The best financial advice I know is “live on less than you earn and save the difference.” But what if there’s no daylight between what you earn and what you spend?
Many of us confront this problem because of four scary expenses: housing, healthcare, student loans and child care. Take housing alone. By my calculations, it would take a six-figure income to buy a $435,300 home, which is the median cost of a U.S. home today according to the National Association of Realtors.* The median U.S. household comes up well short of this, with $78,171 in 2025.
With challenges like these, it’s time to add a new chapter to the financial planning textbook—how to make more money. What would you include in a “make money” playbook? I’ll pitch my ideas, but it honestly feels like I’m stating the obvious. You may have better ideas from your life. Please add them in comments—I look forward to reading them.
Here are my thoughts:
- If you’re still in school, know what your college major pays before you—or your child—graduates. You can look up the average first-year earnings of many majors at specific colleges here. It’s a goldmine of nuggets like this: At Purdue, graduates in biology earn $33,500 a year, on average, versus $69,200 for mechanical engineers.
- If you’re already in the workforce, continue your education by earning a professional designation or advanced degree. This makes you a trusted authority with your employer. Extra credit: Many employers, like mine, will pay the freight on a job-related degree.
- Job hop for a big pay bump. I wrote about this once during the pandemic, when job seekers had the upper hand in salary negotiations. That may not be true now, except in specialty fields like AI. Back then, one commenter said that changing employers seemed disloyal. If you agree, seek out promotions with your current employer.
- Teach what you know. Nearly half of all college faculty are adjuncts these days. The pay is only so-so in my experience, but it helps to organize your knowledge. Besides, you’ll be seen as a leader in your field.
- The world of side hustles is enormous. I’ve done freelance work and found it slightly rewarding, but every dollar counted at that moment. I’ve made more by renting out an extra house that came with my farm property. If you go the side-hustle route, just try not to wear out your car delivering passengers or pizza.
I have a second category of suggestions related to cutting expenses. No, I don’t mean draining the fun out of life, say, by never eating out. These ideas won’t diminish your quality of life but might save you tons of money:
- Unless you’re a gearhead, buy a used car and run it for many years. You may save tens of thousands on each car purchase without sacrificing mobility. When repairs get to be a hassle, buy another used car with the savings you’ve stacked away. You don’t have to own a clunker. I’ve been driving Volvos.
- Pay your credit card in full every month. Use the card as much as you like, as long as you never carry a balance. My card pays me 2% cash back, but you may prefer airline miles.
- Reframe the college decision by refusing to borrow more than one year of future pay in the student’s field. For example, a nursing student at the University of Connecticut wouldn’t borrow more than $69,400—the average pay nursing graduates receive. Can’t be done? Ask for more aid or try another school.
- Stay organized and on top of your finances. I’ve paid a penalty for paying bills late or carrying unwanted subscriptions. Sigh. Your bank, your credit card, even your local parking authority would love to dun you with mindless charges. Try not to let them.
I hope this helps someone. Now, what are your ideas?
*I assumed a 20% down payment and a 7% mortgage rate and kept the monthly payments at 30% of total income. Those who spend a higher percentage of their income on housing are deemed “cost-burdened” by the U.S. Census Bureau, but many are stuck there.
Did you just log in? If you don't see the commenting form, please refresh the page.
Greg, this is a very useful article and it generated a lot of interesting comments, including some I was going to offer, but stated more eloquently. It seems pragmatic for a student or young person to put him or herself in the employer’s shoes and consider why the employer might choose to hire them. As for those who prefer fields which are less remunerative than STEM fields, as long as they are aware of the differences in future expected average salaries and employment opportunities, and factor that in to their decision making regarding tuition and loans, they should go for it. And of course, many are “good with their hands” and have a natural aptitude for a variety of careers for which they may receive training in vocational or tech schools, and often earn a good living. And I liked Norman’s suggestion below to never stop learning.
Good article, Greg. While saving as much as possible has always been a prudent choice, New objectives call for trying to create predictable additional income out of what you already have.
you have provided good food for thought.
Perhaps a hobby might turn up some interesting ideas. At one time I gave piano lessons part time. . An off shoot of my love of music.
To emphasize and expand on what Norman Retzke said below, when asked I advise young folks to look for vocations that people cannot live without…and do those.
