Making a grand per month can do many wonderful things for you and your family—you can save for retirement, save for your child’s college education, or use the money to become debt free.  However, sometimes extra money is needed just to make your budget work.

The adage is to spend less than you earn, but what if your earnings are too small to meet your expenses?  What if you are frugal, but you are in a low paying position such as a paid internship or a graduate assistantship and you just can’t make ends meet?  What if you have unexpected expenses such as medical bills or an expensive car repair, and you don’t have enough money saved to pay cash?

In many cases, the option is to use credit cards, which can start the downward cycle of credit card debt that becomes very difficult to escape, especially when you are living on a low income.

A grand a month can mean the difference between future prosperity and falling into debt, sometimes deeply into debt.

Although it may not seem like it at the time, it may be easier to begin a side gig to make extra money (eventually a grand per month) than it will be to incur debt now and work to pay it off years from now.

My husband and I struggled financially when we had two kids 17 months apart and I quit my job because I would be bringing home very little after daycare.  My husband was finishing his Ph.D. and working as a graduate student.  We took out student loans and used our credit cards to make ends meet.

Thankfully, I began to work as a virtual assistant and freelance writer and started bringing in extra income to supplement my husband’s small salary.  At first, my little bit of income was so small all it did was reduce the amount of debt we had to take on.  However, within a few months, I was making enough that we could scrape by on our income together, so we no longer had to accrue debt.

Now, a year later, my husband has graduated and moved to a better position and I am making more than a grand per month on my side gigs.  This extra money has allowed us to begin aggressively paying down our debt, but it will take a few years.

I wish I would have started looking for a side gig earlier instead of feeling paralyzed by our financial situation.

If you are in a tight place financially, don’t feel victimized.  There is much you can do to improve your situation.  Perhaps you can tutor or become a freelance writer or a virtual assistant or open a lawn mowing business.  There is something you can do, and every little bit of extra money you make can help improve your budget.  A side gig can improve your financial situation, and if it helps you stay out of debt, you have the potential to grow your wealth instead of paying down debt when your financial situation improves.

I am reminded of the guy who put down the hardwood in our family room.  He did the same thing for a living, but would also do some extra work on the weekends.  We paid for the hardwood, and he and his dad came over on a Saturday spending about 8 hours to put it all down.  Obviously, the job was professionally done, and we saved about 25% compared to what it would have cost to go through a national or regional flooring chain.

We paid him and his dad $600 for the 8 hours of labor.  That means his take was $37.50 per hour provided he split the money with his dad equally.  Who knows, maybe his dad was willing to work for a few beers and lunch?

Can You Do Some Moonlighting?

So what kind of moonlighting could various professionals do to earn an extra $1000 or more per month?  Accountants could prepare taxes or manage the books of small businesses on the side.  Charging less than the big firms could save some money for these individuals yet could be more lucrative per hour since the revenue isn’t going into a lot of overhead.

Nurses could provide home care on the weekends to elderly individuals.  There will be a great demand for this someday and maybe you could turn it into a business.  I know someone who reviews medical charts for malpractice lawyers and makes $250 per hour!  It doesn’t take long to make an extra grand doing that.

Are you a teacher that could do some tutoring?  Or do you have some musical skills that you could use to teach piano or guitar?  Are you a carpenter that could offer woodworking classes and charge a small fee to teach a small group how to do a small project?  Many people are willing to pay for specialized knowledge in these and many other areas.

Sometimes it only takes a little bit of thinking outside of the box to understand that the possibilities are endless.

Related articles

• Make $1,000 a Month With Your Passion (grandpermonth.com)

Progress so Far

I did mention that I have a topic which I believe fills a hole in the existing knowledge base.  I believe that it will solve a problem as well as address a fear that many investors have.  I even have a good title, in my opinion.  I have been thinking about the ebook a lot and have been writing notes mentally, but have little put down on the actual word processor.

So far, I have what I would call a partial outline.  It isn’t incredibly detailed but does cover about 3/4 of a page.  It is enough that I think I should start writing and see what develops from there.  So that is the plan for today.  As soon as I get this post complete, I will start writing.  The plan is to get at least 500 words written today and maybe another 500 tomorrow.

It seems that each page on an ebook is about 250-450 words depending upon the font.  If I figure about 400 per page and I want to write about 60-100 pages, then I am looking at about 24,000 -40,000 words which would be about equivalent to 48 – 80 blog posts.  I have been routinely making it a goal to write posts that are at least 500 words.  Since the outline currently has about 6 divisions, I am thinking that 6 chapters of 10 pages each is reasonable.  It may turn out to be different, but at least I have a rough idea of what I might be tackling.

The writing load doesn’t seem unreasonable considering I have over 200 posts at one blog, almost 250 Hubs, another 100+ posts at Cash Flow Mantra, plus those that I have written for this site.  I should be OK.

