There is nothing wrong with saving money and living frugally. My wife and I do multiple things to save money, and will always look for ways to cut expenses. Recently, though, I have become much more focused on increasing income instead of trying to save money.
I think there are a few good reasons to focus on income versus spending time and energy trying to spend less, including:
- You already have cut expenses/spending
- You have significant fixed costs (student loans, mortgage/rent, utilities, etc.)
- You have goals that will require significant capital
- You realize the opportunity cost of trading time for income and as long as you are trading time for income, you might as well make as much as possible
Personally I fulfill all the above bullet points. I believe many people fulfill at least one, if not more, of the above points and have thought about what they can do to increase their income.
Here are some of the ways you can actively work towards increasing income:
Switch careers
This may be a drastic move, but in some cases quitting your job and going back to school for a different profession will pay off long-term. Various jobs pay over $100k such as medical doctor, petroleum engineer, and lawyers. While some of these careers will take significant time, effort, and debt, they can in fact increase your income.
If you have not gone to college, getting a degree will increase the number of career opportunities that pay well. There are only so many jobs that can be done without a college degree, and on average they pay less than someone who has at least finished undergrad. I’m making a broad generality with this statement, but I believe it’s tough to get a job that pays $20/hour + without having a college degree or some sort of specialized skill such as plumber, electrician, etc.
Pursue additional income streams
In the past I’ve written about how to turn your hobbies and interests into income, and I think it’s smart to pursue some sort of side income in addition to your full- or part-time job.
Additional income streams can be as wide-ranging as rental income to delivering pizzas on the weekend. If you know how to play the guitar or some other instrument, consider teaching lessons on the side. If you like writing, consider pursuing freelance writing on the side (Freelancewritingigs.com posts freelance writing jobs on a near-daily basis). The various ways you can increase income are truly only limited to your imagination.
Move up in your current job
In my current employment as an accountant, I look to capitalize on the skills I have and always improve my skills so that I can take on more work in less time. For me it involves improving my technical skills in Microsoft Office, gaining a broader understanding of our systems, and being able to build up transferable knowledge.
If you are in the career path you want to be in and will not consider switching careers (or do not need to because there is room to move up in your current job), consider evaluating your current position and finding out how you can become more valuable to the company. This may be improving skills or taking on more projects/tasks, or it may be figuring out how you can move up to a manager position from a supervisor position. It’s important to figure out how likely it is that you will move up or what you need to do to move up to the next level; in some situations you will be better off switching to a different company or some other department within your company rather than trying to move up in your current role.
____________
Increasing income can be incredibly beneficial. Making more money can help you reach your goals and live a more fulfilling life. It has the potential to free up your time as you shift to more passive income such as income from dividends or having rental income. Eliminating debt and having a larger safety net can reduce stress and improve quality of life. I see few negatives with increasing income.
____________
Photo by Andrew Magill
Check out some of our favorite personal finance resources:
Are you getting the best credit card rewards? Check out the top cash back credit card offers (updated daily)
Make extra money: 15 ways to make money from your computer
Get the First Chapter Free!
Join our online community and get the first chapter of the book Student Loan Solution absolutely FREE!
You can’t go wrong trying to make more money! Well it could take a lot of your free time, but it’s just a questions of organization at the beginning then it is just added bonus! Unless I really need cash, I would avoid the pizza delivery gig and focus either on learning new skills and negotiating a promotion or starting a side business that I enjoy, hoping to bring extra income on a regular basis for the long term.
These are all great ways to make a higher income! Right now for me it’s busting my butt with my side hustles.
Good post. I agree that there’s only so far you can go in terms of saving money and being frugal. I think a lot of people though do overlook the ability to earn extra income to improve your overall budget. Sure, some may take considerable time, but many do not. The extra income plus the money savings can really be a boost to your overall budgetary health.
