Everyone wants to make more money. But how many people actively pursue it? How many people actually take it a step further from just a wish to making it a reality?
In the personal finance community, most of the discussion seems to surround cutting expenses, paying off debt, and living below your means. And rightfully so. These are important concepts when it comes to personal finance. There are numerous people out there who retired early while making only a modest salary because they live well below their means.
This is one route you can take. You don’t have to make a lot of money to be rich someday. All you need is time and some self-discipline to make it happen. But there are limits to this method. You can cut your expenses to the core. Live in a shack, walk or ride a bike to work, eat ramen noodles, don’t run the A/C or heater. Basically, you could live below the means of a poor college student. But in the end, there’s only so far you can go. At some point, you reach the bottom and can’t cut your expenses any further.
There’s another route you can take, though. We are our biggest asset. Everyone has, in theory, unlimited earning potential. Sure, some are more gifted than others, smarter than others, come from a more advantaged background than others. But the opportunities for making money are plentiful today. You don’t have to be incredibly smart or already have great connections. What you need is industriousness and enthusiasm. That’s it. These two qualities will take you a long way in life.
If you want to really cut the time it takes to reach financial independence, then both cutting your expenses and focusing on increasing earnings will get you there the fastest. Since there is so much out there focused on cutting expenses, we’ll focus on earning more money in this blog post.
This past year, I increased my salary by 20%. As I noted in my goals for 2017, I plan to increase my salary by 15% in 2017. Those are some large increases. The average wage increase in 2016 was 3%. With inflation running at around 2%, the standard increase doesn’t go very far. How exactly did I do this in 2016 and plan to do it again in 2017? By creating more value for my company.
At the beginning of the year, I laid out a plan for what I wanted to accomplish. Each accomplishment created more value for my company. This is the key. Create more value for someone else and you create more value for yourself. I discussed this plan with our CEO and we linked these accomplishments to increases in my pay.
There was only one problem. In 2016 I had to make some changes in my department at work. We had some forced and unforced turnover that led to us being shorthanded. This led to an increased workload for me. At multiple times during the year, I was performing the work of three people.
This was killing me. I had this carrot in front of me but didn’t have enough hours in the day to complete the work of multiple people and work on my new initiatives. Or so I thought.
Be More Productive
A common excuse for not doing more is not having enough time. I don’t go to the gym because I don’t have time. Eating healthy is impossible because I don’t have time. I don’t look for ways to increase my income because I don’t have time. These are all just excuses. In my experience, I’ve come to find that those who are the loudest about being busy, actually accomplish the least. They’re the people that binge-watch Netflix. They spend their free time being sucked into the endless trap of social media. These people spend hours on end consumed with nonproductive activities.
Just to be clear, there’s nothing wrong with doing these things. If you’re content with where you are and enjoy watching numerous shows and seeing what everyone is up to on social media, then have at it. Just don’t complain that you don’t have enough time. You do. You just chose to spend your time on those things instead of other pursuits.
Starting in 2015, I made some changes to how I spend my personal time. For starters, we cut the cord. Not for monetary reasons, although with the average cable or satellite bill at $130 per month, you’ll be saving a nice chunk of change. The main reason we cut cable is the freedom it provides. The average American spends five hours watching TV. Our TV was always on. We’d get home from work and just turn it on out of habit. We got tired of spending so much time watching crap, that we just cut it out completely. This opened up so much more free time to read, workout, golf, you name it.
In 2016, my focus turned to becoming more productive at work. The changes I had made in my personal life made a big difference, so why couldn’t similar changes have a big impact at work as well? About mid-way through the year, I implemented several changes to how I spend my time at work.
Effectiveness vs. Efficiency
Efficiency is often confused with effectiveness. You can become incredibly efficient at a given task. But if the task doesn’t provide value, then it’s a waste of time. Effectiveness, on the other hand, is doing things that get you closer to your goals.
Let’s look at one of the biggest time sucks in the working world, Email. Say you take the time to set up an elaborate system of folders and rules to sort through the loads of Emails that hit your inbox every day. This system allows you to manage your emails and respond faster as they come in. Sounds efficient. But is it effective? No! The average worker spends 28% of their time managing email. TWENTY-EIGHT PERCENT!! Over a quarter of your week is spent reading, responding or deleting emails. And to top it off, most of these emails are not urgent and not important. Definitely not an effective use of time.
I found that a much more effective use of my time is to limit email checking to twice a day. And I DON’T check email first thing in the morning. Studies show that workers are most productive in the morning. Don’t spend your most productive hours doing nonproductive tasks!
