Month: January 2021

  • How to Pay Yourself First and Finally Start Saving Money

    Here’s how most people approach saving money:

    They tell themselves that they’ll save whatever is left at the end of the month. But someone there never seems to be anything left when the end of the month rolls around.

    I was stuck in this pattern for years, and I know how frustrating it can be.

    I finally learned the “pay yourself first” strategy, which has completely changed the way I budget and has helped me to save money consistently each month.

    In this article, I’m sharing how you can pay yourself first to pay off debt, build your emergency fund, and save for your biggest financial goals.


    How to Pay Yourself First and Finally Start Saving Money


    What does it mean to pay yourself first? 

    The concept of paying yourself first means that you set aside money in your budget for savings and financial goals before budgeting for anything else. You treat your savings just as you would any other bill, meaning its non-negotiable.

    The entire purpose of the “pay yourself first” strategy is to avoid the problem I talked about earlier, where you run out of money each month before you have a chance to save any. 

    When you pay yourself first, you transfer money out of your checking account as soon as you get paid each month before spending any. Then, you can only spend what’s left.

    Paying yourself first is an effective way to build your emergency fund or save for a financial goal. You can also use it to pay off debt by making extra debt payments as soon as you get paid.


    How to pay yourself first

    Follow these steps to implement pay yourself first in your own budget.



    First things first, write down your monthly income and expenses.

    If you’re a salaried employee, calculating your monthly income will be easy. If you have an irregular income because you’re self-employed or are an hourly or tipped employee, this will take a little more work. I recommend checking what your income has been for the past 3-6 months and taking the average amount.

    It should also be easy to figure out your fixed monthly expenses. These are the non-negotiable expenses you have to pay each month, like rent, insurance, and your student loan payment.

    Once you’ve calculated your fixed expenses, try to determine how much you spend on other expenses throughout the month. Your variable expenses will include things like groceries, dining out, transportation, clothing, etc. Your discretionary spending may change each month, but you can probably look back a few months and find the average.

    Read More: Creating a Monthly Budget: A Step-by-Step Guide



    One of the most important steps in paying yourself first (at least in my opinion) is setting financial goals.

    It’s easy to tell yourself that you’ll save money. But unless you really have a why behind your savings, it can be hard to stick with it. If you set a specific goal, you’ll have something to motivate you to follow through. 

    Savings goals you might save for include:

    • Building your emergency fund
    • Start saving for retirement
    • Saving for a new car
    • Saving for the downpayment on a home
    • Saving for a vacation
    • Renovate your home
    • Start a business
    • Reach financial independence

    You may have some short-term goals that you can reach in just a few months. On the other hand, some of your goals may be long-term goals that you won’t reach for several years. The method of paying yourself first can work for either type of goal.

    Read More: How to Set Financial Goals You Can Achieve



    Once you’ve calculated your income and expenses and figured out what you want to save for, decide how much you’ll save each month. You want to make sure you’re saving enough to make a real difference but not so much that you don’t have enough money for your monthly spending.

    An easy way to figure out how much to save is to divide the amount you want to save by the number of months before you want to have it saved.

    Let’s say you’re planning a vacation next summer, and you expect to spend around $2,000. If the trip is 12 months away, just divide $2,000 by 12. You’ll find that you need to save roughly $167 per month for the next year.

    Of course, the amount you can pay yourself is also limited by your income. While you might love to buy a house next year, if it requires that you save $5,000 per month and you don’t earn that much, that financial goal may simply not be a reality.

    And in the case that you have multiple financial goals you’re saving for, as many of us do, then you’ll have to decide how you can either prioritize one goal or split your savings between the two. For example, I have the goal of financial independence that I’m always saving for, but I simultaneously save for other smaller financial goals at the same time.

    If you’re new to paying yourself first, you might worry about overspending and running out of money. If you’re just getting started, begin with a small automatic transfer.

    When I first started using this strategy, I did an automatic transfer of $50 the first week of the month. As I adjusted to my new spending limitations, I increased my monthly savings.



    A great way to ensure you pay yourself first every month is to automate it. Set up an automatic transfer to go through a day or two after payday each month. That way, you’re saving regularly, and you don’t have to think about it.

    I can almost guarantee that if you don’t automatic it, you’ll often come up with an excuse for why you can’t save as much this month.

    And if you’re using the pay yourself first method to pay off debt, just set up an automatic payment each month for the amount you want to pay.

    The goal you’re working toward will determine where the automatic transfer is going. Depending on the goal, you might have your automatic transfer going to a savings account, a retirement fund, a taxable brokerage account, a debt account, or something else.

    Read More: 6 Easy Ways to Automate Your Finances

    As a quick tip, some employers allow you to set up your direct deposit so you can split your paycheck between multiple accounts. This strategy can be particularly useful in helping direct money to your savings account.


    Benefits of paying yourself first

    Paying yourself first is one of the best strategies to help you build your savings or pay off debt every month.

    Many individuals and families struggle to make progress on their savings. The most recent data shows that only about 39% of Americans would be able to cover a $1,000 emergency.

