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Increasing your income is a rarely discussed topic when it comes to personal finance.
Sure, there are PF blogs talking about side hustles. But just a few of them making this an integral part of their writing. Even less are talking about other ways of making money. It seems like everything they are telling you about is saving more and the basics of investing.
There must be a mystic cause why most of them are refusing to share their knowledge about it. But first, let me tell you a little story of my own. After that, I will show you why growing the flow of money that goes into your bank account is actually so important. Finally, I will unveil the reason, why other bloggers are hiding these pieces of information from you.
Reaching the limit
Last year, I was doing pretty well. I’ve started tracking my finances and built a sustainable budgeting system. I was putting aside 50 EUR/month for my working equipment (MacBook, iPhone, office requisites). Furthermore, I added 100 EUR/month for our holidays and another 50 EUR/month for our future wedding. I was also taking care of my long-term goals by setting aside 100 EUR/month for investments. I was covering all of my expenses, had no loans to take or pay-off and I had not to live a frugal life at all.
Before you tell me these numbers are pretty low, I actually just had 725,20 EUR/month of income as I was (and I am) just a working student and 400 EUR/month from my parents to support me while studying. I also had a lot of costs to cover like a train ticket, health insurance, smartphone with cell phone contract, college fees, food and many other small things.
While my bank account grew a decent amount each and every month I knew that it was not enough to cover the rent of an apartment (they are pretty high in the area I live in). As time went by, the desire of moving together with Mrs. Budget was rising accordingly.
Sigh, I faced a dilemma. Even if I cut my expenses a little more and stop spending any money on books, clothes, entertaining stuff (what I already barely did), it was just not enough. Improving my saving did not help at all. Better investing would solely help for the long run. It looked like the only option was to wait for the end of our college time.
The importance of increasing your income
While I was revisiting my budgeting system at the beginning of this year, I finally had an answer. I found the weakest link, the bottleneck. I simply wasn’t generating enough income. For now, I will skip on the details but after a little online search, I discovered a much more attractive job that was also better paid than the one I had. After the following job interview, I became part of the new company, and now I’m able to learn from high-qualified developers and also add another 200 EUR/month to my calculations. From that point on, we were finally starting to looking for our new home.
In some situations, it’s hard to improve your financial system without increasing your income. This is especially true if you don’t like this die-hard frugality lifestyle.
This is not limited to the situation where you have more money to spend. If you want more money for investing or increase your short- and mid-term savings, this step can help heavily. And while spending less often results in another $20/month (which is also pretty good) a side hustle or a raise can generate several hundred dollars and more.
If you are not fully convinced right now, that increasing your income is often the better solution, I want to show you an example.
Frank drives 60 minutes to his office and back home daily. As he wants to improve his finances he decides to use the bus instead which saves him $50/month. However, his commuting time increases to 2 hours a day (30 minutes one way). This adds up to 20 hours per month (1 hour * 20 working days). Is this reasonable? It may is. Though, in 20 hours per month, you can run a decent side hustle that generates much more than $50. So if you are willing to do so, it isn’t a sensible decision.
Why are most PF bloggers not talking about making money?
Are they not talking about it, because they’ve found a magic formula? No. It’s quite simple. They don’t know how to make money. And it’s actually a lot easier to save money as to increase your income.
Do I know how to make more money? Ehm…
How many side hustles have I created? Well..
Am I the owner of a highly successful business? No…
Okay, I have to make a confession. I don’t know either. Before you call me a goofball and close the browser window, let me explain first.
I want to experiment a lot here. I will create case studies for side hustles, I’ve already done some work as a freelancer and I will switch to full-time freelancing soon. My blog is an online business for me, too. So maybe, I can’t be your mentor in the first place, but if you want to join me on this journey, learn from my failures and get some insightful hands-on advice, feel free to join me.