Good post. I am seriously considering selling things on ebay right now to bring in some extra cash flow. I have TONS of baby stuff/clothes. It sells in a garage sale for 50 cents to a dollar each but on ebay baby stuff can go for several dollars! I wish I had more time. I could probably rake in a few thousand for all the stuff I have.
Easiest way is the side hustles. It takes a little bit more time when trying to make more from a current job. Find something you enjoy and start making money doing it. You just have to be creative.
The only downside to earning extra income is the amount of time it takes. It is much easier to do it while you are young before you have kids. You are smart to have an income property with your new house. I used to do as much work as I could, but now am looking at more passive ways to earn income so I can be around for the family more.
@Eyesonthedollar I agree that it’s easier without kids. In fact, I can’t imagine having this blog while I have kids. At least at this beginning stage where it’s a lot of time-intensive work with little income. If I could have hired writers it would be easier to maintain with kids.
I definitely like #1. If you really want to increase your income, there’s no bigger lever you can pull than switching your main income source. The “side hustle” thing can be a distraction. I think if more people focused on their #1 income, they’d do a better job. Nice piece!
@AverageJoeMoneyIf you’re good enough at your side hustle you could turn that into your main source of income. Perhaps even start your own business.
My wife’s uncle owns a welding shop and I do his books. His main focus is on industrial businesses, but he is very talented at making metal furniture which has a bigger profit margin.
However, in some cases you’re right. A side job can distract you from furthering your main career choice.
@JustinatTheFrugalPath @AverageJoeMoney I don’t think anyone would disagree that a side hustle can turn into a full time income, nor are there a lack of examples. I think Average Joe makes a great point tho that they can be a distraction. I’m constantly assessing whether things I do on the side are a distraction or something productive with potential.
Additional income streams are my current path, and even though it’s very part-time it’s helping so much! I hope to switch careers (I am serving and want to be in marketing) as soon as I can find a job in my field !
The best and most profitable way for me to earn more money is to simply work overtime at my current job. I would like to build up some side income though as my job can get quite stressful. I’ve also been thinking about going back to college to pursue a different career but I’m not sure I’m ready for that yet.
You’re right, this goes hand in hand with saving money. Pursue passive income :) I love investing in web properties that grow on their own and bring in passive income. It’s too bad I sold most of the properties to work on a new project that ended up failing lol. Just have to pull myself back up and do it all over again. In hindsight, should have never sold any passive income streams!
You are right, you can only reduce your monthly fixed expenses so much and the best alternative is to find ways to make more money. When I worked in the corporate world I worked a ton of overtime. For the first few years I was paid for all of the OT and it was wonderful. Later on I switched jobs within the corporation to something I really enjoyed. OT was expected and we weren’t compensated for it, so eventually I moved on.
Just in time! We are trying to think of more ways to make money since we’re at the point where saving more isn’t feasible. We’re already living very frugally and hardly going out at all, so time to look at ways to make more!
@seedebtrun I think it’s natural to cut expenses and then look at how to make more money. Some never get around to cutting expenses, tho, and just stick with making more money ;) Best of luck finding ways to make more!
I’m all about creating side hustles to bring in extra income. For me that has mainly meant creating a bunch of online income streams.
The biggest is from my blogging where I’ve made more than enough to cover my wife leaving her day job to take care of our son. I also do things like designing logos for websites (like this site! ), doing some consulting for other bloggers, selling ebooks, designing tshirts, and more. It’s all about getting as many pans in the fire as you can, and hopefully as many of them as possible can be as passive as possible. :)
@moneymatters I’m following in your footsteps ;) At least I hope I’m as successful as you some day at making money online.
I am glad I am in private accounting now. When I was in public accounting I wasn’t allowed technically to have part time jobs or side gigs. It was actually in our hand book and we definitely weren’t allowed to do taxes for anyone other than friends and relatives (for pay at least). At my new company our handbook says we are allowed to have other jobs and side gigs if we want as long as it doesn’t conflict with our employer. There definitely isn’t any side gig I can pull off that would compete with my employer so I’m safe :)