Optimizing Your Income
May 5, 2008, 4:15 pm
Make the most of the money you have coming-in to improve your financial life.
One way to improve your finances is to exercise some influence on how fast the money comes in. In other words, you may need to optimize your income.
Unfortunately, most people feel that salary is set by their employer and there's really nothing they can do to increase it, except to work harder and hope for the best. But you do have a lot of control over your income, and if you are currently trying to accomplish some challenging financial goals, a pay increase is a big help.
One option is to take on a second job. Granted, many people can't do this, either because they have too many responsibilities at home or the nature of their job requires them to be available after hours on short notice. If you can take on second job, though, you'll be amazed how quickly it can either get you out of a hole, or allow you to save up a lot of money.
If you're in a salaried position that doesn't allow for a second "job," you might want to consider working freelance on the side. Be careful, though, how you approach freelance. You'll probably want to avoid doing work with a competitor of your full-time employer. Also, be prepared to set about a fourth of your earnings aside for the IRS. In fact, it's a good idea to consult an accountant about the tax implications before accepting freelance work.
If a second job isn't realistic for you, there are a few ways to increase your salary with your current employer.
Be an asset to your employer. While productivity will not always get you a raise by itself, there's very little you can do to increase your income if you don't do a good job. And it's especially important that your employer perceive you as a good worker. So make sure you do the little things, like having a good attitude on the job, showing up on time every day, and getting along with co-workers.
Communicate your salary expectations. Remember, good employees who produce results are hard to find. If you're sure that you are an asset to your employer, let them know what you feel you're worth. This doesn't mean to walk into the boss's office and demand a raise. It means that you should let your boss know that you have goals, in terms of your salary, and ask him or her what steps need to take place for you to get there.
In a very subtle way, this approach lets your employer know that if they take you for granted and don't provide an opportunity to achieve your salary goals, then they run the risk of losing you to an employer who will.
Be prepared to move on. It's possible that your employer may tell you your goals are unrealistic at that company. If that's the case, better you should know it as early as possible, as opposed to spinning your wheels there for years and years. If you do start interviewing, it may be common protocol to hide it from your employer, but don't worry if they suspect. Most employers know that, when good employees start taking long lunches, it means they're probably interviewing. It could just be the nudge they need to give you that raise.
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