I don't understand what to do when Turbotax says I have to update my wages and income area to report income earned while I was living outside the US?

If you did not receive a W-2 for your wages, there is no need to complete the W-2 section.  Report your foreign earned income on Form 2555.

If you started a W-2, then delete the W-2.

Enter w-2 in the Search box located in the upper right of the program screen.  Click on Jump to w-2

To enter Foreign Earned Income -

• Click on Federal Taxes (Personal using Home and Business)
• Click on Wages and Income (Personal Income using Home and Business)
• Click on I'll choose what I work on (if shown)
• Scroll down to Less Common Income
• On Foreign Earned Income and Exclusion, click on the start or update button

Or enter foreign income in the Search/Find box located in the upper right of the program screen.  Click on Jump to foreign income

I think you misunderstood my question.  I know where to go for these different areas.  Here is the problem in detail...

I am asked "did you make money outside the US". I click YES

What form was Foreign Income Reported on?  I click W2.  And click continue.

I click 

Ok ... first the W-2 is entered in the W-2 income section ... continue thru that section and click on foreign employer ... continue to the foreign income section and complete those interview screens.