How to Increase Your Income When Budgeting Isn’t Enough
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In the world of personal finance, budgeting is often hailed as the cornerstone of financial stability. It’s the tool that helps you track your expenses, cut unnecessary costs, and ensure your financial ship is sailing smoothly.
However, there comes a point in everyone’s financial journey when budgeting alone isn’t enough. Sometimes, even with all the penny-pinching in the world, you still find yourself falling short. I’ve been there. As costs rise, there’s only so much you can cut before you’re left feeling deprived and frustrated.
That’s why I started this blog—to find ways to make more money while still sticking to a smart budget. In this post, we’ll explore why increasing your income is just as important as budgeting and offer practical tips on how to do both effectively.
Why increase my income?
While budgeting remains a critical aspect of financial literacy, it has limitations when the prevalent advice leans heavily towards further expense reduction. Often, this solution left me feeling frustrated and upset because I was unable to do anything really enjoyable.
After all, I was lowering my expenses even more than I already had. Do not get me wrong, budgeting is extremely important to your financial future, but it is also important to enjoy the present time, too. For me, my solution was to budget while increasing my income online, as this gives me a chance to have some extra disposable income while still meeting my financial goals.
Where do I start?
There are two things to immediately start doing: start a budget and learn how to start an online business. I would do both at the same time, but if I had to choose something to do first, I would learn about starting an online business specifically a digital marketing business with an affiliate marketing emphasis. While starting a traditional brick and mortar business is also an option, it typically requires more time and upfront capital compared to an online business—which I’ve covered in a previous blog post.
When I went through my first online courses, they set me up with a financial company to help start my business and monitor my finances, both personal and business, for tax season.
That helped me look through my finances and start a better budget than I already had, because I already had that information compiled for my taxes. Furthermore, I had their personal contact information so that I could ask them any questions that came up, and trust me, I had questions.
I know nothing about taxes besides that they are complicated! I have been through several online courses since then, but this course was the only one that set me up with a financial company after I took their course.
4 Tips for Combining Budgeting with Increasing Your Income
Tip 1: Track Your Spending Separately
I strongly recommend that you have at least 2 credit cards: one for personal use and one for business use. For a vast majority of states, you can write off anything you have purchased for your business, and it can be hard to keep track of that if you have it mixed with your expenses that you are not able to write off.
Now keep in mind that with an online business, sometimes that personal to business line can be already quite muddy, so please consult with a professional tax advisor, as they will be able to help you be compliant and not be in trouble with the IRS.
The more credit cards you have, the more complicated it gets, so please research each of your credit cards in more detail to see if it is even worth keeping them after you pay them off.
Tip 2: Create Realistic Budgets
In some cases, you can do just one budget, merging your personal and business, in what is called a sole proprietorship; however, this also makes you liable for your business debts. I have what is called a Limited Liability Company, otherwise known as an LLC, which keeps my personal property separate from my business.
For that reason, I have two budgets. My business budget follows the same format as my budget, just with some minor differences.
One of the big differences is that when it comes to my budget, I make sure that I am following my budgeting rules and not going over in spending on anything, so that I can save the most money.
However, when it came to my business budget, I had to spend more money than I had in the beginning due to start-up costs. I only spent money on important things for my business, such as the establishment of my LLC, educational programs, and the necessary online programs to establish my blog, all of which I could write off once I started to make an income.
Important Note: This is my own experience; every business is different, and every state has different laws.
Tip 3: Emergency Fund Allocation
It is extremely important in today’s economy to have an emergency fund. I strongly recommend having a 6-month personal emergency fund given the uncertainty of this economy.
For your business, I would recommend paying a lot of what you need for your business yearly because your business needs consistency and time to grow. I still have a 6-month emergency fund for my business; however, usually this is not that much money due to the online nature of my business and that I have already paid my expenses out for the year.
Tip 4: Cut Unnecessary Expenses
Does this sound familiar? I find that a lot of times, subscriptions that I knew I canceled were surprisingly still active and taking money from my account every month. This tip is to make sure that you are not paying for something you are no longer using or no longer need.
I strongly recommend going through all your expenses to make sure that money is not going out randomly. I would also recommend choosing one day a week to shop online and one day for your groceries.
Technology is both a blessing and a curse because you can now shop and get free shipping any day of the week, even at 3 am. I have purchased something on Amazon that I thought I needed, only to find that I don’t need it.
I'm now unable to return it because the time has passed, and I ordered too much. I have found that waiting until one day of the week to order online really helped me narrow down what I needed.
For your business, since you are starting from scratch, there should not be a lot of unnecessary spending to start with. I strongly recommend finding a course or two and sticking with its advice for at least a year.
From what I know, taking more than two courses in this industry often just leads to noise getting in the way of your success. I started with this course to get the fundamentals down, and then also took further training in blogging, as that is something I always wanted to do.
Those are the only two courses that I am currently using the knowledge of, although I have taken more courses to try them out and see if I liked the courses enough to recommend.
The truth is these two courses have the best information that I have seen so far, and one of them was only $17. The money I spent on these courses, I have since written off, due to Legendary also providing me with a consultation with a business that deals with taxes.
Overall, budgeting by itself eventually will not be enough when it comes to bettering your financial future, and that is why combining it with increasing your income is a spectacular idea. So, take the leap you need to better your financial life!
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