Whether you’re struggling to get out of debt or saving for a down payment, you probably have days when you feel like life would be easier with a little more income. Or a lot more. If you aren’t expecting a huge raise from your current employer or an inheritance from a wealthy relative, applying for a second (or third, or fourth) job may seem like the logical solution. But before you start sending out resumes, follow these steps to find out whether you really need more work in your life.
1. Cut unnecessary expenses
The easiest way to have more money is to just spend less. Of course, this is easier said than done. If you don’t already have a budget on paper or a spreadsheet somewhere, now is the time to make one. Be sure to include all of your regular expenses and track where you’ve been spending extra cash. You need to know where your money is going before you rush out trying to get more of it.
Start your budget cuts by setting spending limits on things like hobbies or going out. You’ll know that you need to make “X” dollars per month for that budget category, and you can still enjoy guilt-free fun up until you reach your own self-imposed limits. You can also look for ways to indulge in your favorite things without spending as much.
For example, instead of hitting the mall every weekend to snag a new designer outfit, try shopping at discount or secondhand stores to find the same clothing at a fraction of the price. Have one drink instead of two at happy hour, or paint your own nails instead of getting pricey manicures.
Next, take a look at recurring expenses: your bills. Are there any that you can reduce or eliminate completely? If you’re paying $99 a month for cable but only watch one show, you can rent or buy episodes online and ditch the recurring monthly costs. Look at your car insurance: Are you paying for more coverage than you really need? You may need a cellphone and internet service, but maybe you could find a cheaper plan. As long as you won’t get hit with fees, go ahead and cancel any memberships or subscriptions that you aren’t actively using. Look for ways to reuse and recycle instead of buying everything new. Bike or carpool to work once in a while to save money on gas.
All of these little changes can add up to huge savings that, over time, amount to as much as a part-time income.
2. Calculate potential income
When you ask yourself if you need a second job, also ask yourself what it is you could do. Contract work? Freelancing? A paper route? Working third-shift security? Selling your yard sale finds on eBay?
Since all different jobs offer varying schedules and rates of pay, you’ll need to do some research. Knowing how much free time you have now, calculate the hours that you could reasonably expect to work at a second job, remembering that you need time to commute, sleep, and breathe at some point. Multiply this by the average rate of pay for the job you’re considering to find an estimate on your potential gross income.
While you’re researching, think about the associated costs with this imaginary occupation. Will you need to buy a new wardrobe or uniform? How many more miles will you put on your car driving back and forth, and what will that cost you in gas money? Do you need to obtain a special license or certification?
And, of course, don’t forget about taxes. Subtract these numbers from your gross income to get a rough idea of what you can expect to bring home if and when you land that extra gig.
3. Consider the intangibles
Before your eyes go all Scrooge McDuck imagining the bags of gold you’ll be making, take a minute to think beyond the financial considerations. There are some things money can’t buy—right?
It’s a given that when you work more, you have less time to yourself, so you’ll have to decide how much your time is worth to you. Are you willing to pass up social events, family gatherings, or Netflix binging if they conflict with your new schedule? Will you still have time to squeeze in a workout or play with the kids?
If you live with family or roommates, be sure to consider what impact your second job will have on them. Your new paycheck might make it easier to pay the rent, but you also won’t be around to help cook dinner or walk the dog. Talk with the people around you before you decide if the financial stress outweighs potential work stress, or vice versa.
4. Decide if it’s worth it
Now that you have a clearer picture of your finances and the possibilities that lie ahead, it’s time to make a decision. Look back at your budget and decide if you really need more money to meet your basic living expenses, or if it would just be a nice bonus. If it falls in the bonus category, weigh the numbers and the intangibles to determine whether a new job is worth the trouble.
Keep in mind that unless you’re considering joining the military or the CIA, your decision now doesn’t have to be permanent. You can hold off on getting a second job while you really focus on cutting expenses and sticking to a budget. Or you can plan to work more for a year while you pay off those pesky student loans. Maybe it’s worth sacrificing some free time and sleep right now so that you can rest peacefully in your dream house later.
It’s up to you to decide, so get out your pen and paper or your laptop, and either start writing up your new and improved budget plan, or start filling out that application for a profitable second job.
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