Step 2: EARN MORE

Once you’ve figured out your monthly spend, made sure that it’s comfortably less than you earn and identified any areas you can spend less on, you will be in a good position. You can live on what you bring in and you can start to save and invest the rest.

But what if that isn’t enough for you? What if you’re looking at the numbers and thinking “I’ve only got $30 left at the end of the month. How am I supposed to build a retirement fund on that?”

The other side of the equation is to look at ways to increase your earnings. Since you’ve established your monthly outgoings, anything you can now add on top is gravy. You can save the lot. This can make a big difference.

Let’s say for example you were making $3,000 per month. You only had $50 left to invest. That’s just a 1.7% savings rate. But if you could work out how to earn an extra $250 per month and still spend the same amount, you’d be up at about 10%, which is a great place to be. And who knows, once you’ve got the hang of making some extra cash, you might well be able to increase that a lot further.

Again, there are many many ways to increase your earnings. We’ll look into lots of them in due course, but I want to give you one simple way to start.

The easiest way to get extra cash, right now

Open up your cupboards. Look under your bed. Pull things out of your garden shed. Look carefully at what you see and ask yourself honestly if there’s anything there that you haven’t touched in a year or two. I know that I have plenty.

Sell it.

Seriously, I know you wanted that snowboard for ages, but you can get another one if you ever need it, or just rent one. How about that pair of shoes? I bet if you put them on eBay, or your local equivalent, someone will buy them from you. And pay you for the shipping. Cameras are my personal Achilles heel. I’ve got more lenses that I know what to do with. If I needed a quick cash injection, I could get rid of some and probably not notice.

If you have kids, this is even easier. I bet you have so much plastic junk in your house that they haven’t played with for months that you could make $100 in the next few days easily. Find a sale going on near you and have a good clear out. Your life will look better for it anyway, and you can kick start your increased earnings right now.

I just sold this baby seat. We didn’t need it any more and I earned about $80. We also freed up some space in the house. Easy wins!

Evaluate your need to increase your income

Once you’ve started down the road to earning extra income, it can be addictive. You start to see opportunities to earn a bit extra everywhere. Some of those opportunities might be perfect for you, especially if they’re flexible.

Think about taking a bit of overtime or some extra shifts at work. You could also look at some casual work, maybe at a large event, or if a friend with a business needs a hand. Helping run a stall at a market or dog/babysitting. I have a friend who has recently trained as a tour guide. Product testing, mystery shopping, gardening and even working as an Uber driver are all valid ways to earn some extra cash without too much of an investment.

Nowadays there are also so many opportunities online you just have to start looking. eBay shops, Etsy stores or Amazon reselling are all the rage for selling physical goods online. If you’ve got some serious skills, maybe as a designer, writer, editor or photographer, people will definitely pay you for your time. You could list your services on Fiverr or Upwork, or even just ask your friends if anyone needs your particular skills. You might be surprised by what they’re willing to pay!

All of these commitments though come at a cost; the cost of your time. You are trading your free time for money, and that may well have an emotional cost on your family. If you are working every spare hour and not giving yourself to your loved ones, you probably need to evaluate your choices.

Maybe you don’t need to earn more

Decide whether or not you really need, or want to earn extra income. It could just be the wisest thing to do for you and your family is actually not to take on extra work. It might be that settling for your current savings rate, with some sensible cost savings in your life might actually be enough for you.

If by working extra, just because you want to earn more, the health of your family or even your own mental health starts to suffer, then maybe earning extra is not the right thing for you.

It could just be the wisest thing to do for you and your family is actually not to take on extra work.

It’s a decision I am taking right now, with a possible promotion to a better paid training position at work. If we think that the time cost of taking that position is unacceptable to my family, then I won’t take it.

One way to determine if you need to save more is to look at your financial goals. We’ll learn how to set them and then review them later on, but if you have an idea of how much you need to save monthly or annually, it helps. You have a measuring tape to lay your savings against and see how they measure up.

Your decisions on whether or how much side income to pursue really have to depend on your priorities. If you have a serious amount of debt to clear, then making some time sacrifices here, in order to earn the extra money that you really need, might be something you have to suck up and get on with for a limited time. If however earning extra is not such a priority, you have to weigh your time against the money.

If you can identify some time that you have, that you are happy to give up on a regular basis – one evening a week, for instance, then deciding to use that time to earn extra cash might be a good idea.

If you really don’t have any extra time in your life, then you probably need to look at whether you can extract more income from your main employment. If you can get paid more without giving up your time, then that’s obviously the best way to approach this. Not being in a ‘normal’ tax environment as an expat (depending on where you are living of course), you don’t always have the advantages of tax relief when paying into a pension, of deferred savings accounts. If your country of residence does allow this, then it’s free money and you should look into it. For a lot of you though, this just won’t be an option. Paying little or no income tax has its costs.

How to get started earning more

We’ll look at how to ask for a raise, maximising your income and all of that later on. But for now:

  1. Start by going and searching for cash that you have lying around already and make it work for you.
  2. Evaluate your need to earn extra. Weigh up your use of your time against what you could earn on the side, and decide what your priorities are.
  3. Take a long hard look at your paid employment, and decide if there’s a way in which you could get paid more for your time there.

(Or just send your kids out to wash the neighbours cars. That works too.)

So finally:

Step 3: Invest the difference, wisely

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