    Not only can paying yourself first help to prepare you for a financial emergency, but it can also help you make progress on your financial goals.

    The pay-yourself-first method is especially well-suited for people who struggle with spending. Think of it as a reverse budget. Rather than having to stick to your spending plan to save, you’ll be limited to spending what’s left after saving.


    Final Thoughts

    I know how frustrating it can feel to be so determined to save, and yet you somehow never manage to. Paying yourself first is one of the best ways to reach your financial goals, even if you’ve struggled to do so in the past. Trust me – your future self will thank you.

  • How to Use a Zero-Based Budget to Reach Your Goals

    When I started budgeting, I thought I was doing great.

    I had plenty of money left over in my budget after accounting for all my expenses, and I thought for sure I’d be able to save a lot and pay off my debt quickly.

    But somehow, the end of the month would roll around, and I never had any money left over.

    I just couldn’t figure out where all my money was going. Sure, I’d usually eat out more than I planned or make an impulse purchase here and there to buy new clothes. But surely it wasn’t enough to spend all of it.

    Why couldn’t I save when I knew I had wiggle room in my budget?

    It turned out that the key to changing my financial situation was zero-based budgeting. Rather than spending the extra money in my budget, a zero-based budget forced me to make a plan for each dollar I earned, including putting money toward savings and debt.

    In this article, I’m sharing what a zero-based budget is and how you can use one to reach your financial goals.


    How to Use a Zero-Based Budget to Reach Your Goals

    There are affiliate links in this post, meaning I may make a small commission at no additional cost to you. For more information, see my full disclosure policy here.


    Zero-based budget definition

    Zero-based budgeting is a way of planning your spending where you make a plan for each dollar. When you use a zero-based budget, you budget down to zero every month, meaning your income minus your expenses always equals zero.

    It’s important to note that budgeting every dollar doesn’t mean you spend every dollar. The purpose of zero-based budgeting is to help you pay off debt and save for goals because you include them as a line item in your budget.


    Zero-based budget advantages and disadvantages

    The biggest advantage of zero-based budgeting is that it forces you to be intentional about your spending. Rather than have a large sum of money available to spend each money, you can only spend money that you’ve actually budgeted for that purpose. 

    For anyone paying off debt or trying to reach a big financial goal, a zero-based budget is the best way to ensure you actually make progress each month.

    The biggest downside of zero-based budgeting is that it requires more time than traditional budgeting. You have to make a detailed plan for your money and then track every expense throughout the month to make sure you’re sticking to it.


    How to make a zero-based budget

    1. Write down your monthly income. If you’re a salaried employee, this should be easy. For freelancers and other workers with irregular income, start with your average monthly income.
    2. Write down your monthly expenses. Be sure to include fixed monthly expenses like rent and insurance, as well as variable spending like groceries and entertainment.
    3. Set financial goals. A zero-based budget only works if you decide ahead of time where your money is going. You should have specific financial goals to send extra money to. Your goal can be anything from saving for a big expense to paying off debt.
    4. Give every dollar a job. When you finish your budget, your income minus expenses should equal zero. This doesn’t mean you spend every dollar! It simply means that every dollar is either budgeted for spending OR budgeting for debt payoff or a financial goal.
    5. Work on getting one-month ahead. The zero-based budget is easiest to use when you’re one month ahead on your budget. In other words, you’re using last month’s income to pay this month’s bills. This is important because it ensures you know at the start of the month exactly how much you have to budget.


    Zero-based budget example

    I promise that zero-based budgeting sounds more complicated than it is. I’ll use a real-life example to show you how this type of budget works in practice.

    Let’s say your monthly take-home pay is $3,500. Using a normal budget, it might look something like this:

    Expense CategoryAmount
    Student loan$250
    Cell phone$75
    Total spending$2,495

    As you can see, this budget leaves a lot of wiggle room. You’d have $1,000 left each month that you could use to build your emergency fund, fund your debt payoff plan, or save for your financial goals.

    Unfortunately, that’s not usually how it works. Often we tell ourselves that we’ll use whatever money we have left at the end of the month to reach our goals.

    But because we weren’t intentional with our spending and didn’t make a plan for that money ahead of time, we simply find other things to spend it on. And then you might be lucky to have $100 left to put toward saving, let alone the full $1,000 you should have left.

    Here’s what a zero-based budget might look like using the same income and expenses:

    Expense CategoryAmount
    Student loan$250
    Cell phone$75
    Sinking funds$250
    Debt snowball$250
    Total spending$3,500

    As you can see in the budget above, each budget is accounted for. You can’t impulse-spend a few hundred dollars on Amazon because you’ve already given that money a job.


    Zero-based budgeting with irregular income

    If you have irregular income, you might worry that zero-based budgeting won’t work for your situation. And it’s true that this budgeting style can be more difficult if you don’t know how much money you have available for the month.

    But I actually think this budget is perfect for those with irregular income.

    But here’s the catch.

