Ways to Increase Income & Decrease Expenses

People are really feeling squeezed financially these days. The costs of nearly everything are increasing while incomes are staying the same. This creates the need to make adjustments in our spending plans (budget). While it is easier to do a little of both increasing income & decreasing expenses, sometimes that is not enough. Sometimes we really need to dive into what we can do to make our spending plan balance.

Decreasing Expenses

Tracking Expenses

The very first step is knowing exactly what you are spending your money on. You need to track your spending to figure this out. Tracking can be very simple – use pen and paper and write down everything you spend & what it was on. There are different tools, apps, etc. to do this but save your money and use pencil and paper. Categorize the spending while looking at your budget to see if it is accurate. Then adjust accordingly. When you are tracking expenses, it will often slow down impulse spending. This occurs because if we know we must write it down (be accountable) we will rethink the expenditure.

Trimming Expenses

Trimming expenses is another way to decrease spending. By trimming expenses, I mean stretch out the time between those purchases.  If you regularly get a haircut, nails done, car wash, eat out – anything you do regularly – try stretching out the time between services. If you can do it less often it will save you money and you will still be able to do these things. Also, look at your bank and credit card statements. Look for any regular monthly expenses. You may find subscriptions or streaming services that you are no longer using, yet are being charged for. Canceling these can save you money. Eliminating impulse purchases can save us money. Furthermore, paying bills on time can save us money (no late fee).

Increasing Income

If you’ve trimmed all you can out of your monthly spending, look at increasing income. Increasing income can be more difficult because we only have 24 hours in a day. So, adding a second job is not always feasible.

• Turn your hobby or skills into a business. For example, sell or teach your craft to others.
• Market your skills – advertise your services. Such as painting, organizing, cleaning, yard work, car repairs.
  
• Clean out your stuff by selling it. This takes time and the results may help in a one-time shortage but not long term.
• Try a gig employment opportunity. This could be in person like working for a company that does sampling events in stores, mystery shoppers, concessions, or labor.
  

Major Life Changes

Sometimes the financial shortage is too great for some of these ideas, and you will be looking at a major life change. Examples of major life changes can include changing jobs, re-education for a better or different job, moving to reduce housing costs, divorce, death and disability, major illnesses, birth or adoption, uninsured/under insured loses; the list is endless. Working with a professional can help you to identify your goals, plan your spending, create an investment plan, and help make your money work for you. If you are facing a large amount of debt that you just cannot handle it is best to seek out financial counseling.

• National Foundation for Credit Counseling (NFCC)
• Association of Financial Counselors, Planners, & Educators (AFCPE). They have certified financial counselors that can assist you.

America Saves: It’s no doubt that saving for competing priorities (like home ownership, retirement, and education) can feel overwhelming!  Focus on saving for major life milestones while not abandoning your other financial needs or wants. #ASW2024 #AmericaSavesWeek