There are two sides to every coin. If we want to live within our means, decreasing expense is not the only way to accomplish that goal. We must also consider increasing take-home pay. Let's consider listing examples for each. To think big, let's talk only about activities that will result in net changes of at least $1,000 a year. Here is a small sample:
Ways to Increase Take-home pay:
- Overtime in the current job, or be more efficient and productive
- Change W-4 and take-home more money
- Find tax deductions, tax credit, and tax refund
- Take a part time job, write, blog, and earn extra income
- Network and change job
- Home-based small business (not a hobby that eats up your profit)
- Rent a spare bedroom
- Invest smartly, don't follow the lemmings
- e-Bay
- 2 or 3 garage sales
- Sell your car with higher loan amount and replace it with a much cheaper but reliable Dave Ramsey car
Ways to Decrease Expense:
- Set up a budget and stick to it (you may have to give up few luxuries)
- Cut up credit card and switch to debit card (you spend 12% to 18% more with CC rather than cash)
- Build up 3 to 6 months in a rainy fund (won't cost you in interest, fees, and penalties)
- Change lifestyle: eat less, use less energy, exercise more, and reduce carbon footprint
- Shop smart online (online shopping reduces sales tax, shipping fee, and a lot of legwork)
- Pay off consumer loans. You'll save on interest expense big time.
- Buy a level term life insurance, and cash in whole life insurance. Use the cash value to reduce your debts
What are your ideas for increasing income and decreasing expenses?
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Comments: 3
This year, we can fund $22K in 401(k) and $12K in Roth. Plus we get 3% matching for 401(k) plus over $5K in tax savings.