Goals Over the Next Month

This is where I force myself to be accountable.  Let’s assume that I can put in 10 hours over the next month (about 2.5 per week).  During that time, let’s assume that I can write about 500 words per hour.  So, I should have 5,000 words written by the next progress report.  Simple, isn’t it!

This post has taken me about 15 minutes so far, and I have written over 400 words.  Not bad.  But I didn’t have to do any research or fact checking so 500 words per hour for my book seems reasonable.  Wish me luck over the next month.  The past two weeks have been busy, and I was treading close to burnout so took a few nights off where I didn’t do much at all.  Today, I am feeling good so I am going to finish this up and roll with it.

Putting faith in past performers

Let us start with a caveat. In some cases, a shares ISA that performed well the previous year might perform very well the next year, too. However, you shouldn’t choose which ISA to go for based purely on the fund that had the best result in the previous year, as there is no guarantee it will do as well again this year. Instead, it makes sense to do some thorough research to determine the best ISA for your current needs.

Failing to use your allowance

Not using up the ISA allowance is another mistake that many people make. Of course, you might not always be able to afford to save the full amount every year, but it is worth saving as much in your ISA as you possibly can because of the tax benefits attached to them. Just remember that tax benefits can differ according to your personal circumstances, so if you are unsure of the benefits you’ll receive from saving in an investment ISA, it’s worth seeking advice to check.

Being too short-term

Another mistake to avoid is thinking only in the short term. One notable thing about stocks and shares investments is that there is a risk attached to them, because the market is not guaranteed to rise and can fall – meaning you can get back less than you originally put into your ISA. However, over the long term, there is a very good chance that your investment will rise, which means it pays to think ahead when you open your ISA and aim to invest for a period of five years or more.

Not switching early enough

Sometimes, it makes sense to stay with your current ISA provider. They might well be the best option for you several years running. However, if you think that another provider could give you a better deal than you are currently getting, it makes sense to switch early in the tax year so that you can continue to enjoy the tax benefits and other benefits associated with your new account. This also applies if you are opening your first stocks and shares ISA: don’t delay or else you might miss out on being able to save your full ISA allowance for this tax year.

Paying more fees than you need to

Finally, even though investment ISAs typically come with fees for managing the fund on your behalf, there is no reason to pay more than you need to. If you pay higher fees than you really need to, you could be missing out on a significant amount of money, so have a look around and make sure you choose a good ISA that also offers reasonable rates of fees.

Related articles

• Isas: five tips to help your savings grow (telegraph.co.uk)
• The best Cash ISAs for the new tax year 2012/13 (mirror.co.uk)

The Defining Difference Between the Wealthy and the Poor

Do you ever notice how poor people compare themselves to one another? Sure, they might brag about the latest toy that they “bought” or the most recent vacation that they took (compliments of their credit card), but ultimately, if they really want to compare apples to apples, they try to estimate the hourly wage of the other person. Most people don’t do it intentionally, but if your friend is a nurse who makes $25 an hour, and you are a mechanic that makes $14 an hour, I bet you’d feel poor in comparison. On the flip side, if you were the nurse and you friend was the mechanic, you’d probably feel quite wealthy!

This mentality of comparing an hourly wage is the poor man’s way of thinking. After all, your friend could be a doctor, but he might be in debt up to his eyeballs! He’s probably still got his 6-figure student loans, a huge mortgage, and a few car loans! If your only debt is your $80,000 house, you might actually be more wealthy than your doctor friend!

Those that are wealthy define their financial status not by their income, but by their net worth. After all, when you’re 70 years old, what’s going to matter, how much you made each hour or how much you’ve saved over the course of your life? The key is how much you’ve saved over the course of your life.

How to Improve Your Net Worth

Whether you make $10 an hour or $100 an hour, it really doesn’t make much difference. What matters is how much you are investing for the future. Sure, it might be easier to invest if you’re making $100 an hour, but you’d be surprised how easily one could spend that amount of money. If you want to be wealthy, you should be participating in most of the action items below:

• Live well below your means
• Increase your income (perhaps by a grand per month?)
• Avoid most forms of debt (especially if they’re funding depreciating assets)
• Have an emergency fund (so you aren’t forced to borrow at a high percent)
• Invest if your company 401(k) or Roth IRA
• Build up your own business (and reinvest the earnings back into it)
• Invest in real estate
• Accumulate passive income

Notice that I did mention increasing your income. While this isn’t really necessary, if you can up your income by a grand per month, think of how quickly you could increase your net worth! Even if you struggle to increase your income, all you have to do is live below your means and stay disciplined, and you’ll be able to watch your net worth grow and grow!

This post is from Derek who writes at Life and My Finances.