    It really only works with irregular income if you get one month ahead on your budget. In that case, you can create a customized budget at the start of each month based on the money you earned the previous month.


    The best zero-based budget apps

    When it comes to planning out your zero-based budget, there are two different tools I’d recommend. You can choose the right tool for you based on your budgeting style.

    • You Need a Budget (YNAB): YNAB is hands-down my favorite budgeting app. With this zero-based budget app, you only budget with money you already have, and you give every dollar a job. It’s the app I personally use. It completely changes the way you think about budgeting, and really teaches you to be intentional about where your money is going.
    • Spreadsheet: Before I started using YNAB, I spent years using just a simple spreadsheet in Google Drive. It’s definitely more hands-on than an app, but perfect for someone really trying to turn their finances around.


    Final Thoughts

    I know how frustrating it can be to put a ton of work into a budget, only to have it fall apart halfway through the month. A zero-based budget is the best way to be intentional about where your money is going and help you reach your financial goals.

  • Using Debt Consolidation to Pay Off Credit Card Debt

    The average American family has more than $5,200 in credit card debt, according to the Experian 2021 Consumer Credit Review. And as a nation, we hold nearly $900 billion in credit card debt.

    This type of debt can be especially discouraging. The interest rates are notoriously high, meaning we end up paying back far more than we spent.

    Credit card debt can also often be a reminder of decisions that we aren’t particularly proud of, such as poor financial decisions in our younger years.

    While there’s no easy way to get out of credit card debt, a debt consolidation loan provides a way to pay your debt off a bit more quickly and save money in the process.


    Using Debt Consolidation to Pay Off Credit Card Debt


    What is debt consolidation?

    Debt consolidation is the process of taking out one loan to cover the balance of other debts. A debt consolidation loan is typically an unsecured personal loan — in other words, there’s no collateral attached to it. In the case of debt consolidation to pay off credit card debt, you’re taking out one personal loan and using it to pay off all your credit card balances.


    What is the purpose of debt consolidation?

    Debt consolidation is often used for the purpose of credit card debt.

    Credit cards have notoriously high interest rates, especially for younger borrowers. And the fact that many people have more than one credit card can mean they’re also making multiple monthly payments.

    If you have a lot of debt, you might be making sizable monthly payments on multiple cards, all at painfully high interest rates.

    Not to mention that having multiple monthly payments also means that you’re more likely to forget a monthly payment here and there, which can have major negative implications for your credit score.

    When you consolidate those credit cards into a single debt consolidation loan, you have one monthly payment and one (hopefully) lower interest rate.


    How does debt consolidation affect your credit?

    Anytime you borrow money, you can expect to see an impact on your credit score. In the case of a credit card debt consolidation loan, you’ll likely see both a positive and negative impact.

    First, you’ll probably see your credit score take a bit of a hit because of the hard inquiry on your credit report and the new debt account.

    But in the long run, it might actually help your credit score. When you consolidate your credit card debt into a single personal loan, you bring your credit card balances down to (hopefully) zero. As a result, your credit utilization goes way down.

    Additionally, as you make on-time payments on your loan, your positive payment history will help to slowly boost your credit score.


    Pros and cons of debt consolidation

    Debt consolidation comes with its fair share of pros and cons that you should be aware of before taking the leap.



    • You’ll save money. Ideally, a credit card consolidation loan would have a lower interest rate than your credit cards. As a result, more of your money each month is going toward interest. You’ll save a lot of money in the long-run.
    • You’ll have fewer monthly payments. If you have multiple credit cards with debt, you likely have multiple monthly payments. A debt consolidation loan can help get you down to just one monthly payment.
    • You’ll boost your credit score. As I mentioned above, a debt consolidation loan can help to boost your credit score over the long run.



    • You may still end up with a high interest rate. Because personal loans are unsecured, they still come with higher interest rates than other loans. And for someone with a low credit score, your rate might be just as high — if not higher — than the rate on a credit card.
    • You could pay fees. Many lenders charge origination fees on personal loans, meaning you’ll end up paying a bit more money.
    • It’s not the most cost-effective option. Depending on your credit score and the amount of debt you have, there might be a better way to pay off your credit card debt, which I’ll talk about in the next section.


    Debt consolidation alternatives

    A debt consolidation loan can be an effective way to pay off credit card debt faster, but it’s not my favorite option. Depending on your credit score and the amount of debt you have, you might instead consider a few other options.


    A balance transfer is when you open a new credit card and transfer your existing credit card balance to the new card. Many credit card companies offer 0% interest from anywhere from 6 to 18 months for a balance transfer.

    With the 0% interest, you have the chance to pay down your credit card debt much more quickly, with none of your money going toward interest.

    To learn more, visit my guide on paying off credit card debt with a balance transfer.



    Another alternative to debt consolidation is to use a secured loan. The benefit of this is that secured loans generally have lower interest rates, meaning you’ll save even more money.

    Secured loans available for debt consolidation are usually those that use your home as collateral. Options include home equity loans, home equity lines of credit (HELOCs), and cash-out refinances.

