Having multiple income sources is one of the financial goals a lot of people aim to reach. There is no question on the importance of having a fixed or regular source of income. It can come from a regular job, a career, or even a business you decided to put up. The value of being able to plan around an amount that you know is coming is sometimes considered a luxury.
Having a regular flow of income opens up a lot of opportunities for you and your goals in life. You can make plans for the future and have a blueprint for the things you want and need in life. However, having several sources of funds can be an advantage for you and your finances goals. Here are some of them you might want to look into.
Multiple income sources can help you pay off debt much faster
If you have a surplus of income every month which means you can meet all your financial obligations and still have some left, you can allocate it towards debt payment. As you do this, you will also free up more income in your budget by paying off one debt payment after the other. It also helps you lower down your stress level.
One thing you need to understand about taking on debt is that it is not always a bad idea. There are actually debt accounts that can help bring you closer to your goals. If your dream is to have a house of your own, taking out a mortgage loan can help you do just that. This type of loan can even end up as the biggest monthly payment you will make every month for the next few decades.
However, taking out the loan starts with preparation and knowing what you can afford to pay. Once you do and decide to take out that loan, you have to be consistent in meeting your payments. If you are, your debt payments are not a problem and will only start to be one if you fail to make your payments. Having extra income can be a big help in making sure you get to pay off the loan faster before you encounter problems.
Having more money can give you the chance to save money
If you have multiple income sources, it would give you a better chance of saving money. However, you need to understand that it is not an assurance that you will be able to save money. An excess in your funds can be an advantage only if you make the most out of it. You still need to make sure that the money finds its way to your savings account.
The challenge with a lot of people who have multiple income sources is that as their income goes up, so does their lifestyle. Extra money in the budget means buying shoes, clothes, gadgets, or making unnecessary spending. It is even possible that you start charging questionable expenses on your card because you believe you can pay it off.
If you have multiple sources of income, you need to make a conscious effort to save money. If you are the type to easily forget, you can look into automating the process to help you save money. This can help you go through your life without forgetting to put aside money for your future. It gives you the chance to automatically save money and make sure you are on track.
It helps you manage money problems better
If you have multiple income sources, you could find it easier to save for emergencies and you should take advantage of that. You never know what can happen in the future regardless of how perfect you believe your present is. A great job, career, or even a business venture with sales through the roof can all change in an instant.
Your stocks can take a hit one day and lose a lot in the company or you might even be shown the door at work because the company you work for is losing money. It is not always about work because you can meet challenges in your personal or daily life as well. It can be as small as a car repair, a leaky faucet, or a hole in your roof. Your health is also another area in your life that can be unpredictable where an innocent sickness can lead to an emergency room visit.
Apart from being able to manage problems better, it can also help keep you away from getting into more financial trouble. When an emergency strikes and you do not have any savings under your name, your tendency is to take out a fast, but a high-interest loan or use your credit card for a cash advance. Once you do, these can put you in a big financial hole and make it a lot harder for you to recover.
It gives you the ability to chase your passion in life
It is a rare sight when people get to choose the job they want. Oftentimes, a lot of people would be content doing a job that is far different from their hobby or passion. This is because the bills never stop and chasing your passion can often lead to a dry spell for your finances. The regularity of a day job’s paycheck trumps most people’s desire to pursue the things they want.
If you are at a point where you are trying to identify how to have multiple income sources, you can take a look at doing the things you want and turning a profit from it. This is oftentimes called an income-positive hobby. If you are adept in taking photos and you have the tools and equipment you need, then offer your service to family and friends.
If you do get the chance to work on your hobbies and earn a decent amount from it, you might see that as a viable option for either choosing a different career or making retirement less of a drag. On top of that, you will be doing something you love which can make the job a lot easier for you. You get to be better at your craft and can increase your income as time goes by. This is a great idea especially as MSN shares that about 45% of Americans earn extra income outside their primary job.
Extra money can pull your goals closer
If you have multiple income sources, it can be a lot easier for you to pull your goals closer. If you took out a 30-year mortgage loan and you have an extra income every month, you can pay down your mortgage lot faster. The idea is if you plotted out your retirement a few decades out, you might be able to pull that closer and retire earlier. If you put that extra money into those goals that you have, there is a good chance that you will reach them much faster. You get to enjoy life much more and even be able to chase new goals even.
Having multiple income sources is easier said than done but it can help you in a number of ways including reaching your goals faster. You do need to make sure that you are not over-exerting yourself because you will only negate all the hard work you have put in.