Forget savings- you might just need to earn more!

12.12.2020 | Family Finances

This blog post is very special because it’s inspired by and written as an answer to an email I received last week from a friend and a regular reader of my blog, Jane from Liverpool.

Immediately after I read the email I came up with a few quick answers and a few pieces of advice.

And then I realized that giving advice is the easiest thing under the sun! We are all good at it, aren’t we?

The problem is, often what looks to you like an easy problem to solve might mean the end of the world to someone else. Equally, what seems impossible for you might be ‘bread and butter’ for someone who sees your situation from a distance. Yes, I know, it sounds banal, but it is kind of the foundation of the matter.

So in writing this article I am answering Jane’s email, and, at the same time, I am saying everything I believe is relevant for anyone else in such a challenging situation. I want to make my answer both personal and public; I hope it will work.

I’ve been thinking a lot about money the past few weeks and I would actually really, really appreciate your opinion! Every text I read that you write is focused on:

– people wanting to get out of debt, or save up
– people wanting to invest
– people wanting to understand how to budget and stop spending more than they earn, etc.

In my case, I have a very small debt. I had a credit card that I had to get as an emergency the Christmas before last. I pay £50 per month back on it (minimum payment is £25) and my current debt on the card is £2800. I have no other loans, credit cards, mortgages, and nothing on finance. I try to live within my means and not spend money that I have not earned. There is no interest charged on my credit card until July, which is when I will try to move my balance to another 0% card. I have cut the card up and no longer use it.

Regarding savings, I have recently opened a savings account and I put £100 in it. I set up a direct debit of £50 per month, which is the maximum I can afford.

I work as a teacher 5 hours a week, I work as a support worker 25-30 hours a week, and I try my best to spend at least one full day a week writing. This is because I believe that when I finally finish these books and other projects, I will be able to make money from them. Despite working hard, my annual income is low and under this Conservative government, I am not entitled to the help with rent etc that I was entitled to a couple of years ago, despite my income being lower than it was before. I do receive working tax credits, and the honest truth is that without working tax credits I would be homeless right now. I’m a lone parent of a teenage daughter, who does work part time but still demands money frequently!

My outgoings are enormous, and they are all things that I have no choice to pay. I have a budget and I update it regularly. Most bills increase every April, although my wages don’t. Currently, the cost of surviving for me no spouse to help me cut the cost of living is £1500 per month – this is around the same amount that I receive, in wages and working tax credit. The £1500 outgoings are for gas, electric, rent, water, council tax, car insurance and tax, diesel, food, wifi, mobile phone. I am always shopping around for the best deals, and I am on the best deals but still cannot always afford to get to the end of the month.

I have NO luxuries, except for very cheap travel deals (my last holiday was £46 for flights and I spent £150 by staying at peoples’ houses for free and not eating in restaurants). I do not buy new clothes, I do not go to the hairdresser, I do not have a television. I have just cancelled standing orders and direct debits that I can’t pay: Union fees, Netflix, Spotify, pet insurance, and a £30 payment to my daughter’s trust fund. It makes me angry that although these things are not luxuries, I still don’t have the money to pay for them. I work overtime when I can, but the more I earn, the more I am taxed, and so my situation does not change.

The way I see it, I am a slave to the system and the only escape would be to live off-grid and self-sufficient. My dream is to have some woodland and build my own house or live on a canal boat or a caravan to save money. But of course, this dream seems impossible at the moment because there is no money to save up. I have a million business and investment ideas, like buying a small canal boat and renting it out on Airbnb, but I need money to make money!

Basically, Andrzej, I am wondering how those of us who live in poverty can escape from this conundrum? I believe I am very sensible with money, but I still struggle to survive and am one month away from homelessness, always. I’d like to request an article on this topic please!

Thank you for this email. In my life I have been through extremely challenging situations, such as debt or addictions, and I really do understand how people feel in a situation which looks like a classic ‘vicious circle’, seemingly hopeless and jumbled. Actually, I would say I love it, because personally, I believe that those challenging circumstances are a potential source of our future strength, maturity and creativity.

Let me start with a general picture, which is the political aspect of Jane’s challenge.

There is no doubt that the system in the UK is not yet entirely fair. Why is that?

Why is there still a huge gap between rich and poor? What’s the reason? Does it exist because of the rich abusing the system and exploiting the poor? Or perhaps because the poor are not willing to take a risk and work hard enough to change their situation? Or maybe just because this is how every system, or most of systems, work?

Do the winners always take it all? Is there a natural tendency for the rich to get richer and the poor to get poorer?

My answer is that most social systems are extremely complex and there are no simple, straightforward answers.

The truth, based on observation, is that the ‘winners’ do take it all, but ‘the losers’ (those who have not yet won) can win next time. Nothing is static. Things flow. And almost every system rewards those who try to improve their situations, whether it be their own or that of their fellow citizens.

A typical social system is designed to reward those who are active and don’t give up. Unless this is a corrupt system, like the one I remember from my home country, Poland. Thirty years ago we had a kind of mild version of the Soviet economic and social system, the so-called ‘peoples democracy’. By the way, if you believe that the antidote for a conservative government might be ‘a just and progressive system’ modelled on the Soviet democracy, please be careful what you wish for! There is a rich literature on that topic, including ‘A World Apart: The Journal of a Gulag Survivor’ by Gustaw Herling-Grudziński, and the like.

