5 Strategies to Make Your Income Work Better for You

If you know me, or read my articles on a regular basis, then you’ve probably heard me say that it’s not about what you make, but what you do with what you make. Of course, if you are wise with managing your money, then more money is going to help significantly.

On the other hand, if you aren’t capable of managing the money you do make, bringing in more income is not going to change your situation. You’ll need to make your income work better for you, before focusing on making more money.

The good news is that there is always room for improvement. When I speak with potential clients and they tell me their current income doesn’t seem to cut it, I ask how they manage their money. There are always opportunities to do things better, and make your income work better for you. Check out 5 strategies to make the most of your current income, before seeking out more money.

First and Foremost, You Probably Don’t Need More Money

If you are thinking that more money would solve your problems, but you don’t even have a budget in place, I would tell you master what you do have. Managing your money, however small you may think it is, will be your saving grace. Once you can make the most of each paycheck, stick to your budget, and set financial goals, you will be ready to handle more money.

I’ve worked with clients with all types of income ranges. There are women making six figures every year who have debt and can’t save. There are also women who make $40,000 and can save every month. The difference is how these women budget and manage what they do have.

Also, you don’t want to wait until you make more money before you start managing what you have. As I mentioned earlier, more money is not going to solve your problems. Make sure you can get the hang of budgeting your current income to the best of your abilities. You can also read the article 5 Signs You Don’t Make Enough Money to see if you really don’t make enough.

Strategies to Make Your Income Work Better for You

Strategy #1 – save right when you get paid

If you do not have a portion of your paycheck direct deposited into your bank account each payday, you are not making your income work better for you. The best way to save your money is to do it before you have a chance to miss it. We can always find something to buy, so instead of having money available to buy things you don’t need, save it!

Does your employer not offer direct deposit? No worries. On pay day, once your money hits your bank account, have an automatic transfer set up to savings. There are plenty of ways to make sure you can save right when you get paid. You can make your life so much easier by having your savings happen automatically.

One important thing to note is to make sure you know what you can afford to save. Save money is only effective when it’s not touched. If you end up saving more than you truly can afford to, you’ll likely have to dip into your savings. Create and review your budget to help you determine what amount should be saved from your paycheck each pay period.

Strategy #2 – make expenses even each pay period
Do you get paid monthly? Then this strategy may not be effective for you. However, if you are paid weekly or bi-weekly, try to make your expenses each pay period has even as possible. This will allow you to avoid the paycheck to paycheck lifestyle (especially if one pay period is more expensive than the other). It can seem hard to make your expenses even each pay period, especially if you have a high rent payment.

To help, you can ask your bill and credit card companies if you can change your due dates. You can also split your rent payment between both paychecks. You will need to have one month’s worth of rent handy before doing that though. Check out the article How to Get One Month Ahead on Bills for some additional insight.

Strategy #3 – limit your discretionary spending based on income

Your budget should revolve around your income. You first need to make sure that your income covers all of your bills, expenses, and standard savings. Then, it should cover all variable, but necessary expenses like gas and groceries. Once all of that is taken care of, then you can allocate what’s left to the discretionary spending categories.

Discretionary is simply another word for fun or not a necessity. These are things like going out to eat, shopping, and partying. When thinking about how you can make your income work better for you, you’ll want to pay attention to the discretionary spending. This spending can get out of control very fast, if you let it. Overspending on things you don’t need can cause you to think you don’t make enough money.

Strategy #4 – If your expenses exceed your income, you have 2 choices

It should be pretty clear by now that if you want to make your income work better for you, you absolutely need a budget. Your budget will show you if you truly can afford all of the things you spend money on consistently. Let’s say you’ve created your budget, and after all discretionary spending is cut, you still can’t afford all of your expenses. You have two options at this point: spend less or make more.

Are there any monthly expenses you don’t need and can get rid of? Are there ways you can save on gas, groceries and other variable expenses? Before shifting to making more money, make sure you are doing everything in your power to make your current income work for you. If there is nothing more to cut back, you will need to find ways to make more money.

Strategy #5 – Have a plan for extra income

The last strategy you can leverage to make your income work better for you is to have a plan for extra income. Whether it’s a raise, bonus, tax refund, or extra money that came your way, have a plan for it before you get it. If you wait until you get the money to think about what to do with it, you’ll likely spend it.

Extra money can help you reach your goals faster. There’s nothing worse than getting a couple thousand dollars and not making the most of it! Think about how you can leverage extra income that makes its way to you now. When that income does find you, you’ll know the best way to use it!

Where to Start

Are you ready to start making your income work better for you?! Start with a budget. Get your finances on paper (or a spreadsheet) so you can see what you’re working with. Map out everything and align it to your income. Your budget will be a living, breathing document. It will change as you get a better handle on your money. Don’t be afraid to use it and refer back to it throughout the month. Also, don’t let mistakes force you to stop altogether. You can get yourself back on track. We’re human. We all slip up.

If you need some guidance with budgeting and making the most of your income, schedule a free consultation with me and let’s talk through it!

Related: 7 Things to Do When You Get a Raise

Remember, it’s not about how much money you make, but what you do with the money you have. Make sure you are doing everything in your power to manage your current income. Once you’ve mastered what you currently have, you can focus on get more! How do you make your income work for you? Have you tried any of the strategies listed above? Post a comment below to share your tips, experiences and questions!

The CGS Team



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