Hey everyone! Happy Friday. I've decided that every other Friday I will attempt to publish a short post that asks all of you readers a question. Today's question is about what is more important to you: negotiating for a raise or working on increasing your side income.
Both negotiating for a raise and working on side income are important to me. Of course I want to work my hardest at my job, but my side income is also growing at a very good rate. Both are very important to me.
As everyone of course knows, I talk about extra income and working on side hustles a lot on my blog. It has pretty much taken over my blog, and that's because it's the main thing that I'm working on in my life and ours lives revolve around it right now.
Last week, Savvy Financial Latina published the post I Got My First Raise. In this post she said:
I wasn’t expecting a huge raise, but somehow the raise I got disappointed me. I should be happier my paycheck is increasing by $50 every two weeks, but somehow I’m not. $50 is not going to change my life. Don’t get me wrong I love that I’m earning $50 every paycheck. An increase in income is always good by me! I just don’t want to be stuck in the pool of workers who expect and/or are satisfied with a small percentage merit increase every year.
Side Hustles are worthwhile
Her post made me think. To me, a raise that I've earned from my job is usually a very small amount and insignificant to what I can/could make with my side hustles. However, when I first started my job, I thought that the only way that I could ever make more money would be from me earning salary raises. I never even thought about side hustles or that people focused a lot of time on income outside of their job.
There are many different ways to make money from side hustles. You can invest such as with ForexSpace.com. If you are a good investor, there can be passive income and gains made from investing your money. This is something that I want to do more of, but I want to focus on my debt first! You can also start a blog, freelance write, mystery shop, walk dogs, become an online designer, and so on. The things you can do for side hustles are endless!
Savvy Financial Latina said that she was disappointed with her raise. Why is that? Well, $50 is still good money, but it's nothing life changing for her. This is exactly why I work towards side hustles and extra income. The amount you get from a raise, is usually very small compared to what you can make with a side hustle. Yes, sometimes a raise can be a decent amount, but what if you want to strive above and beyond the usual 3% raise each year?
The amount that you get from a salary raise is limited. However, the work you put into your side jobs and extra income can become an unlimited amount of raises. There doesn't have to be a limit on the amount of income that you make from a side hustle.
Raises are important also
On the flip side, of course raises are important as well. Raises and bonuses that a person earns can be more worthwhile because not everyone has time to develop a side hustle and increase their income that way.
For a lot of people, negotiating for a raise can be worth more than a side hustle because of growth. Maybe a person doesn't want a side hustle because they are happy with what they make from their job and are content with their life. Nothing wrong with that of course, and this could be a good reason for why negotiating for a raise holds a higher value to someone.
In the post, Leigh comments and says that “huge raises early in your career make an incredible difference because they compound over your career! Then again, my salary has gone up by a bit over 33% of my original salary since I started working post-college about 3.5 years ago!” This is where salaries can come into play as well. A side hustle may not be sustainable forever, whereas your salary most likely will only increase from where it is now, and will add up over time.
So what about you?
Are you focused on increasing the amount from side hustles or is a salary raise more important to you? Why?
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I would look for raises at work as long as they do not imply working more hours. You can work more, but still be out of work by 5 or 6pm. I have friends working 12 hour days for a good paycheck but not so good if you consider the hours they put in. Whereas on the side you can generally work for a bit more money than you get at your day job. Sure you wouldn't have to commute if you worked an extra hour at work every day, but then they come to expect that you leave later and the day you don't want to, they think you are a slacker.
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I think this is a very good way to look at it. If you're putting in extra hours for that raise, is it still worth it?
My recent post Negotiate for a Raise or Work on Side Income?
I agree! Raises are totally important, and you absolutely have to show them what your worth and why you think a raise is deserved (go in with plenty of backup). But if you are growing your side hustles as well, this helps insure you against job loss. Nothing is more comforting than knowing you work but you don't need the work.
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I agree. It is nice that I am now pretty well diversified and can handle a blow to my budget!
My recent post Negotiate for a Raise or Work on Side Income?
I'm more interested in raises. I bring home a considerable salary, so even a 2-3% raise, while paltry, makes for some descent extra income. Plus raises compound over time, so while a raise may not be worth much this year, add up several years worth of raises and you're getting somewhere.
