This article is part of my “Secret to Success” series. Check my index article to see where it all started and for the other four parts!

For many, including myself, we find it much easier to reduce our spending than to earn additional income. Whether it’s limited availability of jobs, skills, motivation or financial backing, there’s always “something” that gets in our way to gaining higher pay or side-income. Some people are introverts, some are extroverts. Some need to plan everything, while others have a “Just Do It” mentality.

But regardless of your perceived capabilities and limitations, you do have at least one marketable skill; sometimes you just need the confidence that you can ask for that raise or start that side business.

How to Earn More Income

No one is going to become wealthy by keeping the same exact salary every year of their life. Inflation causes the cost of goods and services to constantly rise. “Lifestyle inflation” also causes the need for more money. For example, you want a bigger house, more/newer gadgets, nicer/more exotic vacation, etc.

Basically, there are two ways WE have tripled our income since college:

1. Increased salaries
2. Side business income

Increasing our salaries

Each year, I get a social security benefits mailing which details how much I’ve made (according to tax returns) since I first job. It’s interesting watching my income grow every single year (except one in college). When I was 15, I had a paper route and then moved on to a job at McDonald’s (with a work permit since I wasn’t 16 yet). My parents didn’t force me to get a job; rather, I wanted one. In that year, I pulled in about $600. I was rolling in dough!

Over the next few years, I progressively increased my income either by working more hours or getting pay raises. However, these raises were mostly from increases to the minimum wage rate (I started when it was about $4.25/hr). It wasn’t until late college that I started getting more than minimum wage.

In college, I went back to working at McDonald’s, mostly because they were paying $6.50/hr ($1 more than minimum wage). By the time I left after 2 years, I was up to $7.25/hr, but then I took a paycut to become an office manager of a women’s clothing store (imagine, the only guy in a store full of college-age women workers!). By the end of college, I was pulling in around $4000-$5000/year, but I was spending much more than I earned.

Luckily, in my first job out of college, I got a salary about 10x what I was making before! But did my spending slow down? Only slightly. I spent $3,000 on new furniture, ate out for lunch almost daily and traded in my brand-new Saturn L300 in for an even newer Acura TL-S, losing $6500 in the process.

Once in the professional world (i.e. out of college and part-time jobs), I was pretty happy with my first few raises. In the first year, I got a 12% bump, and then 8% in my second year. But then the money started drying up. In my third year, I got a 4% raise, and in my final raise, I only got about 2.9% (which was on the high end for our department). And this was a Fortune 100 company with record profits year-over-year! I had a feeling things would only get worse, so I made my move.

Within the realm of a salaried job, there’s only a few ways to increase your income:

1. Ask for a raise
2. Hope for a raise
3. Change jobs (but ask yourself why you’re switching jobs first)

I’ve never had to ask for a raise, but I did hope for one because in that job, I ended up on a 15-month pay raise cycle in year four, but I had no idea how long I would be waiting till I finally got the raise. So instead of constantly waiting every 15 months or so, I decided to go for option 3: I got a new job.

Taking a big risk for big rewards (switching jobs)

I’m not the type to take big risks, but I will move to a new job if the timing, pay and risks fall in line with my expectations. So in the spring of 2005, I took (in my mind) a major risk: I left my cushy corporate job for a job 90 miles away. I lived near D.C., worked in northern Virginia, but took a job in eastern Pennsylvania. But since I’m somewhat risk-averse, we decided not to sell the house yet. Instead, I commuted up each Monday and came back Friday. I rented a room in an old converted farm equipment building for about $300 a month, plus internet.

It was just after we bought our first home, and it was the first summer we’ve ever had to maintain a pool (in our MD home). While I got a 14% raise (which mostly went to rent), the distance put a strain on our marriage since the wife was less willing to take the risk and move. In the end, I left the company after just 5 months because they got acquired and our positions were at risk. I found a job in federal contracting near our home in Maryland…and got another pay bump.

After just 7 months, that contract ran out and I moved on to another employer for another pay increase. I finally stayed at this new employer for 3 years and was able to get 2 pay raises in that time. Finally, I decided to leave that company (even though I was up for another raise in a few months) because I was losing skills and not gaining experience. I now work in a university IT department (another pay bump), and I’m finally pretty happy with my job.

