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Saving Money for Beginners – part 5

„Saving Money for Beginners“ is part of a series of articles from our guest author Victor.

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This is part 5 of Victor's series „Saving Money for Beginners“. If you have not yet read the previous parts, you can find these here:

Part 1 / Part 2 / Part 3 / Part 4

Let’s briefly review what we have done already, if you have been following my previous articles: 

  • You accepted that saving money and paying money monthly to yourself is as important as paying your home bills.
  • You have opened a separate bank account where you will send this monthly payment
  • You have the discipline to actually start saving, you don’t lie to yourself and you don't postpone important financial decisions for your own future
  • You have started to save money every time you can, and the result of this action (actual saved money) is transferred directly to your savings account.

We will now search for a small source of income “on the side”. And at the same time we do this, we will give our first “baby steps” in relation to the concept of “cash-flow”.

Now, ask yourself: is there something you have at home that you can easily sell? Let me underline easily, and, just as important, with no extra cost.

Do you have a hundreds of DVDs or Blu-Rays at home? Or special books you don’t read anymore (and - be honest - you don’t plan to read!). Do you own clothes in very good condition that you can sell? Did you just have a baby, he/she is growing, and the clothes don’t fit anymore? Do you have any toys from your kids that they don’t play with anymore?

The first part of this task is to find something you have and that you can sell. The second part is to find a platform or a market where you can sell these.  

Generally, you would have two options, depending on the items to be sold:

  • You can list them in a website like Amazon, Ebay, Craigslist or similar. But the cost will be taken only when you sell something. Not before. Remember! Be disciplined and don’t lie to yourself! Otherwise you start spending money again, before you even know whether you will be making any extra money.
  • Or you can go to a flea market and sell your “merchandise” there. The disadvantage to this option is that you will have to pay for the place and benefit to be at the market. So, again, don’t lie to yourself and: negotiate a good price, make sure you have enough good material to sell (not things you want to get rid of!), and do the math! Calculate your costs, put a price what you will be selling, and make sure you are making a profit.

I am personally more a fan of the first option, as you just let the online marketplace do the job for you. It won’t be cheap, as they will probably take close to a 20% of the price of what you are selling. And you also have to pay shipping costs. But you forget about it, and wait for the orders to come. 

Please note, this is in no way an option to get rich, or be your main source of income. It only is, as mentioned at the beginning, a small source of income on the side.

Once you start selling, you will notice that you need discipline, and you need, again, not to lie to yourself. If you sell something: you need to package it, take it to the post office for shipment and deliver a good service, for a good rate at the marketplace, so you sell more. You will also need to start doing math and calculations so that you don’t end up paying more for shipping than what you actually get for selling the product. 

Be honest, don’t sell things that are broken or do not work. It will come back to you and you will be paying more. This task is about creating another safe and constant source of income, not to make a big-buck quick.

Mathematics is another big part of savings and investment that will be very important from now on. Don’t worry, mathematics is very fun when it is about your own money. 

No surprise, once you have sold your first product on the online marketplace, or after spending a day at the flea market selling your used clothes, you will, of course, move all the money to your savings account. 

And now you have created three different cash-flow sources:

  1. Your monthly bill payment for savings, 
  2. Every little amount of money you save on daily expenses
  3. And the earnings of selling things at home you no longer need

Please note that this extra source of income, should no take a big amount of your time and should not be a big source of stress. It is meant to be a side activity.

Do you have any other ideas you can share about what people can do on the side? Feel free to share with us.

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Photo: Victor/Private

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