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Increasing your income will most likely get you closer to your goal, and help you solve a lot of problems.
It’s not easy to stay motivated when you’re facing financial problems, but the only thing you can do is persist. At the end of the day, you must combine your focus and action to hit your income goal this month and the next months to come.
What is Income?
Income refers to the money a person or business receives in exchange for working, providing a service or product, or investing capital.
People earn income through their salary, and businesses earn income from selling services and goods that are priced more than their production costs. A person’s income may also come from pensions, gifts, or government benefits.
There are three different income types, and understanding them will enable you to plan your future better.
If you regularly receive a salary from your job, that’s your active income. This means that you are exchanging your energy and time, or participation for money.
Active income can stem from wages, tips, commissions, and many more. For instance, if you are working as a barista, the money you make hourly and tips you receive are considered your active income.
This refers to the income that comes from investments, royalties, capital gains, and dividends.
For instance, if you’re a recording artist, you can enjoy passive income from selling your music regardless of when it was released.
This type of income is earned from a partnership, rental property, and other businesses where you don’t have active involvement. This type of income usually requires investment and time to make a profit.
For example, an investor can receive a regular income stream with little to no effort.
Benefits of Increasing your Income
Earning more money can change your life. Whether you want to pay off your debt or take a vacation, this could be achieved if you level up your income.
We’ve gathered more long-term and short-term benefits of increasing your income below.
You can achieve financial independence
If your ultimate goal is to achieve financial independence and you have very little money left at the end of each month, there’s no way you can achieve stability if you don’t change anything.
Be ambitious enough to seek more sources of income so you won’t be left empty-handed if emergencies come your way.
You can reach your goal
Remember, even making an extra Php5,000 a month more than you originally earn will make your financial goals happen faster.
You can get rid of your debts
Paying off your debts will help you achieve peace of mind. Although you may not get rid of all your debt in a few months, you can pay it faster if you have more income.
You can have money to build a business
Earning more money will allow you to test the waters without worrying about losing all your money if you fail.
Related: Personal Finance 101
10 Ways to Increase your Income
A lot of people think it’s impossible to earn more money than what they are already making, but that’s not true. It may be challenging at first but it will be worth it.
Check out these ways to increase your income.
1. Side Hustle
A side hustle refers to any employment you have aside from your full-time job.
Freelancing on the side is very common for those who want to have supplemental income. Side hustles are not the same as part-time jobs because having a part-time job means you’ll have an employer who will decide your working hours.
With a side hustle, you control your freedom.
The best thing about side hustles is it can be related to your passion. Here are some of the most common side hustles for Filipinos:
- Insurance agent or financial advisor
- Sharing economy (ie: Grab)
- Home-sharing/vacation rental services
- Buy and sell
For more information on side hustles, check out this in-depth guide.
2. Side Business
Building a business is a dream for many. But if you can’t risk leaving your full-time job to do this, why not start with a side business?
Being your own boss will allow you to earn more money, and thankfully, there are tons of businesses you can start even without a huge capital.
Our favorite side business ideas include:
- Sell food
- Offer storage rental
- Resell furniture
- Sell art
- Photography and videography business
For a more comprehensive list of business ideas, check out this guide.
3. Go back to school
If you are serious about becoming more successful in your chosen industry, you should consider going back to school.
While this is considered a more long-term approach, it will make way for more working opportunities. When you have a doctorate or master’s degree, you will be considered to fill higher-level positions.
Before you go back to school, research which field will be the most rewarding in the future. This way, you can put your time, money, and effort in the best academic track.
If you don’t want to go back to school, you can also consider trying the next tip.
4. Upskill & get certification
With today’s hypercompetitive climate, many people have become inspired to use their spare time to improve their skills.
Upskilling involves learning additional competencies and skills. This not only boosts progress in your chosen career but also improves your employability. Upskilling can also grant you more earning opportunities.
There are many ways you can upskill yourself. One of the most common is to do online training.
When deciding the best online course to take, think about which skills you want to improve that could potentially benefit companies.
For instance, taking courses like Instagram Management and Branding will enable you to understand how to use the said social media platform for business.
5. Ask for a raise or promotion
Are you hitting all your quota at work and you think you’re due for a promotion or raise? If so, why don’t you talk to your boss about it?
This may sound easy but a lot of people feel nervous at the thought of starting conversations that involve a promotion or raise.
Before you do this, be realistic. Make a rational evaluation of your performance in the past year. If your performance is subpar, skip asking your boss for more benefits.
You need to have a solid performance to be considered. You can also gather evidence that will support your promotion or raise. Metrics and reports will prove that you are outperforming your co-workers and adding more value to the company.
It is also important to ask in advance. By the time the year ends, your superiors have likely made decisions on pay increases and promotions.
More importantly, be mindful of your attitude and know the fine line that separates being assertive and being rude.
6. Build Passive Income stream
It’s every person’s dream to earn money while sleeping. Having a passive income will allow you to earn money even when you still have a full-time job.
This type of income stream includes self-charged interest, rentals, and other businesses where you don’t have to materially participate in it. More specific examples of passive income include:
- P2P lending
- Cryptocurrency mining
- Selling digital products
- Becoming a silent business partner
- Collecting royalties
Want to get more passive income ideas? This guide will help you.
7. Cut unnecessary expenses
What you may need is not an additional source of income, but to decrease your unnecessary spending. Before you can do this, you should track your spending habits to know where your money is going.
Chances are, you’ll be surprised at how much you’re spending on eating out, buying new clothes, vices, transportation, or monthly subscriptions you aren’t actually utilizing.
After you have done this, clearly separate your wants and needs, and create a budget based on that.
When doing chores like grocery runs, make a list before going to the store so you won’t be tempted to get extra items. This way, your spending will be more manageable.
8. Work from home
Working from home is not just convenient, it’s also a great way to save money. When you don’t have to go to the office, you will spend less on transportation.
You’ll also avoid the temptation of going out for meals and coffee, or buying work clothes. These may seem like small expenses but they can add up and give you extra money that you can use to pay off your debt or save.
9. Make money with your hobbies
Think about what you love doing in your free time. Whatever your hobbies are, there are ways you can earn money through it if you’re serious enough.
For example, if you love scrolling through social media, you can apply to become a part-time social media manager and put all your knowledge to good use.
If you love taking photos of nature, you can sell framed photographs.
For those who love baking, consider opening up pre-order slots so other people can taste your creations.
The sky’s the limit with transforming your hobby into a money-making machine.
10. Income Investing
Income investing refers to building an investment portfolio that is focused on generating funds or earnings that you can live off of1.
Although this type of investment strategy is more popular with people nearing retirement, it’s better to start it while you’re young. This way, you’ll have more chances of developing a steady income flow faster.
Read Next: How to Protect your Income