If you’ve been trying to get your finances together for awhile now, but there isn’t enough money to go around, the problem might not be your spending; it might be how much you are earning. There are two parts to every properly balanced budget: how much you are spending and how much you are earning. If you aren’t earning enough, no amount of frugality will solve your financial woes.
When this occurs, there is only one option: you need to earn more money. There are a few ways you could do this. First, you could ask for a raise, and second, you could earn money on the side. Each of these options has pros and cons, which we’ll explore below.
Asking for a Raise
Asking for a raise is the quickest and easiest path to earning more money because you can do so basically right away. But it’s not as simple as walking into your boss’s office and demanding more money. First, you need to justify your raise, because “I need more money” is not a good reason. You can do this either by taking on more responsibility, upgrading your skills, or listing your recent projects and outcomes.
Earning a raise can be a great way to increase your income without having to work more hours. Earning more money will also be helpful if you plan to move on to another job down the road. But asking for a raise has some cons. First, you are at the mercy of your employer. If even you’re doing a great job at taking on more responsibility at work and producing good outcomes, if the business isn’t doing well or your manager is constrained by company regulations, a raise might not be forthcoming.
If you find yourself in this situation, it might be worth trying to earn money on the side. Earning money on the side can be a great way to improve your income and has numerous benefits.
Earning Money on the Side
First, earning money on the side has nothing to do with your job, which means it could supplement your income if you were ever to be laid off. Diversifying your income is an excellent way to guard against job loss and helps you sleep better at night. Second, freelancing in your field can help you build your portfolio. If there is a specific area of your work that you can monetize through freelancing, you’ll gain more practice at it and hone your skills. Third, there is typically no limit on how much money you can earn on the side - the only barrier is how many hours you are willing to put in.
For example, if you earn money on the side by walking dogs or doing yard work, the only limit to how much you can earn is how much time you are willing to devote to this endeavor.
Before you jump headlong into entrepreneurship, you should know that there are some downsides to earning money on the side. First, while the sky is the limit to how much you can earn, you also have to do it outside of your regular working hours. This could lead to some long days, and working 50 or 60 hour weeks is not out of the question.
Second, you are responsible for paying taxes on all of the income you earn on the side. That means you need to set aside 30% of everything you earn for taxes, and you need to declare all of your income come tax time. It takes some time to get used to tracking everything, but the hardest thing is sitting on that cash and not spending it.
So which is better asking for a raise or earning money the side? Personally, I’m a fan of earning more money on the side. Yes, it takes more effort, but you have more control over your outcomes and having a thriving side hustle guards against potential future job loss.