Why You Should Have More than one Source of Income, and the Importance of Savings

June 10, 2017

Before jumping into this post, I know that this doesn’t fall under my usual blog description. However, this is important to discuss, as money is an integral part of our lives.

This morning, I received a call from my boss telling me not to come in until otherwise noted, because there is a gas problem, and we cannot operate until that’s fixed. Rather than feel dismayed at losing out on a work shift, after the call, I said, “Oh, good! This gives me time to finish moisturizing my hair without needing to rush.” The reason I don’t feel crushed is because I have three sources of income.

The advice that I’m giving should be taken with a grain of salt, the reason for that being is that I’m young (19), and have no formal education in economics (I’m obtaining a degree within the Humanities). But what I do have is common sense, more life experience than the typical person of my age which forced me to mature early, and informal economics courses. With that in mind, let’s get into this!

The first thing you need to understand is that no job is stable, some are simply more stable than others. Whether you work as a CEO or a janitor, your job is not guaranteed to be there the next day. Cuts to employees happen, your company can sink and go under. If you’re to have just one source of income, you’ll likely be, put bluntly, screwed at some point. I’m not advocating for people to work themselves to death, but it’s incredibly important to spread out your earnings. Take on what you’re capable. My mother, for example, has three sources of income, and it allows us to live a relatively comfortable, middle class life. My three income sources lead to me working 5 days a week on average, so I still have time to myself.

When determining your income sources, you may want to diversify the manner of your earnings. For example, my primary source of income usually pays very well, but is unstable, and occasionally has dry spells. My secondary source of income has guaranteed pay, but it’s minimum wage. My tertiary source of income is basically pocket change right now, but it will grow over time. If I were out of work for some time from any of those sources, I wouldn’t be too distraught.

Secondly, whether you’re my age, or in your early thirties, you seriously need to start working on your savings. Not all jobs offer a 401k investment plan, so you should at least have a savings account and try not to touch the money in case of emergencies. If you don’t make a lot of money, consider setting aside 5% of your earnings into your savings. When/If your financial situation does improve, move up to 10 or even 20% of those earnings. This is for your future, after all. The reason I so strongly advocate for savings is because at least, in the US, there won’t be much available in social security for Generation Z, my people. Meaning we need to invest in our futures now and take control of our lives. I currently set aside 5% each week, and though it’s not much, I’m filled with pride at knowing I’m investing in myself.

I hope this proves useful to someone out there. If you have any questions, please leave them in the comments!

Namaste,

V

 

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