{"id":199,"date":"2022-03-28T12:00:00","date_gmt":"2022-03-28T12:00:00","guid":{"rendered":"https:\/\/moneywithkatie.com\/how-to-increase-income-the-best-way-to-save-more\/"},"modified":"2025-08-29T16:41:54","modified_gmt":"2025-08-29T16:41:54","slug":"how-to-increase-income-the-best-way-to-save-more","status":"publish","type":"post","link":"https:\/\/moneywithkatie.com\/how-to-increase-income-the-best-way-to-save-more\/","title":{"rendered":"What the Data Says About How to Save More Money"},"content":{"rendered":"
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What if I told you there was a way to spend more<\/em> money, while still increasing your save rate?<\/p>\n

There is. It\u2019s called \u201cincreasing your income.\u201d<\/p>\n

Here\u2019s the thing: This \u2018advice\u2019 is usually harder to swallow, because it\u2019s not immediately actionable. It\u2019s not able to be deployed identically by every single person reading this blog post in the same way that, \u201cCancel your Hulu subscription and negotiate your WiFi bill,\u201d is, and for that reason, I think we tend to talk about it less than we should.<\/p>\n

The way a therapist increases her income is going to be different than the way that a marketing professional increases her income. It\u2019s useful in directionality<\/em>, but frankly, requires more self-awareness and hard work than most other personal finance advice.<\/p>\n

But for the majority<\/em> of people (read: the lowest earning 40% of Americans), one of the most impactful financial moves they could make isn\u2019t learning how to invest more strategically, cutting back on costs, or employing a cash envelope budgeting system: It\u2019s earning more money.<\/p>\n

As a (previously) self-proclaimed Frugal Frannie, I would\u2019ve scoffed at this advice: \u201cOh, just earn more money<\/em>? Sure, Janet, thanks for the tip! I\u2019ll just go tell my boss I need a 25% raise! F*** off, I\u2019m canceling my hair appointment and calling it a day.\u201d<\/p>\n

In fact, I\u2019ve even written in the past<\/span><\/a> about why spending less actually matters more<\/em> than earning more: And while I think the logic involved holds steady, it\u2019s inherently narrow in its usefulness. Why? Because there\u2019s a true lower limit to the amount you can cut back, and oftentimes that \u201ccutting back\u201d ends up meaning removing all the small, discretionary pleasures from life that (existential crisis warning) make it worth living.<\/p>\n

I\u2019m going out on a limb here: The best way to save more is to earn more, and today, I\u2019m going to show you why \u2013 and how.<\/p>\n

The best determinant of save rate is income<\/h2>\n

This isn\u2019t just my opinion: It\u2019s supported by the data. Nick Maggiulli, the author of Just Keep Buying and the blogger behind Of Dollars and Data, shares this:<\/p>\n

\u201cGoing back to 1984, the bottom 20% of earners have consistently spent more than 100% of their take-home pay<\/em> on [food, healthcare, housing and transportation],\u201d (Just Keep Buying, pp. 27).<\/p>\n

If you\u2019re anything like I used to be, you\u2019re probably looking at that statistic and saying, \u201cThen just live somewhere cheaper or eat less!\u201d Here are the averages:<\/p>\n

Food: $367<\/p>\n

Healthcare: $238<\/p>\n

Housing: $960<\/p>\n

Transportation: $382<\/p>\n

Not exactly excessive, if you ask me, and \u2013 again, according to the data \u2013 this is approx. $900 more than they earn<\/em> in a given month. They\u2019d have to cut their spending in half <\/em>to save anything.<\/p>\n

When we look at the next 20% on the income ladder, Maggiulli finds something similar: Those in the 20th to 40th percentile earn 200% more than those in the lowest 20%, but their spending is only about 40% higher.<\/p>\n

His conclusion is clear: When you look at the data, the best determinant of save rate is income<\/em>. The more you earn, the more you save.<\/p>\n

Those in the highest 20% of earners save approx. 50% of their income (for the record, the \u201chighest 20% of earners\u201d are those who earn an average of $174,777 after taxes as of 2019).<\/p>\n

How to increase your income<\/h2>\n

I\u2019m going to play my \u201cpersonal finance blogger anecdote\u201d card and point to an example from my own life.<\/p>\n

When I graduated from a state school with a public relations degree, I figured I\u2019d make anywhere between $38,000 and $45,000 per year. I was lucky: I ended up getting a job in marketing in a big, Fortune 100 company, and my starting salary was $52,000.<\/p>\n

In the years that followed, I received a series of small raises: $53,000, then $60,000, then $66,000\u2026 By my company\u2019s standards, they were really strong increases, but I was still (almost by definition<\/em>) a very average earner: The median income in 2018 was $64,324, according to Statista.<\/p>\n

In order to get ahead financially, I made a lot of (decently frugal) choices:<\/p>\n