Making More Money

See also: Long-Term Financial Planning

What do you do when you’ve drawn up your budget, and you know that your expenditure exceeds your income? There are two real options. The first is to save money by reducing your outgoings in some way. There is more about how you can do this in our pages on Spending Less Money, Avoiding Spending, and Tips for Saving Money.

The second option is to make more money. This is often more appealing because it does not involve any reduction in your outgoings.

This page provides some options for making more money. It covers generating a passive income, self-employment and the ‘gig economy’, and ‘hobby businesses’—plus several points in between.

Taking a Second Job or ‘Side Hustle’

When we talk about ‘second jobs’, we usually mean something that is very different from your ‘day job’. This is purely because it is nearly impossible to fit two conventionally ‘full time’ jobs into your life.

However, plenty of people supplement the income from a ‘day job’ with evening or weekend work. This might include work like babysitting or childcare, house- or pet-sitting, and work in bars or restaurants. These jobs are generally on-demand. You can find them via local ‘help wanted’ ads, often online.

Check for local licensing requirements, especially for childcare

In some places, you may require a licence and/or criminal records check before you can look after children, for example, as a nanny or childminder.

Check with your local authority before you start advertising, and make sure that you meet all requirements.

It may seem tempting to avoid anything that might have costs—but a fine could easily wipe out all your profit.

You may also be able to find work online that is time-flexible and done remotely, contract by contract (see box). Examples of this type of work might include editing, computer programming, social media management or writing, depending on your skills and experience. You may find our page on freelancing tips is helpful for finding suitable areas to look.

Joining the ‘Gig Economy’

The ‘gig economy’ is a term used for freelancing or contract work where you hire yourself out one job or contract (or ‘gig’) at a time. Much of the traditional freelance market works like this, but there are also some new options since the rise of the digital economy, including sites like Deliveroo, Just Eat, Uber and Taskrabbit. For most of these apps and sites, you choose which contracts to bid for and accept.

In principle, this means that you work when you want to work. In practice, it can mean that you feel forced to take any work that you are offered in case there is no more later.

Another option that can be a useful ‘side hustle’ is tutoring or teaching, depending on your skills.

There is a ready market for tutoring at primary school level, and towards an 11+ or secondary school entrance, and then again for older children preparing for public exams. If you are a musician or artist, you may also be able to teach others in this area. Again, check with your local authority about any local licensing requirements if you plan to work with children.

Buying and Selling

It is worth thinking about whether you have anything second-hand that you no longer use or want, especially if it is in good condition.

Auction sites like eBay and other online marketplaces mean that it is relatively easy to pass on goods like this. If you prefer selling without the bother of dealing with packing and posting anything, you could try local car boot sales or fleamarkets. These usually offer you a slot at a sale, for which you pay a fee, and you are then free to sell your goods for whatever prices you choose. You could also host a garage or yard sale at your own home, to save you having to transport goods. However, be aware that fewer people will travel for that, so your prices will need to be lower.

From clothes to books to electrical items, there is a market for everything. Individual items may not be worth much, but it all adds up.

Check the Value First

If you have anything that you think might be valuable, then it’s a good idea to ask someone knowledgeable before you start selling. It would be galling to sell something for a fraction of its value.

Local auctioneers and antiques dealers are often happy to give you a ballpark valuation from a quick look. This can tell you whether it may be worth selling via a specialist.

Items that may be worth considering for valuation include:

  • Any jewellery, because even old costume jewellery is very saleable, and precious metals are valuable;
  • Collections of anything, including stamps, cigarette cards, and toy cars.
  • Old china, silverware and crystal, especially sets;
  • Books, especially sets, and especially those out of print and in good condition;
  • Vinyl records, because a few are extremely valuable, and it’s worth getting an expert opinion in case you have any of those; and
  • Wine, particularly anything that is a good vintage.

For all these, you will probably get a better price if you go to a specialist dealer than if you try somewhere where people expect a bargain.

Some people make a business out of buying and reselling items via auction sites.