In which situation you consider reading my ‘boost your income’ posts
There are many situations where you should read my blog posts about this topic, including:
- If you are stuck in your day job and want to get more productive and stand out
- You have created a budget that you stick to and want a little more cash aside
- If you want to create a side hustle/business to reach your financial goals faster
- You want to be your own boss
- You want to automate and/or eliminate some of your work
- Just because you want to have some fun by creating something
But! Often money isn’t the problem at all. Many people think they need another $50/month and then they would finally start investing or saving for an emergency. Instead, as soon as they have the money they buy liabilities (a new cell phone, Netflix subscription, etc.). It’s very important to get rid of the clutter, remove the ‘keep up with the Joneses’ lifestyle and create a reasonable budget. Check my (working) budgeting system for more information.
What topics will be covered?
There are several topics I will write about. I can’t cover everything that is related to career advice as well as building a big company with thousands of employees. I think this isn’t even PF anymore. Though, I will cover parts of creating a small business as well as side hustles.
This is the first part and one that anyone (business owner, employee, freelancer) can use. This topic includes my toolchain, batching of tasks, automate or eliminate some of your work and some lesser discussed parts such as improving your concentration or increasing your motivation.
Actually, these posts are not directly influencing your income. However, they will help you get in the position to ask for a raise, get (more) work done and increase your overall value (for companies or clients).
If you want one book recommendation that heavily influenced my writing about this topic, take a look at the 4-Hour Workweek by Timothy Ferriss. I can highly recommend reading this book. It’s really is a game-changer when it comes to productivity and life-hacking. One could say it’s the bible for (online-)entrepreneurs.
This is the first step into creating an own business. You don’t have to create a product instead you will offer a service. The service is you as a person and the skills that you have. You can be hired for improving your clients’ web design, creating and running an online marketing campaign or help on a project as a software engineer.
As I may not be an expert on all of these fields, I can at least help you with the general setup. How to calculate your hourly rate, when to switch to another client or which networks you should use to get a decent amount of project requests.
Freelancing can be much more motivating compared to working as an employee for a company. The more and better you are working, the more cash gets into your pocket.
With a side gig, you can add some income without giving up your job or take a lot of responsibilities. In the context of side hustles, you often hear people talk about passive income. Different from what you may think passive income doesn’t mean you don’t have to work for it. You use time and energy at the beginning and mostly a little amount of it to keep it up-to-date and improve it. The money flows passively into your pocket and in theory can generate an income even after years of the initial work.
An e-book is a great example of passive income as you can earn money from it even years after you have written it and become rich while sleeping. If you want to check out passive income in more detail, I can guide you to Pat Flynn and the Smart Passive Income blog and podcast. Believe me, you won’t find someone with his expertise of this topic.
I will also cover the parts of creating an active side hustle like dog walking or working as a virtual assistant.
You may have noticed, that investing is also some form of passive income. You do the research before you buy an asset and later you have to manage your portfolio while extending it. If you’re interested in investing, you can find the starter page of my posts around the topic here.
Building a business
This is the master class. You finally want to become your full-time boss. As I cannot and will not help you build a business like Amazon, I’ll have some great guidance on how to create an online business. The basics of finding a product idea, how to create a product and build a healthy company (healthy means you stay healthy because you don’t have 70-hour workweeks). I will also cover basics of accounting as this is important for investors that want to buy individual stocks as well as business owners.
As this is a highly advanced topic, I will not cover it before my blog takes off. However, I wanted to list it here, because you, as my reader, should know where our journey goes and what you can expect from me.
Where to start your journey
If you haven’t created a budget yet, and if you are not consciously spending this is the wrong place to start. You need to know, that adding another $50 is mostly not the solution to the overall problem. If you need some help here, check out my posts about budgeting and how to create a financial system. Don’t skip this!
A great thing to start is to think about what do you want to accomplish. If you just want to get a little side income check out my posts about side hustles. However, productivity can help anyone to get things done and will be a good read for you.
Is working for someone else the real problem you should start reading the freelancing category.
Lastly, if you want to create a company and learn how to come up with ideas, then the building a business is the section to go.
Homework: Think about, what’s the best fit for you. After that, dive into this subject and I’m sure you’ll not regret it and will have all the success that you dream of.
Thanks and have fun by increasing your income on Budget Like a Sir!