But that’s not my only income!

Diversifying your income

Three years ago, when I was languishing in the federal contracting world, my wife decided I needed a hobby. Through the fortune of knowing a wise individual, I got into personal finance blogging. Again, since I wasn’t ready for the risk involved in launching my own business, blogging turned out to be a low-cost, low-risk money making option.

While I started blogging just for a hobby, after a year I was starting to pull in pretty nice side-income. While it’s nowhere near a substitute for my paycheck, it has enabled us to pay down debt much more quickly, as well as take some nice trips and add to our savings.

I’ve diversified into other categories of blogging, but my main site still remains CleverDude.com. However, I still consider this a hobby, which is why I continue to write for my readers rather than search engines. If I treated it like a business, I probably wouldn’t be able to induce as much of my own personality into the writing as I would like. So truly, I am doing something I really like, and getting paid for it.

As for my readers, if you’re considering creating a side business for additional income or to diversify your income, consider your own risk tolerance. If going out on a limb scares the daylights out of you, then think about dipping your toe in the water with something low risk first, such as blogging. However, I’ll warn you that money won’t come quickly, or easily. While it’s a cheap personal investment in terms of money, the time I’ve spent learning, writing, interacting and networking was/is enormous, as it will be for any serious business endeavor.

How are YOU Earning More?

Now that I’ve told you how we’ve gone about earning more income from salary increases and side-businesses, tell me how you’ve gone about boosting your income, whether it’s asking for a raise, changing jobs, starting a side-business or inheriting a huge some of money (jealous).

This article is part of my “Secret to Success” series. Check my index article to see where it all started and for the other four parts!

Frugality and thriftiness seem to be the new buzz words in this economy, but if you’ve been following CleverDude.com for the last 3 years, you’d know that frugality is not a new concsept here.

I kicked it all off back in January, 2007 with an article titled “5 Xtreme Saving Ideas!“, followed quickly by “How to live without your Tivo” (before Hulu caught on). And my favorite early frugality article was “5 Ways Balding Gracefully Can Save You Time, Money and More!“.

I even have an entire “Ways to Save Money” series.

But I also try to practice what I preach. I (usually) follow all of my 50 ways to save money by not wasting, partly to save money, but also to save a bit of the environment (or just ruin it a little bit less). However, we aren’t always frugal, but my thought is you need a break sometimes or else you’ll get burned out of trying to be good. Then again, some people were born thrifty, while it’s a life-long challenge for others.

But I don’t write about frugality to sound condescending to those who may seem “wasteful”. Rather, I write about things I’ve tried, whether I was successful (or unsuccessful) and whether I honestly think it’s a worthwhile endeavor, simply to give my own point of view. But my idea of frugality in suburban Washington D.C. is probably very different than someone from a farm in Idaho or a beach in Maui.

Frugality in a Relationship

And for all of you in a relationship, or even just with a roomate, you’ll know that no matter how frugal (or cheap) you want to be, if your spouse, partner or roomie have other ideas, then you’re probably out of luck. Usually the less frugal in the partnership will win out, depending on the issue.

For example, if you’re trying to save on heat or A/C costs, but your wife (ahem, Stacie) is more than willing to have a “thermostat war“, then it will cost you money, time AND a little bit of your relationship. Sometimes it’s best to just pick your battles wisely. Not only do you need to ease yourself into practicing frugal methods, but you also need to educate, motivate and persuade them to be a bit more conscious about their usage habits. It’s a long road for the dedicated individual, but it pays off in benefits along the way.

Next Up: Earn More

Ahhh, beer. That was the focus of this evening’s DC Personal Finance Blogger happy hour, since we held the event at Brickskeller in downtown Washington, D.C. While I’m not a big beer fan, I do like to try out-of-the-ordinary foods and beverages, so I opted for:

- a Young’s Double Chocolate Stout and
- (after trying a bit of Mapgirl’s) a Duchesse de Bourgogne

I realized I had the Young’s in Pittsburgh earlier this year, and it was still just as tasty (I don’t normally like dark beers, much less stouts). As for the Duchesse, I’m surprised I ordered one after tasting it, but it grew on me. It basically tasted like A) cider or B) balsamic vinagrette. But it had a smooth flavor and no bite.

