75% of Americans are living paycheck to paycheck, including the ones with degrees. That means one of two things: 1) we’re either not bringing enough money in or 2) we’re spending too much of the money that we’re making. I made some significant changes at the beginning of this year that changed the dynamic of my whole lifestyle. I made half of my salary on my own through blogging, products and services. Without getting too detailed, my savings account is a couple thousand short of my annual salary even though I unexpectedly had to purchase a car earlier this year. Whatever the case may be, I want to discuss some changes you could be making in your own life that will hopefully allow you to make and keep more money.
A lot of people think that because they can afford something, they should have it. Whether it be a car, a more extravagant apartment, or expensive handbags – just because you can buy it, doesn’t mean you need to. The issue that we run into is feeling like those material things increase our value, when the reality is they decrease our net worth. Switch what makes you feel successful and your life will change.
Give up Guilty Pleasures
What you think you need, you really don’t. Ever since I could comfortably afford designer shoes, I’d buy a handful of pairs every year. January marked my first full year of blogging and I knew I wanted to take my brand and business to the next level. I vowed not to purchase a single pair of designer shoes, but to instead use that money to do the things I knew my business was going to need and eventually make me money. That was hands down the best decision I made for myself this year. I haven’t skipped a purchase yet that I regret, which means I didn’t really need it to begin with, and I’ve made gains in multiple areas that I’m proud of. Material rewards should be few and far between. Business over bags in 2018.
Invest in What Will Propel You
Whether it’s an educational course, a new laptop, or a set of newly designed business cards – make a financial investment in something that’s going to bring you a promotion, a better paying job, or an increase of profit in your business. Use the money you save by skipping out on, in my case, shoes, to buy the Adobe Suite you’ve been needing to design for your ideal client, that ring light for your new YouTube channel, or custom boxes for your new online boutique. It’s much more wise and rewarding to spend money that will grow what you’re wanting to pursue and hopefully bring money back to you than it is to spend it on something that’s only going to sit and never make you a dime.
Create an Additional Source of Income
So many people are living without wiggle room in between paychecks. We need every dollar that’s coming in and before we get it, it’s already assigned to go to something or someone else. If an emergency comes up, you can’t handle it immediately because you don’t have the money at that very moment and that shouldn’t be the case. It’s advised that we have at least four months of our salary saved up, should anything happen and some people don’t have four days of theirs put away. Before I found ways to make money outside of my paycheck, I had little spending money in between paydays. I’d get paid, put money into my savings (which was non-negotiable), pay my bills, and have just enough to make it another two weeks. Once I was able to create additional sources of income, I quit depending on my paychecks. Money was dropping into my account every other day and I no longer needed to wait until payday to handle what I needed to. One source of income hardly cuts it these days. Find a way to tap into something else that will bring in some extra cash, or even turn into a business that will eventually replace your paycheck.
Live Below Your Means
I’ve always been a hustler, and I’ve always been frugal, but I’ve always only had to take care of myself. Getting engaged made me want to hustle for much different reasons. If you thought living alone was pricey, think about building a household. It’s A LOT. At this point, I want my bank account cuter than my wardrobe, so if I have to pass up on the newest releases then so be it. When I wrecked my car this summer I didn’t just go for the car I could pay for, I went for the car that was a few hundred dollars under what I could afford. I REPEAT: Just because you can pay for it, doesn’t mean you should buy it. I’m very pleased with my purchase, but even more pleased that the car I chose will be paid off in half the time I financed it for.
Separate Your Personal and Business Accounts
This will help you so much in the long run. If all of your money is falling into your personal account, you’ll use the money like it’s yours. With all of your money in one account, it’ll be really hard to differentiate what your profit’s been when it’s time to do the numbers. I didn’t see the first couple of thousand dollars that I made for myself because it was going into my personal account and being used as bonus money. If you’re going to pay yourself, pay yourself from your business account and use the rest of the money you’ve made to grow your business. This will also make it much easier when it’s time to do your taxes.
It’s Not About What You Make, It’s About What You Keep
Not only did my salary increase this year, I began making a decent amount of money for myself with products, offering services and sponsored collaborations. Making more money than the year before didn’t mean anything else but putting up more. I talked in this post about adjusting your savings as your income increases. The goal is to have more money coming in, without increasing how much money is leaving.
What financial goals do you have in 2018 and how do you plan to achieve them? Comment below!