Many of us walk around with a cost mentality, often dropping our heads in a sorry attitude when walking past things we cannot afford. Although loans should be something we can afford before applying for one, paying a loan off can quickly burn that same mentality into our minds.
For many, a new possibility should be considered. What if paying off your loans can be because you’re not cutting out expenses, but adding more income?
What if, you get to spend money and pay off your loan, at exactly the same time? Yes, you’re not seeing double, it’s possible!
Paying off your loan can often take you back to why we took out the loan in the first place. In most cases, it’s because there was a shortage of funds. And now, ironically, because of the loan, there’s a shortage of cash flow.
The way to get out of this persky situation is to create more cash flow. It doesn’t mean just cutting cost, but slightly adapting your lifestyle, and finding ways to create the extra cash that you need to build your lifestyle for the future.
6 Ways of creating extra income
Start creating extra income now
- Sell the things you don’t need. A good spring clean will do your cupboard good and your pocket as well. Pay off your loan by selling things you don’t use or even consider having a good old yard sale.
- Use your skills. You do not need to be a qualified teacher to teach or provide a service to share your knowledge. Use websites like Gumtree.co.za to find tutoring jobs or try your hand at some odd freelance jobs.
- Go online. Online surveys that pay. This won’t make you a billionaire, but it will give you the extra cash you need right now. Do a search on google and see what options you have.
Start creating extra income for later
Allow your money to grow and pay off your loan all at once.
- Earn money with your money. Open a savings account with a high interest rate or buy at places where you earn cashbacks.
- Invest in your talents. Become an expert in something and place a price on your services. This allows you to build income and develop your odd skills. Soon enough you can be a professional freelancer and allocate those funds towards future accounts. It will not be immediate funds as it takes time to establish the value of your time, product or service.
- Invest in a space where people can advertise. Small spaces like pole stands or t-shirt branding.
3 Responsible ways of spending that extra income
Pay off debt
Every little bit helps. Cumulative efforts gets things done and dusted, including fighting the power of compound interest that works against you in debt.
Here are a few tips to help you climb this mountain:
- Set a fixed amount for yourself and how much you should pay each month/week. Use that debit order function on your online banking portal for a change!
- Create a budget and stick to it. You do not need to cut on your way of living but stick to your budget and don’t go into further debt.
- Not everything extra is extra spending money. Your debt gets first place in your extra income, so prevent the mountain getting bigger by paying off your debt as soon as you can with what you’re bringing in extra.
Create a financial buffer
A financial buffer is about having money as a backup for ICE situations. Building and maintaining a financial buffer gives you freedom to make choices based on your current needs. This eliminates the worry of paying bills at the end of the month and creates a sense of peace within and around your finances.
Invest in your future
The one thing that gives you the juice for life. It is possible and can be reached quicker if extra money is invested instead of spent. Investing is not only massive amounts of money, it’s here a little and there a little, as the saying goes. Most banks offer options to invest small amounts to reach a larger goal.