Part 2 – Income, Earnings & Savings
Understanding and managing your income, earnings, and savings are crucial for financial stability and growth. These basics affect everything from your daily life to long-term goals. By increasing your income, wisely using your earnings, and saving regularly, you can create a strong financial foundation for the future."
SECTION TOPICS
1. Income Sources. Evaluate your income and do your best to diversify how you earn money. Relying on one source can be risky, especially in an unpredictable job market. Consider side hustles, freelance work, or passive income from investments. Varying income sources provide financial security and new growth opportunities.
2. Earnings. Maximize earnings by continuously improving your skills and qualifications. Invest in education and professional development to boost your career prospects and earning potential. Regularly review your career goals and seek opportunities for advancement, whether through promotions, job changes, or starting your own business.
3. Savings. Create a consistent savings plan by setting aside a portion of your income regularly. Aim to save a specific percentage each month, starting with building an emergency fund for unexpected expenses. Once your emergency fund is established, focus on long-term goals like retirement, buying a home, or funding education.Set up automatic transfers to your savings accounts to ensure consistent savings without having to think about it. This helps you prioritize savings and reduces the temptation to spend extra money.
4. Budget. Develop a budget that outlines your income, expenses, and savings goals. While we covered budgeting basics earlier, this section focuses on including savings goals in your budget. Allocate money towards savings and investment objectives. Regularly review and adjust your budget to reflect changes in your financial situation and goals. Be sure to download my Budget Worksheet at my website, LoriMoneyCoach.com.
5. Invest & Grow Your Savings. Focus on investing your savings to grow your wealth over time. Explore various investment options, like stocks, bonds, mutual funds, and real estate, to diversify your portfolio and minimize risk. Investing helps your money work for you, generating additional income and building long-term wealth.
With a strategy and plan for managing your income, earnings, and savings, you can achieve financial stability and work toward your long-term goals. A balanced approach gives you financial security and peace of mind, leading to a prosperous future.
#1 – INCOME
Income diversification is important for financial stability and growth. Relying on a single source of income can be risky, especially in an unpredictable job market.
Evaluate and Diversify Your Income
1. Current Income Create a list of all your current sources of income. This includes your primary job, any part-time work, and income from investments or side projects. (Download Income Worksheet at LoriMoneyCoach.com)
2. Additional Income Streams
a. Side Hustles: Consider starting a side hustle that aligns with your skills and interests. This could include tutoring, pet sitting, consulting, or any other service you can offer in your spare time.
b. Freelance Work: Use your professional skills to take on freelance projects. Freelance websites like Upwork.com, Fiverr.com, and Freelancer connect you with clients looking for various services, from graphic design and writing to programming and marketing.
3. Passive Income: Explore opportunities for passive income, which may require an upfront investment of time or money but generate ongoing revenue with minimal effort. Examples may include rental properties, dividend-paying stocks, peer-to-peer lending, and creating digital products such as e-books or online courses.
a. Leverage Your Hobbies & Interests: Turn your hobbies and passions into income-generating activities. If you really enjoy crafting, consider selling your creations on platforms like Etsy. If you love photography, offer your services for events or sell your photos online.
4. Invest in Income-Generating Assets (We’ll cover this more in-depth in Investing section coming up!)
a. Real Estate: Investing in rental properties can provide a steady stream of passive income.
b. Stock Market: Invest in dividend-paying stocks or mutual funds. These investments can provide regular income through dividends, as well as potential capital appreciation over time.
c. Bonds and CDs: Consider investing in bonds or certificates of deposit (CDs) for more stable, albeit lower, returns. These fixed-income investments can add stability to your income portfolio.
By evaluating your current income sources and seeking out diverse ways to earn money, you can create a robust financial foundation. Diversification not only improves your financial security but also opens up opportunities for growth and prosperity.
#2 – Earnings
Maximizing your earnings is fundamental for building wealth and financial stability. Focus on improving your skills and qualifications to increase your earning potential ...
(THERE'S MORE INSIDE → PART 2: INCOME, EARNINGS & SAVINGS)
LORI WILSON
YOUR MONEY COACH
For over 18 years, I immersed myself in the world of financial services as an advisor, mastering a broad spectrum of areas from insurance (i.e., life, disability, long-term care, health) to investments and comprehensive financial planning. Today, I'm dedicated to helping my clients improve their financial literacy, as too many people are so unprepared — not just for retirement, but for managing their day-to-day finances. This has to change. The ever lurking problem is that money does bring up both anxiety and fear, not just because people lack capability or the ability to grasp or understand money, but because financial literacy was NEVER TAUGHT to them, either by their parents, society, in school or a combination of those three.
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As a MONEY COACH, LORI WILSON is dedicated to helping you improve your financial literacy, as too many people are so unprepared, not just for retirement, but for managing their day-to-day finances. Lori's mission is to provide the financial knowledge her clients need to make clear, confident, and informed decisions about money. When you're ready to start your journey to financial mastery, you can call upon Lori to help.
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