3 min read · Jan 2, 2024
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I read every personal finance advice column I come across, and none of them ever start with the most important question of all: Am I making enough money?
They tell me to max out my RRSPs, access any employer matching, stop buying lattes, start automating my savings.
But when I first started budgeting, I was making less than $30,000/year, and that was my biggest problem.
“Making enough money” means that your take-home pay covers all of your bills and leaves enough left over for a little bit of savings and maybe some nice-to-haves. Personal finance articles will tell us that we fully control this through our choices about lattes and avocado toast, but it is also about things you have no control over, like the cost of living in your area, and things you have some control over (but not much on a day-to-day basis), like your salary.
How would I know if I’m not making enough money?
- You’re making less than the living wage for your city. You can often find this information with a little research. Sometimes it’s published by local non-profits or even local government.
- Your bills get paid, but your debt is increasing every money no matter how hard you try — and you’ve already cut your budget to the bare necessities.
- You’re sometimes missing bills or unable to cover minor emergencies that arise.
This could happen because of overspending, but it can also indicate that your salary is too low to cover your expenses. And if you can’t cut your expenses down any further, then the real challenge is to increase your income.
Could this mean I’m underpaid?
It could! There are online tools like Payscale.com that can help you determine if your salary is out of line with market. Any tool you use should factor in your years of experience, relevant credentials, and the going rate for work in your field. Don’t just compare yourself to a coworker — you may be missing key details that could explain the pay gap.
Let’s say I’m not making enough money. Now what?
Knowing that your financial challenges aren’t a result of overspending is actually very freeing. It’s hard to think straight with that much guilt, shame and confusion weighing you down. Now you can focus on the problem of increasing your income.
Some options include:
- The ever-popular side hustle! Selling items or services online can help fill small budget holes or save for a large expense. It’s not a forever solution, but it is relatively easy to get started, and even a small amount of success will help you grow your confidence.
- Career growth: If you have the privilege of working at a company that offers growth opportunities or career development resources (including mentoring, tuition assistance, or a good track record of promoting internal candidates), you can begin asking around and developing a plan for your next career move — with a raise included, of course.
- Education: This tends to be a long-term investment, but it also has huge potential to change your life. Adult education is a lot more flexible than it used to be, and most programs offer skills training that is directly applicable to your field. There are also grants and tax incentives that can help make it more affordable.
