I believe that the single most important task you can perform to increase the amount of money you have is by tracking and optimizing your expenses.
The most common counter-suggestion is, “why not just increase your income?” As in, instead of spending so much time optimizing your expenses and wringing a little bit extra out of your budget, why not just make more money and not have to do any of that?
If only it were that simple.
Table of Contents
Do you want to make more money?
This is the point in the post where if someone was selling a course on “a foolproof method to increase your income”, it would start to appear here.
But I don’t have a course. And I can’t say that I have much in the way of advice for raising your income.
- I think that most people lowball their salary asks, mainly because they want the job and so are very risk adverse. They don’t want to do anything that jeopardizes the job prospect.
- Some people haven’t done enough research into what the job is worth.
- Even knowing what one other person is getting paid can give you a huge leverage. I once was told this crucial piece of information during the hiring process by someone on the inside of a company I was interviewing at, and I credit that piece of information alone to probably a 20% raise.
But all the motivation and pep-talks and “you should be an entrepreneur and make your own money” and and all that isn’t going to help you when you’re in line for a job where the salary is fixed.
Sometimes, your income can’t be changed.
Which is why it’s a good thing that income doesn’t necessarily natter.
More isn’t necessarily more
It’s not how much you make, it’s how much you have.
By this, I mean, don’t fall into the trap of thinking that if you make more money, you’ll necessarily change your financial position. All too often, an increase in salary is accompanied by an increase in lifestyle.
If you get a 20% raise, and then spend 20% more, what have you gained?
You’ve gained a lifestyle increase, but not a money increase. You still have the same student loan payments, mortgage and rent payments, and everything you had before. More money might be coming in, but more money is going out.
Now, it’s perfectly possible that you might be an exception, and you might take your raise and use it to pay off your debts and start building wealth. And for you, I say, bravo.
But, especially if you’re in a situation where you’re not getting a raise (and let’s be honest, most of us are not getting raises) you don’t have to sit there powerless. You have agency.
Focus on what you have
You have complete power over what comes in. You can decide how to spend your money with the income you have now.
If you are not tracking your income and expenses, making a money plan every month and sticking to it, then you could be leaving hundreds of dollars on the table.
I know it’s hard. But I can tell you that it works. I can even tell you how it works.
But none of that matters. Give it a try and see for yourself. No raise required.
But enough about me. Have you ever gotten a raise and found that you didn’t have any extra money? I’d love to hear about it in the comments below.