Sunday, July 6, 2014

7 Tips to Increase Your Annual Income by 10%

Most people go through life trying to earn more by working or doing more. They don't seem to realize that earning more could be as simple as spending their money more wisely.
 
A simple but powerful technique I use is the annual "stock-take" of my spending habits. Using the mnemonic SCAMPER, I methodically review my spending and eliminate or reduce "waste" putting more money in my pocket.
 
You can do the same. Here's how ...
 
Substitute. For some products, there is often only an incremental difference between the branded and non-branded versions. Substituting a branded detergent for the generic version will save you money without any significant difference.
 
Combine. To encourage loyalty, many companies offer discounts on bundled packages or bulk purchases. To enjoy these savings simply, combine services like your mobile, internet and television services and convert your monthly purchases into quarterly ones.
 
Adapt. Businesses are always cutting costs to increase profitability. Many, if not all, of their practices can be adapted for individual use. For example, businesses capitalise on differences in exchange rates to buy cheaper goods and services from overseas. For an individual, buying branded products online can save you money too.
 
Modify. With a little thought, many everyday products have multiple uses. So instead of buying one gadget for each task, modify your existing gadget to do others. For example, with the simple change of the drill bit, power drills can be fitted with a buffer to polish cars.
 
Put to Other Use. A variation of the modify tool, products that have reached the end of their useful life can be put to other uses. For example, old clothes can be made into rags or tailored into floor mats; 1.25l pet bottles converted into watering "cans" or piggy banks; or old electronic items disassembled for spares. Your only limit is your creativity.
 
Eliminate. Over time some of the conveniences we pay for become no longer necessary. That gym membership that you pay for via automatic bank deduction or that additional mobile phone feature that you no longer use. The list is endless. If you have not used something for the last 6 months, you are likely not to need it anymore. So eliminate them.
 
Re-arrange. Not all habits are good. Formed unintentionally, some of these habits may be at the root of our poor spending habits. For example, having that cup of coffee before leaving for work may result in you meeting rush hour traffic and having to pay extra on toll charges. If however, you rearranged your habit to have coffee in the office instead, you will miss rush hour, avoid paying addition toll charges and save not only money, but time.
 
As you can see, these simple "tips" are not magic but common sense. With a little thought and effort, these tips are powerful enough to help you save at least 10% of your annual income. Thus, as I said in the beginning of this article. Sometimes earning more is as simple as spending more wisely.
 
P.S. If you have used any of these tips to increase your income, I want to hear from you. Please share your experience with me and the other readers in the comments section. Cheers!

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