A lot of personal finance books, after repeating the mantra of spend less than you earn, talk about how it isn’t the amount of money you make, it is how you use it. I agree with that, to a point, but there truly is a point where the amount of money you make is actually a factor. If that wasn’t the case, anyone who has started truly paying attention to where their money goes would have fully funded retirement accounts and emergency funds and whatever else we gave value to in life.

That isn’t to say there is a hard and fast number that one must make to be able to get by in our present society. The cost of living varies so much from place to place and region to region that it is impossible to narrow things down to “If you make X and use it wisely and contribute Y to your retirement savings, you will be able to live comfortably and have a long and prosperous retirement.” And there are always people who can stretch our assumptions and do more with so little that our brains can’t even absorb it.

But there’s a limit to frugality. There’s a limit to saving and to investing and that limit is what we earn. We can downgrade our house, or rent where that is more appropriate, we can bike to work and limit food to the healthy essentials and nothing more, have no entertainment budget, and still, we might not be able to meet every arbitrary possible goal for savings and retirement. If we only earn $2000 a month, it is hard to imagine being able to contribute $2200 to retirement every month.

The good news in this is that with effort, creativity, and a little luck, we can earn more. We may just have to let go of the assumptions that we have to fit a specific mold and earn money only through a traditional 9-5 job. There are opportunities to be creative and turn hobbies into income streams, different part time alternatives, and other ways we can bring in a little extra income, if only we open our minds to exploring them. My own income streams consist of nothing that would fit into a “traditional” mold, yet I manage to bring in enough money every month to greatly enhance our debt reduction goals. At some future point, that may allow us to hit retirement contribution limits I never thought possible. For example, the maximum amount we can contribute to retirement theoretically through a 401K and 2 Roth IRAs is about $25,500 a year. If we contributed that solely with my spouse’s income, he’d bring home almost but not quite enough to pay our mortgage payment every month (which is equal to the typical 3 bedroom rental in our area) and nothing else. But with my income, made up of various income streams that allow me to stay home with my young children and avoid the expense of daycare, we may have a shot at at least approaching that contribution limit in the future if we choose.

Boiling down the argument to “it’s not what you make, it’s what you spend” is oversimplifying the issue and not giving due credit to all the middle class families like ours who truly don’t make a whole lot of money every month. But don’t let that stop you – seek ways to make you life truly guided by what you choose to spend and not spend. The amount of income we can earn is certainly not limitless, but it may be more than we previously imagined.

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