How to Maximize Your Income – Budgeting 101

In order to truly know how to maximize your income, you must create a budget to put your income to use in the most profitable way possible. So, if you haven’t downloaded your free budget template yet, you can do so here now and create a budget for this entire year!

To begin to set up your budget, today you will focus on how to maximize your current income and future income opportunities.

How to Maximize Your Income Opportunities if You Work Under an Employer

If you are working under an employer, one tangible thing you can do today regarding how to maximize your income is to evaluate what opportunities you have for promotions, raises, and increasing your benefits. This may involve simply reading your company policies or setting up a meeting with upper management to review where you stand and what is required of you in order to move up. Some key questions to ask are:

• Since so much has changed since the pandemic and now current employment continuing to decrease, you may find that company policies and opportunities for promotion have changed due to extenuating circumstances. Doing an honest review with your employer about how things may have changed will allow you to see the big picture of how this may affect your finances. For example, during the recession of 2008, we had a freeze on raises at my place of employment. Even if there may be setbacks now, at the very least, you can be made aware and plan accordingly. Also, you will be more aware of when increases are projected to be available again. Because I was aware of this freeze, I knew to project my income to remain the same (with my place of employment) indefinitely and to make the best use of it a.k.a. maximizing my income. If I wanted to bring in more income, I knew it wasn’t going to come from my current job and could find other ways to bring in more rather than waiting and hoping due to lack of knowledge.
• If your employment has not been negatively impacted by the effects of the pandemic and current policies, it will be a bit easier for you to be direct with your employer about how to move up in position and income. If you are already doing the work now, then you should be able to easily prove yourself regarding obtaining promotions and/or increases in your income. If you are not aware of what is required of you to obtain certain positions, you can now get on the same page with your employer about what they expect. You can find out if you are required to take more classes or obtain specific certifications or a higher degree. It can be easy to get comfortable and not seek out these opportunities if your job is secure. And, there is nothing wrong with that, especially if you are happy. For those who want to build wealth more quickly, not seeking out ways to increase your income will cause you to remain stagnant.
• If you have maxed out on possible promotions and find that there are no opportunities available to move up or increase your income, it is great to be aware now. You can decide if it’s time for a job or career change. Or, if your job provides excellent benefits you would like to take advantage of, for now, this can be a great time to start a side gig. You would be amazed at how a side gig can succeed so well that it can replace your income and beyond. The opportunities available these days, especially through social media and the internet, are endless. For example, all of my jobs can pretty much be considered side gigs. I am an Author and I am currently creating other digital products, I work in accounting and finance (I worked for two companies as an independent contractor at one point), I blog, I create videos, and I am an Amazon affiliate. I’m doing what I love so it doesn’t even feel like work! Bonus: all the while, I’m bringing in income from my passions!
• If you have a job that provides excellent benefits, you are blessed. Take advantage of them! For example, if your employer offers 401K matching, MAX IT OUT! This is by far the best retirement investment opportunity. If you are not aware of what matching from your employer is, this means they will match the amount you contribute. For example, a previous employer of mine automatically provided a percentage of my income toward my 401K. On top of that, they matched any amount (up to a certain amount) that I put into my 401K. That means, my investment was doubled AND compounded with interest! Again, if your employer offers matching, MAX IT OUT! I can’t stress this enough! (I cover more on investments in another post.) Now that I made that clear, review with your employer what other benefits they provide. For example, some employers have certain tiers based on position, income, or seniority level. Within those tiers, they can provide varying benefits. For example, you may have to be in a certain tier to receive medical benefits. Whatever the case, making yourself aware of what your employer offers gives you the opportunity to maximize the benefits they provide.

So, don’t hold back! Today, initiate that meeting with your employer to see what is available to you. If you are doing your job well, you deserve to be rewarded!

How to Maximize Your Income Opportunities if You Are Self-Employed

Whether you are working a full-time job under an employer with a side gig or two OR fully self-employed, the opportunities regarding how to maximize your income through self-employment are endless! As stated in the previous section above, I am self-employed with what you may consider to be a combination of side gigs (I am an Author and I am currently creating other digital products, I blog, I create videos, and I am an Amazon affiliate). All of which I love … so it doesn’t even feel like work!

Being your own boss is definitely A LOT of work as everything falls on you. But, if you are doing what you love, like I said before, it doesn’t feel like work! With all the hustling, however, it can be easy to forget the different ways you can grow under your self-employment opportunities.

So, today is a good day to take a step back from all the busyness to see if you can better utilize your time. Here are some things to think about to help you maximize your time and income:

• If you find yourself overwhelmed by tedious jobs which take you away from income generators, it might be time for you to hire out. If you are a perfectionist like me, I KNOW HOW HARD THIS CAN BE. However, it might be time to let go if your time can be better spent making fewer big decisions rather than numerous small decisions. So, take a step back, list out the little things you can hand over and start. For example, if your website could use some updating, you can start by utilizing a small job hiring site like fiverr to hire someone to create a new brand logo for you. As you become more comfortable handing over smaller jobs, you will feel less anxious about hiring for longer term and get all the little things off your plate. Besides looking at hiring out as a way to give you more time to focus on bigger income generators, these smaller tasks that you hand out can become income generators in themselves as they help you improve your business overall (i.e. a better website bringing in more business, improved customer service, etc.)
• Note your highs and lows with your business last year. Let go of the lows and focus more on the highs. For example, if certain products or services sold better than others even if you worked SO HARD on the ones that didn’t sell well, it’s better to focus on what did sell well to make up for the time spent on what didn’t. I know it may be tempting to push the products you put so much work into. But, the market is always changing. So, to maximize your income now, focus on what the market is telling you what they want right now. Your other products may just be more suitable for another time.
• List out all the ways your job can turn into other income opportunities. For example, maybe people ask you all the time how you make money being self-employed. You can create a resource you can sell teaching them how you bring in income through your experience and expertise. If you are a blogger, you can review different ways to place ads on your blog or include affiliate marketing links from your favorite, trusted brands. The opportunities are endless! Simply take the time today to brainstorm what you can do, and take action on at least one item on your list today!