Attendees

The usual suspects were in attendance, but we did have a new face (and a second appearance):

• Mrs Micah (who organized the event)
• J Money from Budgets are Sexy (sporting the mohawk as usual)
• Mapgirl from Mapgirl’s Fiscal Challenge
• Craig from Budget Pulse blog (honest, I’ll try your company’s budget software one day!)
• and making a new appearance, with only a week of writing under his belt, was Brian from Building Wealth Together. Let’s give him a round of applause for lasting so long!!

It was good to have a small group because at most we only had 2 conversations running at a time, and we really learned from each other. Even though two of us (Mapgirl and I) have passed the 3 year mark on our blogs, we can still get rejuvinated by the new bloggers, with their fresh minds and go-get-em spirit.

Thank you fellow bloggers for a great night out. It was worth the 2 hour commute to hang out with all of you!

Reader Kyle has the following question that I hope some of you can help with. If you have a knowledgeable answer to his dilemma, please comment below:

Looking everywhere for a helping hand. Question about taxes. I’m in a serious pickle it would seem. I am now 3 years behind in taxes and have got some big fees to negotiate. Never mind how it happened, it’s complicated, 1099 and was catching up on rebuilding a life after a brief spout of homelessness and couch surfing. Got out of that hole, but right into a new one.

I was planning to file everything, set up a payment plan and be on a smooth road to recovery when a lay-off struck. Now I am unemployed and just barely getting by again.  Even if I get a job soon, I won’t be making close to as much, savings are drained too. What can I do in this situation to approach the I.R.S. for repayment without just losing everything?

Everyone says get a tax attorney do work it out, but I can’t afford that right now. Is there a way I can pause till I’m back in the game. I hear they are being mindful of the recession. How mindful can I expect them to be?

I know I have some tax geeks in my ~3000 daily readership, so help your fellow reader! I purposely stay away from taxes because it’s all I can do to not screw up my own each year (and just imagine if I stayed in the Accounting major in college!).

Thanks in advance!

This article is part of my “Secret to Success” series. Check my index article to see where it all started and for the other four parts!

In my recent article “Everything you ever really needed to know about Personal Finance on One Page“, I highlighted Trent Hamm’s 5 basic fundamental practices in Personal Finance that lead to financial independence. I also told you I would explain how, in our own lives, we’ve practiced these same principals to reach our current level of success. I’ll also add how we plan to continue utilizing these methods to further advance our financial independence and wealth.

The first principal is definitely the most important to financial success:

Spend Less than You Earn!

Doesn’t this idea sound so simple it’s actually pretty lame? However, while you think “spending less than you earn” makes perfect financial sense, you’d be wrong thinking everyone understands the concept.

For example, back in college, I was making about $6,000 per year (my last 2 years) working part-time. While that sounds like a small amount to me now, also consider my parents were paying (via loans) for my housing, and I was paying (via loans) for my tuition. That $6,000 could all towards my living expenses.

Our current grocery budget is $2500 per year for 2 people, but back in college I would dine on Ramen Noodles for a dollar per week. Where was all the money going?

It was going to food, alcohol, musical instruments, electronics, a new car and totally random things I can’t even recall purchasing. And in the end, I left college with about $15,000 in credit card debt and a $20,000 car loan. Tack on $20,000 in student loans, and I was $55,000 in debt right from the starting gate. I spent much more than I was earning. MUCH MORE!

Changing our spending patterns

I attribute most of the change in my spending to Stacie, as she’s the frugal spendthrift, while I’m the impulsive spender. However, I will take credit for stopping the use of credit cards for at least a year after college. Granted, it took me about 6 years to pay off that credit card debt, but it’s gone now.

It was insanely difficult to bring our spending under control; Stacie even came close to leaving me (justifiably) because I almost traded in my Acura on yet another expensive car. I think that may have been the turning point in my own head (although I still battle my impulsive nature).

