If there’s one lesson we learned from 2020, it’s to expect the unexpected. And when it comes to finances, we must prepare now so that we’re better equipped to handle even the most robust challenges with resilience.
Maybe your goal is to set aside a few hundred dollars each month toward discretionary spending and incidentals. Finding ways to supplement your income can also help you achieve long-term goals such as paying off student debt, setting up an emergency fund, or strategically investing. One of the most effective ways to quell anxiety about our financial future and to meet both short-term and long-term goals is to establish diverse streams of income so we can build wealth at minimum risk. Here are four ways you can begin to supplement your income today.
1. Embrace the Side Hustle
Side hustle culture has swiftly entered the mainstream. In fact, according to a survey conducted by Monster in the wake of the COVID-19 pandemic, 92 percent of respondents considered it to be a good time to participate in the gig economy and 57 percent of respondents were open to looking for gig work while between jobs.
It’s no wonder the recent trend has quickly gained traction. A side gig offers a flexible schedule and an opportunity to expand your portfolio or client base while also building financial stability. Freelance writers, photographers, designers, and web developers are just a few examples of people taking advantage of these opportunities.
But side hustles aren’t just for artistic types; opportunities run the gamut. Uber and Lyft offer some of the most well-known side gigs, and “odd jobs” such as lawn care, snow removal, and nannying are easy to manage using the website TaskRabbit. Other websites, including Upwork, Fiverr, and Toptal advertise freelance and facilitate the hiring process, adding some security to the process of securing a side hustle.
2. Become a Small Business Owner
Now might be the perfect time to turn that passion project into a money-making reality. Starting your own business can feel like an intimidating task full of looming unknowns. But don’t be fooled; there are numerous online platforms and tools to help you get off the ground.
For creatives with inventory ready to sell, well-established platforms such as Etsy are a great place to start. Etsy and similar sites offer tools to help you gain the knowledge and support to build your business without the added stress of balancing the books or managing marketing strategy. When it does come time to build your own website, check out easy-to-use platforms such as Wix and Squarespace.
3. Generate a Passive Income
It’s easy to get stuck thinking that the only way to make money is by sitting at a desk and looking at a computer for a 40-hour work week. But this is not the only option anymore. Generating a passive income can prove a highly profitable way to supplement your personal funds, even when you’re not actively working.
Bloggers who insert affiliate links, authors who self-publish e-books, app designers, and even YouTubers are great examples of people taking advantage of passive income. These creators not only hone their brand and entice audiences, but they also profit from round-the-clock views, clicks, and downloads, long after the video or blog has gone live. Essentially, creators are publishing and monetizing their creative portfolio all at once.
Renting out property is another way to generate passive income. Especially in large cities such as New York City, where the average rent for a one-bedroom apartment in Manhattan comes to nearly $3,500/month, it’s no wonder that renting out your extra space can earn you money quickly. Rental sites such as Airbnb make this even easier to do in the short term. Just keep in mind that, although it may be less of a commitment than a full-time job, you’ll still need to set aside time each week to welcome new guests, manage changes to check-in/check-out times, and maintain all amenities.
4. Invest in Your Financial Future
Investing, especially while you’re young, is one of the most meaningful ways to build wealth. Compound interest is real, after all. But investing isn’t actually as complicated as it is made out to be. You don’t need thousands of dollars saved up before you begin to invest. Even $1 is enough.
You’ll begin by deciding how you want to invest and then choosing an investment account. When you first think about investing, maybe picture wealthy individuals buying stock in Apple or Nike. In reality, there are many ways to invest: through your employer, by working with an online broker, or even via robo-advisors.
No matter how you choose to invest, the basic steps are the same: You’ll set a budget for your stock investment, then focus on long-term investment goals while managing your stock portfolio regularly.
Generating ways to supplement your income can be exciting and financially rewarding. But it all starts with managing your budget. That’s where FSCB can help. Meet with your advisor to learn which options are right for you.