Want Financial Freedom? Penny-Pinching Isn’t the Answer

Updated: Apr 14, 2021

Financial Freedom Depends on Increasing Your Earnings - Increasing your earnings is much more effective than cutting expenses if you want to achieve financial freedom.

“Financial freedom.” It’s a goal for many of us, but often seems like an unachievable dream when you’re facing debt, monthly bills, and unexpected emergency expenses.

If you’re in that camp, you might have a minor panic attack when you think about your financial future. You think you’re doing alright, but then you sit down at night to pay the bills.

Your kiddo needs braces. Your car is on its last leg. Another school expense. Another medical bill. Christmas bills. Broken stove. Rent is due.

Your heart starts racing and panic starts setting in about how you will support your family. The inner voice of self doubt starts getting louder. Then, you get angry, frustrated, feeling like it’s hopeless — no matter how hard you work, you can’t win. You never seem to get ahead.

You start thinking about ways to spend less money from month to month, assuming that a life of penny-pinching will get your finances on track. But the truth is, you can’t “thrift” your way to financial independence. No matter how great you are at stretching a budget, it’s a drop in the bucket compared to the vastly more powerful approach of making more money than you are making now.

Why increasing your earnings is the key to financial freedom

Investing in yourself and increasing your earning power will be the biggest step you can take towards being financially independent. Look, not all of us want or need to be billionaires or live the life of a movie star. We just want enough to easily pay our bills, not have to freak out at life's unexpected expenses, and maybe take a vacation once in a while. We want a dependable car, a nice house, and a comfortable lifestyle..

Will saving $100 a month by depriving yourself of, say, lattes, get you that? No.

I’m all for living within your means and being frugal. But in the long run, increasing your earning capacity will be a far more powerful tool in making your life more successful and more financially comfortable.

If you’re done living paycheck to paycheck, stop looking at ways to make your current paycheck last longer. Instead, think about ways you can generate additional income.

Simple ways to increase your income this month

If a promotion and raise at your current job is out of the question, consider one of the following methods for raising your earning potential in the upcoming month:

1. Take on a side gig.

The gig economy isn’t going anywhere, and there’s a “side hustle” for just about everyone out there. Becoming a rideshare or delivery driver is an easy and in-demand option, or if you’ve got some creative talents, market your services as a freelancer on sites like Upwork or Fiverr.

2. Sell unwanted items online.

If you have “junk” lying around your house that you no longer use or need, you’re sitting on a great potential source of income. eBay, Poshmark, Craigslist, and even Amazon are great places to sell gently used items like books, toys, and clothing. While this isn’t a long-term earning solution, it’s a good place to start while you build up your income in other areas.

3. Explore passive income streams.

It’s relatively easy to find a suitable passive income stream — that is, a source of income you don’t have to actively work to earn. With just a bit of upfront “setup,” strategies like affiliate marketing, investing in stocks, self-publishing an ebook or course, or opening a high-yield, interest-bearing financial account like a CD can boost your earnings with very little ongoing effort.

4. Start your own business.

Entrepreneurship isn’t for everyone, but for those brave enough to pursue it, there’s no better feeling than being in business for yourself. If you have a full-time job, you’ll likely need to start small and launch as a side business at first, but as you gain more clients, you can start planning your exit.

These are just a few of the countless strategies for increasing your earning capacity and setting yourself on the road to financial freedom. You just have to find the one(s) that work best for you and your desired lifestyle.

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