Easy Ways to Increase Your Earning Potential Today

Are you sick of feeling as though you always have more bills than income? Every month, you work hard to bring home a decent wage to support your family. Yet, somehow, when you need funds, there never seems to be anything available in your bank account. Sometimes, the problem might be that you’re struggling to manage your budget. Not knowing how to properly look after your money could mean that you spend too much, too fast. In other circumstances, your issue might be that you’re not taking advantage of opportunities to increase your earning potential. If you’re already doing everything you can to reduce excess spending and improve your financial habits, but you’re still facing money worries, then the following earning boosters could be just what you need. Let’s look at some quick and easy ways to turn your life around.

Consider a new job

All jobs have their pros and cons to consider. However, some roles definitely pay more than others. If you feel as though you’ve already gotten everything you can out of your current position, and there’s no room left to grow, a new role might be the best option. If you don’t want to switch away from the current company that you’re with, you could ask about switching to a different department. If there’s nowhere else for you to go in your current business, then it might be a good idea to see what someone can offer you elsewhere. Many people who switch jobs can take advantage of looking to improve earning potential than those that stick with the same role. Remember, if you do decide to switch to somewhere new, take your time to find something that actually appeals to you. Don’t just jump at the first offer you get. Play the field first.

Stick with learning about topics that you’re genuinely interested in. This will give you an opportunity to get a job in a space that you enjoy.

Improve your reputation

Reputation can make a big difference in your earning potential these days. In a world where we’re constantly connected to the internet, your image online might help you to find a new or higher-paying job. For instance, if you’re connected to the right people on LinkedIn, then you might speak to someone who can give a good word for you in a higher-paying department in your company. Start by auditing your existing personal brand online. See what people will find if they look for your name. If you have any unprofessional social accounts that are set to public, make them private immediately. Once you’re ready to begin building a name for yourself, look for opportunities to network and show off your skills. This could mean that you join some professional groups, comment on forums, or even visit local events from time to time.

Once you’re ready to begin building a name for yourself, look for opportunities to network and show off your skills.

Develop your skills

Sometimes, jobs will pay you a higher wage for a reason. A career that requires a specialist skill will often pay more than a basic entry-level job. With that in mind, it might be worth building on the talents that you already have. Think about the kind of things that you enjoy doing. Maybe you could work on something like coding or improving your technical expertise. The best way to boost your chances of getting your new skills recognized is to check out some student loans and head back to school. There are tons of different courses that you can take to add new certifications to your resume. You could also look into building out your knowledge about other topics online, taking free courses in your spare time. Stick with learning about topics that you’re genuinely interested in. This will give you an opportunity to get a job in a space that you enjoy.

Ask for a promotion

When’s the last time you just asked your boss whether they could pay you more? If you know that you’ve been delivering excellent work for a good while now, then it might be a good time to ask for a raise. Most business leaders won’t want to take the risk of losing an employee that’s valuable to the team. Check websites that list job openings and find out if there are any higher-paying companies out there that provide a better wage for the role you do now. This will give you a good starting point when you start asking for a wage. If you’re nervous, remember that hiring new team members comes with its own costs. If you’re a great employee, your boss would prefer to keep you around most of the time—even if that means paying more.

If you want to be able to pay your bills each month without worrying about your bank account, it’s worth keeping your mind open to ideas that could increase earning potential.

Start a side hustle

Finally, if you’ve already gone and built some new skills at school, but you haven’t found the perfect job to use them in yet, why not try creating your own career with a side hustle? This is basically a job that you can do on the side to add more income to your bank. Many people have discovered that they can put a few extra hours into their work online each day and make a hefty amount of additional income. Thanks to the gig economy, it’s easy to find opportunities to make cash with things like graphic design, content writing, website development, and more. Start by making a list of the kind of things you’d be interested in doing. You might even decide to create your own business and sell items online using a dropshipping company. Dropshipping services handle things like manufacturing and shipping products for you, so you just need to build a brand and find customers.

Increase your earning potential

Money might not make you happy, but it’s one of the most important things in many of our lives. If you want to be able to pay your bills each month without worrying about your bank account, it’s worth keeping your mind open to ideas that could increase earning potential. Whether you’re developing new cash opportunities with your current employer or thinking about becoming your own boss with a side hustle, make the conscious effort to invest in yourself this year. The quicker you start working on your new earning opportunities, the more money you’ll make for your future.

7 Pros and Cons of Investing in a 401(k) Retirement Plan at Work

A 401(k) retirement plan is one of the most powerful savings vehicles on the planet. If you’re fortunate enough to work for a company that offers one (or its sister for non-profits, a 403(b)), it’s a valuable benefit that you should take advantage of.

But many people ignore their retirement plan at work because they don’t understand the rules, which may seem confusing at first. Or they worry about what happens to their account after they leave the company or mistakenly believe you must be an investing expert to use a retirement plan.

Let's talk about seven primary pros and cons of using a 401(k). You’ll learn some lesser-known benefits and get tips to save quickly so you have plenty of money when you’re ready to kick back and enjoy retirement.

What is a 401(k) retirement plan?

Traditional retirement accounts give you an immediate benefit by making contributions on a pre-tax basis.

A 401(k) is a type of retirement plan that can be offered by an employer. And if you’re self-employed with no employees, you can have a similar account called a solo 401(k). These accounts allow you to contribute a portion of your paycheck or self-employment income and choose various savings and investment options such as CDs, stock funds, bond funds, and money market funds, to accelerate your account growth.

Traditional retirement accounts give you an immediate benefit by making contributions on a pre-tax basis, which reduces your annual taxable income and your tax liability. You defer paying income tax on contributions and account earnings until you take withdrawals in the future.

