When people feel financially stretched, it can be hard to decide where to cut back. What if you just focused on earning more instead? It seems like the logical solution — but there's a problem with that logic: almost everyone increases their spending when their income goes up. The result is that you find yourself right back where you started, just at a higher level. In this episode, Tim shares a real example of a household earning over $400,000 a year that still had nothing left over, why trying to out earn your spending rarely works, and a practical framework for building a gap between what you earn and what you spend — and keeping it.

One Key Takeaway: Earning more won't solve a spending problem. Instead you need to spend below your means, save the rest, and widen that gap every time your income goes up.

Links:
Send me a question to be answered on a future episode.
Sign up for the Keep It Easy newsletter.