What if I told you there was a way to spend more money, while still increasing your save rate?

There is. It’s called “increasing your income.”

Here’s the thing: This “advice” is usually harder to swallow, because it’s not immediately actionable. It can’t be deployed identically by every single person reading this blog post in the same way that, “Cancel your Hulu subscription and negotiate your wi-fi bill” is, and for that reason, I think we tend to talk about it less than we should.

The way a therapist increases her income is going to be different than the way that a marketing professional increases her income. It’s useful in directionality, but frankly, requires more self-awareness and hard work than most other personal finance advice.

But for the majority of people (read: the lowest-earning 40% of Americans), one of the most impactful financial moves they could make isn’t learning how to invest more strategically, cutting back on costs, or employing a cash envelope budgeting system: It’s earning more money.

As a (previously) self-proclaimed Frugal Frannie, I would’ve scoffed at this advice: “Oh, just earn more money? Sure, Katie, thanks for the tip! I’ll just go tell my boss I need a 25% raise! F*** off, I’m canceling my hair appointment and calling it a day.”

In fact, I’ve even written in the past about why spending less actually matters more than earning more. And while I think the logic involved holds steady, it’s inherently narrow in its usefulness. Why? Because there’s a true lower limit to the amount you can cut back, and often, that “cutting back” ends up meaning removing all the small, discretionary pleasures from life that (existential crisis warning) make it worth living.

I’m going out on a limb here: The best way to save more is to earn more, and today, I’m going to show you why—and how.

The best determinant of save rate is income

This isn’t just my opinion: It’s supported by the data. Nick Maggiulli, author of Just Keep Buying and the blogger behind Of Dollars And Data, shares this:

“Going back to 1984, the bottom 20% of earners have consistently spent more than 100% of their take-home pay on [food, healthcare, housing and transportation].” (Just Keep Buying, p. 27).

If you’re anything like I used to be, you’re probably looking at that statistic and saying, “Then just live somewhere cheaper or eat less!” Here are the averages:

Food: $367

Healthcare: $238

Housing: $960

Transportation: $382

Not exactly excessive, if you ask me, and—again, according to the data—this is approx. $900 more than they earn in a given month. They’d have to cut their spending in half to save anything.

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.

His conclusion is clear: When you look at the data, the best determinant of save rate is income. The more you earn, the more you save.

Those in the highest 20% of earners save approx. 50% of their income (for the record, the “highest 20% of earners” are those who earn an average of $174,777 after taxes, as of 2019).

How to increase your income

I’m going to play my “personal finance blogger anecdote” card and point to an example from my own life.

Keep reading.

Speaking of increasing income and getting out of our comfort zones, I’m on a real kick this week: buying a small business.

• Podcast: “The Most Profitable Skill to Learn (from a $200M+ VC Investor) with Codie Sanchez” on BiggerPockets Business Podcast. Y’all, when I tell you I’ve listened to every single podcast interview she’s ever done…This was my favorite, though. She tackles some tough questions, like the “right” way to build income over time (and continue leveling up), and the way a victim mindset can get in the way.
• Article: “When the Optimists are Too Pessimistic” from Of Dollars And Data. A little perspective on the stock market during volatile times. “Michael Kitces did an analysis where he discovered that retirees following the 4% rule in a 60/40 portfolio were more likely to 4x their wealth than deplete any of their principal after 30 years. In other words, if you started retirement with $1 million in a 60/40 portfolio and withdrew 4% a year, your chance of ending up with $4 million was higher than your chance of ending up with under $1 million after 30 years.”

This week, I’m throwing it back to an old blog post chronicling my most unique side hustle to date: being a fitness instructor. I like this post because it illustrates how we usually stumble into the best side hustles from following our own interests.

If you’re young and enjoy exercise, I think becoming a fitness instructor is one of the best side hustles out there—it pushes you, it’s humbling, it requires you to energetically lead a room, and it’s actually pretty fantastic for getting to know new people.

At the risk of sounding like an asshole, I feel compelled to state that it’s not for everyone: Merely liking exercise is not enough of a prerequisite for becoming a fitness instructor (which actually involves more theatrics and stamina than actual love of exercise, in my opinion), but I think anyone can be developed to the point where they’re pretty good. (I say that because I work with some of the best fitness instructors in Dallas, and I know I’m total #AmateurHour by comparison. But thanks to two separate really comprehensive and cut-no-corners training rounds, I think I turned out all right.)

