The Secret Money Equation No One Is Telling You

There’s a lot of chatter about saving on the Internet and even my blog is not exempt. I frequently wax lyrical about the power of saving money. But I haven’t been telling you the whole truth.

When it comes to money, saving is only one half of the equation. The other half is where the magic happens. It’s where dreams come true and life changes for the better. It’s where family vacations and early retirement become realities instead of just stories you read.

Here’s the secret no one talks about:

Earning more money

After a certain point, you can’t save any more money. There’s simply nothing left to cut. You’ve cancelled your cable, moved apartments, hacked your beauty routine and even started biking to work. Your savings rates are high and maybe you’re even stashing half of your income.

But there’s no future in saving.

Saving will never give you more money. It will only reclaim money that was already yours.

Earning more money, on the other hand, will change your life.

Right now, I save half of my income. Each paycheck is sliced in two and I live comfortably on one half. But there’s no future in that. The minute I start a family, pay for my wedding or stop living with a roommate, my savings rate will drastically decrease. In other words, my current finances are not designed to support my long-term goals.

So what’s a girl to do?

Should I…

A. Continue to cut back and hoard my pennies.

B. Never leave my house and live the life of a deprived hermit.

C. Earn more money!

Hopefully you chose, “C.”

(If you failed the quiz, don’t stress. There’s hope for you yet!)

At a certain point, it’s impossible to cut back anymore without losing your freaking mind. After all, we’re only human and there’s nothing wrong with you know, enjoying life.

In the same way it’s crucial to stop spending money to the point of excess, it is also necessary to stop saving money to the point of misery.

 Two years ago, when I was living in (almost) poverty, no amount of cutting back could have saved me. The only thing that could have actually helped? More money.

Saving money will only get you so far.

It’s like learning addition and subtraction in math. It’s part of the fundamentals and it’s necessary to learn, but it’s only the beginning. Without knowing how to save, earning more money is pointless because you would spend it all and still feel poor.

But once you learn the basics, you’re ready for the big kid math. You’re ready for the imaginary numbers and graphs and all sorts of crazy equations that come with advanced learning.

You’re ready to earn more money.


Think of personal finance like a game:

Level 1: The Money Basics

Now is the time to understand credit scores, debt, net worth, how credit cards work, and basic investing options.

Start here with CNN’s article: Basic Money Lessons You (Probably) Missed in High School

Still looking for more information? I’m currently working on a FREE survival guide for money basics that won’t make you want to scream (or cry from boredom). Subscribe to the mailing list for updates.

This level is kind of boring. It’s easy to master, but can feel dull. DO IT ANYWAYS. These are the fundamentals of the fundamentals. When you’re at this level, you’re learning how to count.


Awesome, now you’re ready for the next one.


Level 2: Save and Optimize

This is the level where you learn about yourself, your values and your money goals. Perhaps you’re a spreadsheet junkie and love tracking every single penny. Or maybe you’re more like me and prefer a less formal relationship with money. Whatever your style, now is the time to discover it. Once you optimize, it’s time to save. Cut out the expenses that aren’t adding to your happiness.

Once you cut ruthlessly, you can spend freely on the things that bring you joy.

Unsure how to tell the two apart? This guide is for you: How to Only Spend Money on Things That Will Make You Happy.

 Congratulations! You just learned addition and subtraction. You may now move on to the final stage.


Level 3: Earn More Cash

You’ve learned the basics and you’ve optimized your finances. You’ve scaled back according to your values and you’re saving a good chunk of your income each month. (In other words, you’re awesome)

Now is the time to earn, earn, earn.

Throughout the next few months, I’m going to cover a lot of different ways to earn money on the side and invite some awesome people to share their stories on the blog as well. I’ll even share how I’m earning money on the side. (Trust me, if I can do it, you can do it too.)

But in the meantime, here are some amazing resources about how to make more and take control of your earning power. Grab a cup of coffee, relax and learn from some of the greats:

1. Side Hustle Nation


2. I Will Teach You to Be Rich


3. Smart Passive Income


4. Unsettle


Congratulations on reaching Level 3.

I can’t wait for us to unlock it together.


7 thoughts on “The Secret Money Equation No One Is Telling You

  1. Des @ Half Banked says:

    I seriously wish I had learned more about side hustle income and different income streams right out of school! I think my greatest mistake was thinking that a full time job meant I didn’t have “time” or “need” for another job or hustle. Boy, was I wrong, lol. At least I learned the error of my ways eventually!


  2. Andrew @ Quest for Billions says:

    This is something I have been thinking of a lot recently as well!

    Saving money is important. We won’t get ahead by earning a lot of money if we are just spending it all. But like you mentioned, there is a limit to how much we can save, but there is no limit to our earning potential.

    I like the sports analogy for this. A great sports team needs to have good defense (saving) and good offense (earning). But maybe “the best defense is good offense” – it is much easier to save $25k per year if you are making $100k vs. $50k.

    The difficulty lies in taking action to grow our income. To save money, often we need to do less than we are doing right now. This may be difficult given the lifestyle we may be accustomed to, but we can still save more by say watching TV on our couch vs. going out to the movie theater. By cutting back, we can see immediate results. Increasing income, on the other hand, requires doing more. It can take a lot of time and effort to grow a successful side hustle. It is more of a long term investment for the future with the potential of a much higher return!


  3. Our Next Life says:

    Amen, sister! If you can keep your lifestyle from inflating while you work on earning more, that’s the magic formula for success all the way. And it can be pretty joyless to pinch every single penny — far better to put that energy into building the skills you need to move up in your career and make more money!


  4. Sarah Noelle @ The Yachtless says:

    Oh man, the “stop living with a roommate” thing is exactly where I’m at right now. I’ve been living with 2 housemates for the past 4 years, and though they’re nice people and the overall situation is really good (low rent, pleasant neighborhood, nice landlord), I just don’t know how much longer I can do it. I reeeeeally want my own place. And I’m having to come to terms with the fact that in order to do that I would need to, as you say, make more money. (I’m starting a new job soon and will be making more than I was in grad school, but the difference really needs to go towards paying off my student loans…so if I were to move into my own place I’d need to make *even* more.) So yeah, I’m totally with you on this — more money is where it’s at! 🙂


  5. Alyssa @ Generation YRA says:

    This is such a great way to break down the levels and creating the whole equation, Taylor! Saving and earning have a comprehensive nature that will allow for more positive results. It’s great to start with the basics (foundation is everything!), then once you get comfortable to start moving forward to level 2 and 3. If you try to tackle it all at once from the very beginning, it will all seem very overwhelming – which typically causes people to get discouraged & stop! The book, I Will Teach You To Be Rich was one of the first personal finance books that allowed me to set up an incredible amount of money systems. I love Ramit’s take on making money even while you sleep! Now, it’s my turn to increase my income even more by side hustling even though I am working full time. It’s tough! I find myself exhausted if I take on too much.


  6. Jen @ Frugal Millennial says:

    You are definitely right that you can only save so much, but you can always earn more. That’s why earning more is crucial. I am working on paying off six figure student loan debt, and simply saving would not be enough to accomplish this. Earning more money was an essential component of my debt payoff plan as well.


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