

Like what I did here, I create useful content to bring value to readers. They might learn something new, or find a solution to their problems. In return, the writer may earn some income from readership or affiliated links. It is a win-win situation. Contents can be in the format of articles, videos or podcasts. With new platforms, everyone can be a content creator.

4. Investing

Investing comes with risks, but it is the method that you can earn without selling your own time for it. A lot of people are afraid of investing, hence I wrote the article <Why You Are Afraid of Investing and Can Never Be Rich>. Investing is less scary than what you really think, by educating yourself, you could make your money working for you.

5. Invest In Yourself

Investing in yourself is the best thing you can do for yourself, not buying a new car or a new bag, but investing in yourself by learning new skills, expanding your horizons, it will bring you way more opportunities in the future. If you obtain the demanded skills, it could increase your employment chances and demand higher pay. If you obtain new business skills, you can start a business on the side and potentially make it profitable.

The list is non-exhaustive here. What you should take away is to explore new ways of earning besides your usual job, once you have optimized your expenses.

Earning $2000 More Is Easier Than Saving $200 More

If Rachel has a combination of side hustles that earn her $200 per month, in 10 months she could make $2000. But meanwhile, she remains her living expenses at the level that anything lower is not possible for her.

When earning more is easier than saving more, you are on the track to explore your earning potentials. If you remain the same expenses and increase your earnings, your savings will grow, and your net worth will grow.