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12 Month Plan to Improve Your Finances: Month 3 - Pour More Into Your Bucket

In a Nutshell: If you follow the SmarterSquirrel 12 Month Plan to Improve Your Finances, in Month 3 - Pour More Into Your Bucket, you should be on your way to earning more money than you were before. This extra money coming in will help you get closer to reaching your target of saving what you need to on a monthly basis to reach your financial retirement goals. As you increase your earnings, remember not to increase your spending, this way you can accelerate your saving, investing and paying down debt.

“ Invest in yourself...”

Money you earn either actively through work or passively through investments is like water pouring into a bucket. Money you spend, either on things you should spend your money on or things you shouldn't spend your money on, is like water pouring out of that same bucket, assuming the bucket has a hole in the bottom of it. The amount of water in the bucket tells us if you are pouring more in than what goes pouring out. If your bucket is empty you're probably not pouring enough in or you've got too big a hole in your bucket. Essentially, you want a bucket that is full and overflowing, where you're pouring more in than what goes pouring out of the hole in the bottom of the bucket. 

In Month 1 you calculated how much money you are bringing in (how much is pouring into your bucket) and how much you are spending every month (how much is pouring out of the hole in your bucket). In Month 2 you calculated how much you will need to save every month to reach your retirement financial goals. If the amount you save and invest each month, as calculated in Month 1 is equal to or more than what you calculated you need to save each month in Month 2, then congrats, you're doing great, your bucket is filling up! This month's lesson isn't going to be as important for you as it is for others, but it still may be useful if you want to fill your bucket faster.

If you aren't saving and investing as much as you calculated you need to in Month 2 to hit your retirement financial goals, then you're definitely going to want to pay attention here. Your bucket is either not filling up fast enough or it may even be running dry.

Let's say you're 25 years away from retiring and are 40 years old and want to retire with $100,000 passive income every year and have nothing saved yet. Based on the math we did in Month 2, you need to save and invest $2,780 every month. Let's use that as the example. If all that amount needs to come from increased income (some can come from increased savings but just for example let's assume you can't possibly save anything with your current income and expenses), assuming you're in a 35% tax bracket, that means you need to earn an additional $4277 a month.

So this month, we will look at ways you can pour more money into your bucket. Yes it's important to look at spending and control it, but that's what we'll do next month. This month we look at how to increase the money flowing into your bucket. Next month we'll look at how to reduce the money flowing out of your bucket.

So at the end of Month 3, you should have a good plan of attack to increase the amount of money you are bringing in. We will look at various ways you can do that. Some may be short term, others may actually require a bit of investment and a temporary decrease in cash flow coming in for a later larger payoff.

BUT REMEMBER... I have no professional training, skills or accreditation in personal finance, I am not a certified financial advisor or planner at all... so if you need professional personal financial advice, seek advice from a professional. I'm not a professional, I'm just a guy with a blog who figured some stuff out for himself and am just sharing what I know and what I've learned over many years. Some of my friends ask me how to get on the same financial road I'm on, and so I thought I'd tell them and you how to do what I did through this SmarterSquirrel 12 Month Plan to Improve Your Finances, now in Month 3...


If you make enough to save and invest enough to hit your retirement financial goals, and you're happy with the lifestyle you are able to live with the money you make, then great for you. Keep at it. If you're not, then let's look at how you can make more money so you can pour more into your retirement savings and investing bucket.

Let's start with your main source of income. For most that's your only job or if you work a few part time jobs, it's the job you make most of your money from. If you keep working that same job, will you be able to hit your financial goals?


For me, I was in a job where I didn't make very much money. If I kept at it, I would be living a lifestyle that would not have been enjoyable for me, and I would not be financially independent in my late 40s. So I decided to make a change and get the prerequisites to start on a new and more lucrative career path.

I decided to get an MBA. That would mean two years of no longer working. Two years of debt to finance the MBA tuition and to finance the cost of living for two years of not working while I went to school. That put me about $70,000 in debt. But when I graduated with my MBA I was able to get a job paying about 3x what I was earning before I got my MBA. That definitely allowed me to hit the target mentioned earlier of earning $4,277 more a month.

Doing the math, if I had stayed in my original career I may have theoretically wound up with $47,665 in dividend income by the age of 50 by living a very cheap lifestyle vs doing the MBA, living a much more comfortable lifestyle and theoretically winding up with $140,697 in dividend income by the age of 50. 

Even only allowing my expenses to be at most half of my take home pay, I was still able to afford a better lifestyle after the MBA than what I was able to afford in my earlier job.

