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I’ve always been a frugalista.

As a kid, I loved accumulating change in my piggy bank and counting it out on my bedspread. If I was saving up for something, like a new game cartridge for our Atari 2600, I wasn’t about to be distracted by candy bars or shiny baubles.  As an adult, I discovered Amy Daczcyn’s Tightwad Gazette books and spent hours combing the pages for tips and tricks.

Though I spent a lot of years as an at-home wife and mom, my ability to cut costs and live on less helped our family weather some pretty rough times – and retire a considerable amount of debt.  I’m proud of my ability to pinch pennies, and (I think) rightfully so.

But over the past few months I’ve come to a realization. It’s something I’ve probably known all along but managed to shove to the back of my head:

Sometimes cutting expenses, even to the bone, isn’t enough.

Cutting Costs

If you’ve read anything about accounting ever, you know that to stay afloat, you have to spend less than you earn. There are two ways to balance a budget – spend less, or earn more.

Most of us have found plenty of ways to decrease our expenses. Buy inexpensive foods and prepare them at home. Shop for clothes and furniture at thrift stores or yard sales. Give homemade gifts. Buy a fuel-efficient car or bike to work or take public transportation. Shop around for lower insurance quotes. Plant a garden.

But here’s the thing: At the end of the day, there’s only so much you can cut.

  • You have to live somewhere.
  • You have to eat something.
  • You have to have some way to get places.
  • Most of us enjoy the little extras, too, like wearing clothes and having health insurance and reading blogs on the internet.

So life is going to cost something.

Here’s another thing: Cutting expenses usually draws on other resources, like time and energy.

  • Carpooling cuts your commuting costs, but you have to make arrangements and coordinate schedules.
  • Cooking from scratch cuts your food costs and is probably healthier, but it takes time and energy and someone has to clean up afterward.
  • Scoring great bargains at the thrift store means shopping often and combing through racks and trying things on.

And so on. These things may well be worth doing, especially if you enjoy them, but there’s only so much of you to go around.

The Other Side of the Equation- Increasing Income

If you’ve hacked your budget to the bone, or as close to the bone as you’re comfortable with, and you’re still not making ends meet, you have to work the other side of the equation. You have to make more money.

Here’s something else I’ve just gotten around to figuring out: That extra income may not have to be a lot of money.

I mean, we all would want to win the lotto, try out for mobile casino and hit it big, or even “simply” finding our dream job that pays gobs of money.

BUT think about it. If it would help your budget to save $20 every month on your phone bill, wouldn’t it help your budget to earn an extra $20 every month by washing your neighbor’s car or watching her kids for an hour? A little here and a little there adds up.

For years, I put off the idea of earning money as a writer because I didn’t think I could write enough – or sell enough – to bring in a full-time income. Well, the verdict is still out on that. But writing enough to bring in a part-time income has been a huge boost to our budget.

Not only that, but I’m building up a portfolio and networking with other writers. I’m discovering writing contests, calls for submissions, and potential markets for my work.

Some side hustles turn into full-blown businesses. Some never do. Either way, as long as you’re making a reasonable amount of money for the hours (and materials, if any) you put in, you’re ahead of the game.  Over time, little income trickles can slowly ad up to become income streams. Add together enough income streams, and you might just end up with an honest-to-goodness income.

And with that income, you have the opportunity to balance the equation.