Great Savings 18: Maximize Your Income

 

Saving money and building long-term wealth for education, retirement, or other purposes isn’t just about pinching pennies. Of equal or even greater importance is to find ways to maximize income. This can feel next to impossible, especially if your current job feels like a dead end. Yet there are many ways to boost income.  Adding even a few extra dollars a week can mean adding thousands in the long run. Here are 8 money maximizing ideas to get started:

 

Before we jump into some terrific money maximizing strategies, check out the chart below to see how creating even a few extra dollars of income a month can make a huge difference in your overall wealth down the road. As you can see, even $25 a month can add up to $3000 in 10 years and that doesn’t include any interest. Put your creative genius to work and who knows? If you invest your extra money wisely, you might easily double or even triple it over time.

 

This chart shows how extra income adds up over time.

Even a few extra dollars can make a huge impact over time.

 

So what are the best ways to start generating extra income? Check out these strategies:

 

Great Savings Tip #18 - Maximize your income.(1) Start by taking a hard look at your current job. Do you like what you’re doing? Are you getting paid enough for your efforts? Maybe it’s time to consider some alternatives. Experts tell us that switching employers can sometimes result in an immediate pay bump. Of course, this depends on what you do for a living, how well you can sell yourself and the job market in your area. Even so, it pays to keep your resume up to date and constantly be on the lookout for new opportunities.

 

Do you work hard or just try and get by?

Does your boss know you hustle at work? How does your work stack up to your peers? It matters when you go to ask for that raise.

(2) Ask for a raise. If you’re sticking to your current job and feel confident you’ve been doing good work, your best option may be to approach your boss and ask for a raise. Though employers are generally loath shell out extra cash for their employees they also value a job well done and understand the cost of training new people. Make an appointment to talk to your boss in private. Be polite and respectful and remind him or her of some of the special projects you’ve been working on. Don’t be afraid to tout your work ethic and by all means tell your boss you really like working for the company. Employers don’t want to hear you’ll leave if you don’t get what you want and they don’t need a sob story. They’re interested in production and profit so make sure the people you work with know you’re serious about the work you do. Then when you talk to your boss ask for a specific sum. It should be reasonable considering the economy and situation for the company. Your boss may not be able to give it to you now, but don’t let that stop you from getting it down the road. If an employer says no, then find out what you can do to change the situation going forward. If your boss repeatedly puts you off, it may be a signal the company is in trouble or you’ve gone about as far as you can. If either is likely it may be time to look elsewhere.

 

(3) Ask for a promotion. Some businesses are very structured and only pay employees within a specified range for a particular job. Chances are good that if you’ve been in your current position for any length of time you may already be at the higher end of your pay scale. This means your ability to get raises going forward is limited. The way out of this trap is often through moving up. A promotion generally equates to entering a new pay range and that gives your boss more latitude when it comes to increasing your paycheck. Of course, a promotion is never a given so you’ll need work hard, generate respect from your peers, take on work that others may try to avoid, tune up your skills and convince your boss you’re the man or woman for the job.

 

Turn a hobby or passion into a money making activity.

If your passionate about something, figure a way to make some money doing it.

(4) Turn a passion or hobby into a money maker. Where does it say you can’t be paid for doing what you love to do? Enjoy crafts? Then why not figure out how to market them? You might sell them on the internet or at craft fairs. Like to cook? Then find out who might pay for freshly baked home-made cookies or desserts that you’ll deliver to a location of their choice on a weekly or monthly basis. Love to play music? If you’re talented, hook up with others and start a band. Then work together to set up some gigs. Or try playing on the street for tips at local street fairs or in busy shopping areas. You may need a permit so check it out to avoid a fine. Like to paint or draw? Ask around and find out who likes your work and whether they might pay you for it. If not, ask if they know anyone who might, or try selling your art at a street fair.

 

(5) Start a business on the side. If you need that regular pay-check it’s hard to quit a job cold-turkey and start a business. In fact, this can be the surest path to a personal financial disaster because businesses take time to get established. Many people interested in starting a new venture will do it in their off hours. Then once the business starts to make money they can decide whether or not to quit their day job. One key for success is to start a business with very low-overhead. Overhead is that portion of your business expenses you can’t do without. So, for example, if you rent a building to warehouse or sell products you’re stuck with paying rent every month whether you have paying customers or not. By starting a business that doesn’t require a lot of specialized equipment or facilities (i.e. overhead) you spend less getting going and end up with a better chance of success.

 

Start a dog-walking business.

Many people work long hours and need pet sitting or walking. If you love animals a business to fill the need could be a winner.

