How to Make More Money (Without Getting a Second Job)
Money Girl reveals 5 tips for making more money, without having to get a second job or go back to school.
Laura Adams, MBA
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How to Make More Money (Without Getting a Second Job)
If you want to improve your personal finances, like saving more money or paying off debt, there are 2 fundamental solutions: spend less, or earn more. Or you can turbo-charge your efforts and do both.
While I always encourage cutting unnecessary or mindless spending, there’s a limit to how much you can cut back. On the other hand, the amount you can earn is limitles – but it’s usually more difficult than cutting expenses.
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In this episode, I’ll cover an important way to make more money that doesn’t involve getting a second or third job—or even going back to school for an advanced degree. Using this information can make you happier at work, and help you earn a lot more money.
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Hop to a New Job
If you’re ready to earn more money, one of the quickest ways may be to simply change jobs. This is a trend that I’ve observed over and over in my career—and there’s new data to support the economics behind job hopping, which I’ll cover in the next section.
Job hopping used to be frowned upon by managers and human resources professionals. If you stayed at a job for a only short period of time, you’d be considered disloyal or flaky, while if you stuck it out for the long term, you’d be rewarded with recognition, annual raises, and even a cushy retirement pension.
But now the tide has turned, and job hopping doesn’t have the same stigma. Far too often, employers tend to overvalue new hires and undervalue existing employees. Frequent job switching is the new norm, especially for younger workers. In fact, it may even be seen as an indication of ambition or motivation.
How Much Does Job Hopping Pay?
So exactly how much does it mean to your bank account to switch jobs? A recent study by ADP showed that changing jobs increases earnings an average of 5.3%, while those who stay with their employer see increases of just 0.7%.
However, how much of a pay raise you’ll receive from job hopping varies depending on your age:
- Workers age 16 to 24 were the most likely to switch jobs, and also saw a significant pay hike of 8%.
- Workers age 25 to 34 switched less frequently, but saw a slightly higher wage increase of 8.3%.
- Workers age 35 to 55 switched even less frequently, and showed a lower pay bump of 4.8%.
- Workers over age 55 were the least likely to switch jobs, and received the lowest wage increase of just 0.8%.
This means job hopping pays off the most for Millennials, about half as much for Gen X workers, and not much at all for Baby Boomers. A separate studyopens PDF file showed that Baby Boomers are more satisfied with their compensation than younger workers, which may be one reason why older workers tend to stay put.
See also: 5 Decisions Millennials Must Make to Grow Rich
5 Tips to Get a Job That Pays More
If you’re ready to increase your income, here are 5 tips to get a job that pays more:
Tip #1: Start Networking
It’s important to constantly be building your professional and personal network. Recruiters regularly use LinkedIn to find potential job candidates, so beef up your profile by highlighting the skills you want to be employ in your next position.
Even if you really love your job, always be open to exploring new opportunities. If you end up with a job offer, you can always use it as leverage to get a raise with your current employer.
Tip #2: Leverage Recruiters
And speaking of recruiters, leverage their time, connections, and resources to find a new job, without infringing on your current one. An employer typically pays a third party recruiter either a flat fee or a percentage of your first year’s salary.
Tip #3: Consider Relocating
A good rule of thumb for an entry or mid-level position is to stay with an employer for a minimum of 2 to 3 years.
Moving to a big city or higher paying area of the county can be one of the fastest ways to advance your career with your current employer or a new one. Even relocating for just a few years can be a terrific way to bump up your salary trajectory.
Tip #4: Never Burn Bridges
Job hopping should never mean leaving an employer in a bad position. Always act professionally, make the transition as easy as possible for the team you leave behind, and never, ever burn bridges.
Tip #5: Don’t Hop Too Quickly
Unless you’re completed dissatisfied with your current job, don’t job hop too quickly. A good rule of thumb for an entry or mid-level position is to stay with an employer for a minimum of 2 to 3 years.
But the higher up you are on the corporate ladder, the longer you’re expected to stay. Also, don’t make a switch unless you can score at least a 10% pay increase.
More Benefits of Job Hopping
In addition to getting a bigger paycheck, switching jobs may have other benefits. One is getting exposed to new people, environments, challenges, and solutions. Even doing the same job at different companies may come with different responsibilities, which help you build new skills.
Boosting your income now can also help you get more income in retirement. Your Social Security retirement benefits are calculated in part by the indexed average of your top 35 wage-earning years. So earning more annual income can help you qualify for higher benefits, and give you more money to spend during retirement.
No matter if you score a raise in your current job or by hopping to a new one, don’t forget to also raise your retirement savings. Invest a minimum of 10% to 15% of your gross income in a tax-advantaged account, such as an IRA or a workplace 401(k), to build a healthy nest egg for retirement.
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About the Author
Laura Adams received an MBA from the University of Florida. She’s an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura’s previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.