If you are like many people, you rely solely on your income from your primary job. You might think this is OK, but in reality, you are setting yourself up for trouble. When you rely on one income, you are at a major risk should you lose your job. How will you pay your rent or buy food? Ideally you have some savings to fall back on, but at the end of the day, if the economy tanks and your company lets you go, you are going to have to figure out a backup income source quickly.
It is for this reason why you should have multiple streams of income. By diversifying your income, you don’t have to worry as much should you lose your job. In this post, we will talk about how to go about adding income streams and what to expect.
How To Add Income Streams
There are many options when it comes to adding income streams. Your first step is to figure out what you really enjoy doing and seeing if there is a way to earn some money from it. For me, it was with blogging. I started off on the side, not really making money, but that wasn’t the goal at first.
But as time went on and my site grew in popularity, I began to make some money. It wasn’t a lot, but it was helpful. I was able to increase my savings with that money.
For you, the goal is to write down some things you enjoy doing and researching to see if there are ways you can make some extra money.
If you find that there are a couple of things you enjoy doing and could make money doing them, try them all out. You don’t have to limit yourself to just one additional stream of income. The more streams you have, the better.
The key is taking into account your time. You don’t want to work your main job all day and then spend all night on other ventures, even if you enjoy them. You need some down time.
What To Expect From Your Income Streams
The main thing to keep in mind when it comes to income streams is that you aren’t going to make as much as you are in your primary job. Yes there are some people that do, but that isn’t the goal. The goal is to simply bring in some extra money each month.
When you do start making some money, don’t factor it into your budget. Simply take a small portion of it and put it aside for taxes next year since you will have to pay taxes on this income.
Next, put the money into a savings account or even use it to pay off debt.
Whatever you do, don’t spend it. You are looking to get yourself to a better financial place. For most of us, this means getting out of debt and or building up a savings cushion. In a few years, you will be amazed at how much your side income has helped your bottom line.
The longer you can go without budgeting this money, the better off you will be. Once your debt is gone and you have a nice savings cushion, you can use the extra money to boost your retirement accounts or even save for a dream vacation.
At the end of the day, adding in some other income will do you a world of good. Not only will it help you to better your financial life, but it will make any job loss a lot less stressful. This is because you will have money set aside to help cover your expenses while you look for another job and you will still have some money coming in to help offset things as well.
So look into other income sources but don’t over extend yourself. You want to bring in some extra money while also enjoying your life to the fullest.
Thanks Don. They key point I’d add here is to remind people that building up additional income streams takes drive and effort for example, starting a blog doesn’t happen over night. It can take a lot of effort and writing before a blog starts to generate any revenue.