Increased Savings or Increased Income?

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This is an ever-evolving question that depends on your present situation and goals, those that exist currently and those you aim to achieve in the 1, 2 and 5 or more years. It’s the, “which came first the chicken or the egg”. IF you spend all your time trying to decide which one first, odds are, you will starve to death so start with one. I had periods in my life where I had one job and was solely focused on savings, and other periods where I was working two to three  jobs and trying to combine raising my income and my savings rate as I was intentionally pursuing a goal that I was determined to achieve.

People always ask for tips and tricks on how to progress faster to their goals. My first question to them will always be there same: “Do you know where your money is going?”. If you don’t know where your money is going, how to do you expect to have an idea of what you can save? So people are able to outspend their money issues but that isn’t exactly a repeatable strategy to say the least and is not recommended

First, you will need to break things down to the very beginning and learn if you need a budget in the first place.

When you are talking about the basics, I don’t want to use the “B” word, but creating a budget is a big part of it if you are starting out. You need to see where the holes in your financial boat are and if they can be plugged. Anyone can create a budget, it’s a fairly simple process. From here it is important to find what you are being intentional about and what you are spending on the things in life that give you value. If buying a $4 cup of coffee from Starbucks brings you value and joy then spend away. No one should ever tell you what you value and what you shouldn’t, that’s up to you to decide.

It is the elements that don’t bring you joy and value that you can trim. There are always things in our spending that we can curb and modify and it’s important to be open and flexible with it as we go. Just remember to always pay yourself first.

Once you have the basic budget down, you can shift your focus to looking at increasing your income. It could be simple tasks as small as looking what others in your field are making and determining a game plan as to how to broach that topic with your employer to ask for a raise. (“I will teach you to be rich” by Ramit Sethi is a great book that can help you get the groundwork done to help you broach this topic at work.)

Not comfortable doing that? Look at what you are spending your money on and see if there is an easier or cheaper alternative to those goods and services you can get to replace what you currently have (e.g, switching phone carries, cancelling television and moving to streaming platforms, etc.). These are some small tricks that you can do to lower your expenses and ultimately increase your income.

We live in the age of the gig economy. There are endless ways to market yourself and your skills into a side hustle, adding an additional stream of income. Even during COVID, people are getting incredibly creative by selling custom made masks , creating online courses to teach others new skills, opening a digital printing store for the pictures you’ve taken on your travels around the world, or by providing a service such as food delivery or ride sharing. Don’t let people tell you there’s no way to make money other than your normal 9-5 job. There are millions of ways to make some extra money if you are willing to put in the work.

Not everyone is going to want to try their hand at a side hustle or pick up a second job because it just doesn’t fit them. That’s perfectly fine! This might not work well with everyone as we all have various levels of responsibilities in our life and things that demand different amounts of our time. Some people have kids or are taking care of their parents and it’s not always feasible as a result. But if you say you don’t have time because you are binging Netflix multiple hours a day, then maybe there’s a better use for your time. Why not try and take a skill  you are good at and find a way to see if you might solve someone’s problem! Good at spreadsheets? Market your skills in bookkeeping for a small local business. Enjoy creating collages and building furniture? Create yourself a Pinterest page to show off your creations and maybe turn your passion project into a small business.

Odds are you won’t be able to totally replace your normal income overnight or even after a few months. But if you were able to market your skills and create something that brings values to others you will have a new stream of income you would be able to tap into. From there you can move your passion projects into smaller lines of business for you. From there you can use the extra income to invest in your business to watch it grow, invest for longer term gains, increase your spending or take the trip you always wanted to. This money is free for you to do with at your own choosing.

All it takes is an idea with a little dedication. Rome wasn’t built in a day and neither was any profitable business. What is the worst that can happen? You fail? So, what, people fail every day. You only really fail if you give up and never try again. If it is something important to you, why not stick to it and keep going.  You are trying to improve yourself while learning something new along the way.