Scrimping and saving for your financial goals? Try increasing your income instead

We’ve all heard the usual spiel about being smarter with our finances – save money, skip the daily overpriced lattes and avoid the avocado toast. While it’s shocking how this simple dish of bread and fruit easily goes for S$15 to S$22 at many cafes, cutting it out won’t be enough for us to achieve financial freedom.
It’s true that succumbing to lifestyle creep will break your finances quicker than you think. That’s why learning how to budget well will always be a key life skill. 
But the truth is, focusing solely on cutting singular expenses will never be enough. What’s more, nitpicking over every cup of coffee and brunch outing can quickly feel restrictive and unsustainable, making it hard to stick to in the long run. 
Yet, while there’s a hard limit to how much we can save, there’s no limit to how much we can earn.
When I was in my 20s, saving money was my superpower. 
I became an expert at finding discounts through various means, including using coupons, membership deals and email newsletter promotions, as well as strategically deploying my credit cards for the right spending category each time for the maximum benefit.
But after a few years of trying whatever I could to save more money, I was already spending just S$500 a month on a take-home salary of S$2,000, and it was close to impossible to spend anything less since I still had bills to pay.  
I had to learn the hard way: You can only cut so much of your costs before hitting an irreducible minimum – a pretty miserable point where you’re left with only strictly necessary expenses like housing, food and transport. 
Even this floor is one that keeps rising. In the last few years alone, we’ve seen prices go up for all these things (and will likely only get higher over time).
This floor isn’t entirely unshakeable either. 
Imagine saving up S$300,000 for your retirement years, only to be hit by an unexpected medical bill (one that your insurance no longer covers, since you couldn’t afford to keep up with the rising premiums in your non-working years). 
Or perhaps, you budgeted that you would spend S$2,000 a month in your retirement on life’s essentials, but over time, inflationary pressures have driven up your monthly expenses by 30 per cent even though you’re not spending on anything more than exactly what you planned.
Cost-cutting alone will never give you the financial security that you seek. 
Once I realised that growing my income would yield me more money than simply cutting back on my expenses, my whole mindset shifted. 
In a world where wage increases do not always keep up with inflation, boosting your earning power gives you the flexibility to adapt, invest and grow your wealth. 
If you’re long overdue for a salary increment, you may want to consider asking for one. Negotiating a S$500 monthly raise with your boss may not sound like much, but over a year, that’s an extra S$6,000.
Once I learnt how to negotiate for a pay raise, I doubled my salary between 2014 and 2016, and then again a few years later during the COVID-19 pandemic as my workload and rank increased.
Today, I make five times what I used to earn as a fresh graduate – all through strategically negotiating and demonstrating my value. 
Building a side hustle can also help you to diversify beyond just a single pay cheque. 
People have often told me I have a knack for simplifying and communicating complex concepts, so I taught tuition to junior college students and provided ghost-writing services to several finance brands.
In total, these side hustles easily brought in an extra S$1,000 to S$2,000 a month – a sum I could never have hit even if I’d managed to cut my expenses to zero.
If you can find a side hustle that you enjoy doing, it is less likely to feel like work. 
Even if you struggle to find the time or energy to commit to a regular gig outside of your day job, there are plenty of simpler side hustles online you can do while on the go, such as filling up paid surveys or sharing affiliate links for products you already use and love. 
By increasing your income, you’re not just cushioning yourself against future expenses, but also increasing the capital you have to invest for your long-term financial security. You will find it easier to build an emergency fund, invest, and achieve your long-term goals. 
Budgeting is still important. Having more money doesn’t mean you no longer need to plan how to spend it. 
Ultimately, if you’re seeking financial freedom, saving the money you already have won’t be enough if you aren’t also doing something to add to it. 
Dawn Cher, also known as SG Budget Babe, has been running one of Singapore’s most popular blogs on personal finance for the last 10 years.