8 unique ways to be more productive with your income
June 25, 2021
9 minutes to read
This story originally appeared on Due
Efficiency doesn’t just have a place in the office. Your money can also be efficient if you know how to be productive with your income.
Personal finances are a touchy subject, of course. Everyone has their own goals: a car, new household appliances, pursuing new investments. Likewise, each has its own hurdles, ranging from leverage to uncertainty about the stock market. If you think about it, you’ll find that it’s easier than you think to make your money grow.
Tips to be more productive with your income
Start with these eight simple suggestions:
1. Start saving early
The best time to start saving money is when you are young and single. The second fastest time is today. The sooner you are able to set aside substantial sums of money, the more time that money has to grow. If you can set up a retirement fund while you are still in your twenties, your savings will grow exponentially. It is the magic of the composition.
The sooner you can earn compound interest, the more money you will have at your disposal in retirement. That said, don’t feel bad if you haven’t been able to put a lot of money into a retirement fund yet. You can’t go back in time and start saving sooner. However, what you can do now is set aside a percentage of your salary to fund your retirement fund on a regular basis. Also check with your employer and see if they will match your investments while you are on their team.
2. Keep a nest egg handy
It is never a bad idea to have a nest egg in your savings account. There will be days, after all, when something goes wrong. Maybe you have a tire on the road, or maybe a loved one gets sick. Either way, you’ll need a nest egg in place to help you with the challenges of the day.
Nest eggs like this can also generate interest if you let them sit long enough. While this interest can accumulate in pennies, you will still be able to generate a small passive income without even lifting a finger.
When it comes to protecting your nest egg, you can also get creative. For example, purchasing a blanket from home warranty companies can help you avoid having to pay for emergency repairs to major systems in your home.
If you have the possibility, determine the type of financial cushion you want to build up in your savings account. The longer you avoid diving in it, the better your future will be.
3. Adopt a side activity
It seems like everyone these days has “sideways fuss”. Whether they sell homemade products on Etsy, work part-time as photographers, or pursue other hobbies, most people have found a way to earn money outside the office.
It can be hard to start pushing to the side, of course. Making the time for a second job, especially one that requires even more basic work than a desk job, can be taxing. However, the financial benefits are numerous. If, for example, you like to take photos in your spare time, you can earn money by pursuing your hobby on weekends taking wedding photos. This income complements what you earn in the office and makes it easier for you to pursue your passions.
Secondary activities for those who wish to spread their wings may include the following jobs:
- Online freelance
- Advertise a rental home on Airbnb
- Sell old items on eBay or Etsy
- Take online surveys
It should be noted that a side activity can overshadow your office job if it is in the right field. However, when starting out, make sure you leave some space between a side activity and your daily work. If responsibilities on your side start to interfere with your responsibilities at work, you may want to consider other ways to increase your income.
4. Remove Debt From Your Playbook
Debt is perhaps the most powerful force limiting the productivity of your income. It doesn’t matter if you’re paying off your credit card debt every month, struggling with a mortgage, or paying off student loans. The more money you have to put in someone else’s pocket, the less you can spend on your financial goals.
Of course, you are not alone if you are struggling with unwanted debt. Americans are collectively facing $ 4.2 trillion consumer debt value alone. Political positions on the validity of student debt are also constantly evolving, leaving active students to those in their 40s who wonder what their financial future holds for them.
If you want a more active and productive income, however, you need to take debt off your playbook. This, of course, is easier said than done. The best way to do this, however, is to tackle it head-on.
Define your goal
Sit down, alone or with a financial professional, to determine your debt amount. Higher numbers can be intimidating, but once you have a goal to strive for, managing your money becomes a little easier.
Create your budget
With this large number in mind, you can begin to cultivate a budget. Determine how much you want to allocate to payments each month. If there’s a percentage you can reduce of your paycheck to go directly to your debt, consider doing so.
do not forget to give yourself space in your budget for the things you love. Whether it’s a good chocolate from a local store or a bottle of wine at the end of the week, don’t let your financial ambitions for the future rob you of the fun. When you’re in debt, the little celebrations make every payment even more substantial.
Avoid making your debt worse
If you don’t have a substantially flexible income, you can rely heavily on your credit card for groceries, entertainment, and bills. However, if you’re trying to get out of debt, you’ll want to limit those purchases. Consider putting a personal limit on your credit that you know you can pay off each month. You don’t want to give up a credit card entirely – your credit score, after all, is essential. However, the less you can buy on credit, the more you can invest in your savings.
5. Capitalize on low risk investments
The stock market is an inconstant mistress. Investing, however, is integral to turning your income into something more substantial. Now, that doesn’t mean that you have to invest a huge amount in unreliable stocks.
Instead, think about the type of investment options can be made available to you through an employer. An employer who offers you the opportunity to invest in company shares obtains certain advantages. If you are fortunate enough not only to benefit from the success of your business, but also to have your supervisor match your investment, then your income is virtually guaranteed to grow and be more productive.
6. Explore your options in real estate
There are investment opportunities available to you outside of the stock market. You always have the option of invest in real estate. There are two different ways to do this. For starters, you can buy land or property and lease it to other parties for a profit. This more traditional method of property management is well established and comes with reasonable financial security.
New investment opportunities
Alternatively, you can contribute to a real estate crowdfunding project. Real estate crowdfunding projects tend to bring you long-term gains. You and several peers can participate in another person’s project and generate passive income from the success of that project several years later. Real estate crowdfunding is a relatively new practice, although its early investors have seen substantial success. You can explore different real estate crowdfunding platforms to learn more about projects that can help you be more productive with your income.
7. Establish secondary funds
That you are self employed or working in a traditional office environment, there is nothing more strenuous than tax season. The taxes you have to pay to the federal and state governments are, in essence, the money you earn but never see. This makes it so difficult to be productive with the income you earn.
While you can choose the type of deductions you want to take advantage of when working with an account, there are easier ways to limit the amount of taxes you have to pay per year. If you want to set aside some of your hard-earned money, consider opening a second fund.
Secondary funds serve two purposes. For starters, they allow you to put money aside for the future, making sure you have a nest egg on hand if you need it. Most importantly, they reduce your taxable income. Any money you invest in an HSA, FSA, SEP, IRA, or 401 (k) is money that your federal and state governments cannot tax. In short, secondary funds reduce your overall income. Although you may have earned $ 100,000 in a year, you may benefit from taxes withheld from a lower portion.
8. Open a high yield savings account
It is a mistake to keep all of your hard earned money in your checking account. If you want your money to work on your behalf, consider opening a high yield savings account instead.
Most online banks offer their customers access to high yield savings accounts. The interest you get from high yield savings accounts far outweighs what you might otherwise earn by working with a standard bank. In other words, the more money you save, the more money you will earn.
If you open one of these accounts at a legitimate bank (which you know, hopefully do), there is no risk of losing capital.
There is more than one way to be more productive with your income. Don’t let it languish in your checking or savings account. Instead, explore the unique ways you can increase your income stream without getting a second or third job. The more you can distribute what you earn, the healthier your financial life will be.
The post 8 Unique Ways To Be More Productive With Your Income originally appeared on Due.