Roth retirement accounts require you to pay tax upfront on your contributions. However, your future withdrawals of contributions and investment earnings are entirely tax-free. A Roth 401(k) or 403(b) is similar to a Roth IRA; however, unlike a Roth IRA there isn’t an income limit to qualify. That means even high earners can participate in a Roth at work and reap the benefits.

RELATED: How the COVID-19 CARES Act Affects Your Retirement

Pros of investing in a 401(k) retirement plan at work

When I was in my 20s and started my first job that offered a 401(k), I didn’t enroll in it. I was nervous about having investments with an employer because I didn’t understand what would happen if I left the company, or it went out of business.

I want to put your mind at ease about using a 401(k) because there are many more advantages than disadvantages.

I want to put your mind at ease about using a 401(k) because there are many more advantages than disadvantages. Here are four primary pros for using a retirement plan at work.

1. Having federal legal protection

Qualified workplace retirement plans are protected by the Employee Retirement Income Security Act of 1974 (ERISA), a federal law. It sets minimum standards for employers that offer retirement plans, and the administrators who manage them.

ERISA offers workplace retirement plans a powerful but lesser-known benefit—protection from creditors.

ERISA was enacted to protect your and your beneficiaries’ interests in workplace retirement plans. Here are some of the protections they give you:

  • Disclosure of important facts about your plan features and funding 
  • A claims and appeals process to get your benefits from a plan 
  • Right to sue for benefits and breaches of fiduciary duty if the plan is mismanaged 
  • Payment of certain benefits if you lose your job or a plan gets terminated

Additionally, ERISA offers workplace retirement plans a powerful but lesser-known benefit—protection from creditors. Let’s say you have money in a qualified account but lose your job and can’t pay your car loan. If the car lender gets a judgment against you, they can attempt to get repayment from you in various ways, but not by tapping your 401(k) or 403(b). There are exceptions when an ERISA plan is at risk, such as when you owe federal tax debts, criminal penalties, or an ex-spouse under a Qualified Domestic Relations Order. 

When you leave an employer, you have the option to take your vested retirement funds with you. You can do a tax-free rollover to a new employer's retirement plan or into your own IRA. However, be aware that depending on your home state, assets in an IRA may not have the same legal protections as a workplace plan.

RELATED: 5 Options for Your Retirement Account When Leaving a Job

2. Getting matching funds

Many employers that offer a retirement plan also pay matching contributions. Those are additional funds that boost your account value.

Always set your 401(k) contributions to maximize an employer’s match so you never leave easy money on the table.

For example, your company might match 100% of what you contribute to your retirement plan up to 3% of your income. If you earn $50,000 per year and contribute 3% or $1,500, your employer would also contribute $1,500 on your behalf. You’d have $3,000 in total contributions and receive a 100% return on your $1,500 investment, which is fantastic!

Always set your 401(k) contributions to maximize an employer’s match, so you never leave easy money on the table.

3. Having a high annual contribution limit

Once you contribute enough to take advantage of any 401(k) matching, consider setting your sights higher by raising your savings rate every year. For 2021, the allowable limit remains $19,500, or $26,000 if you’re over age 50. A good rule of thumb is to save at least 10% to 15% of your gross income for retirement.

Most retirement plans have an automatic escalation feature that kicks up your contribution percentage at the beginning of each year. You might set it to increase your contributions by 1% per year until you reach 15%. That’s a simple way to set yourself up for a happy and secure retirement.

4. Getting free investing advice

After you enroll in a workplace retirement plan, you must choose from a menu of savings and investment options. Most plan providers are major brokerages (such as Fidelity or Vanguard) and have helpful resources, such as online assessments and free advisors. Take advantage of the opportunity to get customized advice for choosing the best investments for your financial situation, age, and risk tolerance.

In general, the more time you have until retirement, or the higher your risk tolerance, the more stock funds you should own. Likewise, having less time or a low tolerance for risk means you should own more conservative and stable investments, such as bonds or money market funds.

RELATED: A Beginner's Guide to Investing in Stocks

Cons of investing in a 401(k) retirement plan at work

While there are terrific advantages of investing in a retirement plan at work, here are three cons to consider.

1. You may have limited investment options

Compared to other types of retirement accounts, such as an IRA, or a taxable brokerage account, your 401(k) or 403 (b) may have fewer investment options. You won’t find any exotic choices, just basic asset classes, including stock, bond, and cash funds.

However, having a limited investment menu streamlines your investment choices and minimizes complexity.

2. You may have higher account fees

Due to the administrative responsibilities required by employer-sponsored retirement plans, they may charge high fees. And as a plan participant, you have little control over the fees you must pay.

One way to keep your workplace retirement account fees as low as possible is selecting low-cost index funds or exchange-traded funds (ETFs) when possible.

One way to keep your workplace retirement account fees as low as possible is selecting low-cost index funds or exchange-traded funds (ETFs) when possible.

3.  You must pay fees on early withdrawals

One of the inherent disadvantages of putting money in a retirement account is that you’re typically penalized 10% for early withdrawals before the official retirement age of 59½. Plus, you typically can’t tap a 401(k) or 403(b) unless you have a qualifying hardship. That discourages participants from tapping accounts, so they keep growing.

The takeaway is that you should only contribute funds to a retirement account that you won’t need for everyday living expenses. If you avoid expensive early withdrawals, the advantages of using a workplace retirement account far outweigh the downsides.

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The post Should You Rent from a Private Landlord? appeared first on Apartment Life.

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The post Should You Refinance Your Student Loans? appeared first on Good Financial Cents®.

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