For those of us who never knew a working world without email, this seems crazy. It did to me at first. What if an important email goes unanswered for several hours? What if an important deadline is missed because I’m not checking my email? It doesn’t happen. Since I’ve implemented this practice, I haven’t had a single email that was life and death and needed to be responded to immediately. And guess what? If it is something that is life and death important, it shouldn’t be coming through an email! Truly urgent and important matters should be communicated in person or phone call.
Becoming a More Effective Worker
If you want to get paid more money then you have to demonstrate your value to the company. We are a value driven society. The world needs things from you. What do you have to offer? Those who create value are more sought out and better paid. Spending a quarter of your work week tackling unimportant and non-urgent issues will not create more value. No one has ever received a pay increase because they efficiently manage their email. However, freeing up more time during the week to focus on important tasks will.
So back to my story of creating more value in 2016. I had several initiatives in place to accomplish during the year. Every one of them led to more value for my company, and a pay increase for me. The problem was I had no time. So how did I take on the work of multiple people and still have time to achieve new goals for my department? Eliminate time sucks!
Here’s a summary of the things I implemented that freed up a lot of my work time.
1) Check Email twice daily.
We discussed this earlier. Email is one of the biggest distractors there is. Every time we receive an email, a pop-up appears on-screen and a ding sounds letting us know how important we are. I turned these notifications off and resolved to not open my email until 11 am each morning. Come mid-day, I respond to necessary emails, skip over the junk, and then exit. Repeat again at 4 pm.
This was a huge eye-opener for me. I didn’t realize just how much time the constant checking of Email was costing me. Not only was I being distracted for those few minutes of checking email, but it would take several minutes to get back to the task at hand. Removing this distraction has helped me retain focus and get more done.
2) Change homepage to Google search.
Many workers’ homepages are set to a news site. Mine was always MSN. Go ahead and open MSN right now. I guarantee you there will be some breaking and important news that you have to see. I use the internet a fair amount during the day to research various matters. When my homepage was set to MSN, I was immediately hit with numerous distractions. Succumbing to human nature, I would click on the article with the flashy title to see what’s going on.
Then, when I get to the end of the article, there’s a slew of other links with headlines designed to get you to click on them and waste more time. Here’s a sample of some I found just now, “The Most Addicting Shopping Site for Women,” “The 10 Biggest HGTV Scandals,” “Quiz: 85% of People Can’t Identify These 50 Films From the ‘80s.” Fifty clicks of the mouse later, and I’ve just wasted twenty minutes consuming pointless information that I otherwise would not have cared about.
By changing my homepage to Google, which has no articles to offer a distraction, I no longer find myself forgetting why I originally went out to the internet in the first place.
3) Plan for the following day.
Not having a plan for anything is a surefire way to failure. I’m not a natural planner. Most days I would roll into the office without a specific plan of what I wanted to accomplish. This was leading me to perform less important tasks that are easier to get don’t but don’t provide as much benefit.
When I began to plan ahead and list out the top five things I want to accomplish the next day in order of importance, I began to see a big change. Those tasks that provide the most benefit are put at the top of my list. This allows me to be much more effective, and not just busy.
4)Dive into the most critical task first.
Along with not checking my email until 11 am each day, I make sure to keep my email closed until that time. Previously, that was the first thing I did just out of habit. Every day, before I check any email, voicemail, the stock market, etc., I make sure I have checked off my most critical task of the day.
The most critical task is often one that’s difficult or may have some element that I’m not thrilled about doing. By tackling this first thing, I don’t give myself an opportunity to procrastinate. I always feel a lot better after knocking out my most difficult task, and it provides me with momentum for the rest of the day.
5) Set aggressive timelines/goals,
What happens when you have a month to complete a project? If you’re like me, then you spend the first three weeks convincing yourself you have plenty of time and don’t really accomplish anything. Then, as the deadline looms, you switch into overdrive and knock the project out on time. Why not do this from the start?
This is the final thing that really helped me accomplish more. I had a ton on my plate and several of my new initiatives left to get done. Instead of procrastinating, I did just the opposite. I set aggressive timelines and sent meeting requests to our CEO to review what I had completed. With these aggressive timelines set, I spent less time making the project out to be bigger than it is and more time getting it done.
Implementing these five simple things turned me into a more effective worker. It doesn’t sound like much, but I think you’d be surprised at how much time is wasted each day with just a few minutes here and a few minutes there consumed by these time sucks. Eliminate these, and you’ll free up more time to spend on value-producing activities. I was shocked at how much time I was able to find in the midst of doing the work of 3 people to meet my personal work goals. This allowed me to increase my income in 2016, and thus increase my savings even further.
Readers, are you an efficient or effective worker? What steps have you taken or plan to take to increase your value and make more money? I’d love to hear your thoughts on strategies you’ve implemented to make yourself more effective.