When it comes to making more money, the best place to look is where you're already working.
Side gigs are great for some supplemental income. You can use the extra money to pay down bills, any existing debt, or save more for retirement. I'm not knocking that in the least.
But if you want to increase your income, the first place you should look is where you're already making the most – your job. Adding an extra 5% to a salary of $50,000 is an extra $2,500 – something that would take a lot of Uber miles to equal.
So before you start looking for a little extra side money from doing surveys or delivering groceries, see how you can increase your income from your day job.
Get the Employer Match
This one is listed first because it's the easiest.
If your employer offers any kind of employer match on retirement contributions, such as a 401(k), take it.
It's free money.
It won't increase your take-home pay but you get that money piped directly into a 401(k), which you will get to spend when you reach retirement age.
Use Tuition Reimbursement
Many employers offer tuition reimbursement programs as part of their benefits package. My first job would pay for a Masters degree in a relevant field as long as you stayed with the company for at least a year and a half afterward. If they left before the year and a half, there was a schedule for how much you would have to pay back and even that schedule was fairly generous.
It never hurts to get more education in a relevant field. And companies know this, which is why they offer the program in the first place, and they also know you become a more attractive employee, which is why they often require you to stay with the company for some time afterward.
According to the 2014 Consumer Expenditure Survey, here is the mean income before taxes of each education group:
|Education Level||Mean Income|
|Less than high school graduate:||$28,037|
|High school graduate:||$40,260|
|High school graduate with some college:||$47,891|
|Master's, professional, doctoral degree:||$123,654|
I used a tuition reimbursement program to get a Masters of Business Administration because I already had a relevant technical Masters. If you have a technical undergraduate degree, pursue a technical masters before an MBA. It's better specialize even further (extend your expertise in your core competency) than generalize (pick up a business degree).
Education reimbursement isn't limited to college degrees. There are a lot of certifications out there that can make you a more valuable employee. There are a lot of technical certifications for showing competency working with different products or services, especially in the information technology world.
Here are the top 15 IT certifications according to Global Knowledge 2019 IT Skills and Salary Report:
- Google Certified Professional Cloud Architect – $139,529
- PMP® – Project Management Professional – $135,798
- Certified ScrumMaster® – $135,441
- AWS Certified Solutions Architect – Associate – $132,840
- AWS Certified Developer – Associate – $130,369
- Microsoft Certified Solutions Expert (MCSE): Server Infrastructure – $121,288
- ITIL® Foundation – $120,566
- CISM – Certified Information Security Manager – $118,412
- CRISC – Certified in Risk and Information Systems Control – $117,395
- CISSP – Certified Information Systems Security Professional – $116,900
- CEH – Certified Ethical Hacker – $116,306
- Citrix Certified Associate – Virtualization (CCA-V) – $113,442
- CompTIA Security+ – $110,321
- CompTIA Network+ – $107,143
- Cisco Certified Networking Professional (CCNP) Routing and Switching – $106,957
These certifications aren't as simple as taking a class and passing a test, they often require you to have hands-on experience and recertification. But companies know these are valuable and many will pay for you to get these certifications if you are willing to put in the time.
For example, the Project Management Professional (PMP) certification requires 35 hours of PMP-related training as well as thousands of hours of project management experience. If you have less than a bachelor's degree, you'll need 7,500 hours of experience. A bachelor's degree or higher and you only need 4,500 hours. Only then are you allowed to apply to take the exam!
If you pass, you need 60 hours of “professional development units,” which are various maintenance classes and tasks, every three years to maintain the certification.
But getting these certifications can boost your income because they are so in demand.
Ask for a Raise
Asking for a raise is one of the scariest and most important things you can do to increase your income. It combines our natural fear with asking for something with the fear of failure with the awkwardness of money. Isn't it lovely?
But this is one of the most important things you can do. If you don't ask for a raise, you aren't giving your manager a “Good Reason” to give you one. (more on this later)
You will also find a lot of guides on the internet explaining what you need to do to succeed… but it comes down to one key idea:
You need to demonstrate your value to the company and why they should share some more of that value with you in your compensation.
How you do this will come down to tactics but the strategy is clear. You need to demonstrate value and how replacing you will be difficult, or impossible, and then find the right time to ask for the raise.
Ask Your Boss
Ask your boss if there are ways for you to take home a bigger paycheck.
A lot of websites online lose sight of the fact that not everyone works a corporate salaried (exempt) job. If you work a non-exempt job, which means you're paid hourly, can earn overtime, among other factors; you may not have some of the options previously listed.
In that case, ask. Perhaps your boss can give you more shifts or there's an opportunity for overtime, which pays 1.5x.
The simple act of asking, even if it doesn't yield immediate results, may pay off down the road when an opportunity is available. Your boss may think of you, especially if you do the next suggestion.
