If you want to lose weight, there are two important parts of the puzzle: eat better and exercise. Those two areas combine to have a big impact, but one is much more important. It is easier to skip the burger than swim laps for two hours to burn it off. To make a big difference, you need to control the input, not the output.
The same logic can be applied to finance. Budgeting, the exercise of personal finance, can make a big difference. Going from no budget to watching your expenses can save you a lot of money. However, as some financial bloggers point out, it is important to go for the big kills rather than a nickel here and a dime there. Cutting your rent, insurance, and cable/Internet bills can save big over the course of a year. Even more important, though, is income.
If you can save $10 per month by asking your cable company to lower your bill, that is $120 per year, not too shabby. But if you can get a raise of $100 per month, that is $1200 per year, which is a bigger impact.
What we see here is that controlling your income can have a bigger impact than controlling your expenses. Easier said than done, right? WRONG. There are two major methods to increasing your income. 1. You get a raise or increase income from what you are doing already. 2. You create a new source of income.
I have created new sources of income from a few places over the last year. The most successful has been eHow, where I have made over $1,000 in the last 18 month. If I did more there or added another supplement, I can have that grow by more. It only took a few hours to get started on making that $1,000, why can’t you do it.
Getting a raise is also possible, even in today’s economy. If you are worth it, your company will pay you more to stick around. I got a raise of nearly 20% in the same time period my group laid off about 15 people. If I can do it, you can do it. Just work hard and be the best at your job. Sometimes that takes time and careful negotiation, but it is possible.
Ramit over at I Will Teach You to Be Rich is kicking off a series on earning more income, and it is worth a read. I know there are silent readers out there, please come out of the shadows and let us know if you have secondary income streams in the comments. Any residual income? If not, tell us in the comments too. As a community, I am sure we can come up with some good ideas.