5. Comparison shop.
Another super smart thing that you can do to be good with your money is to comparison shop—on virtually everything. When I have done this, particularly with larger expenses like fairly major home and auto repairs, the difference in prices I have been quoted has sometimes been surprising! Get the most bang for your buck by calling several (I usually call at least five) places or checking several stores before making a purchase or spending money on a service like a car, plumbing, or home repair.
This year we wanted to do some fairly extensive home improvements. And one of the things we just got done was to replace our gutters (they needed it!). And like I always do, I called around to several contractors who came out and gave bids. We ended up paying just under $1,000, and I think they did a great job. (From what we can tell; but we’re no construction experts!)
But the difference between the highest bid we got and the lowest was over $500! So please, please, always comparison shop, and the more expensive the purchase, the more places you should compare.
Shortly after we moved into our home (which was a foreclosure and hadn’t been lived in for over a year, maybe two) we noticed that our water wasn’t draining from our showers. And someone at our church gave us the name of a local plumbing company. They came out, and they wanted us to spend $4,000 to dig up a big bush and snake our line and do I don’t remember what else. But $4,000!
So I called around to several other places, and we ended up paying around $400 for a smaller company to come out and just augur through our line and clear out the roots that had grown into it and put down some anti-root stuff.
Now, that first company isn’t a “bad” company, at least not according to Google and my neighbor. They have a 4.5 star rating, with over 2,500 reviews. But I will never use them, that’s for sure! Because they tried to way up-sell us and go for the most expensive option instead of the least expensive (or at least a less expensive option).
And don’t even get me started about auto mechanic shops and how important it is that you comparison shop when getting vehicle repairs done! (Find more than 30 ways to save money on vehicle repairs, maintenance, insurance, and other transportation costs in this article.)
So, again, even when you have recommendations from others you trust, comparison shop. Do your own research and due diligence! Call at least three or four companies (but half a dozen or more is what I do). Want to know other ways we save around the house? You can find more than 30 awesome tips for how to save money on housing here (from maintenance to homeowners insurance and more).
6. Put money where it needs to go to be smart with your money and build wealth.
To put your family on solid financial footing and to ultimately build wealth, make sure to do the following things.
Build an emergency fund.
As I mention briefly above, it’s important for your family’s well-being that you have a substantial emergency fund. I recommend at least three but preferably six months’ worth of expenses saved in your emergency fund.
If you haven’t already, make your emergency fund its own separate savings account. You may even want to open an account at a different bank so that the money is not too easy to access, if you think you might be tempted to use it for other things besides true emergencies.
Learn more about emergency funds here.
Check out these other related articles:
Get out of nonmortgage debt.
Once you have at least a starter emergency fund of at least $1,000, another very smart thing to do with your money is to pay off all nonmortgage debt as quickly as possible.
To get out of debt, first figure out how much you owe on your various debts such as credit cards, student loans, car loans, department store loans, and so on.
Then, decide which method you would like to use to get out of debt. Depending on your disposition and what motivates you, I recommend you use either the snowball debt payoff method or the avalanche debt payoff method. Briefly, with the debt snowball method, you pay off your smallest debts first to gain momentum and keep up motivation. With the debt avalanche method, you pay off the debts with the highest interest rates first, and knocking out those higher interest rates could be what keeps you most motivated.
Personally, I recommend the debt snowball method because I think it is a better way to gain momentum, and that is the debt payoff method that we personally used.
Once you are out of nonmortgage debt and are adequately saving for larger expenses and purchases (more on that below) so that you can stop taking on new debt, work to pay off your mortgage early! Being mortgage debt free is amazing, and it is one step closer to ultimate financial freedom!
Save for larger purchases and expenses.
After you have paid off your nonmortgage debt, start saving toward large purchases and expenses so that you can pay for them with cash and avoid going back into debt. Debt freedom = financial freedom = peace and joy 🙂
To save for these large expenses, I recommend that you set up several separate savings accounts (also known as sinking funds). We personally have more than 20 different savings accounts for our various financial goals. You certainly do not have to be that detailed, but I would recommend that every family set up these nine savings accounts:
- Emergency fund
- Vehicle maintenance and repairs
- Vehicle purchase
- Home down payment
- Home repairs
- Furnishings and appliances
- Christmas and gift giving
- Miscellaneous/other short-term savings
By having these nine savings accounts and consistently working on funding them, you will have the cash you need to take care of all of the expenses that that occur.
Start investing for retirement.
Once your nonmortgage debt is paid off and you are saving toward the necessary expenses above, start investing for retirement. I recommend that once you are out of nonmortgage debt you start to save 15 percent of your income for retirement as soon as you can, but at least save 10 percent.
Remember the incredible power of compound interest and start saving as much for retirement as you can as soon as you possibly can.
Check out these related articles:
Start saving for kids’ college (if applicable).
If you have children, also start saving for their college educations as soon as possible to take advantage of the power of compound interest and to help ensure that they are not burdened with student loans later in life.
7. Consider doing overtime, getting a second job, starting a side hustle, and finding other ways to earn more money.
I believe that there are more ways to make money today than there have ever been before. And many of these you can do from the comfort of your own home after you get back from work! Some of my favorite ways to make more money are those listed below.
