Living within your means is an important component of having strong and healthy finances. Creating a budget can be a great first step to making sure your financial house is in order. As you look through your monthly expenses, there are two different ways that you can improve your monthly cash flow.
The first is to cut your expenses – look for ways that you can spend less each month. When you first start tracking your expenses (like with one of our free monthly budget templates), you’ll likely find a few areas to cut back on. Over time, however, you’ll probably run out of ways to cut your expenses. After all, there are so many extra lattes and gym memberships that you don’t use!
The other way you can increase your savings rate is to find extra income. In this article, we’ll look through a few side hustles and other ways to find extra income.
Sell things you aren’t using and don’t need
Most people always have things lying around the house that they no longer use. Take a look around with a discerning eye and decide which things you could do without. Of course, this is not something that you can do every day, but at the rate that most people gather things, you can probably find $100 or more in items once or twice per year. Look for electronics, clothes, toys or other things and sell on Craigslist, local barter groups or on eBay.
Capitalize on your talent
The first item we’ll talk about is dependent on YOU. What makes you special? What kind of skills do you have that might be able to bring in extra income? Many of the other things on this list are more short-term or one-time ideas. Maybe you can start a blog or online business? Or do you have a skill that you could provide to others as a service? It may take some short-term capital to get your business up and running, but the long-term gains from investing in yourself are usually worth it.
Make sure your savings dollars are working for you
Another way that you can find some additional money each month is by making sure that your savings dollars are invested in the right place. If you have extra money already stored up, you’ll want to make sure it isn’t sitting under your mattress or in a checking account earning next to no interest. For money that you don’t expect to need any time soon, consider opening a retirement account. Historically and with a long-term perspective, the stock market has been one of the best avenues for investments.
If you have an emergency fund or other money, you won’t want to put it in the stock market. Because the stock market can be more volatile, any money that you want to have easier access to should be kept in something that is more liquid. But if you still have your money in a savings account at your local bank, you might be leaving tens to hundreds of dollars on the table each month. Many online savings accounts generally offer savings rates 10 to 20 times as much as the rates you’ll get from your local bank.
Open a new bank account
Speaking of bank accounts, many banks have incentives for opening a new account. And they’re often better gifts than the stereotypical toaster. A typical bank bonus might be between $200 and $500, depending on the requirements involved. You can find these bonuses by either searching online or looking at local and national banks to see what they might be offering.
Three things to keep in mind with bank account bonuses. The first is that many of these bank bonuses have requirements like setting up a direct deposit or keeping your money in for a certain period of time. Another is that many of these accounts have fees, which would offset some of the bonuses. Finally, the bonus you earn from this account is taxable; you’ll get a 1099 tax form at the end of the year. Weigh all these factors to decide if the bonus is worth it to you.
Maximize your credit card rewards
Another way to get some extra income is to make sure that you are maximizing your credit card rewards. Credit card rewards can be a good source of extra income depending on your spending levels. In addition to the cashback or rewards you get from ongoing spending, look at signing up for a new credit card. Many cards offer signup bonuses anywhere from $150 to $500 or more. This can be a great source of additional income.
Join the gig economy
Depending on how much free time you have, there are many companies out there that are looking for workers. Some ideas would be:
Rent out part of your house with Airbnb
Drive for Uber or Lyft
Make deliveries with DoorDash or Postmates
Many of these companies also offer new hire incentives that might make the gig seem more attractive at first.
Hopefully, these ideas to get extra income will help spark you as you look for ways to earn more money, balance your budget and get yourself set on the road to financial success!