Earn More and Spend Less

This is Part 5 of the series of personal finance tips for my Siblings, “How Not to Blow Up Your Financial Future”.

Disclaimer: I am neither wealthy nor a financial professional- read at your own risk!

Let’s check out the overview of the 5 Steps to Not Blow Your Financial Future:

  1. See the Big Picture.
  2. Do the Math.
  3. Set a Plan: Budget.
  4. Live Within Your Means: Avoid / Eliminate Debt
  5. Save: Earn More and Spend Less.

Waste neither time nor money, but make the best use of both.

Benjamin Franklin

Earn More

Your saving potential has a limit- there’s only so much you can do to be frugal before it starts to take away from your quality of life instead of adding to it. Your earning potential, however, is limitless. It’s even better if you have multiple ways of earning money, and preferably some that are automated or can happen while you sleep.

When it comes to Earning:

  • Beware of the fast get rich quick or easy money. If it sounds too good to be true, it probably is.
  • Find out what you’re worth, and invest in leveling up your skills, certifications, qualifications.
  • Automate your savings.

Nothing we ever imagined is beyond our powers, only beyond our present self-knowledge

Theodore Roszak

There is a strong correlation between education and income. Education leads to better prospects for earnings and employment.

Education is always what you make of it. A degree today does not guarantee long-term wealth or even a good job.

If you decide to further your education through a college program or trade school, is it a quality program that will leave you with employable skills immediately after? Is there room to progress or crossover over time? Without formal training, do you have a credible way to gain equivalent experience or better? Will your degree or training make you enough to pay the cost of obtaining it in a reasonable amount of time? You still need to “live within your means”, so apply it when considering paying for a student loan.

The successful people who skip college are the hardest workers I know, and pay the time needed to become experts through experience in their line of work. Sometimes experience is also costly, because we make mistakes while learning- some of which result in financial loss and having to start over. In business, between two millionaire entrepreneurs the one with the know-how (“education”) usually can compete more effectively—a higher chance of success because they are more prepared to meet the milestones, challenges, pitfalls, and processes without the learning curve or need to hire those skills out.

The beautiful thing about learning is that no one can take it away from you.

B.B King
Kat Example:

I took out student loans, but saved paying for the first 2 years of school by taking advantage of attending community college, and transferred to a school where I qualified for grants and scholarships. I got to work past the general education to my actual major. The school had an amazing program that helped prepare us with skills and networking to set us up for getting jobs in our chosen field or starting successful companies. They held business competitions, matched us with alumni for internships, had many functions for networking with experienced and skilled leaders in every industry, classes for creating resumes and elevator pitches and job interviews, analysis of financial documents and the process of building and managing all aspects of a company in every phase, and in general fostered confidence in my abilities and future. My college education has been an invaluable experience, providing practical skills I use daily and lifelong connections and growth I wouldn’t have otherwise. It has helped me recognize through the sales and marketing, and survive through recession. 13 years later, we are thriving as a family on a teacher’s salary on our way to another recession, and that takes lots of business management, lol!

A word on investing.

The best time to plant a tree was 20 years ago. The second best time is now.

Chinese Proverb
  • Just start today, even if it’s a little bit. After you make a goal. Make changes as your life changes.
  • Learn about the power of compound interest.
  • Only invest with money you can afford to lose.
  • Always have a clear understanding of what you invest in.
  • If it sounds too good to be true, it probably is.
  • Never invest in a startup that won’t invest in itself.
  • Do the Math- Consider the differences in making a calculated risk, understand the documents when researching companies or stocks to invest in, calculate whether a property or investment will actually make money, figure out how much you need for retirement so you can make a plan on how to get there…

Spend Less

  • Set aside money towards savings first thing when you receive it; if you wait until the end of budgeting, there won’t be anything left over.
  • Build an Emergency Savings. Start where you’re at and try to build up with your goals: $100, then $1000, then $2000, then 3 months of your expenses, then a year of expenses, etc.
  • If your company offer an HSA (health savings account) or matches contributions, use it!!
  • On subscriptions and memberships, I love sharing where I can with others who are close to me like family members.
  • Explore meal planning and cooking

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