Having a financial plan in action is one of the most important things you can do in…
Income – Expenses = Savings
It is a simple equation. If you want more money there are three options – increase your income, decrease your expenses, or both. Yet many Australians find it difficult to save money. Let’s look at ways you can do both, and really start to grow your wealth.
More Income Streams, More Income
One of the simplest ways to make more money is to ask for a pay rise. It doesn’t hurt to ask. However, having more than one income stream also makes sense, like when investing in the stock market, diversification is key. Being solely reliant on your 9 to 5 job for your income could put you in a pickle if you suddenly got fired or were made redundant. When you have multiple, ideally passive income streams, losing one of your streams doesn’t necessarily have quite such a negative impact. Try to add some additional income streams to your existing day job, a little bit here and there, can add up to a lot. When your additional income tallies to more than your day job you are well on your way to becoming financially independent. Here are some examples of additional income streams you could build over time.
Sell Your Skills Online
Set your own hourly rate but make it competitive.
Could you offer your skills in an online freelance forum? Web designers, programmers, graphic designers, copy editors are just a few examples of skills people are willing to pay for online. There are many different platforms where you can list your skills or bid for work:
Review Your Interest Rates
Potential to save thousands over the lifetime of your home loan
If you have a mortgage is it important that you regularly review your interest rate to ensure that you are still getting a competitive rate. With interest rates at an all time low, you need to ensure that you are getting the best deal for your circumstances. Shop around. Enlist the help of a mortgage broker. Saving a few bases points on your mortgage has the potential to save your thousands over the lifetime of your loan.
List Your Unused Space On Spacer
Earn $300 + per month for prime locations
If you have some unused storage space around your home, Spacer provides you with the opportunity to rent out your space. This has the potential to earn you a few hundred dollars a month depending on location and demand.
Dividends From Stocks
This is regular income that you can choose to take as cash or re-invest, which then in turn builds your future returns. The amount varies depending on what shares you own and their dividend yield. While the stock market has taken a hit this year with COVID-19, it has already started to rally.
Rental Income From An Investment Property
Potential to earn $2000-3000+ per month depending on location and provides some tax deductions
Owning a rental property can provide you with regular income and build your wealth (hopefully) through capital growth. It also provides you with some tax deductions. Not everyone is in the position to buy a rental property, but if you can, it can form part of a well diversified portfolio.
Rent A Spare Room On Airbnb
Potential to earn $1000+ per month depending on location and demand
Airbnb is another example of how technology is helping us to utilize our environment to make more money. If you have a spare room and are happy to rent it out, list it on Airbnb. This has the potential to make you $1000+ per month in capital cities and other prime locations.
Rent Out Your Car
Potential to earn $100+ per month depending on location and demand
If you have a spare car or your car sits idle most of the time, why not consider renting it out on carnextdoor.com.au.
This is a great way to make extra cash and to cover the costs of owning your potentially under-utilised car.
Sell on Esty
Potential to earn $500+ per month depending on what you make and sell
If you can sew, crochet, knit, turn wood, or hand-make anything Etsy is another fantastic platform for generating extra cash. Whilst the hourly rate of making and selling things from home may not be fantastic, if you can make things to sell while watching TV at night time, that is just extra cream for your bank balance.
Become An Uber Driver
Earn $20+ per hour during peak times
Uber provides a great platform to make some quick cash. It provides you with the flexibility to work wherever and for however long you want. All you need is a clean driving record and a relatively new car.
The launch of Uber eats means that you can now also use this platform to deliver food if picking up passengers is not for you.
Sell Your Unused Stuff Online (eBay, Amazon, Gumtree, or Buy Sell Swap in your local area)
Potential to earn $1000s
One man’s trash is another man’s treasure. According to data collected by Gumtree, every Australian household is sitting on just over $5400 worth of unwanted items. Take advantage of Australia’s “second-hand” economy and sell old books on Amazon, sell your used electronics on Gumtree, or sell old furniture on your local Facebook buy sell swap page. Utilising the unused items in your home is not only a great way of making extra cash, but it can also help to declutter your life. Win-win!
Reduce Your Expenses
Do you feel you waste money? Do you feel you earn a sizeable income but feel you have little to show for it? Reducing your expenses is another beneficial tactic when saving money. Reducing expenses often comes down to lifestyle modification. Not wasting money is about working smarter not harder. Set yourself a budget and stick to it. Buy less takeaway food, get a cheaper car, go on camping holidays instead of a 5 star get away. However, or whatever, you frivolously spend your money on, look at ways of reducing that expenditure and consider with every dollar you spend “am I making the most of this dollar?”
Remember, whether you are making more cash by generating more income, decreasing your expenses or both, it is important to use your extra cash wisely. Only when you use it towards growing your wealth or decreasing your debt are you working towards ‘getting ahead’.
Contact Elliot Watson Financial Planning for advice to consider the above strategies for yourself 02 4038 1623.
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