Spend less than you earn.
That’s what I consider to be the fundamental rule of personal finance. Everything really comes down to that – frugality, investing, career choices, and so on.
Most people look at that sentence and see the frugal implications. “Spend less” is absolutely a vital part of the equation… but it’s not the only part. “Than you earn” is just as important, and the two together reveal the two key pieces of the financial puzzle.
Keep your spending in check and seek out ways to earn more money.
The problem is that earning more money requires you to invest something. Financial investing, for example, calls on you to take the money you have and use it to produce more money. You buy some shares of stock, collect the dividends, and perhaps sell that stock for more than you paid for it. You buy some real estate and charge rent on the people that live there.
Your Non-Financial Resources
But what do you do if you don’t have a bunch of money in the bank to use in this way? The truth is that you likely already have a lot of non-financial resources that you can invest to improve your income. Here are four quick examples.
Every single one of us has 24 hours per day to do with what we wish. Take a look at this Labor Department chart, which shows how an average working American’s time use breaks down on an average day: 7.7 hours of sleep. 8.9 hours of work related tasks. 2.5 hours of leisure. 1.0 hours of household activities and 1.0 hours of eating and drinking. 1.2 hours of caring for others. 1.6 hours in a nebulous “other” group.
Let’s say you take a bit of downtime at work, part of your daily leisure time, and most of that “other” time and add them together, giving you about three hours on an average day. That’s a valuable resource, one that you can use to achieve a lot of things.
You also have the energy, both mental and physical, with which to take on challenges in life. The simple fact that you’re reading this article indicates that you have some energy to expend each day.
The question is, of course, how you choose to use that mental and physical energy. Are you spending it sitting in a steady state not doing anything productive? Are you engaged in improving yourself or in genuine leisure activity? It’s a choice you’re able to make all the time.
Pre-existing Skills and Knowledge
Every single person also has a set of pre-existing skills and knowledge that’s unique to them but also has some common ground with others. That list of skills is often far longer than people realize, encompassing things like driving a car, organizing your time, and so on, and also including highly technical skills that can help you find a good-paying job.
Those skills are a resource for you. They’re like tools that you have inside of you that you can use to build amazing things – a new career, a side job, or something else entirely.
Another resource that many people possess but overlook are the social relationships and connections that they have, both personal and professional. The positive relationships you have with other people in the world are a true asset, one that you can tap again and again.
As with many resources, however, this resource requires some effort on your part to maintain and even more effort to grow. It’s worth it, though, as the relationships you have provide value in pretty much every aspect of life.
Investing in Yourself Without Money
So, how do you turn these four resources – and others you may have – into better earning opportunities without spending money? Here are nine strategies for pulling off that very trick.
What do you wish you were doing? What does the next rung look like in your career ladder, or what career would you like to jump into? Right now is the time to start paving the way for that, and you can do it by getting involved in communities (online and offline) related to the career that you want and the skills that you need.
What good does this do? It provides a chance to start building relationships in that field which can lead to employment opportunities. It helps you directly build new skills you need for the new direction you’re taking. It provides a place to share your work and get your name out there, too.
You can find such communities all over the place, online and off. Start by checking Twitter for people interested in your desired skills and career path. Look at Meetup for any and all relevant local groups.
This mostly takes spare time, but some extra energy and a few pre-existing social connections can help, too.
Strategy #2: Take Advantage of the Abundance of Online Learning Opportunities
Yes, working toward a degree is a great way to improve your earnings potential, but doing so is usually prohibitively expensive. On the other hand, the actual material that you would learn on your way toward a degree is almost entirely available on line right now. You can start learning what you need to know for free right now.
The number of online learning platforms available right now is incredible. Coursera, edx, and Khan Academy are perhaps the best known ones, but there are topic-specific ones like Duolingo and university-specific ones like MIT OpenCourseWare. All of them are completely free.
These things won’t necessarily earn you a degree, but they will teach you skills, help you earn certifications, build your knowledge base, and make it much, much easier for you to zip through a degree program later on because you’ve already tackled the material. All it takes is time and energy.
