The insights we’ve shared over the last 12 weeks are a great start to righting a severely off-course financial life. Whether it is trimming a few dollars from the budget by cutting back, saving $100 by refinancing your home, or automating menial money tasks, all of the steps can be used to make a big impact. But today we will be talking about something a little different. Instead of talking about cutting your favorite hobbies in order to squeeze a few extra dollars for your retirement in 45 years, we’re going to look at things from a different angle today.
Instead of telling you to live like a hermit — which, by the way, is necessary for a while if you’ve made a bunch of foolish financial decisions — we’re going to talk about working a little differently.
It’s time to make more money…
Right now you have a certain amount of money that comes into your household every month. Many people find themselves in the situation where as money comes in, it is already sent right back out to creditors they owe money to. If you’re spending 99% of what you make it is going to be difficult to have drastic financial change in your life.
But what if you could grow your income 10%? 25%? 100%?
What would life look like then?
Even if you’re spending 99% of what you make right now, add on another 10% and you find yourself in a totally different situation. That extra cash can put your debt snowball in the fast lane or build up your emergency fund in no time.
At the end of the day you can only cut so much. You need a roof over your head, basic utilities, food, clothing, and a way to get to work. In theory you could cut out literally every other expense you had and live like a hermit.
But no only is that no fun, but no one can stick to that plan. It’s impossible. Soon you find yourself eating out just to feel like a half-normal human being before returning back to your cave.
Earning more money sounds nice, but what steps can you take to get there? I’m not going to lie to you: it won’t be easy. It will take extra work and maybe losing a little bit of sleep. But the rewards? Too many to list… but I will say it can transform your financial life.
Earn More Money to Transform Your Finances
Here are a few tips on earning more money.
Get a Part-Time Job
The easiest way to earn more money is to work more hours for more pay. It’s a simple equation: take hours your normally spend relaxing, cleaning the house, watching TV, etc. and multiply them by what you could earn at a part-time job.
Even at minimum wage — ugh! — working an extra 10 hours per week comes to an extra $72.50 per week before taxes. That’s almost $300 every month pre-tax. What would your budget look like with an extra $300 coming in every month?
Turn What You Love into a Business
Being your own boss is the most rewarding and most difficult way to earn extra income. You can’t just show up, clock in, work a few hours, clock out, and earn a paycheck. But it can be so good, so worthwhile… you might find yourself leaving your current job because of it.
Maybe you’ve heard “do what you love” and mocked it. You think what you love to do can’t be profitable. Maybe you’re right… but you won’t know until you try. Someone might just love what you do and be willing to pay you for it.
There are too many options to list on doing what you love, but here are a few main themes:
- Create products and sell them. For you that might mean quilting cute blankets for babies and selling them on Etsy. Or writing an eBook on rental property and selling it online. Or making funny t-shirts about your local area and selling them to independent stores. Use your talents to make something and get paid for them.
- Fix someone else’s problem. The best businesses are ones that have built in customers. Overhear someone complain about a specific problem? See if you can come up with a service to solve it. Your neighbor frustrated that his lawn service costs too much and never shows up on time? Grab a mower and offer to do it for 5% less and always on time. The world is full of problems, you just need to provide the right solution.
Get a Raise at Work
If you’ve got a job in this economy you might be wary of asking the boss for a raise. You can’t just storm into the office and demand more dollars. There is an art to earning yourself a raise – or even better, a promotion. One of my favorite blogs, Lifehacker, covers this well in this article: How Do I Ask for a Raise When I Feel Underpaid and Overworked?
Don’t Waste What You Earn
Once you’re earning extra income be sure not to waste it. That sounds like really simple advice, but consider this: you suddenly find yourself working an extra 10 hours per week. You’re tired. You’re not hanging out with your friends as much. Suddenly it is a lot easier to justify spending a few more dollars here and there — you’re working hard, right? So why not treat yourself?
Just remember the reason you’re working so hard: to earn more income to put toward a financial goal. (And if one of your financial goals is to eventually earn enough money to get back to doing the things you love — great!)
Your To Do List
- You can only cut so much from your spending. We all have a certain amount of fixed costs that we can’t cut from our lives.
- To continue bettering your situation after you’ve cut back, earn more income.
- There are many ways to earn more money, e.g., get a part-time job, start a small side business, and get a raise at work are just a few
I sincerely hope some of you take these tips and run with them. I’d love to hear about someone who finally bit the bullet and suddenly finds themselves with a nice side income coming in. If that’s you, will you let me know?
Kevin Mulligan is a debt reduction champion with a passion for teaching people how to budget and stay out of debt. He’s building a personal finance freelance writing career and has written for RothIRA.com, Discover Bank, and many others.