Why Do You Need an Emergency Fund?
- Job loss or unemployment
- Medical or dental bills
- Home repairs
There’s never a bad time to step back and review how things are going in your career: the new year, after a promotion (or lack thereof), the end of a quarter or following a stressful month. Even if you have your sights set on increasing your earning potential, it can be easy to get stuck in the daily grind and overlook proactive steps you could be taking right now.
Get motivated on the career front and consider these five tips to help maximize your salary potential this year:
It’s a pretty good time to ask for a raise. Really. According to the U.S. Department of Labor, the unemployment rate is low and employers are starting to boost salaries to attract workers. See how this can play to your advantage? Check out websites like Glassdoor.com or job postings in your area to find out how much employers are paying for gigs like yours. You can leverage that information when you talk with your boss, while highlighting the experience you bring to the table, to negotiate a raise and boost your earning potential.
If you’re nervous to pitch yourself for a raise, remember that hiring and training new employees has real costs. Keeping employees at a higher salary can be cost-effective when compared to the expense of recruiting and training someone to replace you.
If you don’t come out on top in a salary negotiation, proceed to tip two to increase your earning potential.
Historically, employees believed the quickest way to increase their earning potential was to change jobs. While there are no guarantees your salary will increase, there are several estimates that indicate the possibility. According to one estimate, the average raise an employee receives for leaving is between a 10 percent to 20 percent increase in salary.
When it comes to looking for a new job, an immediate boost to salary may not be the only financial consideration. A Gallup study found, more than a salary increase, the top reason U.S. workers consider new jobs is to, “do what they do best.” Switching jobs might lead to being more engaged with the work you do, as well as having opportunities for advancement and the ability to learn and grow. Down the line, a promotion or new skills can mean increased earning potential.
Having an idea of where you want your career to go—this quarter, next year or in the next decade—can pay off enormously, but you don’t need to make these plans all alone. A good mentor can provide feedback or advice based on his or her own experience, and help ensure you’re on target to increase your earning potential. It may sound like a sweet deal, but it’ll take some effort on your part:
A side hustle is a flexible job you do “on the side” that can increase your salary potential. Of the many ways to earn money outside of your main job, starting a side business can be a valuable option. The business skills you learn as an entrepreneur can pay off in other parts of your career. You could also give freelance work or consulting a go, leveraging skill sets you already have to help problem solve for other companies.
With any second job, however, it’s easy to fall into a trap of trading your time for money without improving your skills in a meaningful way. Weigh the pros and cons to ensure you’re balancing the desire to increase your salary with the desire to advance your career. Take driving in a ride share program, for example. Pro: It can be a quick and easy way to increase your earnings. Con: It may not benefit your primary career if you work in a very different or unrelated industry.
Coding can be something learned at any career stage to help boost your earning potential in short order. When analyzing its graduates, CodingDojo, a coding boot camp, found that more than half of students were earning less than $35,000 before entering the program. After graduating, the majority of students earned salaries that topped $70,000.
There are free online classes where you teach yourself to code or programs as short as one month where you can learn from a pro all the coding basics you need. Even if an industry switch isn’t in your future, understanding the basics of coding could improve your ability to work with technology, data, programmers and engineers.
Whether it’s with your current employer, at a new company or as your own boss, you should be utilizing your skills where they are appreciated most. By making a conscious effort to invest in your existing skills and develop valuable new ones, you can help increase your earning potential every year—not just this one.
Open a savings account and have it at the ready to make the most of your increased earnings.
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1 Study by T. Rowe Price Retirement Plan Services.