Many people only consider reducing their expenses when times are tight. But, there is only so much your budget can take in the way of belt tightening. There are two sides to the budget equation.
Another way to tackle the problem is to look at the other side of the equation. You can help your struggling finances by increasing your income as well.
Understanding The Accounting Equation Or Budget Equation
On the first day of accounting class in college, the professor put the accounting equation on the board. It is an equation that drives the financial world. Assets – Liabilities = Equity. To put it another way in a budgeting aspect, your income – your costs = what’s left at the end of the day. There are two sides to the equation. There is your income, and then there are your monthly costs. When the budget gets tight, many people fall back on the tried and true method of getting our finances under control by cutting costs, but that is not the only way to get your budget back in alignment. You can also increase your income.
You Can Only Squeeze So Much
You can squeeze the excess costs out of your budget only to a certain amount. Eventually, you will hit a limit as to how much cost cutting measures you and your family can endure. After serious cuts to your budget, your way of life will ultimately be degraded.
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Your family may start to rebel if the cuts are too deep or too drastic. Eventually, you can cut your budget all the way to the necessities of food, shelter, clothing, etc. That is why raising your income may be a better option than cutting costs to the bone.
Three Ways To Increase Your Income
If your budget is just not adding up and you need extra money to make ends meet, you should consider increasing your income. Here are five ways to increase your income and relieve some pressure on your family’s monthly budget.
Take A Second Job
One of the fastest ways to increase your income is to simply get a second job. A job at night or one right after your primary job can be a great source of added income. I’m not talking about starting a whole other career, but you could find a job that pays an hourly wage to help supplement your income.
Sell Something Big
Do you have a large car payment? What if you sold your car and didn’t have that payment anymore? Would your budget be easier to manage every month? You may want to consider having a “beater” car that is cheap and paid off that gets you from point A to point B instead of one with a payment plan if you are having trouble making ends meet with your budget.
Sell A Bunch Of Small Stuff
Another way to raise money to help you budget is to sell some of the small things that you have lying around the house. I used to have over 300 DVD movies until my wife asked me one day how many times I watched the same movie over and over again. Television shows on DVD are another great example. You can sell complete seasons for a lot of money.
How many times are you going to watch and rewatch that first season of CSI? It may be a great show, but you most likely will not miss owning the DVD. Half.com is an awesome place to see used movies, books, CDs, and video games.
When the budget gets tight, many people fall back on the tried and true method of getting our finances under control by cutting costs, but that is not the only way to get your budget back in alignment. You can also increase your income. This is a tactic that can be well worth your time and effort if you are having money troubles.