    Of course, these options have a clear disadvantage: you’re using your home as collateral. If you fail to make your monthly payments, you could lose your home. I would think carefully before using your home equity to pay off debt, and only do it if you feel confident you’ll be able to make the monthly payments.



    You’re probably familiar with debt payoff methods like the debt snowball and debt avalanche. While the two have some differences, each is designed to help you prioritize and pay off multiple debts.

    Using the debt snowball, you prioritize your smallest debt. Using the debt avalanche, you prioritize the debt with the highest interest rate.

    Using one of these strategies may result in you paying a bit more in interest since you aren’t trading in your high credit card interest rates for a lower loan interest rate. However, they can still help you tackle your debt. And you may be motivated to pay it off more quickly.


    When is debt consolidation a good idea?

    Depending on your situation, a debt consolidation loan might be the right option to help you pay off your credit card debt. Here are a few situations where it’s probably a good idea:

    • You have too much debt for a balance transfer
    • Your credit score doesn’t make you eligible for a good balance transfer offer
    • You know you wouldn’t be able to pay off your debt during the 0% interest promotional period on a balance transfer card
    • It’s going to take you a long time to pay off the debt


    Final Thoughts

    As with any financial decision, it’s important to consider your unique circumstances when deciding if a debt consolidation loan is for you. For some people, it’s the perfect solution. But other people might be better served with an alternative.

  • 14 Good Financial Habits to Adopt in 2023

    More than 97 million people plan to set financial goals for themselves. But without a solid plan in place and the right habits to back it up, it can be challenging to reach those goals.

    Trust me – I was the queen of setting goals and new year’s resolutions for myself. But then, I would become disappointed that they would never come to fruition.

    That’s because I never took action to make them happen. I thought I could go from zero to 100. But without a solid plan in place and the right habits to back it up, reaching new goals can be challenging.

    In reality, reaching your goals has more to do with the habits you create. Whether your goal is related to your personal finances, your health, your relationships or anything else, your habits will ultimately determine whether you succeed.

    In this article, you’ll learn 14 good financial habits you can adopt in 2023 to help you reach your financial goals this year and beyond.


    14 Financial Habits to Adopt in 2021


    Track your spending

    To change anything in your finances, you need to know where you are now, including where your money is going.

    I never used to track my spending, yet I’d be confused as to how I ran out of money each month. When I finally sat down and tracked my spending, I was shocked.

    I learned I was spending a lot of my income on dining out and food delivery. I also learned that those small Target runs throughout the month were really adding up in my budget.

    Tracking your spending can open your eyes to where your money is going. It shows you where you’re overspending and can help you set a budget for the future.

    For me, tracking my spending helped me see where I was starting from so I could figure out where I wanted to go. It helped me get real about where I could cut back and how much I could start putting toward my goals if I did.


    Set financial goals

    I talk to so many people who tell me that they know they should be spending money, but they don’t know how much to save or how to do it. And even if they did know, they don’t really have the motivation to do so.

    This is what happens when you don’t have specific financial goals. It’s much harder to save when you really don’t know why you’re saving.

    But when you set financial goals, you know exactly why you’re saving and how much you need to save. For example, if I know I want to spend $3,000 on a vacation with my husband next year, I can figure out how much to save each month to make it happen.

    Plus, the thought of meeting your goal will provide all the motivation you need. If I know I have a dream vacation coming up next year, I’m probably going to be a lot more motivated to save than I would be without a goal.


    Schedule a weekly money date

    Checking in on your finances is so important. I sit down once per week and update my budget, record all of my expenses, and adjust anything I need to. I also sit down monthly to close out my budget for the month and plan the following month’s budget.

    Having a regular money date with yourself is a great way to stay on top of your finances. Put it on the calendar, so you never forget. 

    And if you share finances with someone else, you can have a regular money date to talk about your family finances. For my husband and I, money dates usually include us talking about what our spending looked like the previous month, what special occasions might be coming up in the next month, and any changes we’re considering making to our budget or finances.


    Pay yourself first

    For years I would tell myself that I would save all the money I had left at the end of each month. But the end of every month would roll around, and I’d somehow never have anything left.

    I finally learned the solution to this problem: paying myself first.

    When you pay yourself first, you decide ahead of time how much you want to save each month, whether it be in your emergency fund, retirement account, or toward a financial goal.

    Then, you transfer that money over to savings as soon as you get paid, before you have a chance to spend the money.

    I’ve found the best way to do this is to automate my savings so that I never have to remember to do it.

    Read More: How to Pay Yourself First and Finally Start Saving Money


    Budget one month ahead

    One of my favorite budgeting hacks is to be one month ahead with my budget.

    Most people budget with the current month’s income. In other words, they use their January paycheck to pay their January bills.

    But when you’re one month ahead on your budget, you use your January paycheck to pay February’s bills.

    This type of budgeting has tons of benefits. First, this one-month buffer serves as a small emergency fund. It also helps you to avoid timing your bills to your paychecks, as many people have to do.

    If you want to give it a shot, I have an entire guide on how to get one month ahead on your budget.


