Cutting back on expenses is certainly an important step to take if you’re looking to save more money. If you want to make a positive impact on your nest egg, saving more money is a fantastic place to start.
But the reality is that there’s only so much you can cut and trim and eliminate. We all have living expenses to account for, and trying to cut too many corners on costs can actually lead to financial trouble. If you pare down to the point of feeling deprived, you’re likely to overcompensate later and spend even more than you normally would have when your willpower eventually weakens.
So what do you do if you’ve gotten to the point where your budget simply can’t take any more cuts, but you’re still looking to save more? If you want to increase your savings rate or speed your way along toward your financial goals, there is a solution: you need to increase your income.
Where Saving by Eliminating Spending Falls Short
When you cut expenses, you can only take so much action before you run out of options. The challenge to cut back on expenses might be exciting at first: how much can I save on my utilities? Can I negotiate my cable bill down?
It can quickly become a game to see how far you can go. But once you’ve gone through every single line on your budget, the game ends whether you want it to or not. This can be disheartening and frustrating, and lead to behavior that crosses the line between frugal and cheap.
The Power of Earning More
Your earning potential is theoretically limitless. There is no ceiling in your way that prevents you from making more money; there’s no rule or law that says, “so-and-so can only earn this much, and that’s it.”
Yes, it may be difficult to figure out how to make more money. But it is possible.
Challenging yourself to earn more has many benefits:
- It makes you more valuable (as you’ll likely acquire some new skills).
- It gives you more confidence when you realize what kind of exciting stuff you’re able to make happen when you take charge and take action to make a positive change to your financial situation.
- It allows you to worry less about your money (because you have more of it coming in).
- It provides a larger buffer against unexpected expenses that might otherwise be challenging to pay.
How to Start Earning More Money
It certainly is intimidating to think about earning more money if you haven’t tried it yet. It may even seem impossible.
But countless numbers of people are out there earning more money from part-time gigs, second jobs, and work on the side. Those same people are also paying down debt faster, fast-tracking their progress towards their financial goals, and having more disposable income to contribute to retirement savings.
So how can you get started? Let’s check out a few ideas to get you thinking in the right direction.
Start with your current work situation. The easiest place to try and earn more money is via your current job. Can you take on more responsibility to earn a raise? Can you move up internally and apply for a higher pay grade? Can you pick up extra hours to earn some extra money?
Or try something new. If your situation warrants, look for a similar job elsewhere. Other companies may be able to offer more competitive compensation. But be careful before making this move, and do some research first. Are you getting paid industry standard for someone of your skills, abilities, experience, and history with a single company? Don’t get caught up thinking the grass is greener.
Sell your stuff. Go through each room in your house, and see if you can find things to sell. Make up some rules to help you along. If it hasn’t been used in a year and it’s in good condition, try to sell it. You can use eBay, Craigslist, or have a garage sale if you find enough items.
Additionally, you can create things to sell. Again, use the web to help you. Create a shop on Etsy and sell art or handmade goods. Have a special knack for finding vintage gems in thrift stores? You can flip those items on Etsy, too.
Establish a side hustle.Do you have marketable skills that can be put to use outside of your job? Wait, don’t answer that question – because the answer is most likely yes.
If you love animals, try dog-walking or pet-sitting. Prefer to hang out with kids? Nanny or babysit instead. Or, if you have a lot of knowledge you’d love to pass on, consider tutoring or teaching a community class.
Don’t forget about the skills and knowledge you’ve gained through work experience. You can always do a little freelance work or consulting on the side of your full-time job.
Explore your talents and research if there’s even the slightest demand for what you could provide for someone. Chances are, there are plenty of people out there who would be happy to pay you for your time and efforts. But that’s why it’s called a side hustle – you will have to hustle to get yourself in front of those people.
It’s hard work, but incredibly rewarding once you gain some momentum and start building up a steady amount of side work (and side income).
What To Do with Your Extra Earnings
Once you do start earning more money, your work isn’t over quite yet. If you earned more to save more, you need to follow through and make sure your extra income is actually making it all the way into your savings.
Set up automatic withdrawals from your checking account so you don’t forget, or aren’t tempted to spend. If your extra income is too variable to set up a reliable withdrawal on a regular basis, you can still make sure you’re on track to reach your goals by using the iQuantifi app.
At the end of the day, earning more will get you further than cutting expenses. Chances are you can make time for these income-generating ideas if they’re outside of work. The hour you spend watching TV at night could be spent on a side hustle, for example.
Earning more might require you to buckle down on time management, but it will be worth it in the end when you’re able to increase the value of your nest egg, reach your financial goals, and build your wealth.
By Kali Hawlk, Staff Writer