They buy things in bulk when they find a bargain, scour charity shops and similar sources, and sell their finds on to other people. This is worth considering if you have the time to look about for bargains, and list them on auction sites.

Crafting and Skills

If you have a hobby that involves making or crafting, you may be able to monetise it.

For example, plenty of people have turned a cake-decorating hobby into a small business, or found a market for hand-made baby clothes. Some have even found that their hobby turned into a full-time job as demand grew.

WARNING! Make sure your prices are right from the start

When you are first asked by a friend or family member to make something for payment, it is tempting to ask very little money. After all, you do it for pleasure, so why charge for your time?

However, it is worth costing in your time from the very beginning, to avoid getting swamped by ‘friends of friends’ expecting cheap rates.

You may find it helpful to read our page on Pricing and Charging for Freelancers.

You may be able to sell locally, at school fairs and events, or advertise yourself via social media. You could also set up a shop on an online marketplace like Etsy.

Generating a Passive Income Stream

A passive income stream is perhaps close to everyone’s dream: a source of income where you sit back and relax, but the money still comes in.

Unfortunately for most of us, the obvious way to generate a passive income stream is to have money in the first place and invest it wisely. However, what counts as a ‘wise investment’?

A study by Barclays found that since 1899, UK shares had returned, on average, 5.1% per year, compared with just 0.8% for cash. It therefore makes sense to invest in the stock market. However, as our page on Online Banking and Other Financial Services explains, individuals who invest in the stock market generally do less well than the stock market average. The wise investor, it seems, employs a fund manager.

There is more about this on our page Understanding Investments.

Other sources of passive income include:

  • Rental properties

    Like investment, this will again require an upfront investment.

    Many lenders offer buy-to-let mortgages at very advantageous rates, however, and with a much smaller deposit than you would require for your own home. You can add value to your investment by buying a ‘project’ and doing it up yourself. This may mean that you can generate more income in the long term, but be aware that it will take longer to start generating a profit, as well as requiring more investment upfront.

    Rental properties are not exactly sources of free money. You will need to pay the mortgage each month, and also earn enough from your rent to cover any maintenance and property management costs. You might save money by managing the property yourself—but that will cost you in terms of your time.

  • Websites or webpages that will feature advertisements for which you are paid per click

    Many websites feature advertisements. Advertising was actually SkillsYouNeed’s first source of income, and it is a recognised part of many websites’ financial model. Advertisers pay the websites to feature their ads, and expect to recoup the money when website users click on the ad and buy the product.

    You can do this via your own website, or via platforms such as YouTube.

    The downside of this is that it takes quite a long time to build up a website or social media channel to the point where you are generating enough money from advertising to simply sit back and relax. You also need to be aware that both site users and search engines like new content, so you probably need to pay writers or videographers, or create plenty of your own content.

  • Creating online courses or eBooks

    You can also create online content such as courses or eBooks that people are prepared to buy, rather than consuming for free.

    Again, this is an option that SkillsYouNeed uses, and you can visit our shop to see our range of eBooks.

    The downside here is again the upfront investment of your time (or money, if you pay someone else to create your content). You will have very little idea of how popular your book or courses will be. You will therefore need to do some good market research before investing that time or money, to ensure that you will get a good return on investment. Over time, you may also need to make further investments, to update your courses or books and make sure that they stay relevant.

  • Joining one or more affiliate marketing schemes

    Affiliate marketing is a type of advertising. Businesses pay third parties who successfully promote their products in a way that results in sales. The usual way is for the affiliate marketer to promote the product via their own social media channel, sharing a dedicated link with their followers. They are then paid by the business for anyone who uses that link to make a purchase.

    Affiliate marketing can be a helpful addition to an existing social media presence, especially if you have a growing following and level of influence. However, it takes a while to start generating a profit, and you need to build trust with your followers before you can sell to them effectively.

No Such Thing as a Free Lunch

As all these options demonstrate, there is no such thing as a free lunch. Earning more money generally takes both time and effort. A ‘side hustle’ is a good option for increasing your income. However, if you are short of money, it is probably a good idea to look for some savings as well.