While we frequently focus on the investing side of the equation here at Personal Income, it’s a reality that income and the bottom-line are important too. Otherwise, there’s less money to throw into interesting investment opportunities like gold, real estate or Bitcoin.
Accordingly, in this article, we’re providing some advice on managing your personal and side hustle income to find more success.
If you don’t track the income from a job, and business income from a side hustle, you’re already off to a bad start. Pretty soon, you’ll realize that you’re failing to track your personal and business-related expenses too. Now money is coming into your life and disappearing from it with alarming frequency. When acting this way, it’s very difficult to get enough money to invest. And, when you don’t invest enough, you enjoy fewer of the juicy returns as a result.
To track expenses, you want accounting software that can give you a helping hand, especially with any side hustle that you create. Certainly, these tools come highly recommended by PieSync. QuickBooks is the more interesting of the two because it has better capabilities for trading businesses, but FreshBooks may be all that’s required if you’re only freelancing. Take a look to see if either of these solutions can assist you.
Streamline Spending to Avoid Wasting Money
Don’t waste money on business solutions or expensive personal hobbies. Stop frittering money away on things that you thought you wanted at the time but had a marginal utility because probably it was replacing something you already owned and used. This is true when upgrading a smartphone, tablet or IoT device to get one or two new features that you may barely end up using at all!
Aim to cut out excess spending, to leave more left to invest. You cannot invest what you don’t have leftover, so once you’ve done what you can on the income side, it’s all down to the other side of the ledger. Don’t let yourself down.
Know What Motivates You
When everything is pulling in the direction that you want and you have the “Why” clearly implanted in your brain, then this drives you forward. It will motivate you to keep going on days when you have less energy and aren’t naturally pushing forward. It will give you the added discipline to stick with your routine when you’d prefer not to.
If you fall off the path to success, you won’t hit your financial goals. Keep your mindset right because it will drive you even when you’re flagging a little.Create Saving & Investing Milestones to Reach
When you have a target net worth that you’re ultimately aiming for, it can encourage you. However, it can also seem so large and distant that it’s discouraging to some people. If that’s you, read on.
Break goals down into milestones along the way. Also, create a separate timeline to their achievement separate from any that you have for your retirement goal.
Find an item in your spending, like rent or a mortgage, and figure out how much will be needed in savings and investments to fund it from annual withdrawals at a 4% rate (inflation-adjusted). Then chase this total amount of capital until you’ve achieved it. Then move onto the next part of your budget that requires funding to attain financial freedom.
By being smarter about managing all the money coming into and going out of your life, it’s possible to achieve your goals sooner. You’ll also feel better about yourself from this achievement too.