My personal experience

When I went into fitness, it actually wasn’t to make money. It was to save money. I had just moved to Dallas and started going to Yoga Sculpt classes at CorePower Yoga, a corporate yoga brand. On my $12/hour intern income, the $129 unlimited monthly membership wasn’t exactly in my price range.

I paid for it for a few months, then eventually ended the membership. Working full-time (40 hours a week) meant that I had—surprisingly—a lot of time on my hands.

The Yoga Sculpt Teacher Training, a program that you go through to become an instructor (but with no actual guarantee of teaching), ran $1,200—and I certainly didn’t have that type of money (especially right after graduating and transitioning from intern to full-time employee) to spend on a yoga training where, post-completion, teaching the actual classes earned $12/hour. (I promise I’m not trying to put CPY on blast, but this is a money blog, so I think transparency matters.)

Enter: My lovely Aunt SueEllen, a devout yogi. She offered to help pay for Teacher Training for my birthday and Christmas present, and I accepted. 100 hours of training (over about three months) and $1,200 later, I was added to the teaching schedule once a week on Thursday evenings at 6:45pm at a studio about 20 minutes from my home.

Because even the gift didn’t cover the total cost of the training, I ended up counting it as part of my “gym budget” and spreading it out over about 6 months. Every time I’d earn a $30 paycheck from teaching my classes, I’d count that toward chipping away at the balance. Slow and steady, baby.

The pros and cons of this entry to the fitness world

Most of the large, national fitness brands (CorePower Yoga, Pure Barre, etc.) actually charge clients to go through the instructor training, and it’s a source of revenue. Be wary of any gym that makes you pay for your training before even letting you audition—it means the audition comes after training, and it might not be the answer you want to hear.

While it’s a good entry point for a total beginner, it’s definitely the more expensive route—just with a lower barrier to entry, skill-wise.

There are other national brands (like SoulCycle) that require an audition upfront, then hopefuls move to NYC for 8 weeks of training (not exactly intended to be a “side” hustle, at that point; if you can get 8 weeks off work to swing it, then great).

In any case, these types of brands are a great way to get your introduction to the fitness world if you’re not ready to audition for a local studio (though I know several people at my studio who started teaching there with no prior experience!).

How I landed where I am now

Remember that little factoid about how much CorePower paid? At $12 per hour, it hardly justified the amount of time I spent commuting to and from, programming, playlisting, and teaching classes. Luckily, one of the most valuable ways they made up for the sad pay was a series of studio trades with other boutique fitness studios in Dallas (like SoulCycle, Barry’s Bootcamp, and my studio, Class Studios). I had never done (or wanted to pay for) a cycling class prior to teaching at CorePower, but thanks to the trade, I stumbled into a dark room of stationary bikes at SoulCycle (as a standby rider) and fell deeply, embarrassingly in love with spin. I became an instant Woo Girl, and I rode all the time, despite not being very good.

Keep reading.

Welcome to a new section of the newsletter: Fun Finds. I’m sharing interesting things (whether financial or otherwise) that I come across in my daily life.

• The MakeUp Eraser: I bought these from my facialist and was a little skeptical, but holy sh*t—these things work. They’re little microfiber cloths that (when wet) wick the makeup off your face. I’m not even sure how they work, but I no longer need to buy makeup wipes or makeup remover, thanks to these little guys—just toss ’em in the wash each week.
• Capitalize 401(k) rollover service: I started working with Capitalize last year and, since then, I’ve used them to roll over 3 different 401(k)s into one Rollover IRA. It’s free and easy. 10/10.
• WeCrashed on AppleTV: Just…a WeShitShow.

Here’s the thing: I’m not a negotiation “expert.” I’m no “career coach.” But I am a regular-ass person who loves money, and after getting (and leaving) three different jobs, there are a few underrated negotiation tactics that have worked wonders for me.

(Including one that blatantly goes against some popular advice you may have heard about how to answer that recruiter question, “What salary range are you looking for?”)

In today’s episode, we break down all of those tips and more—including interviews with a career coach and a money mindset coach.

Listen now.