The truth is that there are a lot of unfair things in UK society, like rental prices or the cost of higher education. However, there are also a lot of great opportunities in this country, that is why it’s still such a popular destination for people from around the world. I am not saying that life is easy in the UK, but it is at least very interesting.

When I struggled in the past with money, one day I came to the conclusion that there are only two ways to earn more money: you need to do either do what other people are eager to pay for, or find a way to let them pay for what you do now. There is no other option, I am afraid. So if your current job doesn’t generate enough money, you will have to either find another job or develop new skills. Nowadays, people on the job market need to be prepared to change their jobs (or even their profession) a couple of times within their careers.

The best and the simplest way to solve any problem is this: First, describe your current situation (or challenge) very precisely (point A). Jane has done this very well. Then you need to create your ideal situation, your dream life (point B). She’s done this properly too; however, she might add more details perhaps, and a few more variations of it. What is missing from Jane’s email is a plan of how to move from point A to point B. We all need a good plan; a list of steps we need to take to make changes in our lives. I am not saying it’s easy, but it is necessary, it is doable, and it’s probably the only solution for our life challenges; ones which have and will be an integral part of our lives. Henry Ford’s famous saying “Whether you think you can, or you think you can’t – you’re right” seems like a fitting quote for this topic.


Please, register for our free webinar ‘Run your family finances as if it was a business.’

At the webinar you will learn:

Why the foundation of family finance is open and free communication, and proper standards of collaboration.

What a family budget is, and how to prepare it and put it into practice.

How to set up financial goals that everyone will love and want to achieve

Who should be the family leader, how to choose one and what it takes to be a good leader?

How to enjoy the journey, how to solve conflicts and how to control the execution of family finance plans.


Even in countries like the United Kingdom, It’s risky to count on politicians. I believe that most people have good intentions – and politicians do too, at least from time to time. However, they like to play bigger games; those of national and international power games. They simply don’t care about you specifically, unless you belong to a wider organisation, like a trade union, for example, that is able to negotiate more for their members.

Personally, I like most of the political parties in the UK and European countries. However, I have very eclectic views. I admire the socialist concept of social sensitivity and inclusiveness and, on the other hand, I appreciate the conservative party for their respect for freedoms, especially when it comes to entrepreneurship.

We live in a better world than our ancestors did a few decades ago – and life is significantly better in comparison to one or two centuries ago. However, there are still a few things that haven’t changed in our lifetimes.

The most important thing that has not changed is that the only person in the entire universe that can help you live a great, abundant life is you. It’s great to have family and great friends. We need them all. It is good to have a fair political system and every one of us should strive for such a system. But again, only you can create the life you want to have.

Saving and budgeting are important. It is an absolute must in personal finance management. However, sometimes the only strategy we can implement is to earn more. By the way, ‘Whether to achieve your financial goal through saving or increasing your earnings’ is the title of one of my newest personal finance management course sessions.

And if you asked me what was the most important advice I could give you it would be this: focus the whole of your energy at the moment on earning more and forget about cutting costs. We cannot cut the costs of living till the cows come home; once you have made as many budget cuts as possible, the only option is to increase your income.

Before I published this article I had sent it to Jane. This is her answer:

Thank you very much Andrzej 🙂

I can’t disagree with you on any of that. Of course I realise I need to earn more, definitely. When my ex partner lived with me, I always had a thousand pounds in my current account; the situation I am in is definitely a direct result of us splitting up and also losing students over the past year that I’ve tried (but failed) to replace.

But yes, I need to earn more for sure, and I need to make some big life decisions- do I quit working in the care industry even though I enjoy it and find it very rewarding…? Do I go back to journalism, which was very well paid but had me glued to a computer 14 hours a day, neglecting my family obligations and my happiness and causing me to feel really depressed and isolated? Or do I try to use other skills I have, such as teaching or looking for translation, proofreading and copywriting work? At the moment I’m covering all bases by advertising my services across the board, and seeing what works out best.

I think the main problem is that when you are struggling with money, you end up working so many hours to pay the bills that there is literally no time left to work towards other options, even if they look like they might be very lucrative in the long term.

Saying that, I liked this part from your answer:

Actually, I would say I love it, because personally, I believe that those challenging circumstances are a potential source of our future strength, maturity and creativity.

…because I really do feel that hitting rock-bottom, so to speak, definitely fires up some kind of entrepreneurial spirit. I actually feel I am one of the lucky ones because I do have a degree and other qualifications and many skills that span three different industries (writing and editing, teaching, support work). My current situation has forced me to stop doing anything social and just WRITE.

I do, however, feel for others in my situation who can’t just write or apply for a well-paid job because they don’t have the skills or qualifications to do anything other than menial work. I’ve worked with some wonderfully kind and generous people in the care industry, and many tried hard at school but just didn’t get the grades to really be upwardly mobile in society.

This is why I believe in a £10 per hour minimum wage regardless of job, and even better, universal income would be amazing! This is also why I believe greedy companies and landlords should not be allowed to charge whatever they like and increase their prices every tax year, estate agency fees should be scrapped and rents should be capped – especially in London. Fighting cruel Capitalist policies would go a long way towards a fairer society, but I digress – it’s never going to happen haha 🙂

Anyway THANK YOU for this advice, it’s what I expected you to say but it was also very useful. Particularly the goal setting and how to move from point A to point B. I do know exactly what my dream life looks like and I have skills I can use to make more money, so I am halfway there…now I just need to DO IT.

Thanks again, it’s really appreciated.




Please, register for our free webinar ‘Run your family finances as if it was a business.’

Andrzej Manka

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