What kind of businesses might qualify? Landscaping, window washing and janitorial businesses require less equipment than some and you may already own several of the tools you need for getting started. House sitting, baby sitting, pet sitting and dog walking can also be options. Lots of people have different hours than you do so finding opportunities to cash in on may be as easy as getting to know your neighbors.

 

Some businesses support other businesses.

If you like interior decorating or design you could start a home staging business.

Some other options are businesses that support other businesses. This works great if you know lots of other business people because then you’ll have built-in contacts. Examples might include home-staging for real estate agents, photography, delivery or copying services. Of course, many businesses require some amount of expertise or even licensing so do your homework first. Home inspectors are a good example. Starting a business is easy. Being successful at it requires you do lots of legwork. For more ideas on starting a business with little or no money see our post, “4 Key Principles For Starting A Cottage Business”.

 

 

(6) Harvest hidden wealth. No doubt you’ve heard the saying, “One man’s junk is another man’s treasure.” If you don’t believe it, you could hold a garage sale to prove idea has merit, but the concept of hidden wealth really goes much deeper. Hidden wealth is money locked up in an object or objects just begging to get out. What can that look like? Say your neighbor has a pile of scrap metal in his side yard that’s been sitting there a couple years. To your neighbor and most people it’s junk, right? Yet from checking around you find a recycling yard across town that will take it and pay by the pound. Knowing this, you offer to pay your neighbor a small sum to take it off his hands. Then as you turn it over to the recycler and double, triple or quadruple your money you end up harvesting this hidden wealth—the amount you earn less the amount you pay. For much more on this topic see our posts, “Harvesting Hidden Wealth: Part I and Part II

 

Have any plans for the room you aren't using?

Got a spare room or two sitting idle? You could rent it out or turn it into your home business office.

(7) Get a roommate. Getting a roommate might be the easiest way to add money to your budget. If you have an extra room, or better yet there’s a portion of your house accessible from a separate entrance, you might easily add several hundred dollars a month in rent to your monthly income. You’ll want to check out a potential renter thoroughly and have them sign a contract to insure you get paid. For more on this topic see our “Great Savings Tip #65 – Rent Out A Room.” Another often overlooked option is to rent out your extra garage or storage space. This will work best if it’s a separate space and can be locked. Be sure to come to terms on any items you don’t want stored, such as flammable materials. If you own a recreation property or RV you might also consider renting it out from time to time, though you’ll want to make sure your insurance will cover it. Still another option is to rent a parking space to someone who owns an RV. Think it over. You may own something you only use on occasion. If so, consider whether it’s worth it to you to rent it for some extra cash.

 

See out ways to maximize your investment income.

Where do you put your extra money? Are you investing to get the best return? Are you paying too much out in fees and commissions?.

(8) Maximize your investments. Where you end up keeping your money matters. If it’s in a drawer you make zero interest, yet even a fraction of a percent interest paid on a bank savings account can add up to thousands or tens of thousands over a lifetime. But is a savings account good enough? Though it’s generally regarded as one of the safest investment vehicles around, the return you get from savings account (i.e. the interest) may not keep up with the rate of inflation. In addition, if you invested in stocks and bonds instead you might net a significantly higher rate of return over time. There’s no question stocks and bonds are worth consideration, though it’s important to understand the risks involved. Also worth consideration is that some investments like mutual funds carry management fees and most brokerages charge commission for trading stocks and other investments. Those can add up in a big way if you’re not careful. Taking the time to understand how to maximize your investment income can really impact your long-term wealth. There are no easy one-size-fits-all solutions when it comes to investing so you need to select an approach best suited to your situation and your specific tolerance for risk. For more on this topic see our “Investing Ideas” page.

 

Action Item: Make a list of any and all ways you can earn some extra income. Now, pick one and commit to doing it. Don’t worry if it doesn’t pan out right away. Think long-term, be persistent and ultimately it or something it leads to will generate success.

 

Is your problem short-term cash flow? For 15 do’s and 5 don’t on raising quick cash, see our post, Help, I Need Cash Fast.”

 

2 Responses to Great Savings 18: Maximize Your Income

  • connie says:

    another suggestion: whenever possible, make extra house payments. The extra payments apply directly to the principal, so you are not only reducing the interest being paid on the mortgage, you are decreasing the time until your house is paid off. My husband saved thousands of dollars by doing that.

    Then once the house is paid off, you can start applying all of your previous mortgage money (plus whatever you were paying on the capital) to a dedicated savings plan.

  • connie says:

    Dragon spelling error! Should be PRINCIPLE not principal

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