Strategy #3: Never Eat Alone
This is the title of a very interesting book by Keith Ferrazzi and Tahl Raz that centers around one key point: meal time is a valuable time for building relationships and when you choose to eat alone, you sacrifice that opportunity.
The idea is simple: Figure out a way to eat every meal with someone, whether it’s a family member or a friend or a coworker or someone else, and spend the meal engaged in an active discussion with the people you’re eating with. Part of your goal should be to get the other person to talk and actually actively listen to them and respond to what they’re saying and thinking, as it’s the best opportunity you have to learn and also to really build a strong bond with that person.
Try to pencil in someone as a dining companion for every meal that you eat and really work to make that meal into an opportunity for memorable conversation.
For me, for example, I relish my role as a parent so I eat breakfast each day with my children and eat a family dinner with my children and my wife almost every evening. On the evenings where I do not, that means I’m eating with another community group so I eat with members there. For weekday lunches, which is the hardest part to me, I’ll either skip lunch entirely (to be more productive in other ways), eat out occasionally with people, or actually take a meal to a friend’s house for lunch.
I try to never eat alone, because eating with others is gold for relationships and it costs nothing more than the already existing cost of meals.
Strategy #4: Improve Your Fitness and Appearance and Energy Levels Through Better Diet and Exercise
Maintaining a healthy weight and at least a minimal level of physical fitness is absolute gold in terms of the quality of your everyday life. You look good. You feel good. You have lots of energy. Those factors make it easier to build relationships, have self-confidence, and take on lots of life challenges.
The best part? It’s free to do it. All it really takes is willpower and determination.
Dieting is easy and it saves money, too. All you really have to do is eat less than what you’re eating right now. Stick to a 1,600 calorie a day diet, for example, and most people will shed pounds. Smaller people may need a 1,200 calorie diet.
Exercise doesn’t require a big financial commitment, either. You can run/jog anywhere and body weight exercises (push ups, sit ups, planks, crunches, yoga, and so on) do not require any additional equipment. Need guidance? Youtube has tons and tons of videos on almost every form of exercise.
All you need to give is some time, some commitment, and some willpower and you will improve your appearance, self-confidence, and energy levels.
Strategy #5: Volunteer for Leadership and Communication Opportunities
It’s true in almost every single aspect of life: the people that swallow their nerves and volunteer to lead or to take on scary tasks (like speaking to an audience) tend to be the ones that build lots of relationships with people in the community, build lots of trust from their supervisors and coworkers, and end up receiving raises and promotions.
Raising your hand for a leadership position or a speaking task is really scary for a lot of people. No one wants to sign up for extra work. No one wants to stick their neck out there, either. It’s scary.
Doing so, however, puts you in a position where there’s pressure to perform your best and many, many eyes are watching your performance. It’s a great opportunity to come off as someone who can handle tough situations and challenges and responsibilities – and that’s the type of person who will see raises and promotions in the future. Not only that, leadership and public speaking tasks are usually impressive enough that they become great resume fodder, helping you to get future jobs.
Look for any and all opportunities to lead groups and to speak publicly. Not only will this get you out there, each time you step up to the plate it will seem less scary and you’ll be better and better at it.
Strategy #6: Take on a Creative Hobby
This might seem like a strange way to invest in yourself, but it’s actually a very powerful one.
Creativity is all about looking at problems, situations, and solutions from new directions. Doing so forces us to use our mind in new ways and as we discover those new approaches, they integrate themselves into how we think and handle problems and situations in life.
Creativity isn’t just about paintings, though. It’s about trying anything new and learning how to do it. It’s about coming up with ideas and trying to figure out how to implement them. People are creative when they make dinner or when they write a computer program or when they draft a thoughtful email.
There are countless hobbies that spur creativity. The traditional arts are obvious ones, but things like writing open source software or starting a blog also force you to be creative, and that creativity helps to open your mind and build new skill sets.
