In this article:
If you're living paycheck to paycheck or want to set aside more money for future goals and occasional splurges, you may be ready to make a change. Increasing your income can reduce financial anxiety, help you reach savings goals and improve your overall quality of life. So how do you make that happen? Read on for seven actions you can take today to boost your income.
1. Ask for a Pay Increase
If you haven't received a raise in a while or have taken on more responsibility and work at your job, consider asking for a raise. Just be sure to come to the conversation prepared. Providing examples of how you've helped the company work toward its revenue goals can help illustrate your worth. If you're unsure of how much to ask for, research the average salary in your area for someone with your level of experience. If a permanent raise isn't on the table, see if your employer is open to a one-time bonus for your hard work.
2. Look for a Better-Paying Job
Close to two-thirds of U.S. workers are seeking a new job, according to an August 2021 PwC survey—and better pay is the No. 1 motivator. When starting your job search, update your LinkedIn profile and resume with work experience that showcases your unique skill set. Don't be afraid to tap into your existing network and let folks know that you're open to a transition. The more ears you have on the ground, the more likely you'll be to hear of new opportunities.
Ahead of any interviews, poke around on sites like Glassdoor and Salary.com to get a feel for what the company's average compensation looks like. Being informed will make you more prepared during salary negotiations.
3. Start a Side Gig
Think about your particular personality, skills, interests and availability. Social butterflies might feel drawn to bartending or meeting new people while driving for a ride-hailing company like Uber or Lyft. Introverts, on the other hand, may find their niche with online tutoring or other work-from-home side gigs.
Another option is freelancing. You can leverage your contacts to find opportunities within your industry, as long as you aren't violating any noncompete agreements with your full-time employer.
4. Sell Unwanted Belongings
Your clutter can be another source of extra cash. If you're looking to sell tech and electronics, try the free platform Decluttr. If you're looking to offload clothing, ThredUp and Poshmark are solid options, though these sites do charge service fees. And there's always Facebook Marketplace or Craigslist for listing items and connecting with local buyers. Local secondhand stores may also be willing to pay for unwanted things. Research thrift shops and consignment stores in your area to clarify their policies.
5. Explore Tax Deductions and Credits
Certain tax deductions and credits can lead to a bigger tax refund, which can supercharge your income. According to the IRS, the average refund for the 2020 tax year was close to $2,800.
Tax deductions are worthwhile because they reduce your taxable income. (Charitable donations and student loan interest both count as deductions.) Tax credits work a little differently by directly reducing your tax liability. Refundable tax credits like the earned income tax credit and the Child and Dependent Care Credit, for example, could bump up your tax refund if you qualify. A tax professional can help you determine which deductions and credits make sense for you.
6. Seek Financial Assistance
Depending on your situation, you may be eligible for financial assistance programs. Those who meet certain income requirements can look into medical benefits and food assistance through programs like Medicaid and SNAP. Such government-funded programs are designed to support low-income families and people with disabilities. Those who are temporarily out of work can also apply for unemployment benefits as a way of covering the income gap.
If you're feeling overwhelmed by your finances, credit counseling can be a great resource that could help you save money over time. Credit counselors are certified professionals who can help you manage your money and pay down debt. Certain counseling and assistance programs cater to specific needs, such as student loan counseling and medical bill counseling.
7. Lean Into Investing
Investing is one way to make your money work harder. You can buy shares of public companies through stock investing to net potential returns. If you're participating in a 401(k) at work, you're already investing—but this kind of tax-advantaged account is geared toward saving for retirement rather than creating extra income in the near future.
Instead, a regular brokerage account can be a good vehicle for investing in stocks, bonds, mutual funds, exchange-traded funds and more. If you already have a healthy emergency fund and have plenty left over each month after paying for necessities and setting aside money for savings goals, this may be an avenue to consider. Investing in the stock market carries significant risk and is usually best for longer-term investing—in other words, increasing your income in retirement or down the road. Also keep in mind that you'll be taxed on investment gains.
How to Free Up Room in Your Budget
The following tips won't necessarily increase your income, but they can help your money go a little further each month.
- Pay down debt. This can feel like an income boost because it allows you to keep more of your earnings and pay less in interest charges. Every time you eliminate a balance, you're also doing away with the monthly payment. There are different ways to tackle your debt, and paying down high-interest credit card balances is often a good place to start. If you're already deeply in credit card debt, a debt management plan could help you get out. An added benefit to paying down debt: You could increase your credit score along the way.
- Reduce your expenses. Reducing your expenses is another way to strengthen your budget. Review your spending habits to uncover things you can cut entirely, like unused memberships and subscriptions, and things you can cut back on, such as eating at restaurants. You can also contact your existing service providers to request price reductions or switch to cheaper plans. You might even be able to lower your credit card interest rates.
The Bottom Line
Increasing your income can help you boost savings and live more comfortably. Maintaining strong credit may also help you reach your financial goals more quickly. The higher your score, the more attractive you are to lenders, which can save you money when you need to take out a loan. Experian Boost™† can help you improve your credit score with very little effort. If you have a history of on-time payments for your cellphone, utility bills or even your Netflix® account, you can use Experian Boost to add those payments to your Experian credit report and improve your credit scores instantly.