From then on, we battled our debt more than we battled each other. Since starting this blog, we’ve rid ourselves of over $100,000 in credit card, auto and student loan debt. Wow.

Speaking of CleverDude.com, the accountability this site has created definitely played a major role, and having readers like all of you kept us motivated to prove we could do it.

A budget, duh

The last thing I’ll say about spending less than you earn is that you can’t do it without knowing both how much you earn and how much you spend. And the only way to find out both is to create a budget. There’s tons of resources out there to learn about budgeting, but basically you follow these steps:

1. Add up how much income you get each month (after taxes)
2. Add up all your bills, including utilities, debt, groceries, dining, entertainment, gym, taxes, insurance, mortgage, etc.
3. Document all your bill categories and amounts in an easy-to-manage format
4. Try to reduce the amount spent in each category

That almost over-simplifying the process, but the main point of a budget isn’t to restrain you, but to guide you and to educate you. By being honest and truthful, you’ll understand where all your money is going, and whether you’re spending more than you earn. You can then modify your spending and continually update your budget to see the long-term effects of those changes.

Are you ready to take the first step to becoming a master of your money, rather than being a financial slave? Try reigning in your spending first.

Next up: Living a frugal life

Not too long ago, Trent from The Simple Dollar published a list of his 25 favorite personal finance, career and personal development blogs, and guess who made the list. Yep, Trent felt CleverDude.com was worthy of his daily attention. And, thanks to the wonders of alphabetization, I made it near the top of his list, garnering loads of link love.

Well, now that I’m finally catching up on some of my linking duties, I’d like to call out another of Trent’s articles, which is an eBook titled

“ Everything You Ever Really Needed to Know About Personal Finance On Just One Page“:

While the PDF itself is 49 pages, the core is the first page where Trent simplifies the 5 most basic tenets of wise personal finance management:

• Spend less than you earn
• Live frugal
• Earn more
• Manage money
• Control your own destiny

The remainder of the eBook provides a wealth of Trent’s prior writings to back up his one-pager, recommended books and, of course, lists his 25 favorite PF, PD and career blogs.

I’ll be sharing my story of our own success with Trent’s one-page (although we reached that success before the one-page came out), so keep an eye out for it this week.

And go check out Trent’s One-Page!

Right now our internet and phone services look like this:

Cable TV: ~$20/mth - We only have basic cable (network TV, no ESPN, etc.) as well as a digital cable box that gives us hundreds of hours of free On-Demand programming from channels like HGTV, BBC, Discovery, etc.

Cable Internet: ~$33/mth - This service normally costs about $43/mth, but we got a 1 year discount. However, the discount out this month (see below).

Vonage VOIP: ~$24/mth - We’re on their lowest plan (500 minutes/mth), but thanks to new taxes, including a $2 phone tax for Montgomery County, MD as of this month, we’re paying about $5 more per month than just late last year. But our VOIP plan is a topic for a different discussion.

Negotiating a Lower Cable Internet Price

So we got our newest cable bill yesterday, and I received a bit of a shock when I opened it. Rather than our total bill being about $60 for both TV and internet (with taxes/fees), it was just over $80! It was 8:55pm, and customer support closed at 9pm, but I decided to try to call anyway.

Surprisingly, I got through to a very helpful CSR who immediately noticed two things:

1) Our special discount ended this month

2) They incorrectly applied the code for cable internet as if I didn’t have a cable TV package ($60), which is $17 more per month than their regular internet price.

She corrected the code, but I mentioned it’s still about $15 more per month than I could get DSL. She said she would check into what specials she could offer, but noted that you “usually won’t qualify for a special until 3 months after your last discount ended”. However, she came back with the price of $30 per month (rounded off) for internet; $3/mth less than I was already paying. I said “Sure! Sign me up!”.

Please don’t tempt me!

But then she mentioned they have a special just in the month of June where you can get any of their “Triple Play” items (TV, internet, phone) for $29.95/mth for a year, but you don’t need to get all 3 items to qualify. The TV deal is their “Digital Starter Package“, which gives basic cable plus a digital box (which we already have), plus expanded cable (ESPN, Discovery, etc.), all for just $10 more per month than we’re currently paying.