The only side-hustle that I have is blogging, which is only paying for itself if I ignore all the hours that I put in.
I also invest a considerable amount of my money in dividend growth stocks. So every month as fresh capital gets invested my total income increases. I reinvest my dividends, but I don't have to. Overall I find that investing is the easiest way to increase my income.
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I agree. A 2-3% raise might not be much currently, but over time it does add up.
My recent post Negotiate for a Raise or Work on Side Income?
I would work on both simultaneously as one should not exclude the other. However, you should really like your job otherwise you should find a way to transition into your side hustle or move to something you enjoy more.
I agree!
My recent post Negotiate for a Raise or Work on Side Income?
I think it all depends on whether you enjoy your job or would like to be doing something else. If you really love your job, then I think it makes sense to find ways to add value and use that to negotiate a higher salary. But if you're looking for something else, it makes more sense to put your time into either side income or increasing your value in another field so that you could negotiate a higher salary elsewhere. Personally, I haven't earned any side income yet, though I'm working on it. All of my income increases have come from raises.
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I agree Matt. And I hope you make side income soon 😉
My recent post Negotiate for a Raise or Work on Side Income?
Right now I would say increasing my side income, though I also think getting a raise at your regular 9-5 job is valuable because you don't really need to increase the time you put into that income pursuit. Of course, some raises come with more responsibility which unfortunately might equal more time, so a raise may not be the best way to go if you are looking at minimizing your time commitment.
Overall I'd say pursuing a side hustle should be #1 if you are looking to make more money. It has a lot more potential than busting your ass for a 3% yearly raise (and that would be a very high raise at most employers).
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I agree DC. For me, my side hustles are the main way that I am looking for extra income.
My recent post Negotiate for a Raise or Work on Side Income?
I would tend to agree with Matt in that it depends on which direction you want to go. If it's not clear, or you want both, then I would focus on both and try to get the best of both worlds. 🙂
I agree John. Thanks for stopping by 🙂 Have an awesome weekend!
My recent post Negotiate for a Raise or Work on Side Income?
Like Pauline said, I'm all for raises as long as they don't require more hours from me right now. That's not something I want to do at work. A raise wouldn't prevent side income in that case, so why not go for both?
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I agree. In the case that it doesn't require more hours, a raise is definitely worthwhile.
My recent post Negotiate for a Raise or Work on Side Income?
I think it goes back and forth. Right now I'm focusing doing a great job at work so that I can get a good raise this year, and while I'd really love for it to be substantial, I don't think it will be. Once I get it, I'll probably go back to developing my side hustles a little more.
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I agree Jordann. It all depends.
My recent post Negotiate for a Raise or Work on Side Income?
I've tried a few side hustle's but nothing's yet stuck for me. I don't have a ton of free time to dedicate to it, and I think with a little bit of work I'll be able to get a raise at my company (or another one) of 10%+ next year, just based on my skill set and the market, so it's probably more valuable to negotiate at work.
For you, it definitely sounds more valuable to negotiate for a larger salary at work. 🙂 Have a great weekend!
My recent post Negotiate for a Raise or Work on Side Income?
I just started a new job in March. My salary increased 25% with taking this new position. That said, I'm now putting a lot of effort into my side hustles since I am temporarily happy with my 9-5 salary.
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Wow that is awesome. Congrats on the 25%!
My recent post Negotiate for a Raise or Work on Side Income?
For me, there's more potential in side income because money is tight in my field (and always has been).
I agree. There's only so much more that I can make in my field.
My recent post Negotiate for a Raise or Work on Side Income?
I'd focus on a raise since I work 40 hours (or more) at my full-time job, and I don't have the energy to go after side hustles.
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I think limited time is the main reason people choose a raise instead of side hustles. Side hustles may not always be sustainable!
My recent post Negotiate for a Raise or Work on Side Income?
Since I work full time in a non-profit, a lot of the raises around here are based on what's available in the budget. As much as I love the environment and the people I work with, I don't see this job providing the lifestyle I want. Leslie and I are focused on increasing our side income instead of hoping for raises. Though I won't fight a raise if it comes around!