How you demonstrate value will depend largely on your role in the company. You should try to take on a visible position on important projects, do a conspicuously good job, and then get a paper trail documenting it (letters, emails, etc.). Go the extra mile, be indispensable, and make sure people notice. If this feels a bit mercenary to you, that's fine, you are a mercenary. Would you work there for free?
When to Ask for a Raise
Once you are indispensable, you need to ask for the raise. The best time to do this will again depend on your company. If your company is large, this might be after your performance review. These are usually scheduled in accordance with salary decisions so you want to make your ask as close as possible to the decision. At my last company, it was much harder to get an off schedule salary increase because it required convening an entire group of people to approve it.
If you have a performance review followed by a discussion of the review, ask after the review but before any decisions are made. They're already thinking about adjusting your salary and asking can help influence their decision.
If you don't have any reviews, ask after any major milestones either with the business or you. If you successfully wrap up a major project, ask after that. If you've just earned a certification and are put on a new job, ask then.
You want the warm halo of success around you when they think about compensation. You don't want to pick a random day.
How to Ask for a Raise
When you ask for a raise, be prepared. You cannot be overprepared.
Use salary sites to try to find out how much your peers are being compensated. This can be at other companies, it can be at your company, it can be people with your level of experience and education, but something. This will give you an idea of what might be fair, even if the individual data points are messy.
Once you get the delta, think about what you really want. An increase in base compensation might be harder to get than an increase in your sales commission or an increase in some other perk, such as additional vacation or paid time off days. Perhaps you're doing the work of someone with a higher title and would want to get a promotion in the process.
Be prepared to answer how much of an increase you'd like – which will be informed by salary sites and other inside information you may have. Don't be afraid to ask for what you want and make the employer say no. If you are valuable, the company will try to make it work within their budget constraints.
At the end of the day, it's about your value and the company wanting to keep you. If they can't live without you, they will try to.
Grow Your Network
When you first start working, it's about your output. What are you able to do and how can you get compensated for it.
As you get older, your network gets more valuable. It's about your influence, your relationships, and how those can increase your output.
This is why managers get paid more than front line workers – a manager influences a team where a front line worker influences just him or herself.
Growing your network within a company is valuable because a lot of large companies are inefficient and a lot of the work happens outside formal communication channels. Perhaps it's knowing there's an opening in another department where you might be a good fit. Or it's as simple as knowing someone in another department to help bump you to the front of the line. It's insider information on where an organization is going or what it's planning to do. This can make you a more effective employee.
Growing your network outside of the company is valuable too because a lot of jobs are filled without ever having been listed publicly.
Interview for Other Jobs
You don't know how valuable you are until you put yourself on the market.
I've read many stories of people who interview for other positions and find out they could be making 20-50% more with another company. The only downside is that they like their current working arrangement, their co-workers, and their routine… but no one likes their routine more than a 50% raise!
When you get another job offer, you give your manager a “Good Reason” to fight for a bigger raise. Your manager isn't spending his or her money when they give you a raise, but they have to justify it to someone else. A competing offer for a valued employee is a “Good Reason.”
When I interviewed and took a job with a competing company, I got a near 40% raise!
I never considered staying with my first company because I was intrigued by the work the new company was doing, but I've had friends who took the competing offers back to their first company and then stayed. They are now program managers of important projects, so the move didn't hurt their career prospects. If you're valuable, you're valuable. You might even be doing your manager a favor because a competing offer is a good reason to increase your salary to keep you with the company.
When you join a company, you're often paid a fair salary for the time. But as the years go by, that number is an anchor and all future salary decisions are based on that starting number. The economy can improve, the industry can improve, and you can improve, but you're forever pegged to that number. Companies, especially large ones, rarely give 10%+ raises unless it's tied to a promotion. It's hard to justify.
I was getting 3-4% raises, which was average at the time, but from mid-2003 to mid-2006 the S&P500 went from ~960 to ~1240 (30%+). With three annual 4% raises, my salary only increased by 12.6%. When you consider inflation, the actual “raise” was even smaller.
To really hammer the point home, just look at the previous table of mean income from the Consumer Expenditure Survey (2014). The mean income before taxes of a bachelor's degree in 2014 was almost $85,000. My anchor was a starting salary of $64,000 in 2003.
And if you are afraid of job hopping, consider this: The median number of years that a worker has been with their current employer is just 4.2 years.
Start a Side Business
If you feel you've hit the limit of your day job, whether physical or emotional, perhaps starting a hobby that could turn into a side business is an option.
I'm always hesitant to suggest starting a blog as a good option, but it's a low risk, low impact way to start a business that could one day become an income stream. I am, however, biased because of my own experience. 🙂
That said, there are a lot of benefits of starting a blog outside of income. When I was younger, I had to get a writing tutor to help me get a reasonable score on the SAT II Writing exam. Today, after years of writing thousands of words a day, I feel my writing has improved.
I'm no Hemingway but perhaps one day…
Give ALL of these ways a shot. Don't limit yourself to one! Then let us know how it goes!