So investing in myself paid off. It allowed me to earn 3x more when I graduated. It allowed me to keep getting higher and higher paying jobs. It set me on a much better career path.

So invest in yourself. Find a way to get the career you want that pays much more than what you're making today. Will it help you earn the $4,277 a month more or whatever your particular target is from Month 2?

If you've seen Will Smith in the Pursuit of Happyness, then you know what I'm getting at. You don't have to get an MBA like me. You don't have to become a stock broker like Chris Gardner, the real life character portrayed by Will Smith. Figure out what you want to do that will improve your financial life, that you will also enjoy doing, and figure out what it will take in terms of time, money, effort and sacrifice to acheive it.

Are you a dental assistant who would like to earn more? Why not become a dentist? Are you an admin assistant? Why not become a manager? Are you a cashier at Canadian Tire? Why not become a mechanic? Whatever you are doing for a living now, is there a more lucrative and interesting career path you can get to with a couple of years of sacrifice and effort? Will it put you financially ahead of where you would be if you stayed where you are?

Once you figure out what that path is for yourself. Go for it. You can do it. Trust in yourself and invest in yourself. Whatever it is that you want to do. Others have likely done it before you, and so it is something you can do as well. It may be financially painful in the short term, but trust me, if you pick the right career path for yourself, it will be worth it.

To me this is the most important and most impactful of all the methods of increasing your income in the medium term. Yes there are small ways to make a few extra bucks, but nothing moves the needle as much as investing in yourself to be able to find something more lucrative to do for a living.

Then once you're earning more, it's that much easier to dedicate savings to investing in things that can help you reach financial independence. Just make sure you live on only half of your take home pay as your pay grows. Save and invest the rest. If you're making 2x or more than what you used to make and lived on, then it will be easy to save half of your take home pay.
Chris Gardner gets inspired to become a stock broker...


Method 2 I will touch on briefly. It's the most important part of pouring more into your bucket in the long term. Whether you take your savings and put it into a dividend growth portfolio, or whether you're good enough at investing to find the next Apple, Facebook, Netflix, Microsoft, or other massive growth stock before it takes off, or whether you invest in preconstruction condos at a lower price than what they eventually are worth when built, or whether you are brilliant at finding rental property and great tenants or whether you invest in a business that winds up paying you more down the road than what you make from your job in Method 1... Method 2 is the key to no longer trading time for money... instead it's your money making money for you, compounding and growing until you no longer need to work anymore if you don't want to.

But Method 2, though it belongs in Month 3, it doesn't really belong in Month 3. Be aware of it, it's where we need to get you to. But Method 2 is really a topic unto itself and one that I'll dive deeper into in a later month. For now we need to help you get more money in the near and medium term.


I was in Boston recently on a work trip, and the Uber driver that picked me up from the airport told me that driving for Uber was what he did after work. He lived on the outskirts of Boston and he had to commute in and out of Boston every day anyway, so he figured he may as well get paid to do it. So he gets a couple of fares heading into Boston in the morning. Then gets a few fares heading out of Boston in the evening until he gets close enough to home to drive the rest of the way without a fare.

He didn't tell me how much he makes doing that, but let's assume the guy makes $20/hour doing that. Let's say he does 3 hours every weekday and does that 4 weeks every month. That's $1200 extra earned. If we go back to our example of needing to save $2780 every month. After tax, assuming a 35% tax bracket, the Uber driver has saved $780. He's got $2000 more a month to find. (This is why method 1 is best, find a better job earning more... but until you do, Method 3 can help put a dent in the amount you need to save every month).

There are so many side gigs. There are many blogs dedicated to side gigs. It's a gig economy, haven't you heard? Whether you get a part time job, whether you pick up a couple of extra shifts at your own work place, or whether you find a 'side gig', you will be able to make some additional income on top of what you are already making with your main job.

When I was a poorly paid lawyer in Ottawa, I wanted to fly home to visit my family. But I was tapped out. I didn't have enough money. I didn't want to put the trip on a credit card, that would be a slippery slope into a world of debt and grief. Afterall, if I couldn't afford to pay for the trip with cash now, how would I be able to pay it off at 19% interest on a credit card later? So I got a part time job at a call centre. I did it for a few weeks. It got me enough money to go on the trip home without having to go into debt. It was honest work. It wasn't particularly enjoyable, but it did it's purpose.

So if I can do some telemarketing despite having been a lawyer, then you can do whatever honest side gig you need to do to reach your financial goals. Maybe you can overlap it with something you enjoy and are good at?

