Do you wish you made more money? Don’t we all! You have to increase your income streams if you want to be financially free in a short period of time. In this article, I will share with you 5 easy ways you can increase your income streams.
Before You Increase Your Income Streams
Reduce Expenses And Save
I recommend you reduce your expenses and save a good portion of your salary before you focus on trying to increase your income. The reason is, it makes more financial sense to cut expenses first than it is to earn more income.
I learned this concept in the book Set for Life by Scott Trench.
I have personally paid for and read this book and found the information to be very valuable.
As Scott Trench points out in his book, the money you already have is post-tax dollars; therefore, for every dollar you save, you need to earn $1.33 to match that after-tax wealth (assuming you pay 33% tax on any income earned—including both state and federal taxes).
In other words, you need to earn more in order to save the same amount of money you already have.
Being that it is harder to earn more money than it is to save, your primary focus should be on preserving the money you already have. Only after you cut your expenses as much as possible should you focus on earning more money.
Make A Budget
In order to reduce your expenses and save as much of your income as possible, you need to have a budget first.
Having a budget allows you to see how much your expenses are and can help you find ways to cut your expenses. It can also show you how much of your income you’re able to save.
If you’re just starting out, you can download my FREE Monthly Budget Worksheet.
However, if you want to get serious with your savings and need something a little more sophisticated, you can get my Budget Template.
My template makes it easy to see exactly what percent of your income you’re saving. It also shows you what percent of your money you are spending.
This is the template I actually used to save over 50% of my income and it is the same template I use to this date.
Increase Your Income Streams
To be truly financially free, you need to build multiple streams of income.
This is important for several reasons. First, it creates diversity and protects you if one stream of income “dries up.”
Second, the more streams of income you have the more money you make; the more money you make the faster you can become financially free.
Here are some ways you can increase your income streams:
1. Make More Money In Your Current Job
The first and easiest way to increase your income streams is to try and make more money with your current job. It saves you time from having to try and find another job, or starting a business of your own.
There are two ways you can make more money with your current job: you can 1) ask for a raise; and 2) increase your work hours.
Ask For A Raise
Ask your boss for a raise or a promotion. Keep in mind that you cannot ask for a raise or a promotion just because you feel you’re entitled to one. Remember you are more replaceable than you think.
When asking for a raise you have to be bringing additional value to your company or your boss. Maybe the additional value you bring is taking on more tasks and responsibilities, or higher job performance.
Understand that your income is determined by the value you bring.
Increase Your Work Hours
If asking for a raise is out of the question, or you were denied your request for a raise, consider making more money in your current job by working more hours.
In most jobs, working overtime means you get paid “time and a half”—which means 1.5 times your hourly rate. Of course, this technique does not work if you are a salaried employee and get paid the same amount of money no matter how many hours you work.
2. Get A Higher Paying Job
If you feel like your current employer is not paying you a fair salary for your work, consider getting a higher paying job with another company.
Before deciding to take the big leap, make sure you do your research first to see if you are actually being paid unfairly. Figure out what the median salary is for the field you are in or the job you do.
Keep in mind other things besides your title that may be a factor in your salary such as experience, location, etc. The last thing you want to do is find out that you are being paid right in line with your industry standards, but you actually think you are underpaid.
If you are actually being paid fairly but there is not much room to grow with your job, move to a company that may offer more room for advancement. Personally, I would even take a pay cut to work for a company that has more room for advancement than stay in my current higher paying job that is stagnant.
Keep in mind moving to another company may sometimes require more experience, education, or training; but it doesn’t hurt to consider jobs a step above where you are now.
3. Find A Part-Time Job
This is pretty self-explanatory. You can do almost anything as a part-time job. Some examples are driving Uber, bartending, tutoring, retail, customer service representative, etc. Use my Uber link for $575 guaranteed. If you earn less, Uber will pay you the difference.
4. Start A Part-Time Business Or Side Hustle
I personally like side hustles more than a part-time job because you’re the boss, and therefore offered more flexibility. In addition, there is more room for income growth.
The only downside to a part-time business is your income is not as stable or predictable as it would be if you had a part-time job.
When deciding what kind of part-time business to start, ask yourself “What are my talents and skills?” Figure out what kind of things you like to do? Is there a way to turn your hobbies into additional income?
5. Establish Passive Income
In short, passive income is money you can make in your sleep. Of course, this is my favorite way to earn more money.
It is money that comes from a source other than an employer—the source is usually from real estate or a business you are not actively involved in.
There are so many ways you can establish passive income such as lending money, creating a product, or investing. This article can give you a few ideas.
After You Increase Your Income Streams
Once you start making more money, pay down debt, save, or invest 100% of that additional income. Do not be tempted to spend that money.
That is what I initially did when I started to make more money. I would spend more money because I felt I “earned it” and it was a reward for my success—however, it stunted my financial growth. If I had saved all of the extra money I made, I would’ve been financially free MUCH sooner!
Looking back, that was one of the biggest financial mistakes I ever made, and I do not recommend you do the same!
Automatically save that additional income through automated savings to reduce the temptation of spending it.
Before you increase your income streams, you want to make a budget so you can reduce your expenses and save the income you’ve already earned. If you need help setting up a budget fast try this FREE Budget Binder.
You can increase your income streams by making more money in your current job; moving to a company that may offer more room for advancement; finding a part-time job; starting a side hustle or part-time business; or establishing passive income. After you increase your income, don’t spend that money. Instead, use that additional income to pay down debt, save, or invest.
- How I Use My Monthly and Yearly Household Budget Spreadsheet
- Cutting Your Monthly Expenses: Why It Is Absolutely Necessary
- How I Saved $300,000 In 4 Years
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