    Use your credit cards responsibly

    I love credit cards. I put just about everything on a credit card. The problem is that most people are using credit cards incorrectly.

    First, many people put their expenses on a credit card and then pay it off with the next month’s income. This means they’re spending money they haven’t even earned yet.

    Another habit people have is to charge things to their credit card but then not pay off the full balance.

    Here are a few rules of thumb for using credit cards responsibly:

    1. Only spend money you already have in your checking account
    2. Keep your credit card utilization below 30%
    3. Pay your balance off in full every month

    Read More: How to Use Credit Cards Responsibly


    Make more than your minimum debt payments

    When you have debt, it can be tempting to simply pay the minimum monthly payment the lender requires of you. That way, you have more money each month to spend on other things.

    The problem is that you end up spending way more money in the long run. Depending on the amount of debt you have, paying your debt off faster could save you hundreds, thousands, or even tens of thousands of dollars in interest.

    The sooner you pay your debt off, the sooner you have that money available each month to put somewhere else in your budget.

    And remember, there are other downsides to having debt. Suppose you wanted to buy a house. If you have too much debt, a lender is unlikely to approve you for a mortgage.

    Read More: Debt Snowball vs. Debt Avalanche: Which Strategy is Right For You?


    Avoid monthly payments

    Stores try to convince you to spend money by looking at a purchase as a monthly payment rather than as the full purchase price. New financial services allow you to use a monthly payment for just about everything these days, whether it’s a $1,000 computer or a $25 shirt.

    But remember that payment plans force you to spend more money in the long run. And you normalize the habit of having monthly payments.

    It’s better to pay for everything you can in full.

    Certainly, there are exceptions. When it comes to buying a house, you’ll almost certainly borrow money and have a monthly payment. But for smaller purchases, avoid monthly payments as much as possible.


    Continue to learn about money

    Even if you feel like you’ve got your financial shit down, there’s always room to learn more. Even though I have a lot of experience in personal finance and help coach others, I still regularly read personal finance books and listen to personal finance podcasts.

    As you reach certain goals, there’s likely more to learn for the next one. Let’s say you finally paid off all your debt and have learned to stick to your budget. Now it might be time to pick up a book on investing.


    Learn your spending triggers

    Everyone has their own spending triggers. For some people, a sales email in their inbox is a trigger. For others, it’s walking into Target. For others, it might be having a really bad day.

    One of the best ways to save money is to identify your spending triggers and find ways to combat them.

    Let’s say your spending trigger is sales emails from your favorite store. An easy way to combat this would be to unsubscribe from that store’s emails.

    I used to struggle with emotional shopping, especially as my first marriage was ending. When I was particularly upset, I’d spend money. I overcame that by dealing with my emotions head-on rather than looking for a different outlet.


    Maintain an emergency fund

    I think 2020 taught everyone the importance of having an emergency fund. Millions of people lost jobs this year, Congress dragged its feet in getting aid to the people who really needed it, and the pandemic resulted in huge medical bills for many families.

    Even if your finances weren’t affected by the pandemic, chances are you’ve had a financial emergency in the past that you struggled to pay.

    If you’re just getting started and have high-interest debt like credit cards to pay off, I recommend saving at least one month’s worth of expenses in your emergency fund. Eventually, you can work your way up to 3-6 months.

    The important piece is replenishing your emergency fund when you use it. Let’s say you’ve got an emergency fund of $5,000 and end up with $1,000 worth of car repairs. Your emergency fund is down to $4,000. Your next financial priority should be replenishing that $1,000 before you start saving for something else.

    Read More: How to Build an Emergency Fund and How Much to Save


    Meal plan

    Meal planning has been the single most effective way for me to cut down on grocery spending.

    If I go into the grocery store without a list, it’s pretty much a guarantee that I’m going to overspend. But if I make a meal plan and grocery list ahead of time, I’m good about sticking with it.

    Not only does meal planning help me only to buy the things I really need, but it also allows me to price meals out ahead of time so I know roughly how much I’ll spend.


    Give to causes you’re passionate about

    For many people, 2020 really showed the importance of financially supporting causes that are important to you. 

    Charitable giving in 2020 increased from the previous year, despite the financial struggles many faced. And a special provision in the tax law has allowed everyone to deduct up to $300 for donations, even if they don’t itemize their deductions.

    Chances are you already know which causes are most important to you, whether it’s combating climate change, protecting animals, promoting diversity, etc.

    Whatever it is, take a look at your budget and see if you can swing a small monthly donation to your favorite causes.


    Don’t try to keep up with the Joneses

    Everyone has probably heard the phrase “keeping up with the Joneses.” And most people probably brush it off, thinking it doesn’t apply to them.

    But you might be surprised.

    As we earn more money, we tend to subconsciously increase our spending to go with it — aka lifestyle inflation.

    We upgrade apartments or homes. We buy nicer cars. We eat at nicer restaurants than we did when we had our first jobs. We spend more on clothing, home decor, etc.

