More Money – How do you Get it?
Do you want More Money in your life?
There's probably not a lot of us who would say "no" to that question is there!
It's probably more of an issue of whether we want more of something else in our life, and we just don't feel we can afford it right now. When this happens we get a feeling of wanting more money that has a scarcity kind of flavour to it. This can happen even when we are actually doing quite well, and being able to pay all the bills. We just want more money for extra things. I call this scenario desiring "lifestyle expansion"
Or we may be in the situation where we cannot make all the current bill payments - that is -as a negative cash flow situation that is driving us ever further into more debt. In this case there is a definite feel of scarcity. We not only want but need more money to get our heads above water. I call this scenario desiring "financial security".
More Money for Lifestyle Expansion
Here are the steps to create more money for the extra things you want in your life:
- Define exactly what extra things you want!
- Prioritize the list
- Decide whether you need to earn more, or redirect what you already earn.
- Define your Strategy
1. Define exactly what extra things you want!
Get serious about it, and work out exactly what the cost of those things are. How much is that better car, better clothes, additional holiday, bigger house? Ignore the fear and quantify it! Get serious about it, and work out exactly what the cost of those things are. How much is that better car, better clothes, additional holiday, bigger house? Ignore the fear and quantify it!
2. Prioritize the list
Put all those things you wrote down in order. Most important at the top - least important at the bottom. Or, if there is a large value difference, you could put more achievable items at the top, so you can cross items off the list faster.
3. Decide whether you need to earn more, or redirect what you already earn.
Sometimes it's simply a matter of reducing our spending on things that don't really matter to us, and redirecting that into a savings account, and letting it accumulate for those items we really want. In this case, we don't reallly need more money, we just need to be a bit smarter with what we already have.
If we know that redirecting what we have and saving is not going to achieve what we want (usually because it's a rather large ticket item) then we need to get serious about considering the options for earning more money. What are they? Here's a starter list:
- Do whatever it takes to get a pay rise in your current employment or business.
- Move to a job that pays more money. (You may need to get additional or new qualifications.)
- Do something additional to your current earning role. This could be a second job, or a business that you run on the side. This option is likely to take more of your time though, so you need to be smart about this.
4. Define Your Strategy
Once you've considered the options above, make a plan. Write it down, and break it into do-able action steps. This is your defined strategy for how to get those extra things you want. Then simply execute the action steps. In most cases, the additional money for the extras you want wont happen overnight, but it WILL happen faster than you expect.
More Money for Financial Security.
Here are the steps to create more money so that you are not spending more than you are earning:
- Define exactly how much your spending exceeds your earned income.
- Decide whether you need to earn more, or spend less, or both.
- Define your "Filling the Gap" Strategy
1. Define exactly how much your spending exceeds your earned income.
If you are spending more than you are earning, this shows up by increasing debt levels - typically the balance on your credit card. Look at your credit card statements for the last year. How much has the balance increased in the last 12 months? Take the current balance (eg $8250) and subtract the balance 12 months ago (eg $6890). In this example the amount would be $1360. Then divide that number by 12. So this would be $113 in this example. This result is how much you are overspending each month. So this amount - in this example $113 - how much you need to reduce spending by, or increase earnings by, each month going forward.
2. Decide whether you need to earn more, or spend less, or both.
The key to making this decision is to understand the difference between fixed expenses and discretionery (variable) expenses. Fixed expenses are what you need to survive at a base level of comfort and social acceptability. These are payments for your food, accomodation, utilities, transport to work, basic clothes etc. Discretionery or variable expenses are all the things that you don't really need, but they are the fun things such as entertainment, fancy clothes, holidays, toys etc.
If the amount of your excess spending is spent on discretionery items, you can solve your increasing debt problem quickly by reducing your spending on these things. If you are in a situation where you don't have much or any discretionery spending, and you don't have enough for the fixed items, you are likely to need to earn more money. You can look at ways to reduce your fixed items too - such as moving to cheaper rent, or selling your car, and buying clothes at opportunity shops etc. If you conclude that you really do need to get out an earn more money - then the list in point 3 above is for you too.
3. Define your "Filling the Gap" Strategy
Then it's time to write down your plan. It's really important to get ideas on to paper, because this makes them real. Are you going to spend less, and if so, on what things? Are you going to earn more? If so, which method will you use to do this - and in what time frame. Do you need to save up for a course to increase your knowledge first? Is there a way you can get better skilled for free, or cheaply. All these things will be bullet points on your written plan. Once it's written, put dates for each item on your list, and get on and do it!
Wishing you Maximum Money Success,