Working overtime is one of the simplest ways to make extra money. If your employer offers overtime, then consider taking advantage of it. Especially if you are in a situation where you are working to pay off debt, save up your emergency fund, or save for a large and necessary purchase, working overtime is an excellent option to help you reach those goals more quickly.
Ask for a raise or promotion.
One of the benefits of asking for a raise or promotion is that you receive additional income for (potentially) doing the same amount of work!
If it’s been a few years since you received a significant raise and especially if you’ve been an exceptional employee at work, make a list of your contributions and your accomplishments, and schedule a meeting with your supervisor to request a raise or a promotion. Focus on ways that you’ve earned the company money or saved them money.
If you learn during the meeting that a raise or promotion isn’t going to happen right away, ask what specific steps you can take in the next year or two to make it a reality. Read this article for more information on how to seek a raise or promotion.
Do freelance work.
If you work in a field that lends itself to doing freelance work, consider taking advantage of that opportunity to earn extra income. I have been doing freelance writing, editing, and proofreading since before I graduated from college with my English degree and editing minor, and doing freelance work has not only helped me gain experience in other areas besides what I do for my full-time job but has also at times (when I wanted to give the time to it) brought in significant additional income.
If you similarly enjoy and have a knack for writing, look into freelance writing jobs. You can find ideas for close to 30 freelance writing jobs here.
Freelance proofreading is another great option if you love to read and have a good eye for detail. If freelance proofreading might be a good opportunity for you, then check out this awesome general proofreading course by my friend Caitlyn at Proofread Anywhere!
Look at indeed.com, monster.com, or your favorite job search site for opportunities.
Do consulting or coaching.
Similarly, if you have job experience or a skill that lends itself to it, consider putting that skill to use to do consulting or coaching work. Popular areas for consulting include human resource (HR) consultant, public relations (PR) consultant, marketing consultant, business management consultant, and accounting consultant.
Popular areas for coaching include financial coaching, job coaching, personal fitness coaching, and leadership coaching.
Look for consulting and coaching opportunities on indeed.com or your favorite job website.
Start a side hustle.
If you would rather earn money without working another regular job, there are a lot of things you can do to earn a little extra income with a side hustle. Some ideas include starting your own small business where you turn a hobby into a money-maker, being a virtual assistant, or driving for Uber or Lyft. Learn how to start a side hustle and find out about many side hustles that you can explore.
Start a money-making blog.
The potential for significant income is one of the reasons that I started this blog. If you love helping people and enjoy writing, being a blogger might be a great fit for you. In addition to great income potential (check out these amazing income reports of bloggers who make $10,000 to $100,000 or more per month!), there are many other benefits of being a blogger, such as being able to be your own boss and work on your own schedule. Learn how to start a blog for less than $5 a month.
Make money with affiliate marketing.
Affiliate marketing is where you recommend a product or service to others, and in return for your sending business their way, a company pays you a percentage of the sale that they made because of your recommendation. Affiliate marketing can be an excellent way to make extra income; those who do it well can make thousands of dollars a month (or much more).
For an excellent course on affiliate marketing, check out Making Sense of Affiliate Marketing by Michelle Schroeder, who makes more than $50,000 a month with affiliate marketing! When I decided to start blogging, Michelle’s course is the first one that I bought.
Interested in finding out more about this truly amazing money-making opportunity? Learn more about affiliate marketing here.
Get a (second) job.
If you are in a situation where money is tight or where you have a lot of debt or where you simply want a bigger hammer to pound out your financial goals, then look into the possibility of one of you getting a job or a second job.
If one spouse is not working outside of the home, for example, then consider whether it would be worthwhile for that spouse to start earning an income (perhaps with a job that could be done exclusively from home).
Similarly, if one of you works only part-time, you might want to consider going full-time at least temporarily in order to reach your financial goals more quickly.
Or consider if one spouse is available to get a second job in the evenings or on Saturday, for example, and earn more money that way.
Earn passive income.
Some options for earning passive income are to create a product you can sell, write a book, create a money-making podcast or vlog, or develop an online course. Read this article to learn more ideas for earning passive income.
Use rebate apps like Ibotta and Ebates.
With rebate services such as Ebates and Ibotta, you can earn money by shopping for things and at places where you would shop anyway. With Ebates, you generally buy items through their website to save up to 40 percent on purchases. It is primarily an online service. Ibotta, on the other hand, is an app you use primarily after you make purchases at brick-and-mortar stores. Because of this, you can actually sign up for and use both apps to save on purchases.
Sign up for a free Ebates account here, and sign up for a free Ibotta account here. You can literally sign up for both in just seconds and let the savings start stacking up.
Sell stuff on eBay, Amazon, or your local classifieds.
If you have a good eye for a bargain, you can buy items at thrift stores or garage sales and sell them for a profit on eBay, Amazon, Craigslist, or your local online classifieds.
Sell your clothes to consignment shops.
If you’re like most people, you probably have more clothes than you need. So use them to bring in some extra cash!
Have a garage sale (or regular garage sales).
Declutter your home and earn money, all at the same time!
Check out this article to learn more about and find more ideas for increasing your income!
Would you like to start making more money? Sign up below to participate in the free 10-day Earn More Money, Change Your Life challenge and learn actionable steps you can start taking today to really increase your income!