Politicians in Washington continuously battle over how to reduce the budget deficit. Some favor a reduction in spending while others advocate an increase in taxes, or both.
When we manage our personal finances, we are faced with a similar choice: you can reduce our spending or you can increase your income.
Yet the vast majority of personal finance blogs focus on reducing expenses rather than how to increase your income.
During my twenty years of working as an IT systems administrator, a commercial airplane pilot, and freelance writer, I have learned a few tricks to balance my budget by taking home more money rather than by merely cutting back.
1. Get a Raise
If you haven’t received a raise in a while, it may be time to ask. Enter the conversation armed with the facts about your performance and that show why you are worth the extra money. You can present statistics about your job performance and feedback from colleagues and clients.
Next, show your boss how others in your position are earning more money. And even if your request is denied, don’t end the conversation without some commitment to improving your pay in the future.
2. Switch Jobs
Even if you do receive a race, most companies will rarely offer an employee a salary increase that works out to a percentage that is more than a single digit. Unfortunately, most people develop a narrative about individuals and are unable to envision them taking on larger responsibilities.
To make a major jump in salary, you usually have to switch jobs. When you start from scratch at a new company, you have the opportunity to redefine yourself in a new role.
And most importantly, the best time to look for a new job is when you are already employed. Time is on your side as you continue to support yourself with your existing job, and sadly, employers tend to discriminate against unemployed job seekers.
Early in my career, I was denied a promotion and was told it was because I was too valuable in my current position. Within a month, I found a new job that paid 25% more and offered more opportunity for growth.
3. Bolster Your Credentials
The best way to get a raise or to switch jobs successfully is to add something to your resume other than years. In many fields, a certification is a relatively easy way to set yourself apart from your co-workers and other job seekers. For example, I’ve earned numerous certifications in computers and aviation, while joining several trade associations for writers.
But which certifications should you get? My strategy has always been to avoid what is popular now and look for the next big thing. Demand will always outstrip supply when it comes to the next emerging trends. Fifteen years ago, I worked to obtain several certifications from Microsoft and IBM just as their technology was emerging. These certifications allowed me to ask for double my salary at my next job.
4. Change Careers to Increase Your Income
Over the last five years, I have seen and read too many profiles of unemployed workers who were still seeking positions in dying fields. Workers in today’s economy need to take a step back and look at the big picture of their industry and their area of expertise.
Unlike asking for a raise or simply changing jobs, finding a new career is not a short term solution. But in many cases, you can do it in a year or two.
How do you chose a new career to start over in? First, try to focus on what you really love to do, as you will always be most successful at what you enjoy. Next, look to leverage the background you already have that can be combined with the new skills you are learning.
Finally, set realistic goals. For example, it might not be possible to undergo ten years of training to become a doctor, but there are many other positions in the growing medical field that pay well.
I once leveraged my existing career in computers with my love of aviation to land a job at Boeing’s flight planning and operations division. And as a freelance writer, I have covered computers, aviation, and even my hobby, bicycling.
5. Moonlighting (aka Side Hustling, Part-Time Money Making)
After working eight hours each day, the last thing most people want to do is to continue to work in their free time. But remember, it doesn’t feel like work if you are doing what you enjoy. Over the years, I have held full time jobs while earning money other ways such as fixing bicycles, working as a flight instructor, and of course, writing.
And in many cases, working this second job was a way to test drive a new career and build my credentials before making the jump to a full-time position.
Being frugal is a great way to save money, but we should always make the same effort to increase our income. By considering all of these ways to boost your salary in both the short and long term, you can enjoy the lifestyle you aspire to without relying on frugality alone.
What ways have you been able to increase your income? Share your tips for bringing in extra income or specifically how to get a raise at your current job.