Strategy #7: Get in the Habit of Better Time Management
Like a lot of people my age, I often feel like I am completely drowning in things that I need to get done. I am a writer with more agreements than I sometimes feel like I can creatively keep up with. I am trying to launch another side gig as well. I am a parent with three children that I want to kiss on the head each day before they leave to get on the bus and greet each day when they get off the bus. I am a husband with a wife that deserves a lot of love, care, and attention. I am a homeowner with a house that needs lots of little things done to it. I am involved in my community with spots on various community boards and membership in multiple groups. I also have my own hobbies and interests that deserve a little time, too.
I tend to feel like I’m juggling all of these things best when I have a good time management system in place. For me personally, the Getting Things Done system is the key. I use Todoist as my task manager of choice and Evernote for longer notes. This keeps all of those distracting “I’ve got to remember to do this” thoughts out of my head because I know they’re all stored in an easy-to-access form. That way, I can just focus on knocking out all of those tasks.
Learning how to do this has helped me so much in terms of improving my focus and productivity. I would not be able to juggle my life very effectively without a good system in place, so it has actually vastly increased my ability to earn money and maintain all of the things I care about in life.
Strategy #8: Read Challenging Books
I don’t mean page-turners read solely for entertainment. I mean books that make you think about the world, absorb new ideas, and reconsider your views (every viewpoint I have is constantly being reforged by opposing viewpoints, which actually means that I have very few views that I hold to be strongly true).
A challenging book that makes you really think is something that helps you in countless ways. It improves your knowledge set. It improves your critical thinking skills. It improves your understanding of a specific topic and either alters your views or helps forge them and make them stronger. It helps you to discuss the issues that you learned about in the book with others.
The best part is that there are millions of challenging books available to you for free at your local library. Pick up something that looks really hard on a topic you have an interest in and spend the time to work through it. Stop whenever you’re confused and read things like Wikipedia so that you get a grasp on what’s being said. Think about the ideas that are being shared – do you agree with them? Do they make sense? Can you see how the ideas come together with other things you know?
It’s a process that constantly sharpens the mind. It makes you a better conversationalist. It makes you a better problem solver. It helps you come to better conclusions about life situations. It makes you a more efficient learner, too. All of those things directly help you to earn more money.
Strategy #9: Get Better (and Probably More) Sleep
Sleep is a necessary function of our lives. It recharges our mental and physical energy, making it possible for us to focus on the tasks at hand in our life. Inadequate sleep means that it’s harder to focus on things, it’s harder to approach things with mental and physical energy, and it’s harder to be a happy and vibrant person. We simply don’t have gas in the tank to pull it off.
The key to a good day is all about getting a good night of sleep the night before and, honestly, the nights before that, too. (I find myself affected more by the sleep I had the night before than the sleep of the previous night, meaning that if I get four hours of sleep in the night hours between Monday and Tuesday, I feel like a zombie on Wednesday.) The magic number is different for most people, but it tends to fall between 7 and 9 hours.
I know from personal experience that I can feel pretty good on less sleep for several days in a row, but I also know from seeing my work during those periods that I’m not performing at my best (even if it feels like I am at the time) and I’m certainly a little more “cranky” and emotionally swingy than usual.
The best recipe for a good night of sleep is to simply devote plenty of time to it. Go to bed early so that you can sleep as much as you need. Keep your room as dark as you can and minimize screen time in bed (just put that cell phone away).
If you’re struggling getting good sleep even when you set aside plenty of time for it, consult your doctor. There may be a medical issue involved that can easily be resolved.
All of these strategies are very useful ways to invest in yourself. They can improve your energy level, your decision making process, your knowledge base, your ability to focus, your available free time, and so on.
The catch is this: None of these will really help without long-term consistency. You need to stick to these things over a period of time to really see the benefits. Reading one challenging book is good, but reading them consistently is what will make the difference. Getting one good night of sleep is good, but getting consistent nights of sleep is what will make the difference. Getting a batch of exercise is good, but getting consistent exercise is what will make the difference.
So here’s your game plan. Pick one of these strategies and commit to making it a habit in your life. Try to take steps forward on that strategy every single day for a while. Commit to getting a better night of sleep for a month or to spending an hour a day reading a challenging book instead of watching television in the evening.
Gradually, you’ll find that you have more energy, more skills, more relationships, more knowledge… and eventually all of that will translate into more income.