By: Brayden Marsh

Everyone at some point in their life has wanted a couple more bucks whether it be for investing and saving or spending. I believe that it’s important for everyone to have enough money to be able to do all of these things comfortably, but it’s easy to get overwhelmed by one of these things and forget the other ones and overdo it. I also think it’s important for everyone to monitor their spending and saving habits as the more you pay attention to those, the more you learn about your habits and how to improve them. This guide will not only explain how to make extra money, but how to also make it seem like you’re making extra money by just avoiding certain purchases.

1.    Wants and needs

It is extremely important to differentiate between your wants and needs, and if you are able to differentiate them well and for the most part only buy needs, it will appear you have made money, when in reality you just didn’t spend it in the first place. This is arguably the simplest, but also most difficult idea to follow through on. The idea is that if it is not necessary for living comfortably you probably don’t need it as much as you think you do.

A good example of this is junk food. Whether it’s fast food or candy, it all makes an impact on our spending habits. The biggest issue with junk food is that its so cheap you barely even think about it when you buy it, but eating it often can stack up extremely fast. The average person spends about $148 per month on fast food. While this might not seem like a lot for a month’s worth, this is $1,776 worth of fast food in 1 year. If we multiply this by the average amount of years a person spends in the workforce, this adds up to almost $80,000. Now obviously this number isn’t accurate for most people, because eating habits change with time, but regardless, this is a huge chunk of money that could be saved and used in better areas.

While junk food is a very big part of this topic, it’s only 1 side of it. Just about every day we buy something that we don’t really need and it’s important to recognize this and save the money instead. More good examples of this might be expensive clothing, expensive hair products or makeup, technology, accessories for your living space, and lots of other things.

A good rule to follow is called the 48 hour rule. This rule says that if you want an item, wait 48 hours before buying it and chances are you won’t want it as much anymore. If you can recognize your wants and needs when shopping, you will most likely save significant amounts of money that you didn’t think you could.

2.    Side hustles

Side hustles are a very common way of making extra money that have gained significant popularity within the past few years. Some big examples of this might be selling or reselling stuff online, pet or baby sitting, seasonal yard work for neighbors, simple landscaping jobs, and the list goes on. Although side hustles may not provide enough money to live on, they do generate some extra income if you have the time to do so.

Some side hustles may be better than others at generating income, and some may be more laborious than others, but there are practically unlimited options you can choose from. Side hustles can also be very experimental, meaning you can try something you come up with and see if it works. Many side hustles are also cheap and quick to start and are easy to change up, meaning if one doesn’t work, it isn’t very difficult to switch to another. Overall, side hustles are a great way to generate some income quickly.

3.    Investing and saving

While it might not be fast, investing and saving are some of, if not the best ways, to make passive income and is too important to not mention. The easiest way to save is to put some of your money in a savings account and let it sit, as a regular savings account has an interest rate of about 0.39%-0.45% per year, which means every year your money will grow exponentially by that amount. Putting money in a savings account is very safe, the only risks being the bank failing, in which case each person would fund up to $250,000 per person, and the other case being inflation lowering the value of your money in savings and the inflation rate beating the interest rate.

The other main option is investing in stocks. This option is more risky due to you investing money in businesses that can potentially lower in value, or even go bankrupt. However, this method is also extremely profitable and works a lot faster than savings accounts. The S&P 500 is an index fund that when bought, splits your money to the top 500 biggest businesses. Historically, the S&P 500 goes up in value about 10% every year, and your money grows exponentially. This means that if you put $10,000 in the S&P, it’s predicted to be about $11,000 the next year, $12,100 the next year, and by the 50th year, this number would be $1,067,190.

However, this is not guaranteed. When big changes happen in the world, this can impact the S&P in ways that may bring the value up or down, meaning you can also lose money on it. Some years it might go 5% up, some years it might be 15% up, and some years it might go down 10%. For example in 2022, the S&P dropped about 19.4% mainly because of high inflation rates and technology not doing great that year. Although these aren’t the only ways to generate passive income, they are both fairly reliable and the most commonly used ways to make some money.

Conclusion

People often won’t use these methods because of laziness, risk factors, and it takes a lot of time, effort, experience and information to use each of these methods to make extra money. However, these methods are also almost always worth the time and effort to try.