Just about all of us need to be saving for retirement -- and for most of us, we need to save rather aggressively. The median retirement savings for American households recently was only about $50,000, according to the 2020 annual retirement survey by the Transamerica Center for Retirement Studies.

Saving and investing can be hard to do, though, especially if you're not earning as much as you need to. An obvious fix to this situation is to curb your spending, but the thought of being deprived of some things you enjoy is not going to be appealing. So here's another approach: Earn more.

A smiling woman is holding hundred-dollar bills fanned out near her face.

Image source: Getty Images.

The spend less strategy

The common advice to spend less might have you rolling your eyes, but don't be so hasty -- because it's a powerful strategy. Consider that old chestnut of cutting out your fancy coffee treats. Well, if you do spend $4 on a coffee treat most weekdays, you're looking at an annual cost of about $1,000. Over a decade, that's $10,000 or more. Cut that habit in half, and you might be able to sock away thousands of dollars.

If you're a regular smoker, you can save gobs more. A one-pack-a-day habit that costs you, say, $7 per pack (a not-uncommon cost, nationwide) amounts to $2,555 per year. Two packs a day, and you're spending more than $5,000 annually on cigarettes. Check out the table below, and you'll see just what various saved amounts can do for you over the long run, if you invest them regularly:

Growing at 8% for

$1,000 invested annually

$3,000 invested annually

$5,000 invested annually

5 years




10 years




15 years




20 years




25 years




30 years




Source: Calculations by author.

The earn more strategy

Clearly, there's a lot to be saved by some judicious cost-cutting. But there's even more to be had by earning more. There are many ways to go about bringing more money into your household. Here are a few ideas:

  • Ask for a raise. Many people who ask for a raise get one. If you are suddenly earning $5,000 or $10,000 more, you might divert that additional income directly into a savings and/or investing account. Even without a raise, if you get annual pay increases, you might do the same with those, living on the income you had before the increase.
  • Apply for higher-paying jobs. Look around in your organization and see if there are any positions you might apply for that pay you more. Failing that, look for any appealing better-paying job at other companies.
  • Get qualified for better-paying jobs. You could earn a degree or achieve a professional certification or designation that can open doors to more lucrative positions.
  • Take on a side gig or two for a short or long while. Yes, you might work as a cashier at a local store on the weekends, but a little thinking inside and outside the box can turn up gobs of other possible side gigs, some of which might even be appealing. If you enjoy kids, for example, you might be an online tutor. If you enjoy woodworking, you might make or restore furniture. Like knitting? Sell sweaters online. If you like meeting people and driving, you might drive for a ridesharing service.
  • Sell unwanted items. Most of us have lots of stuff we no longer need or want in our attics, basements, and/or garages. Sell what you can online or in yard sales, and you can reap hundreds, and in some cases, thousands of dollars (depending on just what you have). What you can't sell, you might donate, possibly getting a money-saving tax deduction.

If you can bring in an extra $1,000 per month or $1,600 per month (that's about $250 to $400 per week), you're looking at an extra $12,000 or almost $20,000 each year -- meaningful sums that can help you amass a much bigger nest egg for retirement. Here's what various sums saved and invested regularly can get you:

Growing at 8% for

$10,000 invested annually

$15,000 invested annually

$20,000 invested annually

5 years




10 years




15 years




20 years




25 years




30 years




Source: Calculations by author.

The best strategy: spend less and earn more

Even better than just adopting the spend less or the earn more strategy is doing them both. Think of which expenses you can trim and how you might generate more income. If you have a spouse and kids who might join in, you can all build an even more financially secure future for yourselves.

But if the thought of spending less is just terrible to you, see what you can accomplish by earning more. However you do it, it's important to be saving for your future, because Social Security alone will not have you living very comfortably.