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It may sound very materialistic but we have been bred to earn a higher income ever since we were kids. All those classes, training programs, seminars and college degrees were meant to help us grow our personal net worth. It may be embarrassing to admit but we use money to measure the success of a person. It is true that there are other things in life that are more valuable than money like love, family, respect, etc. But if you think about it, having enough money to live a comfortable life significantly increases our personal happiness and satisfaction.
The question is, just how much do you have to earn to be able to live a comfortable way of life?
According to an article published on CheatSheet.com, a six-figure income is required if you want to have the American Dream lifestyle. In particular, the article said that $130,357 is needed on an annual basis to live comfortably - at least, this is true for a family of four. That means you need to earn more than $10,000 each month.
The same article revealed that the average income of an American household between 2008 to 2012 is a little more than $53,000 each year. That is only around $4,400 each month. That is not even half of what the article said should be earned by the average American family. The article said that if we want to live the American Dream, it has to be in another country that offers a lower cost of living.
For most families, living on one income is not enough. You have to increase your salary if you want to improve your way of living. You actually have two options: you can ask for a raise or you can tap into another source of income (e.g. a second job or starting a part-time career).
3 skills that will help you earn more
If you think that getting longer hours from your current job is not possible, then you can try to learn a new skill that can help you start a second career. Some people have the option to capitalize on an existing hobby. Cooking and baking are some of the popular ways to earn extra. Some people cook meals for colleagues and get paid for it. Others bake goodies and sell them at work for extra cash. There are so many ways that you can earn a living if you have a talent that can be tapped into.
But if this is not an option for you, there are three skills that you can learn that can give you some serious cash flow on the side.Learn a new language.
The first option is to learn a new language. If you think that you gain nothing from globalization, think again. You can use your knowledge of the English language to your advantage. There are many nations that cannot understand this language. You may want to learn a new language so you can teach foreigners or serve as an interpreter or translator. People who are fluent in Chinese, Russian, Japanese, Korean, Spanish, Portuguese, German and other languages can get a part time job. According to USNews.com, the job of an interpreter or translator is very flexible. That means you can retain your day job and still find employment opportunities as a freelancer. The Bureau of Labor Statistics forecasts a 46% growth in employment for interpreters and translators. That translates to 29,000 positions. This is deemed to be faster than the average for other occupations. As the global trade becomes stronger, the need for multilingual individuals increases. The lowest paid for this occupation is $22,180 annually. The highest paid is more than $77,000 a year.Be tech savvy.
We live in the digital age and the more tech savvy you are, the more you will have opportunities for a second career. Think about it. Online or remote work saved a lot of people who were laid off during the Great Recession. Remote work means being able to work outside the office. According to TechRepublic.com, remote work is growing. They cited a report from the US federal government that revealed how 47% of their employees are capable of working remotely - that is more than a million people. And guess what, tech savvy individuals are needed to support this growth.
Businesses are also becoming more aggressive when it comes to their online presence. That means there are a lot of careers being opened online. Programmers, app developers, online writers, web developers and designers, tech support, social media management - these are careers needed to support online businesses.Try your hand at graphic design.
Images are quite powerful in our digital world. Graphic designers can be useful for a lot of things. You can help design campaign materials both in the natural and digital world. You can design shirts and sell your designs online. You can design websites, pages, etc. There are so many possibilities as a graphic designer. According to InnovatorsGuide.org, the growth of employment opportunities for this career is also expected to be faster than the average. The competition for jobs will also be high - but it is still a competitive career to be in. Internet advertising has a very high demand and if you have the talent and great work ethics behind you, it should be no problem to build a second career for yourself.
These skills should be a great way for you to increase your salary. The additional cash flow should help you reach your financial goals.
What to do when you get a salary increase
But when you successfully increase your monthly cash flow, you need to remember a couple of things. You have to understand that the secret to wealth is spending less than what you are earning. That being said, you need to stop yourself from upgrading your lifestyle as your income increases. Truth be told, this is a mistake that most of us are making.
While you have every right to upgrade your lifestyle to make it more comfortable, there are a couple of things that you need to do first.
- Pay off your debts. Some people will tell you to save the extra money that you will earn. But if you think about it, paying your high interest debts will help save you more in the long run. You will not waste money paying the interest - which is actually just making your creditors rich. So if you have credit card debts and other high interest loans, you may want to pay them off first.
- Build up your emergency fund. Another important task that you need to do is to build up your emergency fund. Make sure you have savings for the unexpected events that can come up in the future. That way, you do not have to resort to credit in order for you to get out of a tight fix.
- Invest your extra money. After you have paid off your debts and saved for an emergency fund, you may want to invest your money. You do not have to invest everything. But you may want to invest an amount that you know you can risk. This should be a great way for you to grow your money. You can invest this and forget that you have that amount. After a few years, that amount should be bigger than what you started with.
Once you have taken cared of these three tasks, you can now start upgrading your lifestyle. Of course, you still have to implement financial management practices to make sure you will not make a mistake in your decisions.
Here is a video from the Bank of America that has tips to help you be smarter when it comes to money management.