Start earning more money with your current job and with a new side hustle.
Welcome to Day 27 of the 30-Day Financial Wellness Challenge.
Each day will comprise of financial exercises, some short and others a bit longer, to help you become financially fit. The goal is to tackle different aspects of personal finances one day at a time.
After the 30 days, you’ll have a stronger understanding of your financial health and an action plan to improve your financial wellbeing. Review Day 26: Managing Money
On day 27, you’ll choose a side hustle to earn more.
In a previous challenge, you calculated your income number. For many, a paycheck from a job is typically the only source of income. But for those on the road to financial wellness, multiple income streams is an effective strategy to achieve financial security or financial independence.
Let’s revisit the different types of income sources and streams
Active income is from any service or performance-based activity. This includes money from a job, tips, commissions, and bonuses. It can be from full-time and part-time work or side gigs and hustles. And it doesn’t matter if you’re a retail worker paid hourly or a doctor paid with a salary. Both incomes are considered active. The IRS calls active income as wages, salaries, and tips.
Passive income is received from limited activity. It doesn’t require your daily and active participation to generate income. However, it may have required a great deal of effort to get the income source started. Passive income can come from royalties, rental property, limited partnerships, or other businesses. For the purpose of the IRS, it defines passive income as “any rental activity or any business in which the taxpayer does not materially participate.”
Portfolio income can be considered a subcategory of passive income. But it’s important to make a distinction as it’s treated differently by the IRS. Portfolio income includes money from investments, dividends, interest, and capital gains. Generally, portfolio income is taxed at a lower rate than active income and other types of passive income. It is also not subject to Medicare or Social Security taxes.
And the different types of income streams that fall within those categories are:
- Earned Income: money earned from exchanging your time.
- Rental Income: money earned from rental properties.
- Profit Income: money earned from selling something.
- Interest Income: money earned from lending to others.
- Dividend Income: money earned from profits as a shareholder.
- Capital Gains: money earned from the growth of assets.
- Royalty Income: money earned from licensing your work.
With today’s challenge, we’re focusing on maximizing earnings from your job and earning more with side hustles related to service, rental, profit, and royalty income.
How to Start Earning More
When thinking about earning more money, I want you to think strategically. There are many ways to increase your income that might have been overlooked. Consider the following:
Earning more from your primary job
Ask for a raise. There are steps you can take that can help you get the raise you deserve. Learn how you can ask and get a pay raise.
Use employer benefits
Participate in your workplace plans. Take advantage of employer matching in 401k plans. Not doing so leaves money on the table. Consider higher deductible health plans and contribute pre-tax income into Health Savings Accounts (HSA). HSA funds can help supplement your retirement too. Inquire about tuition reimbursement and student loan payment programs, employee stock purchase programs, stock options, and wellness perks that pay for gym memberships, public transportation costs, smoking cessation programs, and more.
Get a part-time job
It’s not ideal to have a part-time job because ultimately you’re using more of your time. But having a second job for a limited-time can offer a strategic advantage. You can meet your current financial obligations and fast track reaching goals. Additionally, some part-time work offers benefits and perks that might not be offered with your primary job.
Start a side hustle
A side hustle is something you do on the “side” to earn more money for a specific purpose. There are many different types of side hustles. Some depend on exchanging your time to earn while others require an upfront commitment but relatively low active participation.
Earned income from completing tasks and chores, driving people, pet sitting, delivering food and packages, data entry, and professional services.
Profit income from selling your stuff like old clothes, furniture, or pretty much any item you can imagine.
Rental income from sharing your space, second home, extra bedroom, driveway, attic, and garage to someone else. You can even rent your equipment too.
Royalty income comes from things you’ve created and licensed for use like a book, musical beat, online course, worksheets, photos, or artwork.
And there’s also blogging for profit which sits between active and passive income. You’ll earn money by actively writing, promoting, and engaging with readers. And eventually, earn money passively through ad placements, sponsored posts, and courses.
A side hustle can be permanent, temporary, or seasonal that helps balance your cash flow, fund your goals, and pay off your debt. In some instances, people have successfully turned hustles into thriving businesses allowing them to leave their job.
Now, let’s start the assignment.
Day 27 Assignment
Today’s challenge is for you to choose a side hustle. The goal of the challenge is to introduce you to additional ways and opportunities to earn more money.
- Get clarity by answer the series of questions.
- Choose a side hustle.
Step 1: Get clarity and ideas
|What stuff can you sell?|
|What service can you offer?|
|Do you have a driver’s license and a car?|
|Have unused space and enjoy meeting new people?|
|Are you a skilled wordsmith, artist, photographer, or graphic designer?|
Step 2: Choose and execute
|Which side hustle will you try?|
Choose a hustle that excites you and is simple to start. Do your best to make it a success and accept that it may not work out. And if it doesn’t, then choose something else.
If you’re employed, learn all about the benefits and perks available and use them. You can creatively increase income by utilizing perks that impacts your Adjusted Gross Income, frees up time, saves you money through discounts and reimbursements.
- Review the benefits you currently use.
- Speak with your HR manager to learn about additional benefits and perks.
- Complete the benefits checklist
|Offered||Benefits and Perks||Using & Comments|
|Paid Time Off (vacation, sick, other)|
|401(k) employer match|
|Health insurance (health, dental, vision)|
|Health Savings Account / Flexible Spending Account|
|Group Term Life insurance|
|Stocks (options, units)|
|Employee stock purchase program|
|Public transportation credit|
|Student loan payment program|
|Wellness programs (gym, healthy habits, workshops)|
|In-office perks (snacks, lunches)|
|Telecommuting / Flexible work schedule|
|Employee Assistance Program|
|Discounts (shopping portals, affinity discounts)|
- Financial marketplace to find ideas to earn more money that fits your abilities and lifestyle.
- Side Hustles: From Idea to Income in 27 Days written by Chris Guillebeau. The book’s premise is about the importance of having a side hustle in addition to your day job.
Next Daily Challenge: Day 28: Grow Your Money