How do you know which you should focus on more, finding ways to cut back, or finding ways to make money?
Given the high cost of living, there is a lot of pressure to make your money stretch as far as possible. Looking for ways to reduce your expenses, spending time comparing prices, shopping around and being frugal is important. So is finding ways to make money and increase your income. So how do you know which is more important and where to focus?
Disclosure – we do use affiliate links on the site for products and services we personally use. Read our full disclosure here.
Why cut expenses?
When you go over your finances thoroughly, you’ll probably find areas you can cut back in such as comparing insurance/phone/electricity and other bills. Groceries is another area most cut back when things are tight e.g. read how to get free and super cheap groceries. Or check out 18 ways to spend under $150 on groceries.
Our 21-day money challenge is a free list of articles which help you go over your budget and find those areas you can reduce. This is important. Learning to cut back where possible and live within your means will see your financial situation improve.
What if you can’t cut back?
There is a limit as to how much you can reduce your expenses by. Once you have assessed all your spending, your bills and basic living expenses, it is time to focus more on a budget and look to increase your income.
Why have a budget?
You can call it a spending plan if you prefer, but basically, you need to tell your money what to do. Having all your income land in your bank account then frantically paying bills as they come in will not see you achieve your financial goals. A budget is a way of directing your money and ensuring you are successful. Paying off debt? Read how this couple paid off $90,000 in 12 months, starting off unemployed. Saving for the future? Learn how to be a millionaire even as a single mum (hint, compound interest and time are your friend!)
A budget doesn’t need to be difficult. It can be as simple as 60% for living expenses, 10% for savings, 10% to invest and 10% for you to do whatever you want with. Or if you are paying off a debt you might want to do 60% living expenses, 30% debt and 10% do whatever you want.
How you set it up is up to you. Check out how to create and stick to a budget for some ideas. Or this post on budgeting and this one on how to budget on a single income. I’d also recommend reading The Barefoot Investor (Australian) or The Total Money Makeover (American, but I prefer it).
Making More Money
In my opinion, your finances need to be in order. Reduce expenses as much as you can, set up a budget then focus on ways to make more money. I’ve done it this way because by having the rest sorted first I know how much more I need to make to achieve my goals. Think about it, if you don’t know how much money you need each week to live, how can you know how much more you need to pay off your credit card, personal loan or save for a house? Knowing how much you need gives you a goal and an amount to focus on.
How can you make more money?
We live in a time where making money in various ways on the side or from home has never been easier. Each month I share updates about how I made money on the side and how much. I’ve shared 43 ways for single mums to make money, 51 ways to make money from home and 18 ways to make money in 2019. Here are some of the most popular ways to make money.
1. Online Surveys
Most readers who do them make between $2,000 and $5,000 a year doing online surveys. How much you make will vary depending on where you live, your age and other variables companies are interested in. My favourites have been Octopus Group (apparently the highest paying online survey company in Australia). Join Octopus Group free here. Swagbucks is great because you can earn points called Swagbucks which you can convert to gift certificates or USD via PayPal in so many ways. Watch videos, do surveys, use their search instead of Google, shop at stores and activate Swagbucks, participate in team challenges and do Swago. All these things see you earn money quicker. Join Swagbucks for free here.
We have a full list of the best Australian online survey sites here. If you choose to do them, have a separate email address specifically for online survey sites!
2. Share Economy
Airbnb, Car Next Door, Uber and Spacer are just a few options. With Airbnb, I made $1,300 in 5 days at Christmas, another $600 for a few days in August and I only rent my place when I go away. The amount I make usually covers my holiday too! Find out more about how to make money with Airbnb here, sign up to be a host here and also check out MadeComfy and the tips for making Airbnb easier as a host here. If you want to try it first as a guest, get $55 off here.
Car Next Door has been fantastic for me as a user. If you want to try it, get $15 off here. For drivers who rent out their cars you can make an average of $300 a month (more in busy areas) plus your car insurance is covered by them. This alone can mean a big saving for most families.
Spacer allows you to rent out your space and when I was living in Carlton I made $191 a month for no effort renting my car space. Read this post about how to make money renting out your space. Camplify allows you to rent out your camper van. Look at the options available in your area.
3. Your own services e.g. writing, admin, cleaning
The options for selling things you can do are quite varied. From domestic services such as cleaning, ironing, gardening through to being a mystery shopper, doing market research for $100 an hour or running your own business. Freelance writing or being a virtual assistant are two popular options you can do from home, on the side or as a full-time gig. Check out how to set up a business for under $100 here.
There are so many options to make more money. Find some you think you’ll like, give them a go and focus on the ones making you the most money!