Everyone could use a bit of extra money, whether to quickly pay off debt, buy a house, or just to take a much-needed vacation. The good news is that there are many ways of building up a side income while saving more with the money you already have.
Find Ways of Making More Money
The best way to increase your financial comfort is to bring in even more funds. For example, if you bring in $4,000 each month and end up spending $3,500 of that, you might try to reduce your spending to $3,200 each month. There is a limit to how frugal you can be, especially if your income is already lower.
Still, if you were able to get even a few hundred dollars more every week, your savings could significantly increase. There are a lot of ways to go about bringing in funds, but don’t fall for anything that promises to make you rich overnight. It will take hard work to get the funds you desire, and you can expect it to take a while as well. Consider working longer hours at work or taking on a side hustle. If you have a life insurance policy that you no longer need, consider selling that to get a cash payment. You can use a calculator to help determine if you qualify in less than a minute. You can also use it to determine the value.
Paying Yourself First
Once you get paid, the first step should be to pay yourself. Avoid purchasing shoes, clothing, or other things you don’t need right away. By paying yourself first, you will have more money to live the life you are dreaming of. Spending your money as soon as you get it is a sure way to live paycheck to paycheck. Instead, pay yourself, which simply means setting aside a certain amount the moment you get your funds.
If your employer allows it, you might set up direct deposit to two accounts instead of only your primary one. That way, you will be less tempted to spend the money and you can trick yourself into seeing only the amount placed in your primary account as what you can spend. A few things you might do with the saved portion include:
- Placing it into your retirement account
- Investing the funds
- Placing it in a dedicated savings account
No matter what you do with it, make sure you do not choose to move the funds after they have entered that account. That way, it will be harder for you to spend the funds on impulse.
It is a bad habit to get into debt, and once you are there, it is often hard to get out of debt. Of course, some is worse than others, such as borrowing money for a fancy new car or a designer product. If it is a want that you can’t afford, you can’t have it. Instead, try working harder to earn more money for the item. For example, you could get another job that pays better or get a side hustle to earn a few more dollars.
On the other hand, there are some types of debt that are a little less harmful. For example, there might be student loans from school. If you are considering taking on debt for your education, you should be careful since there are less expensive ways to get your degree. Consider looking for a more affordable university and finding affordable housing to reduce your spending. Still, taking on student debt can give you a good return on your investment if you plan it carefully.
Creating a Budget
Many people think that budgets are not that interesting, but they can show you a lot about your financial situation. But tracking expenses can be fun, especially if you are trying to make some changes. The budget can be encouraging since it can help you stick to your spending plan. There are also many tools to make the process easier – often, all you have to do is fill in the categories with the correct numbers, and the tool will do the rest. The budget helps you better understand the amount you are spending every month, as well as what you have previously spent. That way, you will be better equipped for planning for the future. Of course, you don’t have to track every cent that you spend every day. But a good budgeting tool will only take a few clicks before you can see where your funds go.
If this is your first time setting up a budget, start by looking up past expenses based off of previous bank statements. Look at the ones from the past three months or so and split up each of your expenses into categories. Then analyze how much you should realistically allot for each of those categories. There are a lot of different ways of doing this, but you might consider separating things into wants and needs. Things like rent and food would go toward needs, and anything else not necessary for living would go toward a ‘want’. Then you would only spend money on wants once you had paid for everything in the ‘need’ category. Anything leftover could go toward savings. Of course, this strategy works best if you have already paid yourself first when your paycheck comes in. That way, you are not cutting yourself short when it comes to your savings.