Make More Money This Year
January 7, 2010
Making more money in your job typically means making yourself more valuable to your company or finding a job that will pay you more money for your skills and knowledge.
Of course making more money isn’t just about the size of your paycheck you also have to consider your benefits and how they fit into your overall financial situation. Not only that, you want to keep more of the money you make. Here are nine tips from the Financial Planning Association to help you make more money this year and keep more of what you earn.
Research Career Changes
If you’re planning to stay in your field or make a complete change, one of the most detailed yet neutral resources for investigating career fields and their salary and hiring forecasts is the U.S. Bureau of Labor Statistics’ Occupational Outlook Handbook.
This extensive online resource not only lists major career groups, but the leading occupations in it, educational requirement, and most important, salary data. If you haven’t been in the job market for a while, this kind of research is a good way to reset your knowledge of your industry and whether its hiring prospects are bright.
Go Back to School
Going back to college – even community college – can be a major investment. If you’re going to have to finance your education yourself, it’s necessary to have a plan and knowledge of federal, state and local loans, grants and scholarship programs.
The Obama Administration has streamlined the Free Application for Federal Student Aid (FAFSA) form and increased Pell Grants by $500 to $5,350 for 2009-2010 and created the American Opportunity Tax Credit, a new $2,500 tax credit for four years of college tuition. Additional information on Federal Student Aid and Tax Credits is available at on the IRS website. It is important to understand the eligibility criteria and limits associated with each program.
Get Financial Advice
If you want a new job, to head back to school or plan to take a year off, it makes sense to get tax and financial advice. A financial planning professional can help you evaluate your current benefits package and retirement savings or talk through what you should be looking for at your next job if you’re unemployed.
Invest in New Equipment
We’re not talking about machine tools here. Whatever your job or interest, there’s usually equipment to support it. For example, if you’re planning to learn new skills that involve a computer or software, now may be the time to invest in those items. Think about how this equipment will boost your productivity and the time it will take to earn back what you paid. If the numbers work, go for it.
Network
It’s important to get face-to-face with people in the field. You don’t want to do a job search on your employer’s time, but if you can get away at lunch or after work to attend networking functions, it’s worth your time for two reasons. First, you might meet your next boss there. Second, simply by talking and getting to know people already doing the job you want, you’ll get a ground-level view of whether the industry is for you and which employers are the most popular. You’ll also get an idea of which companies to avoid.
Maximize Flexible Spending
If you are up for a salary review soon, it might make sense to hold off on interviews until you have a better idea of what you’re worth in the marketplace. Also, since some companies allow you to spend your flexible spending balances until March of the following year, use up any money in your flexible benefits accounts for medical appointments, glasses or dental work before you leave.
Maximize Take-Home Pay
This is where a call to your tax or financial planner comes in handy. Some fringe benefits may be taxable, which means your real take-home pay might be less than you expected. To the extent that you get to negotiate your benefits on your way into a job, do it in a tax-smart way.
401(k) Planning
You may not want to make any moves for awhile, but it’s good to talk with a financial planner about whether you’ll be moving that money to private accounts. Also, make sure you know when you can enroll in the company 401(k) and other retirement offerings at your new employer.
Secure Your Insurance
You might wait a few months to a year for new health coverage to kick in at a new job. You might need to buy private insurance until then or go onto a spouse’s health plan in the meantime. Also, consider separate disability coverage if you’ve not done so – company coverage goes only so far, and if you are laid off or leave to start a business, you should have coverage of your own that you should buy while you’re still earning a salary.
Lose Some Weight
Even if health reform makes it easier for people to become insured with preexisting conditions, increasingly insurers are taking a dim view of obesity and will still tie the cost of health insurance and other policies to your weight and overall health quality. Being healthy can help you keep more of the money you make!
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Think about it this way…your withholding during the year is simply a interest free loan to the government if you are due money back. But on the other hand, if you can manage your taxes and do not owe penalties it is the other way around. You are using money during the year that they can’t do anything about.
They left out the most obvious… ask! It’s amazing what asking for an increase, especially if you make it project or goal-related (ie: You get a $2000 bonus for every % point that gross margin increases or whatever is relevant to your job). If you make it so that you only make money if the company wins, it’s hard to say no.
Agree, so many people talk about budgeting better but if you can earn more it can help you save more for the future. Even a pt side job could help a lot.
Ben, good advice on losing weight. The health side of life is intimately connected with the professional side. The better you feel the better you perform and the greater the future prospects.
On going back to school, there’s never much press on this, but a lot of people (esp under 35) should consider trade school, or even apprenticeship situations. With so many people faithfully heading off to college (and driving up the cost!), a lot of the trades are struggling to find qualified people. It’s a different mindset, but pay is often better in skilled trades than in college norm jobs, precisely because so few people want to do them. It’s become contrarian thinking at it’s highest.
Hang around with people who are doing better than you are doing is a good place to start. You will come up to their level. If you hang around with people are are not doing well, you will come down to their level. Think successful, act successful, talk successful and you will become successful.
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@Darik, good point. Obviously it’s hard to pay just the right amount but I prefer trying to keep as much as I can, as long as I can.
@Ash, as you point out, by making it a bonus based on a goal, your employer may be more likely to agree to it since they’re not committing to a long term pay increase.
@Craig, that’s right. If you can earn more than you have more money to budget!
@Kevin, I’m not too familiar with trade schools. Sounds like a good opportunity.
@Jimmy, not only might the “positive mental energy” rub off on you but you can pick up some good tips and perhaps some good contacts as well
I am going to try to make more money this year by perfecting on my networking skills to increase my sales. For me Dr. Ivan Misner’s latest book “Networking Like a Pro” was a great investment and it has helped me learn some great skills . So what I am trying to say is that you can make more money by simply investing in a good book and learning from it.
http://www.ivanmisner.com/books.html
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