Saving money and increasing your income is achievable. How can you do that? Let’s take a look!
Tip #1: Create a Budget
This may be my top finance tip. Why? Without a budget, you aren’t tracking where each dollar is going… or how much money you actually have. Without this information or understanding, it’ll be a challenge to save money. Therefore, create a budget!
First, you’ll track your budget on a spreadsheet. Take a look at how I budget here, with a template for you to utilize.
Next, calculate your monthly take-home pay, along with any additional monthly expenses, such as rent/mortgage, electricity, internet, and more. Then, list other expenses, like school loan debt, credit card debt, investments, and other.
Then, acknowledge areas where you can cut back. This includes subscriptions to magazines, music apps, or streaming services. It could be takeout, or personal spending. Give yourself a budget, and stick to it. For instance, budget $200 for personal spending each month.
Finally, subtract all expenses from your income. How much do you have left? Allocate where and how much you want this extra cash to go towards: debt, sinking funds, investments, etc.
Familiarize yourself with your budget and budget every payday. Create a payday routine! The more you’re aware, the less intimidating it can be.
TIP: Setting a budget doesn’t mean it has to stick, although it should be steady eventually. If you’re getting started, track where your money’s going first, then come back to these steps. Maybe you’re unsure of how much money is going towards groceries, or takeout. Track your finances for at least three months, come back to these steps, then make a budget.
Budgets change and evolve as well. This means that income could decrease or increase, priorities change, or something else is added/removed from the budget.
Tip #2: Live Below Your Means
This phrase means exactly as it states. Essentially, don’t use any more money than you need to. Save your money instead. For example, don’t purchase any monthly subscriptions to streaming services that you won’t use or purchase a brand new car if you have a car that works perfectly fine.
TIP: Set sinking funds rather than spend your money right away. Like I mentioned before, don’t purchase a brand new car right away if your current car works just as good. Instead, put that money aside for a down payment on a new car and work it up with additional money you earn. This way when you need a new car, you’ll have the money available.
Tip #3: Increase Your Income
You can increase your income by asking for a raise, getting another job, setting a side hustle, or working more hours at your current job… or all of these!
Here are five tips when it comes to requesting a raise:
- If possible, meet in-person with your supervisor, manager, HR, or whomever it may be, to request a raise. It shows that you’re serious and allows space for additional conversation. Not to mention, you may receive an answer faster, or a better offer.
- Prepare any documentation on why you deserve a raise. Examples include:
- Emails in which you received praise for your quality of work
- A record of tasks you’ve accomplished during your time there (ie, training co-workers, increase in sales)
- A list of new trainings, certifications or education that you completed since the last pay raise/review
- With Tip #2, discuss why your company needs you. You want to set yourself apart from everyone else. Can you easily be replaced? No? Let them know!
- Stemming from Tip #3, let everyone know who you are. The more people that know you, the more that people can speak on your behalf.
- Request a raise when no one else is. If there are ten employees requesting a raise during the same period, the amount you receive may be less or you may not receive a raise at all.
Consider side hustles, such as owning your own small shop by thrifting, DIY projects, or other. There are opportunities available like DoorDash, Uber Eats, Uber, or Lyft too. In addition, have fun with it! Is there something you’re good at? Do that and sell it! Not only will this extra money increase your income, it’ll help with any hurdle, like unexpected car maintenance.
Tip #4: Invest in Your Future Self
Although it may seem years from now, which it can be, retirement is approaching (depending when you want to retire too). What’s on your side? Time. Time gives you space, and grace, to invest! Invest in your retirement by contributing to accounts, like a 401(k) plan or IRA plan. With time, the money in these accounts should grow, increasing your income and saving you money for later in life! Speak with a financial representative to learn more about the different options, on how to get started, or to get your questions answered.
Tip #5: Pay Off Any Debt
While this tip can be daunting, it’ll save you money in the long run. We’ve all heard of interest and that’s what makes this task seem challenging. However, paying off debt helps you overcome interest. Therefore, don’t wait too long to pay off your debt! If you believe you can do it, you can and you will!
Bonus Tip for Those with Partners
Most importantly, talk to your partner about finances, whether it’s fears, goals, dreams, debt, groceries, bills, savings, sinking funds, the list can go on. Talk to your partner.
Not only will this better your communication, it’ll bring you both closer. It’ll set expectations for each of you as well. For example, how much of the percentage each of you covers on bills, such as rent/mortgage, utilities, car maintenance, or trips. Are you both splitting it 50/50, or is it 70/30? Who pays for what? Do you have a savings account together? What’s the plan for purchasing a home? (Tips for Savings for a Down Payment here)
Work together to accomplish your financial goals (not all, but most that’re relevant). This means combining your money. That isn’t to say that you both can’t have separate accounts, have different financial beliefs, or rely on each other completely. It means adding together each of your debt and income when and where it counts. You can’t live in a home without your partner, right? Where else would they live (laughs)? I heard this from a podcast I was listening to. It made me chuckle, but I realized they were right!
Not to mention, even if you’ve paid off your debt, your partner may still have debt they’re working to pay off. In a way, you’d still have debt you’re working to pay off as well. For example, it could slow down the journey towards owning a home, purchasing a new car, or other. Why not pay off debt together, if possible? This way the both of you can make your way to financial freedom!
Important Note
I’m not a finance expert. These are tips I’ve learned and am sharing. However, I suggest that you speak with a financial representative as they’re incredibly knowledgeable in this field. Not to mention, it’s always a benefit learning a thing or two about finances.
In addition, these tips can be harder done than said. Maybe there isn’t enough time in your schedule for a side hustle, for more working hours, or additional income for investments or to pay off debt. That’s okay. One day you will. For now, start with a budget. As I mentioned previously, if you believe you can do it, you can and you will!
