It’s never been more important to have multiple income streams. The current climate has shown us that no job is safe, so having more than one stream of income can help us spread our bets and ensure that we’re always covered financially.
An increasing number of individuals are creating multiple streams of income for themselves through side hustles or passive income sources. Having various sources of cash flow has become well-favored for good reason–there are a plethora of benefits including added financial security, paying down debt, and more.
If you’ve been thinking about adding additional sources of income to your finances, here are some great reasons why it would be beneficial for you.
Increased Financial Security
Workplaces change rapidly. People can get laid off unexpectedly and lose their job due to factors that are completely out of their control. Having more than one income stream ensures you have something to fall back on. If your main source of income fails you, you have something else that you can use. With multiple streams of income, it alleviates some money stress that a job loss can bring.
Helps Pay Down Debt
Paying off debt can be difficult, especially when you have multiple types, like credit card debt, mortgage, or vehicle loans. It can be hard to pay off these debts each month, especially if you have high interest rates. Making extra payments on existing debt might help you avoid paying a lot of interest, and will also help you pay off your debt faster.
Helps You Live Within Your Means
In order to increase your wealth, you must be able to live within your means. If you want to live within your means, you must either spend less or make more money. Cutting down expenses can be especially difficult with inflation and rising costs. If you can’t cut your expenses any further, adding an additional income source can help you cover more expenses and add to your savings and investments.
Rising Inflation
Inflation has made the cost of living expensive. Essential needs, such as gas and grocery prices, have been affected the most. In most cases, pay and salary are not keeping up with inflation. In fact, the majority of Canadians say their finances are being overtaken by rising costs.
Adding an extra income source can go a long way in paying for higher everyday costs. You’ll have extra money to spend on essentials, to put towards your savings and investments.
Opportunity to Work Less
Having more income streams might mean you can actually work less. Passive income, such as investments, digital products, and online courses, can give you increased flexibility in the amount of hours you need to work.
Maybe you’ll find yourself not needing to work overtime or exhausting yourself to get a pay raise. You can spend more time doing things you love, focusing on more exciting ways to make your own money, without worrying if you have enough to cover this month’s expenses.
Achieve Financial Independence
Financial independence can take many forms. Financial independence can mean getting rid of debt, having enough to retire, and more. The possibilities are endless.
By building and nurturing multiple streams of revenue, you will create options for yourself and your career that you probably wouldn’t have otherwise. Maybe you can take a job with more flexible hours, even if it means sacrificing a portion of your salary. Maybe it means that you can transition to working part time. Having multiple streams of income provides a reprieve from the financial anxieties of the future.