I know a guy who owns a restaurant but in his spare time he teaches snowboarding because he enjoys it. When I lived in Japan, there was a local lady who sold homemade kimchee at the nearby subway stop to people on their way home. I met a guy who had a real job, but was selling aloo paratha (delicious Indian flat bread stuffed with potato) in Kensington Market on weekends. I know someone who used to do makeup for women as her side gig. I know a guy who used to DJ dances as his side gig. I know a guy who buys and sells comics because he enjoys comics and making money. There are many things you can do to make a few extra bucks. Even playing a musical instrument out on the street is a good way to make some extra money. I always drop some money into the case or bucket when I hear someone playing some good music in the subway or on the street corner.

Don't get involved in anything that requires you to pay someone in order for you to make money and that requires you to recruit people who then have to pay you in order for them to make money. That would be a pyramid scheme. Avoid that.

So that's method 3, get a side gig.

Avoid pyramid schemes...


There's no such thing as a free lunch but there is free money. Make sure you get all the free money you can get. At work there are typically a few ways for you to get free money.

RRSP Match (401K Match) - Most companies provide some amount of matching funds up to a certain amount that you put in to your work RRSP (401k). So you may get a 50% match of your contributions up to a maximum value of 2% of your salary as an example. That means you should definitely be putting at least 4% of your salary into the work RRSP (401k). Whatever plan they have at work for giving you free retirement money, make sure you contribute whatever you have to in order to get the maximum amount you can. Assuming you have a $100,000 salary, that 2% match is $2000. Free money!

ESPP - Nothing to do with extra-sensory perception... this is the Employee Stock Purchase Plan. If you work at a company that is publicly traded, chances are they have one of those plans. Often, you are able to buy the company stock at 85% of the lower price of the beginning or end of your purchase period. Let's say you put 10% of your salary into it and let's say your salary is $100,000. That's $10,000 put into your company stock at 85% of the actual stock price. Let's say your company stock is $100, you get to buy it at $85. With the $10,000 you buy 117 shares. Let's say the stock stays flat at $100 when you're allowed to sell, that's $11,700. You just made $1,700 without any real risk. It's free money.

Bonus - Most salaried jobs provide bonuses to employees. Usually the bonus is calculated by some combination of how well the company did as well as how well you did in your job. Do your best at your job and make sure the people deciding your bonus know how good a job you are doing (the best way to let them know is to just let them see you doing a great job rather than campaigning). In my experience, good work gets rewarded. So do your best.

Raises - Most places will have an annual performance review. Discuss your performance with your boss and ask about the potential for a raise. Be good natured and yet confident that you deserve it. Maybe you can convince your boss to give you a 5% raise? If you make $100,000 now, that's an additional $5,000. (And when you get a raise don't increase what you spend, save that extra pay.)

Salary negotiations - There is usually some wiggle room when getting your job offer. You can usually get more than what's in the first offer. Ask for more. Ask for something reasonable. Whether it's a sign on bonus. A slightly higher base salary. A higher bonus percentage. Stocks. Options. Whatever it may be, ask for it within reason. You also don't want to become too much of a pain with the people you are about to work with. If it's a choice between a sign on bonus or a base salary increase for the same amount, go for the base salary increase, you'll get that extra money every year.

Promotions - A great way to avoid ever having to do Method 1, is to be so good at your job and at managing your career that you don't need to go away and get credentials. You build your credentials through your work. I had a boss who as far as I know, never got his MBA, but he advanced through his career and got ever increasing responsibilities and success. He's very well regarded in his industry and has an executive position. So if you can get there that way, even better, you don't need to give up a salary for a couple of years of schooling, you just keep getting more senior positions and better pay.

Severance payments - Never sign the severance offer when you get let go without getting a lawyer to look it over first. It may cost a little to get a lawyer to look at your severance offer, but they'll be able to advise you whether the amount being given is appropriate or not. If not, they'll help ensure you get what you're entitled to. In Canada, we tend to be entitled to a lot more than what people in the US are entitled to. So if you're in Canada and working for a US company, make sure they know what you're entitled to in Canada. Make sure YOU know what you're entitled to! And then get it.

Between the RRSP, the ESPP and the raise, you theoretically could have gotten an extra $8,700 for the year. That's an extra $725/month.


Now this is not the same as the side gig. In the side gig, if you make something or provide a service and can do it profitably then that's great. If you can get stuff from China for cheap and resell it for a profit with some branding on Amazon that's great. That's your side gig. That can be sustainable. In Method 5, it's not really sustainable. Usually what you sell, you are selling for less than what you paid for it.

