When it comes to personal finance, one of the most important things is how your income compares with your expenses. Are you living within your means? Or are you living beyond your means? Are you spending less than you earn? Or are you going deeper and deeper into debt?
Living below your means is one of those ‘keystone’ financial habits.
Living below your means lets you save a bit of money each month. It gives you flexibility during emergencies. It provides you with some financial ‘room to breathe’.
Living below your means is important because a healthy saving rate is the only way to reach your financial goals. No amount of ‘financial engineering’ is going to help you unless you can save a small portion of your income each month.
That being said, saving a lot of money while your young can be tough.
Saving money while your young can pay off big time. If you can save money while you’re young, you basically let compounding do most of the work for you.
Unfortunately, when you’re young there are also a lot of demands on your income, and these compete with your ability to save.
Thankfully, as your income grows your capacity to save increases… that is… as long as you can avoid lifestyle inflation. A good rule of thumb is to put half of any salary increase towards your financial goals, and the other half can go towards increasing your lifestyle.
By estimating your future income you can plan to save more in the future and put less strain in your current budget. But what is the right amount to assume for income increases in the future? The answer really depends on your current age.
Asking for a raise is tough, but asking for a raise can significantly boost your income. Over 50% of the people who ask for a raise receive one, and almost 10% received a raise HIGHER than the one they asked for or expected.
With odds like that can you afford not to ask?!?
While 50% can seem like good odds…. you can do even better. To improve your odds it’s important to negotiate a raise ‘the right way’.
Asking for a raise in the right way requires a little bit of prep-work. This prep-work should take place throughout the year. Doing it all at once and then asking for a raise won’t be much help.
You also need to know when raises typically occur. It’s possible to get a raise outside these review periods but its waaaaay easier to work within them. Typically, there is a review period once or maybe a few times per year.
There are also some things you should absolutly NOT do when asking for a raise. Doing any one of these things will sink your chances immediately.
Money is amazing. Just the concept of money itself is incredible.
We all agree to take this worthless piece of paper and assign value to it. Most of us trade a considerable amount of our personal time for these pieces of paper. Then we trade some, or all, of those pieces of paper for stuff and things. Money is just a concept but it’s one we all agree to believe in.
One thing I find amazing about money, is that money can make more money. You put those little guys/girls to work and they start to multiply.
You can put your money to work in different ways. Some ways require you to be an active participate, like starting a business. This is active income. You need to spend money, and time, to make money.
But you can also put your money to work in other ways, ways that are more passive, ways that require little to no work from you.
Earning more money doesn’t necessarily mean getting a job. There are plenty of ways to earn money, or just earn extra money, in very unconventional ways.
The conventional (and somewhat boring) way to earn money is to get a job. If you need to earn more money you might get a second job, or a third. But getting a job isn’t the only way to earn money. There are other ways to earn money that don’t involve getting a job.
In this post, we’ve got seven different ways to earn extra money. Of course, there are lots of unique ways to earn money that we haven’t covered in this post but we hope these will at least inspire you to dig a bit deeper and find something that fits you perfectly.
These ways to earn extra income are slightly unconventional. They might not be as stable as a full-time job but they can be a great way to earn a bit of extra money on the side.
Today we have a guest post about house hacking from Erik. Erik a personal finance and self-improvement junkie who blogs over at The Mastermind Within. House hacking is one of those things I wish I knew about when I was a bit younger. It’s entirely possible to house hack your way to zero housing costs. Housing represents 35% of the average household’s budget so reducing that, even by a little bit, can mean a huge increase in your capacity to save.
In this post, Erik shares the 5 reasons why he believes house hacking is the best early age wealth building strategy. I hope you enjoy it!
Having a hobby is great. Hobbies are an awesome way to enjoy something you love, meet other people, and learn new and interesting things. What can be even better is having a hobby that has the potential to actually MAKE money.
Some people only choose hobbies that have the potential to be profitable. They get to do something they enjoy with the added benefit of possibly making some extra cash on the side.
That extra cash can be put towards all kinds of financial goals. Paying down debt. Saving for retirement. Saving for a special vacation. Or just fun stuff in general.
Over the years I’ve had a number of hobbies that would make extra money. In total I’ve made over $50,000 from my personal hobbies. Some are more profitable than others. The important thing is that they’ve all been fun. This extra money has gone straight into investments where it can grow further thanks to the power of compounding.