How to Increase Income and Feel Financially Secure
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Throughout their careers, many professionals experience times when they want to improve their financial situation. Whether you want to feel more comfortable with your savings, pay off your loans or purchase a new house, you may benefit from a pay rise. Learning about strategies to increase your income can help you establish a more stable cash flow. In this article, we discuss the best methods of increasing your income and provide the benefits of achieving financial stability.
How to increase your income
Here's a list of 12 different strategies showing you how to increase your income:
1. Consider working from home
For those who live in large cities, commuting to work daily can be vastly expensive. On average, Hong Kong residents spend $450 to $480 per month on public transport, which adds up to $5,400 to $5,760 annually. You can easily save a significant portion of this money if you start working from home. More companies choose to operate their businesses with the aid of online platforms and communication software. Consider having a conversation with your manager about remote work or explore remote opportunities online.
Related: 15 Work From Home Benefits
2. Check for tax-deductible business expenses
In case your company can't compensate you for some business expenses, check if you can deduct them from your taxes. For example, if you have paid tuition fees to advance your career, these expenses might be tax-deductible. As of 2021, the maximum deduction for educational expenses in Hong Kong is $100,000 per year. Make sure the receipts are in order to protect yourself from any possible tax audits.
3. Generate a passive income stream
A passive income is a great way to secure yourself financially for the foreseeable future. For example, you can invest in stocks and receive monthly or yearly dividends. The more shares you purchase, the higher the dividend you may receive at the end of each pay period. Remember that the stock market can be extremely volatile, therefore, do some research before you invest your money. Many banks also offer saving plans where you can invest your money safely and get interest payments at the end of each year.
4. Enhance your education
Going back to school might be an incredible way of upping your income. It's important to make the calculations beforehand and consider your industry and role before deciding whether this is the right choice for you. With a master's degree, your chances for a higher-paying job might drastically improve, but it depends on the industry. Compare the salary increase with the cost of education and decide whether the idea of going back to college is feasible for you.
5. Access your employee benefits
Employee benefits may vary depending on your employer and job title. That's why it's important to familiarise yourself with your employment contract. You may be eligible for perks, such as annual bonuses and medical insurance, that can increase your income. Research the topic and your industry to learn more and talk to your supervisor to make sure you're receiving a competitive salary package.
6. Start a side business
There are a few business ventures that require minimal investment and can significantly boost your income. Choosing a problem that you're interested in solving can help you create a solid business plan. For example, you can provide writing or copywriting services, fitness or wellness lessons, write product reviews online, offer your photography skills and monetise your website building skills. You can also generate a passive income by monetising your blog, creating a YouTube channel, crafting jewellery, writing books or starting your own e-commerce business. Remember that starting a new business can take time. It requires you to have a lot of patience before you actually start generating an income from it.
7. Get a professional certification
If you don't have enough time to spend another couple of years studying at university, look into professional certification programmes. Earning a certification can boost your employability because it provides you with up-to-date industry knowledge and helps you enhance your skill set. For example, you can get a certificate in human resources, finances, marketing or computer programming. Nowadays, people can access a variety of educational platforms online that provide high-quality information from top universities at an affordable price.
8. Ask for a promotion
Asking for a promotion can be challenging. Some people believe their skills are proficient enough to enter a more senior position, but they're unsure about how their employer may receive their request. Not every company has a clear hierarchy and a set of promotion requirements. That's why, it's important to learn how to negotiate for a promotion and a competitive salary package.
After having been in the same position for a year, consider asking for a raise by presenting your achievements to your supervisor. If the company has an open vacancy that appeals to you, consider applying for it internally. Your success largely depends on your own self-initiative, so be proactive and ask for opportunities to advance your career and increase your income.
9. Get another job
Sometimes your current job may not have the budget or the need to promote you. If you desire a greater challenge at work though, consider looking for a new job that can increase your earning potential. Visit job boards to understand what skills are most in-demand in the current job market. Update your CV and start applying to positions that interest you.
10. Sell some of your things
If you find yourself surrounded by things that you no longer require, consider selling them. Something that isn't useful to you anymore might be useful to others. You can post pictures and descriptions of your personal items online and use the income generated from these sales to invest in your saving plan, side business or blog.
11. Reduce unnecessary expenses
Record all your expenses and evaluate them at the end of the month. If you discover any unnecessary expenses that you can eliminate or cut down, consider changing some of your lifestyle habits. For example, instead of eating out every day, consider preparing lunches at home for work. Additionally, reevaluate your current subscriptions and think about getting a cheaper option. For example, having an account on a streaming platform is much more affordable than paying for cable TV.
12. Consider paying off or adjusting your loans
Loans and debts can have high-interest rates, and you may use some of your income to pay these bills. Consider negotiating a lower interest rate with your bank and accelerate paying off your debt. If you receive a bonus, consider using these funds to make an extra payment towards your loan. Eliminating debt can help you feel more financially stable, and can let you use more of your income for other expenses.
The benefits of increasing your income
The following is an overview of the various benefits an increase in your income provides:
Helps you achieve a better work-life balance
Trying to raise your income and gain financial independence can be challenging. Increasing your income takes time. Following some financial guidance can help you increase your income while maintaining a healthy work-life balance. Financial stability can eventually allow you to devote more time to your hobbies and family.
Provides an opportunity to pay off debts at a faster rate
Whether you're paying off student loans, mortgages or any other debts, achieving a higher income can help many young professionals eliminate financial pressure. Becoming debt-free means you can focus on building your savings plan. You can then use these savings to invest in value appreciating assets that further increase your income.
Helps you save for emergencies
Having some savings to cope with emergencies is essential. Learning how to save can help you feel more financially secure amid crises and other unexpected events. This way, you can respond to a crisis with a rational mind and offer support to your family.
Helps you achieve your long-term goals
If you want to launch your own business or get a job online and travel, it's important to have at least one year's worth of savings to pursue these goals. Instead of taking out loans or living from paycheck to paycheck, you can build a solid financial foundation and take your time when pursuing your dreams. Launching a business or buying a new house for your family are long-term endeavours, so having financial security can help you achieve these goals at a sensible pace.
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