    There’s nothing inherently wrong with any of these things. In fact, I tell my coaching clients they should identify areas of their lives where they spend guilt-free — for Brandon and I, it’s live music and eating out.

    But it becomes a problem when you spend more in every category.

    A good way to combat this problem is to decide ahead of time how you’ll upgrade your lifestyle. If you get a raise, decide ahead of time which spending categories you’ll increase and which will stay the same. That way they don’t all increase without you noticing.


    Final Thoughts

    2023 can be the year you finally turn your finances around and reach all of your goals. By implementing just a few of the good financial habits on this list (or more than a few), you’ll be amazed at the progress you see.

  • How to Increase Your Income in 2023

    When my husband and I got married, we knew the only way we would be able to pay off our six-figure student loan debt while also saving for our other goals was to increase our income.

    Finding ways to save money is great. But you can only cut so much from your budget. And we knew we wanted to continue to enjoy hobbies like travel, eating out, and seeing live music while paying off our debt.

    More and more often, I hear from other millennials looking to find ways to increase their income to help them reach their financial goals.

    In this article, I’m rounding up a few of my favorite tips for how to boost your income in 2023.


    How to Increase Your Income in 2021


    Ask for a raise

    If you love your current job, then asking for a raise is one of the best ways to increase income while continuing to do what you love. 

    While I know trying to negotiate your salary might sound stressful, look at the positives. Increasing your salary now increases your entire career income projection, meaning you’ll make more money over the course of your working life AND set aside more for retirement.

    Before you approach your boss about a raise, there’s some prep work you’ll need to do.

    1. Start by making a list of your job responsibilities. Write down everything you do in your job, either on a regular or irregular basis.
    2. Next, collect your recent performance reviews. Chances are, your company has some sort of review process in place. If not, gather other written positive feedback you’ve gotten, both from your boss and others. While you’re at it, make a list of any major accomplishments or successes you’ve had in your job.
    3. Do some research online about the average salary for your position. How much are other people making in the same type of position as yours? Another step I’d recommend is asking your colleagues, especially your male colleagues, if you’re a female, how much they make. Bringing this up might sounds scary. But when I finally got up the nerve to speak to a few of my male colleagues about salary, I found that multiple men were making more money than me in similar roles, and I had more responsibility than they did. Even today, the wage gap is still something we’re dealing with.

    Once you’ve done all your prep work, set up a meeting with your boss. I’d recommend telling them upfront that you’d like to meet to discuss a pay raise. That allows both of you to go to the meeting a bit more prepared.

    Once you’re in the meeting, sit down with your boss and tell them that after going through your list of tasks, your reviews, and your accomplishment, you feel confident that you’ve made valuable contributions to the team and would like a raise. 

    Give a specific percent increase. Most raises are about 3%, so ask for a little more, like 5%.

    If your boss has hesitations, you can talk about the conversations you had with your coworkers and the research you did online, showing that people in your role are being paid more than you are. 

    You can also ask some follow-up questions, such as what is causing them to hesitate and how long someone normally works in your role before getting a raise. 

    During this meeting, keep the conversation focused on the job and your accomplishments in it. Don’t bring your personal finances into the mix. Companies don’t give raises because people are trying to pay off debt — they give raises to people who make valuable contributions.

    Ultimately, whatever the final answer is, be gracious and polite and thank them for their time. The worst answer you can get is no. But if you’re rude or don’t take the word no well, then you might damage your reputation with your boss and the company.


    Find a new job

    Getting a raise in your current job is a great way to increase income, but it’s not right for everyone. Some people may not be able to earn as much as they’d like in their current company or line of work. And for those who really dislike their job, more money may not be enough to make up for it.

    Instead, you might consider finding a new job altogether. Here are a few steps to take:

    1. Consider the type of job you want. Before you start applying for jobs, spend some time thinking about what you really want. Ask yourself if you want to stay with the same company and simply apply for a higher-level job. Or maybe you want to switch careers altogether.
    2. Research the job market. Do your homework about the career you want and the current job market. Learn about the types of jobs available, the top companies, and the salary you might expect to get.
    3. Update your resume and LinkedIn profile. Update your LinkedIn resume so it will attract recruiters. When it comes to actually applying for jobs, create one that is tailored to each job you apply for.
    4. Reach out to your network. Once you’re ready to start looking, connect with people in your network. Let people know that you’re in the market for a new job and ask them to keep an eye out for any opportunities.
    5. Talk to recruiters. Depending on your field, there may be plenty of recruiters who specialize in finding candidates for jobs like the ones you want. You can contact recruiters directly or connect with them on LinkedIn.
    6. Apply consistently. Job hunting can be discouraging, especially if you find that it’s taking longer than you hoped. Find a few job boards that you find the best jobs on, and visit those consistently. Eventually, your hard work will pay off!


    Get a part-time job

    A part-time job might not sound like the most glamorous way to make money, but it’s effective and consistent. So many people are on the lookout for the next popular side hustle that they forget that getting a normal part-time job is an option. 

