Ways to Increase Your Income and Build Your Savings

I'm all for keeping a nest egg you can tap in times of financial drought. But in tough times, saving can be rather painful. Fortunately, it's not entirely impossible. You can, with a little effort, a lot of willingness and a smattering of creativity, increase your income, build your savings and sleep tight at night knowing you'll be waking up the next day with money in your pocket and in the bank. Here are some tips you might consider using:

Hoard your income.
There are some people who earn money nearly effortlessly but for most of us, income = sweat and tears. That's why it's incomprehensible why some Pinoys spend their hard-earned dough like there's no tomorrow.

If you want to increase your income (or at least your take home pay), be protective about your money. Sure, go ahead and spend for stuff you need -- food, gas, utilities, rent -- but be wary about purchases that you can actually do without. Be selective though. A new pair of shoes, for example, may be an impractical purchase if you have several dozens already in your closet. But if you only have two or three pairs and all of them are outdated, a new purchase may not be too bad.

Don't spend more than you can afford. Look at it this way: if you spend on unnecessary items, you're only making other people rich. If you want to increase your income and build your savings, be super careful about how and why money leaves your pocket.

Set aside a set amount of your income.
Ever heard of the phrase 'pay yourself first'? This is what it means. From your income, decide on a set amount of money you can save and then live off of the amount left. Let's say your take home pay is P10,000 a month (I'm merely using that amount because it's easier to compute :-)) and you decide to set aside 20% of that. You will only be left with P8,000 to spend on a monthly basis.

Now P2,000 may or may not cramp your style but 2,000 bucks translates to P12,000 after six months and P24,000 after another six months. Plus, you could be earning an interest by then. Get a chunk out of your salary, bonus, commission, even income you earn from your part-time job.

Try this trick for at least 3 or 6 months and you'll see how effective it is.

Found money? Put it into your piggy bank.
From here on, make a resolution to keep all loose change you find in a piggy bank or alkansya. Most people scoff at saving coins these days but you'll be surprised at how easily they can pile up over time.

You could also actively collect coins from all your expenses. Let's say you have a P3,000 budget on groceries and spent only P2,650. Drop the P350 in your home-based savings account and don't put it back into your wallet where you can easily whip it out and spend it.

Make it a Swiss account.
The 'Swiss' account is not exactly one, unless you have millions to stash away where the government can't touch it. The Swiss account is a term used to refer to a secret account some husbands or wives keep that their significant other doesn't know about.

If your spouse is a spend-happy person, you might want to open one. If you're single and has a tendency to spend too much, you will need to open one. If you have a partner who can manage your finances, you still might want to open one. This Swiss account should be a savings account that is difficult to touch, such as one that is accessible only through passbook-transactions (no ATMs). That, or you could keep a good chunk of cash in a time deposit.

By setting aside money that's not easy to get your hands on, you'll be least likely to withdraw it and spend it. Look for banks with a low initial deposit and then regularly, faithfully deposit a set amount to it. If there's a bank that accepts just P2,000 for opening an account and you could save P500 a month for a year, that's P8,000 already. Not bad just for setting aside a small amount.

Get a part-time job or use your hidden skills and talents.
These days, earning an income from just one source is no longer practical. Try your hand on a home-based business or even an online job. If you have a hobby that you can make money from, why not spend weekends creating things you can sell? Some of the most popular home-based businesses I have encountered includes baking, catering, wedding invites and souvenirs, graphic arts, copywriting, candymaking, Web design, scrapbooking, photography, jewelry, even selling cars and real estate.

Start small. Most of the time you probably won't need a big startup capital. Be careful, though. Not every job opening posted online comes from a trusted source.

Try to earn passive income.
Passive income comes from one-time deals or jobs. Some of the most popular sources of passive income include commissions, royalties, rent and interests. Commissions can be earned through network selling while royalties are earnings from work you've previously done, such as books, music, computer programs, etc. Mutual funds and insurances can be good sources of passive income but only after the account has reached maturity and you can begin reaping the fruits from your premium payments.