There are only two ways to improve your financial situation and future.

There are all types of get rich quick hacks out there today. The bottom line though, is that there are really only two ways to fix and better the dynamics of your money situation.

1. Lower Your Expenses

If you don’t have the surplus cash you want each month, then the first step is to lower your expenses. If you aren’t making the bills on time, you just wish you could afford to travel more, or don’t have enough left over to enjoy those small treats for your family after you’ve taken money off of the top of your paycheck to save for retirement or to give to charity, then maybe your bills are just too high.

Ideally your housing expenses won’t take up more than 30% of your monthly income. It’s even better if you can keep that under 25% to create a cushion against rising costs. Then if you can keep all of your other expenses under 25% of your monthly income, you’ll have 25% you can save, invest and use to increase your real net worth.

Maybe you can save by going down to one vehicle, refinancing a car or home, paying off high rate cards, getting rid of an expensive phone plan or leased phone, or replacing an expensive and unhealthy habit with a better one.

Of course, some people are doing really well when it comes to lowering their expenses and yet still seem to be broke. You can really only cut your bills so much. You probably still need a house to live in, need to eat, need internet, and if you have a spouse or family they are going to need some ‘basics’ to keep them happy.

It’s important to remember that you’ll always have bills. Even if you buy a lot in the woods, build your own tiny house by hand, dig your own well, run on solar, and grow most of your own food, you’ll still have bills. You’ll still at least have taxes and property taxes, medical bills, and more. A lot of people aren’t going to find such a minimalistic lifestyle sustainable for the long term either.

We are human after all. Refusing to use any financial leverage or have any expenses can limit your ability to grow your finances as well. Zero leverage can also mean being exposed to even greater financial risks.

Do as well as you can in this area, but at some point you’ll also have to do this…

2. Increase Your Income

The only other way to improve your finances and have more surplus is to increase your income.

You can only cut your bills so far. Then you have to increase your upside. Just don’t soak it all up with new bills that you have to pay every month. Leave a cushion for inflation, economic changes, and for the maximum freedom of what to do with your money.

The two keys here are to prioritize passive income and to invest. This way you can multiply your income at a far greater rate than you can physically clock hours and earn, and you can enjoy a more sustainable income that is independent of your ability to work.

Using some form of leverage in this scenario can also really help to make big leaps and get ahead, especially if you are already behind on providing for retirement and beyond.

So, be cautious in the amount of new fixed expenses you clock up each month, but recognize that creating more passive income is the other half of this sum if you’re looking to really improve your money game.

For More Information:

Find out more about investing in secured debt and real estate, visit our contributor’s website: NNG Capital Fund