I like my job but need more income; what should I do?
This is a common question during any period, but the continued high inflation environment is making this a more and more frequently asked question. In this article, we will share some suggestions on how to increase your income.
Do I, or do I not…like my job
We will start with the obvious option, if you don’t care for your job or are indifferent about it, then possibly the best solution to increasing income is getting a higher-paying job that fits your skill set.
If you are trying to decide, take some time to reflect, write out the pros and cons of the job, and if the ultimate decision is to look for a job, take the time to research and investigate job options before quitting your current position.
But I like my job…
So, we will focus on those who either like their job or have a strong tie to it that switching jobs is not desired or even a possibility.
Another fairly obvious point, but still should be brought up to those needing more income……if you work in a job that pays commissions or bonuses based on sales or production, work harder and smarter to increase your income directly through your efforts.
For the rest of you that do not find it practical to switch jobs or are on a set salary, we offer some possible options:
Ask for a raise
This might be uncomfortable to do, but for many individuals, it is a possibility that could be explored and an excellent solution to improving cash flow. Doing a serious self-assessment and talking to trusted co-workers that feel you are in good standing to warrant a raise is a good idea. Be strategic in taking this approach. For instance, if you have a review coming up, that could be an ideal time. Another way to justifiably ask for more income is to offer to take on more responsibility. Be prepared to explain how you are capable and could be an asset to the company.
Ask for extra hours
Asking to work overtime is an approach that could be well received by a boss or an owner to show that you want to pursue more income. It also shows that you are willing to work for it.
Work a second job or start a side hustle
Although increasing the work week or having a shorter weekend may not sound appealing initially, if you genuinely enjoy the job that you are currently in, look for something similar in the same field to make this option less daunting.
The same mindset goes for a side hustle; if it is outside your current field, do something you enjoy and have some know-how. For many, the need for more income is only temporary, so the extra time spent and sacrifices should feel more doable.
Sell current possessions or engage in some controlled buying and selling transactions
With so many online selling options, if you have some items you can part with (i.e., electronics, unused workout equipment, etc.), this could help meet a temporary income shortage. A traditional garage sale could also be utilized if more desired. Either option should be a tiny investment (if any) and likely yield hundreds of dollars.
Some current possessions that could spill into controlled buying and selling would be hobby items: sports cards, coins, stamps, sports or concert tickets, quilts, or any collectibles. Here is where knowledge in these areas can help you make quick buys for quick sales at a profit.
I emphasize controlled buying and selling because you do not want to get stuck with inventory that you can’t sell and hurt your cash flow rather than the desired intent of increasing your income.
Make current emergency funds or ear-marked cash more productive
We are focusing on the negatives of inflation squeezing budgets and thus the need for more income, but a positive that can help dampen the impact of inflation is the growing yields on cash and safe short-term options. Most money markets yield over 4%, and short-term (6-12 month) Treasury Bonds yield nearly 5% as of the writing of this article in February 2023. Short-term bond funds that are likely past most of the downside they faced in 2022 have yielded around these same levels and could have a little capital appreciation as investors are looking to lock in some return before the Fed may decide to reverse course and begin lowering rates. If you are good with assuming a little risk, bank notes still pay coupons around 10% or better.
This will not be the primary income source solution, but multiple sources can all add up, and getting your cash to kick off $20-$120 extra a month can offset a shrinking income.
Streamline the budget
There are likely a few regular monthly purchases that are more of a want, not a need, and thus can be eliminated when looking at your budget. Like working a second job, if you feel like you are giving up pleasures you resent having to do, remember that it is likely only a temporary interruption. So, if cutting out Netflix, Spotify, or Starbucks is frustrating, try to view it as appreciating it more when you can return to some minor “luxuries” months down the road.
Adding in savings as a priority here within the budget could be a plus, even if it is just saving change like $1 bills or $10 a week; in the end, it all adds up.
Pay off debt to boost cash flow
Ideally, you do not have any extra debt outside of a mortgage. But for many Americans, there are additional debt items people are trying to pay off monthly, from student loans, car loans, and credit card debt, to name a few.
You lose money every month by paying additional dollars on your monthly payments with high-interest rates. As Dave says, use your largest wealth-building tool, your monthly income, to its most significant potential, and not pay someone else (i.e., credit cards, banks, etc.) besides yourself each month.
If you find yourself in this boat and you have a decent emergency fund, then going from 6 months’ expenses covered down to 3 months, and applying those dollars towards paying off your debt, would make sense. It will help create extra dollars in the budget and enable you to build the emergency account back up once those debt items are paid off.
And if you are truly following Dave’s baby steps, decrease your emergency fund to $1,000 and apply any existing savings towards your debt to get that paid off as fast as possible.
We also suggest you refrain from borrowing from a retirement account.
Stopping non-mandatory payroll deductions
These are usually related to healthcare or insurance. So, although HSAs or FSAs are beneficial, if there is no specific need right now for those dollars, then temporarily delaying those probably makes sense.
Also, some supplemental insurances may not be needed any longer, or could be less of a priority, and could boost your take-home pay for more pressing immediate needs if you choose to stop them at this time.
Sometimes charitable contributions of organizations you no longer support or other unnecessary items you forgot about may be running through payroll and could be eliminated. Tax withholdings could also be reduced if you usually get money back on your taxes, so you use those funds sooner to address a temporary shortfall.
Short-term sacrifices for long-term goals
Most Americans would say they strongly desire a higher income. Surprisingly when asked, most people respond very similarly regardless of their current income level, with “about 10% more, and I would be content.” With this being a general attitude, you may get there by implementing just some of these strategies, and if you implement most of them, your cash flow may increase more than 10% higher than your current level.
We mentioned multiple times that taking some of these measures or changes is temporary; you may find that you can return to the old budget and expenditures. Ultimately, you may make some of your changes permanent because you find you are happier with a reduced budget. Then pursuing your financial goals, especially if inflation subsides, becomes more accessible and accelerates even faster. We should all be good stewards and work hard at our jobs, but don’t forget to continue to work hard, and being disciplined at increasing your income can also be productive.
If you are looking for ways to tackle your debt, decrease your monthly expenses, or create a budget, reach out to one of our financial coaches and schedule a meeting.
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