How to earn more and how to have more money. Part 1 of 3

Most of the top personal finance experts, such as Martin Lewis in the UK tend to put a lot of emphasis on saving money, finding economical alternatives, and prepare a budget to stay within each month to successfully avoid the consumerist trap.

We have a lot of experts and resources available to manage our finances but unfortunately, there are very few reliable platforms that offer consistent earning. I think the explanation lies in the golden rule of success in personal finance; it doesn’t matter how much you earn, but what you do with the money you earn. But in the ever-evolving world of digital transformation, global trade, and international alliances, this rule may have become obsolete. In today’s world, saving and earning are both equally important, your ability to generate income regularly, your spending habits, and your saving patterns, all contribute to better personal finance management. 

Keeping a check on spending, cutting unnecessary costs, and adopting saving techniques might not be enough in the 21st century. The solution to the financial problems of general consumers can be majorly solved if they take up part-time gigs to earn additional income.

If we calculate all our reoccurring expenses i.e. mortgage, maintenance and renovation, education, commute, medical, personal development, recreation, insurance, and regular savings, they will amount to at least two million USD for a lifetime of a general consumer. With an average salary of, let’ say, fifty thousand USD per year, it will take as much as forty years of uninterrupted work to earn enough income.

Therefore, in addition to the skills of planning, budgeting, and saving, which are the basis of successful personal finance management, we also need to have additional ways to earn more. A perfect combination to ace personal financial management is earning, investing, and multiplying the money.

In this article we will go through the possible ways to earn additional income, personal finance management via useful tips and tricks on planning, budgeting, saving, and investing.

Since these are very diverse and comprehensive topics, I will publish the article in three separate parts. 

Earning additional income is all about having money, more money and this can be partly achieved through sound management of money and effective financial decisions. This is why why we’ll start with personal financial planning. When asked what the essence of personal finance is and how you can improve your financial health, most people answer by informing the best type of bank accounts, useful financial apps like Revolut, or shopping promotions that help save small amounts from the reoccurring expenses. 

However, almost no one ever mentions personal financial planning. Perhaps because in order to plan finances, you first need to know how to plan your life, and planning one’s life is not an easy art! 

We have special workshops on the art of personal financial planning, achieving your saving goals, and being productive and motivated to look for ways to earn more.

Perception is reality

Once you understand the essence of personal financial planning, you can embark on your journey to make more and more money, starting with the right perception and being mindful of the reality around you. 

How you see and personally evaluate yourself and what you think of the opportunities you have determine what you will be able to achieve in your life. It is our belief and faith in our own abilities that determine our life choices and their ultimate outcomes. Remember, in personal finance and business perception is reality! 

How do you now evaluate your career opportunities? 

How much do you think you can earn in a year?

What are your usual financial choices? 

Do you think your earnings should be at the level of two or five thousand USD per month? Or maybe you can estimate a possible ten or twenty thousand USD per month? 

How much do you think you are worth? 

It is mainly the answers to these questions, and not the so-called circumstances, that determine your earnings. 

As Henry Ford said, “If you think you can, you’re right. If you think you can’t, you’re right too.” Ford is not saying whether it will be easy, fast, or fun. He just says it’s your belief in your abilities and in yourself that will determine your accomplishments. 

So the first step towards maximizing your earning is to decide that you will increase your income. I generally plan to double my earnings every one or two years, and I highly recommend you the same.

The second step is to have firm faith that no matter how difficult, uncomfortable (emotionally and mentally), and complicated it gets, you will get there!

Now let’s look at the eight most common reasons you are NOT making more money.

You don’t have a definite goal and a plan in life.

You’re not growing by improving and learning new skills.

You let opportunities slide because you don’t believe in yourself.

You’re afraid of making mistakes and failing.

You don’t have a plan to manage your finances.

You don’t socialize or network with relevant people.

You are afraid to change, you are in your comfort zone.

You don’t put your maximum effort each day.

Read and go through this list carefully to see what is keeping you from earning more. 

Plenty of money can be saved monthly through discipline and making rational financial decisions. 

Three rules of effective saving 

Technically, saving is actually quite simple. Every day, week, or month, you can put away a portion of your money, either in a savings account or in a jar at home so that you can easily watch the growth of the money you have saved. Saving is completely different from a mental and emotional standpoint. Notice how our world is driven by spending and rampant debt. All the advertisements on the TV and the internet are full of messages urging us to spend and consume things we do not need. 

This is how media tricks us into making us feel we need these things, makes us addicted to instant gratification i.e. instant ownership of things we really desire.

Saving requires a completely different way of thinking and developing better habits. Saving is based on self-discipline and the ability to defer instant gratification. 

If you want to save, you need to start with a thorough analysis of your lifestyle. Prepare a list of all the expenses you incur to help you pick and choose the essential ones.   

More money, in fact, a lot more money, is quite possible with savings. 