So don't make a habit of this. That would be a bad way to make money, buying high and selling low. But if you have some stuff that you really don't need and really don't use anymore, then getting rid of it by selling it can be a good way to get a quick little bunch of cash. Have a yard sale. Free up some space. If you are paying for storage of stuff that you don't really need, then selling that allows you to stop paying for storage so it's a win-win.

If you have a car and don't really need a car, selling that can be a great win-win. Not only do you get the cash from selling your car, but you get to save the insurance, the maintenance, the gas, and car payments if you're still making them and you probably will get a little healthier by walking to the subway more or by cycling more.

I hear Marie Kondo is all the rage, so maybe watching her on Netflix will help inspire you on this one. But again, don't make a habit of it. That would mean you keep buying stuff you don't need and keep selling it at a loss. Bad idea.


I'm actually not a fan of this method. Some people are fine with strangers staying in their home through AirBNB, or renting out their car through peer to peer car loan services, etc. I say it's not worth it. It's your home or your car, do you really want some whacko staying in your place spitting in your coffee cups and dropping your toothbrush in your toilet? Having a separate property and renting that out through AirBNB is different, that's fine, but your own home? Come on, is it really worth it? To me it isn't. 

Just use methods 1 through 5... avoid method 6!


There are many more ways to make extra money. But really consider how much they move the needle vs the effort you have to put in to get that extra money. The big thing is Method 1, invest in yourself and get a much better paying job. That's the biggest increase you can get in my opinion. Method 2 involves getting your money to work for you and we'll discuss that a few months from now. Method 3 is a lot of extra work and if you already have a full time job, then it's going to be tough, but maybe it's worth it. Method 4 is easy, you're already working so why not get more money out of that job. Method 5 is not sustainable. Method 6 sounds horrendous to me. So hopefully you agree, that making the sacrifice of the year or two or three or four that it takes to get the credentials to get a better job is worth it, or you're able to be like one of my former bosses and get promoted to the executive ranks without having to do Method 1.

I'm putting up a spreadsheet that compares where I would have been theoretically if I never did Method 1 and stayed in my old job vs. doing Method 1 and not being paid for a couple of years while going into debt to get my MBA and getting a better paying job after graduating. You can play around with the numbers and calculations and see what the situation would be for you.

Retiring comfortably does take effort, planning, and a lot of saving. In order to save enough, you have to earn enough. Make sure present day you is taking care of future you by earning, saving and investing for your retirement. We started out assuming someone needed to save $2780 every month to retire. With a side gig, we figured you could earn about $1200/month or $780/month after tax and with free money at work ($2000 RRSP which is tax free for $167/month, ESPP for $1,700 which after tax is $92/month and a raise of $5000 which after tax is about $271/month) a total of $530/month. So between those two, you're saving $1,310 from extra income or just shy of half of your target of $2780. That leaves $1,470. Next month we will look at ways to find the other $1,470 a month that our theoretical person needs through saving! There are several ways to make the hole in the bucket smaller so less of our money goes flowing out.

Remember to figure it out for yourself and see how much you need to save to retire based on Month 2 of the plan. See how much you are already saving based on Month 1 of the plan. And then try to make some extra money based on what you just read in Month 3 of the plan to get to the amount you need to save to retire. If you can't get all the way, don't worry. As I said, next month we look at reducing your spending to help you get the rest of the way to your target.

This was the Month 3 portion of the SmarterSquirrel 12 Month Plan to Improve Your Finances: Month 3 - Pour More Into Your Bucket. Stay tuned for Month 4 - Plug The Hole In Your Bucket, coming out the first week of April 2019.

For Month 1 - Where Are You Now? Click here.

For Month 2- How Much Do You Need To Retire? Click here

Be a SmarterSquirrel... Save. Invest. Enjoy.

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SmarterSquirrel 12 Month Plan to Improve Your Finances:
Month 3 - Pour More Into Your Bucket
Lessons Learned:
  • You know from Month 1 how much you are saving each month, and from Month 2 how much you need to save to retire
  • Month 3 is all about earning more money to help you reach your retirement savings goal from Month 2
  • In the long run investing in yourself to get a better paying career or job is the way to go
  • In the meantime, get a side gig if you have to so you can make some extra money
  • Get all the free money you can at work
  • Get rid of some stuff to free up some cash but don't make a habit out of it
  • Don't bother renting your home out, it's nice not sharing your place with whackos
  • Method 2, which involves getting your money to work for you is very important but it will be covered in greater detail another month
  • Download the spreadsheet to see an example of the impact of investing in yourself to get a better paying career or job

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