Budgeting your monthly income gives you a plan for your money. When you budget, you are able to put more money towards achieving goals and dreams.
What’s your dream?
Whether your dream is to travel the world, pay off a house, or have a steady stream of income well before retirement, these steps will kickstart your savings and keep you on track for your goals and dreams.
By kickstarting our savings, my husband and I have saved an extra $1,000 each month. It puts us on track to finish our new home savings goal by January.
To fund all of the awesome things you want (and will) do, extra income is the first step. While I believe in budgeting like there is no tomorrow, there is a limit to what your savvy self can save, but an unlimited amount of income you can earn. To get your juices flowing, here are 11 ideas to create extra income:
– Ask for a raise
– Begin looking for another job that pays more
– Freelance using your talents on sites like Upwork
– Get a second job at a physical location
– Do a ride-sharing app like Uber or Lyft
– Instead of driving for people, shop or pick up food for them on apps like Instacart or Postmates
– Buy and sell items from thrift stores or garage sales on sites like Craigslist or Ebay
– Lower your monthly bills by getting better deals or get rid of some by cutting back
– Do side jobs for neighbors
– Rent a room in your house or invest in another property for Airbnb
– Search the Craigslist gigs to find some quick side work
While some of these ideas are permanent additions, remember that others are only temporary until your full-time employment can reach the level that funds your dreams. Extra income is the first step to kickstart your savings and propel you into your goals and dreams.
Build a Buffer
If you had to choose between getting your bills paid and paying to replace a blown-out tire, you would have to bypass paying your bills for the month to attend to the tire you need now. This is why building your buffer is a step to kickstarting your savings. Without a buffer, one unexpected expense wipes out your savings.
A buffer is a tool of protection – like an invisibility cloak for your savings from life.
To build a buffer for unexpected events, pick any amount from $500 to $1000 and save that money. Choose any amount that you feel will buffer you from unexpected bills. After paying for the basics – rent, food, and bills – focus on putting any and every extra dollar into your savings until this amount is reached.
Pay off Debt – Fast
After you have extra income and have saved up your buffer, your final step to kickstarting your savings is to pay off your debt and fast. Not only will this de-stress you, but you will also be putting more money back into your pocket each month. If your debt is costing you $200 a month, then just by paying off your debt quickly, your income will increase by $2,400 each year. If you’re debt is costing you $1,000 a month, your income will increase by $12,000 each year. You’re giving yourself a raise!
Whether it’s a car loan, student loan, or credit card debt, pay this off quickly (house debt does not apply here as it is a long-term payment goal). Apply any extra money that you have towards the smallest amount of debt and then move on to the bigger amounts of debt to save yourself from paying interest. Pay down debt with laser-focus using your extra income with your buffer in place.
In a matter of months, you can kickstart your savings by earning extra income to apply towards your buffer and pay off your debt to increase monthly income. Besides the buffer you have already built, you will now make more than you did before and be able to stash more cash into your savings.