We've talked a lot about reducing expenses.
Canceling subscriptions.
And all of those things can make a meaningful difference in your financial life.
But here's something I want you to think about.
There's a limit to how much money you can save by cutting expenses.
Eventually, you reach a point where there's not much left to cut without sacrificing your quality of life.
That's when it's worth asking a different question.
Instead of asking, "Where else can I save money?"
What if you asked...
"How can I earn more money?"
I've learned that increasing your income can be just as important as managing the money you already have.
In fact, one of the ways I've been able to increase my income is by changing jobs and using the experience and skills I've developed to negotiate better compensation.
I'll share more about that in a moment.
But first, I want you to consider something.
When was the last time you seriously explored ways to increase your income rather than simply reduce your expenses? |
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More Income Can Give Your Credit Room to Breathe |
Your income is not directly used to calculate your FICO credit score.
But your income can influence your ability to manage the financial behaviors that affect your credit.
Think about someone earning $4,000 a month with $3,800 in essential expenses and minimum debt payments.
They have very little breathing room.
One unexpected expense could force them to rely on a credit card.
Now imagine they increase their take-home income by $500 a month without increasing their lifestyle expenses.
They suddenly have more flexibility.
That additional money could help them...
Increasing your income doesn't automatically improve your credit score.
You don't always have to improve your finances by giving something up. Sometimes you can improve them by increasing what you bring in. |
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4 Ways to Increase Your Income |
There isn't just one way to earn more money.
Others require developing new skills or making better use of resources you already have.
Here are four approaches worth considering.
1. Get a part-time job
But a temporary part-time job can help you accomplish a specific financial goal.
Maybe you want to...
If you can find a part-time position that fits your schedule, you could dedicate the additional take-home income toward that goal.
Your time and health matter too.
Old electronics.
Items we purchased for hobbies we no longer pursue.
Before taking on additional work, take a look around your home.
You might already have something you can turn into money.
Consider using platforms such as Facebook Marketplace or eBay to sell items that still have value.
Then take the proceeds and put them toward a financial goal.
Selling unused belongings generally won't create a permanent increase in income.
But it can provide a one-time boost without requiring you to take on additional debt.
And you might free up some space in the process.
It's with your next one.
You can work hard. Develop new skills. Take on more responsibilities. Become more valuable to your organization. But that doesn't necessarily mean your salary will increase at the same pace as your professional growth.
Promotions may be limited.
Meanwhile, another organization may be willing to pay more for the experience and skills you've already developed.
One of the strategies I've used to increase my income is changing jobs and negotiating a higher salary.
I've been able to secure a 15% raise through this approach.
That kind of increase can make a meaningful difference.
Imagine you're earning $80,000 a year.
A 15% raise would increase your annual salary to $92,000.
That's an additional $12,000 in gross annual income.
And unlike a one-time bonus, a higher base salary can continue benefiting you in future years.
Of course, taxes and other payroll deductions will reduce the additional amount you actually take home.
But the opportunity is worth understanding.
Here's the important part.
You need to know what your skills and experience are worth in the marketplace.
That doesn't mean constantly jumping from job to job.
It means periodically evaluating your opportunities.
And when an opportunity makes sense, don't be afraid to negotiate.
Sometimes your next financial breakthrough comes from recognizing that your earning potential has grown beyond your current salary.
Sometimes you need to become better at something employers are already willing to pay for.
Platforms like Udemy allow you to learn a wide range of subjects at your own pace.
You could explore...
But here's something important.
Completing a course isn't the same as developing a marketable skill.
Build something.
A course can provide knowledge.
Applying that knowledge helps turn it into a skill someone may be willing to pay for.
And that skill could help you qualify for a better-paying position, earn a promotion or generate additional income.
Which of these four approaches could realistically help you increase your income over the next six months? |
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Don't Let a Bigger Paycheck Become a Bigger Lifestyle |
There's an important distinction between earning more money and becoming financially stronger.
That's great!
But then you decide to upgrade your vehicle.
Now you're earning more money but you haven't created any additional financial flexibility.
That's lifestyle inflation.
And it's easy to fall into because we naturally begin adjusting our expectations as our income increases.
A raise can make things that previously felt expensive suddenly seem affordable.
But before increasing your spending, consider what that additional income could accomplish.
Could it eliminate your credit card debt?
You don't necessarily need to save every additional dollar.
Enjoying the rewards of your hard work is part of life too.
But give the additional income a purpose.
Increasing your income creates an opportunity. What you do with that additional income determines how much it improves your financial position.
What would you do differently if your income increased by 15% tomorrow? |
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Control Your Income Growth Plan |
This week, I want you to identify one realistic way to increase your income.
Choose the one that fits your current circumstances.
If you want immediate additional income... Explore part-time work opportunities that fit your existing schedule and responsibilities.
If you want a one-time financial boost...
If you want to increase your salary...
If you want to increase your future earning potential...
Here are a few resources to get started...
Udemy
LinkedIn
eBay
Write down your answer.
Because earning more money is only part of the plan.
Making that money work toward something meaningful is where the real progress begins. |
I want to leave you with something to think about.
We've spent a lot of time talking about controlling expenses. And I still believe that's an important part of financial wellness.
But I don't want you to get so focused on saving a few dollars that you overlook opportunities to earn a few hundred or even a few thousand more.
Your current income doesn't have to be your permanent income.
You can learn something new. You can develop a valuable skill. You can sell something you no longer need. You can explore a part-time job. You can pursue a better-paying position. You can negotiate.
And sometimes you may discover that the skills you've spent years developing are worth more than you're currently being paid.
That's something I learned through my own career.
Increasing my income didn't happen simply because I waited for someone to recognize my value.
I had to recognize the value of my experience and be willing to explore opportunities where that value could be better compensated.
And I want you to recognize that possibility in your own life.
You don't have to change everything overnight.
Start by identifying one opportunity. Take one step. Then another.
Because your financial future isn't limited to how much money you can cut from your budget.
You can also work on increasing how much money comes into it.
Until next week,
Disclaimer: Guide to Perfect Credit and Credit Coach Rob provide financial education and coaching based on personal experience and research. We are not licensed financial advisors, accountants or attorneys. This content is for informational purposes only and should not be considered financial, legal or tax advice. Always consult with a certified professional for your specific situation. |
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