Let’s be real, everyone likes to have a little bit of money as disposable income. Disposable income is what you use when you eat at a restaurant. Or go gift shopping. Or take a vacation, and so on. It’s spending money that provides the nice-to-haves in life: your morning latte, your concert tickets, your hobbies, etc.
For some people, disposable income is cash in the bank left over after paying household bills. For other folks, disposable income is an illusion. It doesn’t exist. Instead, the “purchasing power” (as the banks like to call it) of credit cards is what they use. If you treat credit resources as an extension of your income to buy the nice-to-haves in life, your household’s cash flow likely suffers.
Another Income Stream May Be the Solution
You have options, whether it’s a second job, a “side hustle”, a home-based business, or a yard sale. Some income streams are active, meaning you must do something to produce each dollar, cause-and-effect. Other income streams are passive, where it continues producing after the initial work is performed. Before you pick any one of them, it’s a good idea to evaluate your lifestyle (what makes you happy) and set some specific goals (what you want to achieve, and by when). Everything has a cost. So, if the time commitment of earning more money ends up detracting from your lifestyle, whatever venture you’re considering may not be the “right” choice for yourself. In other words, if the new income stream makes you feel like you’re “chasing money” rather than getting to a better place, overall, you won’t be happy with it because the cost would be your lifestyle.
Income goals are unique to each person.
As the saying goes, “different strokes for different folks.” Each person has their own reasons for exploring income opportunities, whether it’s to be their own boss or just have some “mad” money.
- Some people aim to pursue a business venture for the challenge of it. The idea of creating, building, and watching it grow motivates them.
- Other people want an extra income stream to help pay down debts, make a specific purchase, or save towards retirement. Their efforts may be temporary, a sideline, or seasonal, but a little extra income helps meet their goals.
- Yet still, other people may need extra income out of necessity, to offset an unplanned loss or keep pace with inflation.
Whatever the reason, people generally don’t wake up one morning and flippantly decide to make more money one day. It’s usually something that they ponder, meditate on, evaluate, and perhaps even agonize over for weeks or months. It can be easy to procrastinate getting started. Analysis paralysis is a good description.
There are three significant causes for analysis paralysis when deciding to get started with creating a new household income stream.
- People don’t know what they really want to do
- They don’t know where to begin to get moving in the right direction, and
- They don’t know (or don’t have) the time and/or resources to begin
It’s Important to Keep a Balanced Life
You may have heard that people get what they focus on most. If they’re focused on debt, it’s debt that becomes all-consuming. Even if all their efforts are focused on earning more money to pay off debt, their underlying focus is still “debt”.
Being focused on debt, day in and day out, is stressful. It’s hardly productive. Compounding the problem, many (most) debt payoff systems emphatically place the focus on debt rather than shifting to a balanced lifestyle. As a result, such debt programs tend to create a stressful (perhaps even depressing) routine of self-deprivation.
In reality, a “scorched earth” approach to getting out of debt isn’t just unsustainable. It’s often unhealthy. Very few debt payoff programs create a balanced plan to produce income while whittling down debt.
An effective, sustainable, and healthy debt payoff program should embrace positive changes to household income. In such a program, once your debts are paid off, you’re already on the way to a secure nest egg with good financial habits.
Where to Start
Learning about money is generally a very dry topic. But when you learn about money as it pertains to your unique, individual lifestyle and circumstances, it becomes relevant and even exciting. A PSG Certified Debt & Wealth Coach™ can help. There are some big differences between financial coaches and financial planners. Financial planners provide advice, tell you where to put your money, and recommend investments. Financial coaches, on the other hand, facilitate financial literacy, help you develop new money habits, provide tools and resources to develop your financial skills, and offer a support structure so you are self-empowered.
Consider taking The Financial Acumen Course® to learn relevant, personally applicable approaches to get out of debt, as well as to develop new income streams that dovetail with your lifestyle. Find a PSG Certified Coach to help you explore your options further and learn how your debt free future can become a reality!