Very good article and many great comments below. One thing I’d add is to be willing to go where the work is. That’s what my parents did, that’s what I did (last time at 57), and I think that’s what most people who came to America did (both long ago and today). It’s tough advice, but it’s good advice. Two of my kids managed to stay local, but they both got graduate degrees in high demand fields. But for many of my professional friends in engineering and the sciences who had very lucrative careers, they tended to be being willing to go where jobs were (especially early in their careers). So while it can be tough, I do think it’s good advice.
Excellent list and post. Id add a couple that have worked for me: 1-Assuming you are covering your expenses and have an emergency fund, save the extra amount every time you get a raise. 2. Don’t pass up opportunities in your career. Even if you are in a good place, look for opportunities for advancement. 3. Set up alerts on credit cards when there are charges to avoid scams etc. 4. Be very careful about loaning money to family and friends. It might work out and it might not. 5. Think about some sort of side gig after full time retirement. And it doesn’t only have financial benefits..
I think it’s a very good point. Side gigs are probably most valuable after retirement and very early in college years. Not just for the economics (after all they might not pay as well as “proper jobs”, but marginal tax rates could be lower and importantly they may impart other life skills or ongoing socialisation/stimulation.
Sidegigging by necessity through peak life cost years feels suboptimal but I think we need to understand that Gen Z and following may well approach life in a portfolio career manner without ever going all in on any single source of income.
With regards increasing your income, I think you can make a huge difference by doing the hard things, that others don’t want to. Take on the overtime shift, work on the difficult task or project that others didn’t want, handle the challenging customer. This is not very glamourous advice and you certainly won’t see it on TikTok any time soon, but I really think it has a significant impact on life time earnings.
There is an old expression “Find out what is wanted and needed and then, do that”.
I always approached my jobs/career as a negotiation. In any negotiation there are three outcomes: Accept, counter-offer, or decline”. I avoided any sort of a decline. As a consequence I was paid to travel and solve very difficult problems, growing while I did so. (We had a different slant on “remote work” back then and when not in the field I spent the other half of my time on an engineering team). After 10 years of that I was the Systems Engineer and ran the department. I used this approach when I ran my business, too. We were always busy and profitable. After 60 years of experience, I’d say that approach works, even today.
However, there was one more component and that was to “be of service to others” which I do think is today, a foreign concept.
I’ll throw in a plug for my second career as a preparer of income tax returns. While in my 50s I built a sweet little income tax practice. Eventually I was earning more in my 10 week busy season than I earned all year long in my prior life. I kept it simple by only preparing the Form 1040, personal taxes in other words.
Had I started my business as a younger man, I would have become an Enrolled Agent and prepared taxes for all entities. I also would have done accounting and payroll for smaller businesses and churches; you’d be amazed at how difficult it is for such concerns to find accountants with affordable fees.
That would have produced a very comfortable 6 figure income, and with the exception of that 10 week busy season, it could be accomplished in far less than 40 hours/week (if you limited growth).
And all without a college degree.
Good lists, Greg. Here’s one that may be available to some–make the most of your annual review. My reviewer always had some discretion on how I was graded for a determination of next year’s salary. Just as like an investment, even small percentage increases in pay will compound over time.
How can we affect the review? Steady performance, of course. But there are other ways. Today, Adam Grossman posted an article about decisions that are influenced by memory and events, rather than data. Reviewers are not necessarily different. I’ve tried to pay attention to helping my boss when she needed it most, especially just before she wrote her review. Recency bias has a strong influence on decisions. I’m not claiming we can bluff our way into a raise, but it helps to buff up our presentation.
English philosopher John Locke once asked “If everyone attends the University who will take out the trash.” And so, here we are.
It would be prudent to do some rigorous research before investing significant sums on an education, but first I’d suggest achieving a modicum of financial literacy.
I’d suggest spending the absolute minimum on a post high-school education and thoroughly research the labor market. The entire point of an education is to prepare one for a life and to allow one to also make a meaningful contribution to society. Education is not preparation for the game of Trivial Pursuit. What one wants to do and what employers are willing to pay for are sometimes very different. If you don’t want to work long hours in cramped or uncomfortable surroundings, then choose wisely. Assume you will get only one chance at this.
Take the long view. It may take a few years to get where you intend to go.
It is a fast moving world, skill demands change, too. A couple of years ago “coding” was a guaranteed profession. Today with certain AI tools, there is a new emphasis on the creative aspects and being a software coder may soon be akin to being a dinosaur herder. However, there are legacy systems which will continue to require support for a few more years.
I’d suggest becoming multifaceted and choose a life of continuous education. Be flexible. The robot revolution is accelerating and absolutely no one really knows precisely how this will redefine the job market.