    While my husband and I were starting our debt payoff journey and saving for our RV, I was working full-time in politics while working on my business as a side hustle. My husband, in the meantime, worked as a bartender a couple of nights per week. It was a fairly easy job and one that he liked, and he was able to make an extra $1,000 per month.

    There are plenty of part-time jobs available in food service and retail. Depending on your skill set, you might also be able to find something more specific to your career and earn even more money.


    Join the gig economy

    While there’s no technical definition here, the Bureau of Labor Statistics describes a gig as “a single project or task for which a worker is hired, often through a digital marketplace, to work on demand.”

    These types of jobs are contract positions, and most allow you to work whenever you’re available rather than abiding by a schedule like a part-time job would require. 

    Examples of gig jobs would include:

    • Rideshare opportunities like Uber and Lyft
    • Grocery shopping and delivery through companies like Instacart
    • Food delivery with Doordash, Postmates, UberEats, etc.
    • Pet sitting and walking with Rover or Wag
    • Tackling specific tasks with sites like Fiverr or TaskRabbit

    These side hustles can be great for anyone who wants to be able to make extra money on demand. With a part-time, you’re usually subject to a set schedule. But these apps allow you to work and make money when it fits with your schedule.


    Start a business

    The final strategy I want to talk about for making extra money (and my personal favorite) is to start an online business.

    Now let me preface this by saying that if you’re just interested in picking up some extra income right now to help you on your debt payoff or savings journey, then this probably isn’t the right choice for you.

    Depending on the type of business you want to start, there are likely going to be some start-up costs. Plus, it could be a while before you really start making money.

    I can tell you that I put hundreds of hours of work into my business before I made money. At the same time, if you’re looking for something sustainable that you can build over many years, I love this idea. 

    Starting a business involves selling something, whether you’re selling a physical product, a digital product, or a service. I run a service-based business. I provide money coaching to clients and provide freelance writing services to financial companies. 



    Starting a service-based business is fairly low-cost and doesn’t require a lot of upfront work. What it does require is for you to have a specific skill that you’re offering to your clients.

    Here are the steps you can follow to start your own service-based business:

    1. Step one pick a skill. For me, it’s writing and coaching. For others, it’s social media management, photography, ad management, web design, editing, or a million other options.
    2. Step two is to hone your skill. Depending on the skill you choose, this might be a little or a lot of work. When I decided to become a freelance writer, I already had a degree in journalism and had been writing on my own blog for years. There wasn’t a huge learning curve. But I did have to learn how to freelance write for other sites. But some people might decide to start a service-based business doing something they’ve never done or haven’t done in years. In that case, you may want to take an online course or find an online certification to help boost your skills.
    3. Step three is to build your portfolio. Once you’ve honed your skills, start putting together work to show potential clients. This might require doing a bit of free work. If you’re starting a business as a social media manager, you could reach out to friends or family members who own businesses and ask if you can manage their social media for a while in exchange for testimonials. When I was starting to freelance write, I was able to use my blog as my portfolio. The bottom line is that you need to find a way to display your work and prove to potential clients that you can do the job.
    4. Step four is to start marketing your business. You can do this through social media or by directly reaching out to potential clients. When I started freelance writing, I just started emailing sites I wanted to write for and asking them if they needed more writers. It was surprisingly effective. For my coaching business, I do things differently. I don’t just email women and ask if they want a money coach. Instead, I share value on social media by offering personal finance tips and then sharing information about my program for people who want to work together one on one.

    So that’s how you can get started with a service-based business. I’ve found that’s the type of business that was the best fit for me. It’s my favorite way to make money.



    If that’s what you’d like to pursue, start by considering what product you’d like to sell. Maybe you’re good with crafts and want to handmake something to sell. Or maybe you’re good with graphic design and want to start selling printables.

    Once you figure out what you want to sell, figure out where you’d like to sell it. Etsy is a great marketplace for both physical and digital products. You can also decide to sell your product on your own website using a program like Shopify or WooCommerce. 

    And just like with starting a service-based business, the final step is to start marketing your product online.

    Now, this is obviously a simplistic explanation for how to start a business. There’s so much more that goes into it. If you’re serious about doing this, I recommend seeking out an online course to help you get started.


    What to do after you increase your income

    Once you actually take steps to boost your income, I encourage you to think about what you’ll do with that extra money.

    When your income increases, it can be tempting to spend all of that money. But chances are you’ve got some financial goals you want to save for. Deciding ahead of time how you’ll use the best way to ensure you don’t waste it.

    And once you start bringing in money, follow through on your plan. You’ll be happy that you did!


    Final Thoughts

    Increasing my income has been one of my favorite ways to reach my financial goals even faster. It helps me to save more without necessarily having to cut everything I love from my budget.

  • Traditional IRA vs. Roth IRA: Which is Better?

    One of the most common questions I get from people who are ready to get serious about investing is the best tool to use.

    Of course, many of us get our start investing in a workplace retirement plan, such as a 401(k) or 403(b). But there are also options to help you invest for retirement outside of your employer. Those options include a traditional IRA and Roth IRA.

