INCREASING INCOME OR REDUCING EXPENSES – BEST IN FINANCIAL PLANNING
Financial planning basically measures the management of your income and expenses. Without any income, you can’t have any plans.
Ultimately, even without income. Expenses are permanent and tend to grow day by day. The growth of expenses can of internal habit and external inflation growth.
Here we are going to take you through the comparison between increasing income and reducing expenses. This course will completely deal with how to leverage both the arms to become a financially stable individual.
You will be getting a fair knowledge on how to use both income and expense. It is more necessary to have the two attributes in the same alignment.
1. Increasing Income
2. Reducing Expenses.
Many businessman and successful people use to say “Don’t focus on cutting down your expenses, focus on how to increase your Income”.
This is absolutely true to be a successful person, but you will learn how to march one step ahead of a businessman by implementing, “Increasing your income and reducing your unwanted expenses”
WHY INCREASE INCOME:
Currently, everyone must be earning something for monthly wages. Might be as a businessman, an MNC employee, Small industry employee, self-employed professionals, freelancers, part-time job as students.
· It doesn’t matter, how much you earn currently. It is always to check with your goals and vision after 10 years.
· Hopefully, the current income won’t make you to the aimed position of your life.
· If you are in a job, 9-6 life is more pathetic. You can’t only invest 30-50% of your income to attain your goals. If you do so, your life will be meaningless.
· You can’t enjoy after your 60, you have to enjoy yourself at your younger age.
· Being dependable on a single income is always a dangerous sign of life. May be business or job, if you are dependable on a single source of income. It’s the right time to change your mind.
· If you are a person between ages 20-45, this is the time period where you will be having a lot of energy and more dreams. During this period you have to build your empire of 3-5 streams of income. In which Dividend can be 1 source.
· To start a business without income, please go through the article How to start a business
· Increasing your income will keep you in a secure position, achieving your goals even quicker.
If you plan to build your dream home in the next 10 years with current income. Say it is Rs. 30.000 per month. If you increase your income to another Rs. 5,000 per month, you will achieve your home within 5-7 years. This is a goal-based investment.
· There are many examples who have retired from a job at the age of 28-30. The only reason is, they have made 5 streams of income.
Do side hustle initially in your free time on the skillset you have, do freelancing make some cash flow into your wallet other than the message which pop-outs on 1st of every month, stating Rs. XXXXX credited as salary for the month from XXXX company.
Increasing your income should be always your top priority in financial planning. This will make you achieve your dream of financial freedom at a younger age. Thus you can add value to your family by living the best life.
CUT-DOWN UNWANTED EXPENSES:
· The next step after developing more income stream is not to spend all the money earned and living a fake rich lifestyle.
· A perfect financial planner will figure out the unwanted expenses which they are doing every month.
· Make a decision in your life that you will not live to please others, by showing your worth on wearing costly shoes, cooler, jewels, and other stuff.
· As long as you show yourself rich, they will be with you. The day when you become bankrupt, those people will vanish.
· It’s is your duty to plan well on figuring out the unwanted expense and slash out from monthly budget.
Don’t use any applications for managing your expenses and budgets. Write your budget and expenses in a diary that you maintain, and update at least once every week. The advanced method to maintain budget can shift from dairy/note to MS Excel.
· Figure out the expenses which can be avoided, this is the first step after analyzing your budget.
· There will be many such expenses in your budget, just avoid them. You can either invest or use it for life’s goal.
For example, everyone will be having a specific budget to spend for theater might be a few thousand every month. Save that amount to invest or you can enjoy with that money by reserving a resort with your family in month end to rejuvenate yourself and to work hard for the rest of the month.
· Making more money doesn’t mean that you have to spend a lot of money. Make the extra money to live happily and retire early. Achieve all your goals, which is the most important.
· So, whenever you hear a word on increasing your income, always keep in mind to reduce your unwanted expenses at the same time. Both have to be done in same time.
· There is no difference in strategies for increasing income and reducing expenses. You have to do both, increasing on income and cutting off unwanted expenses.
· If you want to be successful at your young age, make multiple streams of income.
· At the same time make your life minimal by cutting off the unwanted expenses.
· Minimum you should be with 5 streams of Income by age 40.
· Update and analyze your budget frequently at least once a week. So, you will be aware of the unwanted spending you make.
· Make your unwanted expense to invest or to spend for rejuvenating yourself with family.