Below are the three important rules for saving.

Save along with the repayment of each loan installment in the ratio of 80:20. This is an effective way to build up your reserve capital even when you take a loan. If you can afford to spend a hundred USD on each monthly installment, take a loan so that the installment does not exceed by eighty USD. Put the rest, twenty USD into a savings account.

Plan your savings from a broader perspective – preferably as part of your personal household budget. Saving is much more effective and easier when it is permanently a part of your overall personal financial plan included in your overall budget.

Don’t have a financial goal for your life yet? Save one for a training purpose, just for fun, to develop a habit. This habit will bring you a fortune!

How to have more money through more efficient debt management?

My education at school and university was focused on humanistic subjects, I studied literature and cinema and the thing that really caught my attention and stayed with me throughout my life was the implementation of artistic and creative solutions. My parents who had made a considerable fortune thought it was not a good idea to pay attention to money, because there were other more important things in life like education. They didn’t have a college degree themselves, so they believed that the key to real success in life was to get educated at a prestigious institute. 

And so I entered my adult life, with a diploma from Jagiellonian University in my hand. I got focused to make a successful career in international corporations in Warsaw. 

Ultimately I fell into debt as other corporate cogs designed to own the things we don’t require but want to have a standing in the society. 

But I didn’t blame it on my parents, my humanistic education, banks or the media, etc. I was enough self-aware to see my mistakes that led me there. 

The key to success is acknowledging your mistakes and taking full responsibility for whatever happens in your life, even if deep down we feel that not all failures are entirely our fault. 

By taking responsibility, we take back control of our life and that allows us to spread our wings. Otherwise, we can stay stuck in the same situation, resenting others and blaming them for how our lives turn out, and develop a victim mentality that leaves us feeling helpless.

If you are in debt, instead of worrying and resenting others, use the situation as a valuable lesson for the future ahead. The fact is that the only way we can grow is through the challenges, difficulties, and problems that life sends our way.

For me, financial trouble turned out, an eye-opener, an opportunity to gain extensive knowledge about personal finance management. As I began to learn about money, I discovered that knowing financial tips and techniques alone are not enough to succeed. You also need the ability to plan your life, make productive decisions, be disciplined and rational, and have the emotional strength to ignore the things you don’t need. 

If you want to tackle debt you need two things: 

The right attitude 

A good plan and its implementation (we’ve prepared a useful debt management template for you here).

You can use this template if you want to focus on your personal finance management, however, the most effective way to manage your debts is to treat them as part of your overall budget and include them in your financial plan. 

Remember, action eliminates fear. So get to work! 

How to have more money with modern tools and budgeting?

How to make more, work more and save more to manage your personal finance? 

Using the modern tools available for personal finance is absolutely necessary and should be a permanent part of every household budget and financial decisions. However, new technologies cannot absolve us of our personal responsibility for financial decisions.

It is worthwhile to continue to invest time in doing a quick calculation in your head or a swift estimation based on the rule of 70 and the rule of 72. It is also advised to continuously work on your communication skills, negotiating skills, thinking patterns, financial forecasting, and generally adopt good habits to take control of your financial situation.

The most important tool that everyone should have readily available or if you prefer, inside your cell phone, is a comprehensive financial calculator. I mainly use the calculators that are available within cell phone. It has tons of useful commands including compound accumulation, interest rate operations, taxes estimation, the cost of acquiring loans, managing credit cards, interest rate values, and many other useful financial options. 

Another useful tool is Microsoft Excel and Google Sheets. These are great applications for any type of household budget or a special project you have taken up. Regardless of the other advanced applications available, one of these you should know inside out. 

The most useful applications right now are the ones you can download on your phone and easily use on your laptop or system. Personally, I would recommend YNAB, however, I realize that we often have very unique needs and go through varying stages in life, so I leave you to make this decision yourself. Read this article, download some financial applications, try them out for a day or two and choose the one that best meets your needs and requirements. 

A typical good personal finance management application includes many useful features.

Below are a few that I prioritize:

Data Visualization – a quick glance at the chart to know everything about your finances

Reminders/ Notification – necessary for you to timely remember every important payment

Integration with bank accounts and cards – this function is most important of all to manage finances automatically. 

The use of these modern tools is absolutely essential for personal finance management in the 21st century.

The more risk you are able to take, the more skilled you will become in managing finances and get a chance to earn potential profit. 

I will advise you to read another article on this topic along with this one, The 12 Golden Rules of Investment, to get a better idea.

Investing is the most essential and technical part of personal finance management, that is why it is very important to get educated on this topic to invest in the ways that yield profit.  

The most important thing along with knowledge is practice. That is why I recommend a few investment apps that you can download on your phone. After a simple procedure of setting up accounts, you will start your investment journey. Observe how you feel about it, evaluate how much and what you need to learn, and find out the basic rules of investing. 

Andrzej Manka

Part two of the article can be found here.