    Both traditional and Roth IRAs come with some advantages and disadvantages, especially as it relates to your taxes. As a result, each may be best suited to a certain type of investor.

    In this article, I’ll explain the differences between the two types of retirement accounts and how to choose the right one for you.


    Traditional IRA vs. Roth IRA: Which is Better?


    What is an IRA?

    An IRA (which stands for individual retirement account) is a tax-advantaged investment account to help you save for retirement. Unlike 401(k) plans, which are offered through an employer, IRAs are for individuals to invest on their own.

    You can open an IRA at just about any brokerage firm. Once you open the account and start contributing money, you can decide how you want to invest the money within the account.


    Why open an IRA

    If you already have a 401(k) through your employer, you might be wondering why an IRA is necessary at all. There are a few reasons why I recommend everyone open an IRA, even if you have an employer-sponsored retirement plan:

    1. An IRA allows you to invest above and beyond the 401(k) contribution limits
    2. An IRA allows you to diversify your tax advantages — If you have a traditional 401(k), you can open a Roth IRA, and vice versa
    3. An IRA gives you more control over your investment decisions


    What is a Traditional IRA?

    A traditional IRA is similar to a 401(k). You can contribute to the account throughout the year and then take a tax deduction for your contributions. Contributing to a traditional IRA reduces the amount of taxes you owe in that year.

    The money grows in the account. Once it comes time to take money out during retirement, you’ll pay income taxes on your withdrawals.


    What is a Roth IRA?

    A Roth IRA is also a tax-advantaged retirement account, but you get the tax advantage at a different time.

    When you contribute to a Roth IRA, you do so with after-tax money. There’s no tax break in the year you contribute the money. The money grows in your IRA, and then you can withdraw it tax-free during retirement.


    Similarities and differences

    Traditional IRAs and Roth IRAs have a lot in common, but there are also some key differences you need to know. Here’s a table to explain all of the similarities and differences:



    Traditional IRA

    Roth IRA

    Contribution Limit



    Eligibility Requirement

    Available to anyone

    Available to individuals with income $144,000 or lower (single filers) or $214,000 (joint filers)

    Tax-Deductible Contributions



    Tax-Free Withdrawals



    Withdrawal Penalties

    Early withdrawals on contributions and earnings taxed at 10%

    Early withdrawals on earnings taxed at 10%; No penalties for early withdrawals of contributions

    Withdrawal Requirements

    No required withdrawals

    Required minimum distributions starting at age 72

    Best For

    People who expect to be in a lower tax bracket when they retire

    People who expect to be in a higher tax bracket when they retire

    *For the traditional IRA, whether you can deduct your contributions depends on your annual income and whether you have a retirement plan through your employer. If you don’t have a workplace retirement plan, you can deduct your contributions no matter what your income. If you have a workplace retirement plan, you can no longer deduct your contributions once your income reaches $78,000 for a single filer and $129,000 for a married filer.

    Should I choose a Traditional IRA or Roth IRA?

    Plenty of people find themselves overwhelmed when choosing between the traditional IRA and the Roth IRA. It ultimately comes down to your personal financial and tax situation.

    Ultimately, it depends on your financial situation today compared to what you expect your financial situation to be in the future. 

    Traditional and Roth IRAs give you a tax advantage at different times. A traditional IRA gives you a tax break in the year you make the contribution. Because you can deduct your contributions, your taxable income – and, therefore, the amount you owe in taxes – is lower.

    As a result, a traditional IRA may be the right option for someone with a high income today who expects to have a lower income during retirement. You take the tax benefit now while your tax rate is high rather than later when your tax rate will be lower.

    On the other hand, a Roth IRA tends to be a great option for people early in their careers who expect their incomes to grow. You can pay the full tax amount in the current year when your tax rate is relatively low. Then, you won’t have to pay taxes when you withdraw the money when your tax rate may be higher.

    If you’re still struggling to choose the right IRA, you can use a Roth vs. traditional IRA calculator where you enter some basic financial information, and it recommends the right retirement savings tool for you.


    As a caveat to the information about, there are certain income limits applied to IRAs.

    We’ve already addressed the income limit on deducting your contributions to a traditional IRA. However, there is also an income limit on contributions to a Roth IRA. If your income is higher than the limit, you can’t contribute directly to a Roth IRA.

    These income limits may impact which IRA you choose. After all, there’s no use contributing to a retirement account if you won’t get the tax benefits. If income limits prevent you from taking advantage of these accounts or fully enjoying the benefits, it may be worth choosing a different option or contributing more to your workplace retirement plan.

    As a final note, self-employed individuals have more options aside from the traditional and Roth IRA. Learn more about how to save for retirement when you’re self-employed.


    Final Thoughts

    Choosing the right type of retirement account can be overwhelming. Hopefully, this explanation of the differences between the traditional IRA and Roth IRA will help you find the right account for you.

    And remember — both of these accounts help you to save for retirement in a tax-advantaged way. As long as you’re setting money aside for the future, you’re on the right track.