Learn to manage that “I want” conversation in your head. No one really cares what you want, and very few will pay you to do it. If interest align, yours and your employer, then well and good.
There are some very interesting “blue collar” jobs, more than we may be aware of. “Windfarm” technician” comes to mind as does very deep sea diver. But, these are not typical 9-5 jobs and put a different slant on “remote worker”.
Realize that the “easy” period of one’s life ends with the completion of a formal education. Then the real work begins and everything that preceded was mere preparation. Think of it as having been practice with perks.
I would add the following…
Before you consider spending 4-5 years and thousands of dollars on an education outside of the STEM arena, carefully consider why you are doing it. Is it your “dream” or one you are being pushed into by parents or peer pressure? Liberal Arts Degrees are basically “vanity” degrees.
And be very leery of graduate studies if you intend to join academia… especially if you are a white male. The number of PhDs graduated annually in the US is 2-3 times the number of academic faculty openings available, and in the current anti-higher education environment, it will not get better anytime soon. The trend, for at least the last decade, has been to replace tenure-track professors with adjuncts.
Have you considered a trade school? There is a crying need for almost all trades today, and you can bet your as_ AI will not be replacing carpenters, plumbers, brick masons, HVAC techs, etc. In addition, you will not be replaced by some lower-paid person from India, the Philippines, or Ireland, if you are pursuing a degree in the formerly lucrative field of computer science.
Having spent 54 years in financial services, including the last 15 years in financial professional education, I second the idea of pursuing professional education and designations. In some fields, they are almost a requirement for growth and success.
Having just retired from a university, I agree that PhDs are being overproduced relative to the job market and that universities should knock it off. I’ve thought that for a long time. (That said, my recent graduates whom I advised all got jobs—they’re in education/writing studies/applied linguistics. There are ways to build a CV while in graduate school that lead to more success.)
I disagree that only STEM degrees matter and that “liberal arts” (humanities and social sciences?) degrees are for “vanity.” I was an English major and got a PhD in linguistics and had a long and successful career and retired with a very nice pension income. Now, times have changed somewhat, but being an English major with a BA wasn’t an easy road even back in the early 80s after I graduated. But I wasn’t adept in math or science as a student, so going the STEM route wouldn’t have worked for me. I did OK with my “vanity degree,” though.
To the broader point, there are many job opportunities and fields where having a degree, any degree, is an entry-level qualification. And there are still many businesses that believe someone with a humanities degree can read, write, and think, and that those are still important attributes. Maybe you’re not going to make as much money as an engineer, but you probably can still make your way through the world.
All that said, whether one pursues degrees in an academic field or certification in a professional one, I completely agree that neither the student nor their parents should bankrupt themselves or bury themselves in debt forever to do so. There are just too many good options to get an education or training for a reasonable price. It may not be the young adult’s “dream school,” but not everyone gets that. I didn’t, and neither did my kids. We went to state schools.
I have a very strong feeling that for a lot of occupations, borrowing to attend university is a scam. Your idea of a borrowing limit at one year’s pay is prob too high. The borrower needs to show themselves on paper or spreadsheet how they will repay the loan. This is especially true for those that attend private colleges/universities where the tuition per year is north of $80k.
On a different topic, you don’t have to live on the West Coast or in NYC or other VHCOL areas. The home next door to me that just went on the market today is a $950000 fixer-upper.
It’s true, you don’t “have to” live anywhere; it’s still a free country. However, if one has been born and raised somewhere and all their friends, family, and connections are there, it’s pretty hard to tell them to just uproot and go somewhere cheaper. Just a bit too easy to say when it’s someone else’s life.
Unfortunately, it isn’t a “free” country. It is a country with freedom of movement, and freedom of expression, freedom of religion etc. Rent isn’t free. Neither is food, or healthcare or anything else in our economy. In a free market economy people are paid for what their labor is worth. For some, their value in a market isn’t enough to cover their cost of living there. Suggesting that they could relocate to a lower cost area isn’t “telling” them to leave, it is just offering a possible solution to their dilemma.
None of us individually (except perhaps billionaires) have the resources to subsidize that portion of our population which cannot afford to live in VHCOL areas. Only the government can, and currently it doesn’t want to do it.
Honestly Greg, I don’t think I can add much value to this thread. You’ve basically covered all the ideas I would have suggested. Maybe it’s because of my current life stage I don’t need to worry about these things. My one helpful thought is that the generation most impacted by the need to “raise dough” will probably have the most innovative ways to do so