“When I was young I thought that money was the most important thing in life; now that I am old I know that it is.” – Unknown
Though there other ideologies also exist stating money is not everything but money is required to meet the basic necessities of life and there are no means to escape it. People earn to live a good life and improve their standard of living and that is what keeps all of us going on. Everyday a person goes to work with a hope to make a better future for self and for his family. But yes not all earned income is disposable income. We pay tax on the income we earn which is subject to our income and the tax slab rates decided by the government. But yes, people with higher income generally do not get to enjoy the total income that they have earned.
As Albert Einstein has quoted, “The hardest thing to understand in the world is the income tax.” Government is trying its best to minimize tax evasion activities by tax payers. In given scenario, the only way to increase the disposable income is to either upgrade ones skills or increase the area of work.
If one feels that after all the expenses arising out of lifestyle and taxes, there is very little to save for future, then one should either cut down on the expenses or find out ways of increasing the income.
Well, today we have made ourselves so much accustomed to the luxuries around us, that the luxuries have become our necessities and nobody would want to compromise on that. So the next best solution is to find out ways to increase the disposable income. We can have a look at the possible ways to increase the income:
Upgrade your skills : One may take up some further studies course which will help him get a degree and simultaneously upgrade work skills which will help him at work. One may choose to attend certain workshops which will focus at increasing work efficiency. These things will definitely put weightage on the resume and on work performance as well. With an added degree to one’s profile, one may expect a promotion or salary hike at work. This may also help in getting a second job, in case the existing workplace is less complacent.
Start a business : Starting up a business is a big and courageous call. There is a direct correlation between risk and returns. Starting up a business is considered risky as your income is dependent on the trend of your business. But it’s equally rewarding. It demands your time and efforts way more to what one would think of putting as an employee. The difference is that you will see more of the income from your labour because taxation for business owners is a small pinch when compared to the blow that taxes give to employees. Some of your business write-offs can even be claimed against other income sources, but you have to follow the rules carefully.
Investing income: Investing the earnings in reliable and suitable financial assets based on the financial advisors guidance and financial goals of the investor. While one is earning, one may plan to invest for future keeping in mind certain goals like marriage, child education, child’s marriage, buying a house, going on a vacation(s), retirement and so on and so forth which requires money. So the wise thing is when one is earning he should start accumulating for the financial goals bit by bit as well.
Spend less : Tightening your budget will automatically bring down your expenses and result in surplus money that you may invest. One should sit back and analyse the expenses that one is incurring on day to day basis and which are avoidable. If there is an alternative available to the current expenses and which may result in saving money, then one should consider that.