How to Maximize Your Income if You are Dependent on Government Aid

I empathize with you if you are in a position where you must depend on government aid to live. It is not an easy situation as it typically is not enough to afford basic needs like housing and food. If you are in a position where you are in between jobs or become disabled, it is still helpful to have food assistance programs which you can access here and housing assistance programs which you can access here. If you must depend on these programs as your main and total source of income, we are going to work together through this budgeting challenge to see how we can improve your situation. I suggest reading through the self-employed section above and think of things you have overcome, things you are talented in, passions you have, etc. We can brainstorm ways to possibly turn these experiences and expertise into an income eventually.

The Importance of Understanding Tax Brackets

Whether you are working under an employer or are self-employed, the tax bracket you are in can make a huge impact on what you actually take home (or end up paying during tax time). You can go to nerdwallet.com and look up “tax brackets” for the current federal income tax brackets and rates. The income ranges vary from year to year (in October, you can find the tax brackets and rates for the following year).

For Those Working Under an Employer

For those working under an employer, it’s easier for you to understand what tax bracket you are in and what you can eventually be in with possible promotions and raises. Below, you will find all the calculations for your taxes due and take home pay would be if you were at the very top of each tax bracket (with the exception of the highest tax bracket being at the minimum).

I provide a free calculator for you in my free budgeting challenge here so that you can plug in your income and calculate your take home pay based on the annual change. That way, you can plan next year’s budget!

For the Self-Employed

For the self-employed, here is the complete, detailed IRS publication for all the common business expenses and explains what is and is not deductible. And, below, here is a summary of the things you can write off that reduce your income level and can potentially place you in a lower tax bracket:

1. Advertising and Marketing: Costs for websites, social media ads, business cards, and other promotional activities are fully deductible.
2. Business Insurance: Premiums for liability, property, malpractice, and health insurance for employees are generally deductible.
3. Depreciation: Businesses can immediately expense the full cost of most new and used equipment, machinery, and vehicles under the permanently restored 100% bonus depreciation rule for qualified property placed in service after January 19, 2025.
4. Home Office: A portion of rent or mortgage, utilities, and insurance can be deducted if a part of the home is used regularly and exclusively for business. The simplified method ($5 per square foot, up to 300 sq. ft.) is also available.
5. Interest: Interest on business loans, credit cards, and bank fees are deductible, subject to certain limitations on business interest expense that are more favorable starting in 2025.
6. Legal and Professional Fees: Fees paid to accountants, lawyers, and consultants for business services are fully deductible.
7. Office Supplies and Rent/Utilities: Day-to-day office supplies, rent for business premises, and utility bills are standard deductions.
8. R&D Expenses: Domestic research and experimental (R&D) costs incurred in tax years beginning after December 31, 2024, are immediately deductible, a change from prior amortization requirements.
9. Salaries and Benefits: Wages, bonuses, and related payroll taxes and fringe benefits (like health insurance or retirement contributions) for employees are deductible.
10. Taxes and Licenses: State and local business taxes, payroll taxes, and license/regulatory fees related to the business are deductible.
11. Travel and Meals: Business travel expenses (airfare, hotel, etc.) are deductible. Meals while traveling for work or with clients remain 50% deductible.

I share a calculator for all this within my lifetime budgeting system to make this super easy!

The Most Important Thing You MUST Understand

Maximizing your income begins with creating a budget. When it comes to organizing your finances and staying within budget, you must live below your means. In other words, you must spend less than what you bring in. This is the key to becoming responsible to eventually handle more. (These are tough times for many, so if you are living at or below poverty level, and you haven’t already signed up for my resource made specifically for you, be sure to sign up here. It is highly recommended that you complete my budgeting challenge as it is an essential part of my free resource for you.) Now that we are in the correct mindset, we can create a budget and make the best use of your income now.

Today, we are taking actions on steps to see how we can make more eventually. In summary, here is what you will do today:

• For those working under an employer, review your promotion and raise opportunities with your employer by initiating a meeting with upper management.
• For the self-employed, review what you can delegate so you can focus on income generators, review which of your products or services sell better and focus on those, and create new income opportunities from your current products or services. And, don’t forget to collect your expenses over this year for write-off purposes.
• For those fully dependent on government aid, review what you have overcome and what you are good at so we can see if we can turn these experiences and expertise into an income.
• For all of us, review the tax brackets to make yourself aware of how your budget can be affected.

In order to truly know how to maximize your income, you must create a budget for your income now in order to use it in the most profitable way possible. So, if you haven’t downloaded your free budget template yet, you can do so here now and create a budget for this entire year!

Remember, after you create your budget, I show you how it all comes together in a comprehensive lifetime budget that takes minutes a day to maintain.

In the next post, we cover personal financial goals you must make in your lifetime. Stay tuned!

Happy Budgeting!