When you’re in the thick of organizing your finances or vanquishing debt, one of your main focuses will be cutting costs. The more you eliminate from your spending, the more money you will have leftover to achieve your financial goals. Many personal finance blogs (mine included!) offer useful tips on negotiating for lower interest rates on debts, eliminating unnecessary spending, and generally living a more frugal life. But there is a limit to how frugal you can become.
With the exception of taking on a major lifestyle change and choosing to live off-the-grid, chances are you have some basic expenses you can’t get rid of: food, shelter, cellphone, etc. While you may have succeeded in getting these costs as low as possible, it’s unlikely you’ve managed to eliminate them entirely you. Whether you like it or not, it simply costs money to live. Period.
I like reading articles about families that have made a salary of $30,000 stretch to raise their six-children without resorting to dumpster diving, but I do so only to marvel the way I would at an oddity or magic trick — I never think or wish to do that for myself. Why?
Being frugal 24/7 sucks.
It’s good to know what your bottom line is, but not so that you can live there. The bad thing about your bottom line is once you’re living at it, you can’t go any further down. If you’ve trimmed all the fat from your budget, there’s nothing left to cut if you suddenly find you need an extra $100 or $1,000. Sure, you have an emergency fund, but that’s not the same as having flexibility in your disposable income. Once you’ve cut what you can from your budget, your immediate focus should be on how to get more money. A little bit more money, a lot more money, whatever. Just get more.
Your ability to cut costs is limited, but your earning potential is unlimited.
There’s nothing stopping you from bringing in extra money, except maybe an idea of how to do so, but that’s a small barrier to overcome. Whether it’s earning an extra $100 or $10,000 per month, increasing your income is worth far more in the long run than cutting your budget is.
How do you get more money?
Like your earning potential, the possibilities are limitless. If you’re stuck, start small with some easy you can implement immediately such as:
- selling items on Kijiji or eBay
- finding odd jobs on Kijiji or Craigslist (everything from helping people clean out their garage to working gates at music festivals, there is someone out there just looking for general labor)
- providing tutoring in music, language, or academic subject you’re proficient in
- cleaning homes
- babysitting children or pets
- selling creative work such as paintings or handmade jewelry
If you have more resources or have identified a unique market, you might be able to set up a small business. You don’t need to invent a cool gadget or build a multi-million dollar business to be an entrepreneur, even a small operation that brings in a few extra thousand per year still counts. From hauling junk to freelance writing, there are opportunities everywhere.
The important thing is that you don’t wait to start making more money. Start right now.
Finally, one of the easiest ways to earn more money is to target where you’re currently getting most of your current income: your day job. If you’re an hourly employee (like I am as an intern!), inquire about working more hours. Even 1 extra hour per week can add over $100 to your monthly income — that’s $1,200 per year! Staying a bit late on Wednesdays doesn’t look so bad now does it? If you’re not hourly, now might be a good time to negotiate for your salary. Nothing pays off more than a conversation that nets you a higher gross income.
Often when people are looking for ways to pay down debt or save for a major goal, like a down-payment on a home, they seem to be way too focused on cutting costs and living on as small as budget as possible. While initially effective, once you’ve cut all the costs you can you’re left with nothing more to do other than entertain whatever level of deprivation you’ve accepted until your goal is met. Instead, you should focus on cutting costs AND increasing your income as much as possible.
What creative ways have you found to increase your income? What inspired you to find another source of money?