Ooooooh, so tempting. While we get free shows on OnDemand, we have to wait for Comcast to load them up, which appears to be on a spotty schedule. But is this just lifestyle inflation? I know there are other options to watch TV online or by renting DVDs of shows after the season ends, but sometimes I just want to flip through and watch someone eating some weird food, or monkeys doing weird things to each other, or whatever else shows up on cable these days. I don’t want to wait! I want to be a couch potato now!!!

Luckily this is the summer when we have more than enough home projects to keep us busy, as well as our day jobs, side businesses and, of course, my graduate school classes. But it is still very tempting, especially since both our families are coming down next month and some members like their TV (or it’s nice to keep the kids busy while the adults catch up with conversation).

What would you do? Would you pull the trigger and upgrade your package for $10 more a month for a year? Remember, that’s $120, plus taxes.

Not that I put much weight into what Vice President Joe Biden says, but he commented on an issue that I wrote about just last week asking whether Obama’s health care plan really did include taxing health care premiums. The administration was floating the idea around of taxing the employee for the employer-subsidized portion of their premiums, which can range from 50-80% of your actual health benefit costs. That’s a load of money!

Well, today in CNN Money, Joe is quoted as saying:

“We do not think that is the way to go; we think that is the wrong way to finance this legislation,” Biden said on NBC’s “Meet the Press” program. Pressed on whether President Barack Obama would veto a bill from Congress containing such a mechanism, Biden said Obama would consider the measure in total before making a decision.

He didn’t rule out the idea entirely, but perhaps some of the backlash is reaching their ears to make them think twice? Also consider that this is an indirect tax on those making under $250k a year, which is the same group for which President Obama promised never to raise taxes.

Honestly, I’m realistic and know that this administration’s spending cannot be financed without new taxes, whether they’re directly out of my paycheck or indirect through benefits, reduced/cut deductions/credits or employer taxes that make it more expensive for companies to carry employees. But let’s see what else they have in mind.

We were married over 5 years ago, but we’ve held onto all of the cards we received as gifts, and each year we find a new surprise.

After our wedding, while our two families were still in town together (they live 1.5 hours apart), we opened our gifts and cataloged everything for when we sent out thank you cards. We left for our honeymoon the next day, so it was a big rush to gather everything up, get back to Maryland, unload, grab our luggage and get to the airport for our flight to Ireland.

Well, apparently we didn’t grab all the cash/checks/gift cards from the cards and we continue to find money each time we go through the cards (or find more cards placed elsewhere). For instance, last year we found a $50 Target gift card that still had all its value.  The year before we found a $25 check (that we didn’t cash since we didn’t want to pay fees in case it bounced).

Well, this week we found a card with a $100 check from one of my college friends. Five and a half years ago, Stacie didn’t have a job, and I was making less than half of my current salary. We had probably $80,000 in debt, so any money we could find helped tremendously. In addition, the friend who gave us the gift couldn’t be called rich by any means, so $100 was a big gift from her.

While I haven’t maintained good contact with this friend over the years, I did feel required to tell her we found the check, in case she wondered why we never cashed it.

I was tempted to ask whether the account was still open, but then I think that’s a pretty improper question. And I’m not going to try to cash it because of 1) potential bounced check fees and 2) I remember the Seinfeld episode where he cashed all of is grandma’s birthday gifts and he put her in the poor house. I think my friend has long forgotten the check and isn’t tracking it anymore, so I wouldn’t want her to miss a payment on something because I wanted the money.

So the lesson to all of you who are married or are planning it is to check ALL your cards for gifts, take them out and keep them ALL together. Oh, and deposit the money ASAP!

I was watching the news this morning when they featured a parody rap by a local guy named Remy (www.goremy.com). He has about 40 videos on his site, but this is the first one I’ve seen. It’s a parody rap about living in Arlington County, Virginia. Having worked in Arlington, I would say it’s pretty spot on…and HILARIOUS!!!

NOTE: You may need to click through to my site to view the embedded email if you’re reading via email or RSS.