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Hello Reader,

It’s Bola here.

We talk a lot about earning more at Clever Girl Finance, and for good reason. Increasing your income can be one of the most powerful ways to accelerate your financial goals. I’ve certainly seen that in my own life. Earning more gave me the ability to save more, invest more, build my business, and create options for myself and my family.

But something I’ve also learned is that earning more money and actually feeling like you have more money are two very different things.

You can get the raise, land the better paying job, grow your business, or add another income stream and still look at your bank account a few months later wondering where all that additional money went.

And sometimes, it’s not because you suddenly became irresponsible with money.

So many things cost more: housing, groceries, insurance premiums, and travel. Children get older and their expenses change. You may be helping family members or paying for things you didn’t have to think about a few years ago. And yes, sometimes our lifestyles expand along with our incomes too.

Before we realize it, the additional income we were so excited about has been absorbed into everyday life.

The numbers tell part of the story

I recently looked at the latest U.S. Bureau of Economic Analysis Personal Income and Outlays report, released on August 26.

The data showed that incomes increased in July, but once inflation was taken into account, people weren't really able to buy much more with that additional money.

Of course, these are national numbers, and they don't mean every person earned more or experienced their finances in exactly the same way. But I think they illustrate something many people can relate to: more money coming in on paper doesn't necessarily translate into significantly more purchasing power or financial breathing room.

And that brings me to a question I think is worth asking yourself:

Did your income increase, or did your financial capacity increase?

Those are not the same thing. To me, increasing your financial capacity means that your additional income is actually expanding what you're able to do financially.

Maybe you can invest $750 a month instead of $500. Maybe you're finally able to build your emergency fund without constantly dipping back into it. Maybe you're paying an extra $300 toward debt every month. Maybe an unexpected $1,000 expense is inconvenient instead of a crisis. Or maybe you're finally able to spend money on something you value without worrying about how you're going to pay your bills afterward.

That's what I want earning more to do for you.

Not simply give you a bigger number on your paycheck while every additional dollar quietly gets absorbed somewhere else.

So take a look at where your additional income actually goes

If you've received a raise, changed jobs, increased your business income, or otherwise started earning more over the last year or two, this might be a good time to do a personal income-growth check.

Pull up your numbers and ask yourself:

• How much has my take-home pay actually increased? Look at the amount reaching your bank account, not just the increase in your gross salary.
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• Which of my essential expenses have increased at the same time? Compare housing, groceries, insurance, transportation, childcare, utilities, and other necessities.
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• Did I intentionally assign my additional income somewhere? Or did it gradually become part of my everyday spending?
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• Am I saving, investing, or paying down debt at a higher dollar amount than I was before?
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• What would need to change for this additional income to create more freedom in my life?

That last question is especially important because earning more should ultimately help you create something. It could be more security, more investments, less debt, more flexibility, a larger emergency fund, the ability to take a vacation without financing it, the freedom to leave a job that isn't working for you, or simply enough room in your budget that everything doesn't feel so tight.

You get to decide what you want that additional income to accomplish.

Give your next raise a job before you get it

One habit I really like is deciding what you'll do with additional income before it arrives.

If you get a raise, you don't have to save every additional dollar. I'm a big believer in enjoying the money you work hard to earn.

But you also don't have to allow every additional dollar to quietly become part of your lifestyle.

You might decide that when your income increases, a portion automatically goes toward investing, another portion goes toward a specific savings goal, and some stays available for you to enjoy.

There isn't one perfect percentage. The important part is being intentional.

Because one of the easiest ways to earn significantly more money without feeling significantly better financially is to continually increase your lifestyle at the same pace as your income.

Finally...

I will always encourage women to pursue higher incomes, negotiate the salary, ask for the raise, build the business, develop the skills that increase your earning potential, and create additional income streams when it makes sense for your life.

But don't stop at earning more.

Make sure some of that additional income is actually increasing your financial capacity.

Your income is a tool, and the goal isn't simply to make the number bigger. The goal is to use that income to build the security, wealth, flexibility, and options you want for your life.

So if you're earning more and wondering why it doesn't feel like more money, don't immediately assume you're doing something wrong.

Look at the numbers and see what changed.

Then decide what you want the next dollar you earn to do for you.

Build more financial breathing room

If you're working on making your income go further, building your savings, investing more, paying down debt, or simply getting more intentional about where your money goes, Clever Girl Finance has resources to help.

Explore our 30+ free courses, 40+ worksheets, mentor calls, and supportive community to help you turn the money you're earning into progress toward the life you want.

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📺 On YouTube

Tune in to this YouTube video on 7 Things To Do As Soon As You Get a New Paycheck.​

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Be sure to check out the Clever Girl Finance YouTube channel for more great videos!

📖 On the blog

• ​Active Vs Passive Income And How They Work For You​
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• ​How Income Influences Women's Financial Confidence​
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• ​How To Save $10,000 In A Year! 6 Simple Steps To Take Now​

🎧 On the podcast

• ​How Nadia rebuilt her finances after divorce, cancer and major loss​

📲 Follow us on social media​

• Be sure to follow ​@clevergirlfinance ​on Instagram if you don't already!
• Be sure to also ​subscribe to our YouTube channel!​​​

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Talk soon ❤️
Bola