Five Ways To Increase Your Income
If you'd like to enhance your earnings, then here are five simple ideas to get you started.
I think it's safe to argue that no rational person would turn down the opportunity to increase his/her income if this opportunity was presented on a plate. Alas, they say that there's no such thing as a free lunch, so if you'd like to enhance your earnings, then there's going to be some effort required.
Here are five straightforward ideas to start you off:
1. Get a pay rise
When it comes to pay rises, most people take what they're given and are grateful for what they get. However, having spent more than a decade in marketing before becoming a financial writer, I learnt that it pays to `sell your story' when yearly appraisals come around.
Therefore, just before each annual review, I would produce a presentation to reveal my achievements to my line manager. Of course, I can't be sure that these `salary slideshows' helped me to win a bigger share of the pay-rise pot, but I'm confident that they did me no harm! If you'd like to learn the techniques that I've used to win a premium pay rise, then read Get A Bumper Pay Rise This Year and Ten Top Tips To Win A Pay Rise.
2. Claim benefits
Although I know that some people feel uncomfortable about taking money from the public purse, my view is that `the State giveth and the State taketh away'. In other words, we all contribute to the public good via our taxes and, in turn, we are all entitled to claim whichever benefits the State wishes to send our way.
The bad news is that the welfare state is very much geared towards helping certain groups more than others. So, if you're single, childless, healthy and working, then you're pretty much on your own. However, if you have children, care for elderly or disabled relatives, have health problems yourself, or are out of work, then the welfare state becomes your safety net.
Then again, the number and range of benefits on offer is simply staggering, so you need an expert guide to get through this maze. I'm a big fan of the free, independent advice website EntitledTo, or you can try the official Benefit Enquiry Line on (freephone) 0800 88 22 00.
3. Pay less tax
The flipside of `claim more benefits' is, of course, `lower your taxes'. On average, we pay around three-sevenths (42%) of what we earn to the government in direct and indirect taxes. Of course, none of us is under any obligation to pay more tax than the law requires -- and legal tax avoidance can prove very rewarding.
For example, one of the biggest outgoings for working families is childcare, which can soak up thousands of pounds a year. However, by sacrificing £55 a week of your salary in return for the same sum in childcare vouchers from your employer, you avoid paying income tax and National Insurance contributions on £2,860 a year. My wife does this and, as a higher-rate taxpayer, it cuts her tax bill by a tidy £1,173 a year. For more advice on this and other tax-saving steps, read Eight Taxes To Avoid and Stop Paying Too Much Tax.
4.Take a second job
Before thinking about getting a second job, try asking for some paid overtime or an extra shift from your current employer. This is much simpler, especially where the taxman is concerned. However, if you can't earn more where you are, then a part-time or second job could help you to improve your finances.
Check your local papers and look online for vacancies for part-time, evening or weekend work. For example, you should find plenty of listings for casual work in supermarkets, estate agents, restaurants and bars. An extra eight hours a week at the minimum wage (£5.35 an hour for workers aged 22+) would bring in over £2,220 a year before tax. Just remember to leave yourself some `me time' for relaxation!
5.Take in a lodger
You don't need to become a buy-to-let investor in order to make money from property. Under the government-approved Rent a Room scheme, you can let a room in your house to a lodger and earn up to £4,250 a year without paying tax. This works out at just under £82 a week, although you don't have to have a tenant living with you all the time. For example, my former Foolish colleague Jane Mack used to enjoy taking in foreign students during the summer vacations, as she earned a tax-free income and got to meet some interesting and friendly young people.
Finally, remember that all we've looked at today is ways to boost your income. If you want to go the whole hog, then don't forget to tackle your expenses, too. Otherwise, your newly found extra cash could be wiped out by a similar rise in your spending!