From the California Business Journal Financial Newswires.
Money’s tight for millions of American’s right now. For example, only 40% of people have enough cash to cover an unexpected $1000 expense.
That’s scary stuff.
With limited spare cash to hand, the likelihood of having to take on debt in financial emergencies goes up exponentially. Even worse, it makes it far harder to enjoy the fun things in life. Everything from going on vacation to eating at restaurants becomes a matter of affordability.
Thankfully, a few sensible steps and lifestyle alterations can boost your discretionary income and turn that situation around. This is the ‘fun money’ that’s left after your obligatory expenses (think bills, rent, food, tax, and so on). Know how to increase discretionary income and your financial woes soon begin to dissipate.
Even better, you don’t even have to earn more in order to do it. Sound good? Keep reading for 6 ways to boost your discretionary income without earning more money.
1. Downsize Your Home
One of the largest drains on most peoples’ bank balance is their house. The big and beautiful property that they call home could set them back thousands of dollars each month.
Know the struggle?
Think about downsizing. Ask yourself whether you really need a house that size, with the white picket fence and pool in the yard. If not, then moving into a smaller, affordable property could make a mighty difference to your finances.
Of course, you could sell your current home and find somewhere to rent instead. The monthly outgoings could be even lower than those for a mortgage on a smaller property.
Best of all, though, would be to sell up and move back in with your parents. That might sound like an awful, nightmarish idea! However, there’s no denying how much money it’d save.
2. Pay Down Debt
In the bid to increase your level of discretionary income, spending even more money might seem a bit backward. But hear us out!
It actually makes total sense in relation to paying down debt(s).
After all, thanks to the interest rate, sticking to your minimum monthly repayments is a recipe for staying in debt longer and spending more money overall. Throw in the occasional missed payment (and ensuing late fee), and you can soon get sucked into a vicious cycle of spiraling debt.
Getting out of debt quicker will have the opposite effect. The sooner you pay off a loan, the sooner you free up spare cash to allocate elsewhere. Our advice?
Wherever possible, allocate more money each month to this purpose. With multiple loans to repay, start with the one that has the highest interest rate and work backward. It shouldn’t be long before you work yourself out of trouble.
3. Go Green
We don’t have to tell you how expensive water and energy bills can be. Many households fork out hundreds (sometimes thousands) of dollars on them every year.
That’s bad news when it comes to your discretionary income. Money that could be spent on fun family activities goes on paying for air conditioning, heating, hot showers, and electricity instead.
That’s why living a greener and more sustainable home-life makes perfect sense. Take shorter, colder showers, turn off you’re A/C, install energy-efficient appliances, and so on. You’re sure to enjoy lower monthly outgoings as a result.
4. Learn How to Cook
This suggestion might seem a little out of left-field! However, knowing how to cook delicious meals for yourself should reduce the temptation to pay for expensive takeout and/or restaurant visits.
You know you can make something just as tasty (and far healthier) for a fraction of the cost.
Never stepped foot in a kitchen? Buy yourself a cookbook, watch some YouTube tutorials, take a few classes, and master a selection of simple, sumptuous recipes. Before long, you’ll have everything you need to cook your own meals and save money in the process.
5. Take Public Transport
Transportation is another major source of expenditure for many American households.
Big cars, long drives, and high gas-prices combine, siphoning off large chunks of budget enough month just to getting around. Limiting the amount you drive and getting a more fuel-efficient vehicle would both help in this regard.
However, one of the best ways to save money in this key area of life is to take public transport. Leave the car at home and hop on the bus, metro, or train instead! The cost of buying a ticket should be far less than filling up your car/truck with gas. The result?
You’re sure to see your discretionary income increase as the days, weeks, and months go by.
6. Pay Less Tax
Tax is an important element of any fair and functioning society.
However, there’s no point paying more of it than you need to. Doing so will drain your bank account of discretionary income for no need whatsoever. By the same token, finding legitimate ways to reduce your tax burden will increase the money you have at your disposal.
They’ll be able to identify any issues and suggest possible methods of rectifying them. For example, you could consider putting more each month into your 401(k). Because these are pre-tax contributions, your tax bill will go down at the same time.
Time to Grow Your Discretionary Income
There’s nothing worse than being strapped for cash. It makes everything harder and more stressful.
Life becomes a constant battle to scrimp and save. Taking on debt is the only viable means of handling unexpected expenses. And treating yourself to fun-filled opportunities can feel off-limits.
Thankfully, we can all take steps to increase the level of discretionary income we have available. In doing so, these kinds of obstacles become less problematic. Hopefully, this post has highlighted a selection of top ways to do exactly that (without having to earn a higher wage)!
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