The Long Term Trick to Earning More Money in Your 20s and Beyond

Let me preface this by saying that I am very aware the amount of money you make is largely determined by the field you're in. If you have your heart set on saving the whales for a living, you may never make as much as someone working in marketing for a national firm. But that doesn't have to limit you to the paycheck-to-paycheck lifestyle.

In five years since graduating college, I've managed to go from a $35k/year job to a $120k/year job. Do I deserve this income more than anyone else making less than me? No. Will this income remain stable for the year's to come? I haven't the faintest.

But -- one thing I've learned is that, while it's easy to accept scraping by in your 20s, you should live like you need more money TODAY so you can save for later. When you interview for jobs, they can't ask if you have children... or an expensive mortgage... or debt that you need to repay. If you're in your 20s and single with little or no debt, you may tell yourself "I'm doing fine on $35k" and then you wonder why you are having trouble saving any money for retirement or anything else. Live like you need $20-$30k more a year to get by, and pursue your salary - not your lifestyle - based on this white lie. It will give you that extra motivation to negotiate for $5k more a year, or $10k more a year... which adds up over the long term.

The trick to earning more money long term is setting savings goals for yourself. You may not always hit them, but having a number (even one that seems impossible to reach) in one's mind shifts the way you go about living. When you're looking for a job, you're willing to negotiate for the extra pay because it's one of the only ways you may ever reach your goal.

I read that you should have as much in savings when you're 30 that you would like to have per year when you retire. My goal is to have $100k in savings by the time I am 30. At my last salary rate, this was looking quite unlikely. I have 3.5 years until 30, and I'm only at $55k in savings right now.

When I got laid off at my last job, I applied for a lot of different positions, all which had varying salary ranges. Some paid really crappy. I knew I needed something, and I knew I could get by on the crappy pay. But I wouldn't hit my goal of having $100k in the bank by the time I'm 30. So that fueled my job search in a different way.

The other day I was talking to my boyfriend. He thinks I'm "rich." He has an $18/hour part time job and hasn't tried to get anything better. He has no benefits. (Well, neither do I, but I can afford them on $120k and still save.) He told me about his friends who are trying desperately to find a $30k a year job. While I'm by no means arguing that you shouldn't take a $30k per year job if you find something that you'd love or it really is the only option, by realizing you are worth more (or at least telling yourself you can convince someone to pay you more... and that you are going to save the money) probably increases your long term earnings.

Let me put it this way... I could easily be still making $50k or less, and I'd probably be just as happy NOW. But, later, I wouldn't have much in savings, and I'd be really upset that I missed out on the opportunity in my 20s to put a lot of money into savings and let compound interest work its magic.

If you can't make more money at your current job or in your field, get a second job, but just live as if you "need" more money to survive BEFORE you actually do. I'm freelancing on the side of my full time job because I know now is the best time to earn income. Later when I have a family I won't want to sacrifice the extra hours of living to be at the computer... but now, there's lots of time to earn money and then save that money for the future.