LIFESTYLE & TRAVEL

The Key to Success: Managing Multiple Streams of Income

Establishing various streams of income is a smart way to increase your financial stability. It not only secures additional funds to help you pay your expenses but also provides a sense of relief if you fall into hard times. Let’s review a few steps to consider to help ensure your income is being managed effectively before getting started.

Identify all sources of income.

Before you can make data driven decisions about managing your income, it’s important to know when and where the funds will come from. Create a list of each income source along with their expected amounts after deductions, payout frequencies, and how consistent you will be expecting to receive them. Keep in mind, the higher your income, the higher tax bracket you will fall into if you start earning significantly more than you’re used to earning.

Establish a financial account.

Now that you have identified your streams of income, be sure to establish an account with a trusted financial institution that will secure your funds and help to identify ways to reach your goals. Take advantage of the different products and services provided such as tiered savings accounts and certificates to increase your savings earning potential.

Automate your savings and payments.

Depending on how many avenues of funds you are planning to establish, utilize automatic payments and transfers to maximize account opportunities and help to avoid human errors. This will help manage where funds are sent on a regular basis and increase the likelihood of establishing healthy savings habits. It’s important to monitor these transactions to ensure due dates, transfer needs, and saving goals are met on time.

Maintain a livable budget.

As your savings increases, try to avoid lifestyle inflation by overspending just because you have more funds deposited into your account. Create a budget that allows practical spending that matches your everyday needs and wants, along with a goal amount for your savings to help keep you consistent with your saving habits.

Having more than one source of income can become hard to manage. By following these steps, you can set yourself up for success. Remember to pay yourself first but don’t forget about any high balance or high interest debts that could become a problem for you later on. If you have a hard time maintaining your accounts, be sure to speak with a financial advisor on more ways to help keep yourself on track.

Sources:

https://www.bankrate.com/banking/savings/manage-multiple-income-streams/#digital-expense-tracking