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I hope you and Leslie can increase your side income a TON! Have a great weekend 🙂
My recent post Negotiate for a Raise or Work on Side Income?
The income at my job has increased by about 25% since I started 2.5 years ago thanks to raises and promotions and my income has way more than doubled in the seven years since I graduated college. That being said, the side hustle income has helped us tremendously in paying off debt and saving for vacations. I don't plan on doing side hustle forever though, because it does still require some time input, but for now I am content.
That is great! My income has definitely grown, but I'm afraid that there's only so much more that I can make.
I'm sort of with Erica. Though I haven't received substantial raises since starting my job and there isn't a lot of room for a raise given the market, im focusing on side hustles, for now. There's no way I can continue working FT with a growing family and pursue the side hustles the way I want so once the debt is paid off something will have to give.
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I am interested to see what direction you will go Catherine 🙂
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Definitely more interested in starting a side hustle thanks to all your PF Bloggers 🙂
I read something on one of the PF Blogs about how all my income is dependent on one source – my employer. All of my financial security is in someone else's hands. That really resonated with me and planted a seed that I'm now starting to act on. (I wish I remember where I read it to give proper credit!)
I've been at my current job for 4 years (which is at least 2 years too long), and in all that time I've received ONE raise, despite being given a whole other project that used to be a part time position on its own. This raise was for $50/month. And I'm not even sure it's really classified as a "raise" as it was a cost of living increase… I've given up on this place a long time ago, and I'm trying to figure out what's next for me.
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I never once even thought about side hustles until I start a blog, so I know what you mean! And I agree, I like to be diversified so that not all of my income comes from just my employer.
Wow I'm so sorry about your low raise. I hope you find something awesome soon.
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I never gave any thought to having a side hustle before I started reading PF blogs! I've also been inspired, largely by your extra income posts, to start a blog for similar reasons. I think right now I would rather work on building up side income, because while I work hard at my job, I don't think getting a raise will make that much of an impact. At the same time, I am always looking for other opportunities, because I am in an entry-level position and there's a lot of room for growth down the road.
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I agree, PF blogs are what got me started with side hustles. And thanks so much! Glad that I can help. What type of job do you have? I'm always interested in hearing what readers do for a living 🙂
My recent post Negotiate for a Raise or Work on Side Income?
When the economy tanked back in 2008, the company I worked for put a "freeze" on all raises and end-of-the-year bonuses. Even though the amounts were not large, people had really been counting on it. Raises do matter, even if the amount is not anything to write home about.
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I agree. Raises are important, but I especially think in this case that being diversified with side hustles is important.
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For you, it looks like side income could prove to be far more lucrative so I would concentrate on that first.
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I agree!
My recent post Negotiate for a Raise or Work on Side Income?
For me, income is income! I have no chance of negotiating for a raise since I am a teacher. I focus on side income and that includes investing.
I agree, all income is good, and so are all increases in income 🙂
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Since I don't get raises I have to focus on increasing my freelance income or starting to earn more with side hustles that don't have anything to do with my video work.
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This is something that I will have to think about when I make the switch.
My recent post Negotiate for a Raise or Work on Side Income?
Raises all the way! As I said in my comment on Savvy Financial Latina's blog, my income has gone up by a bit over 33% since I started working. I've gotten REALLY good raises in the last few years, which has made a huge difference. A 10% raise when I started is now the same dollar amount as a 7% raise. (And yes, I have seen raises that high.) I don't think my income has topped out either. I'm hoping/working towards another promotion in the next 2-3 years, which would bring my base salary up to a bit over 50% more than I started out with (which was in the high five figures). And with better annual review ratings, not only do you get a better raise, but you also get more stock. I think that side hustles are more valuable when your income is lower. But for me, a reasonably awesome review rating means adding $6,000 or so in base pay versus $2,000 and an extra $10-25k in stock than a medicore review rating.
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That is awesome Leigh! Sounds like you are doing very well.
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Thanks for the mention.
I'm concentrating on both. Of course, I want to concentrate on doing better in my career, and getting raises, but I want to build side income. Doing both, would allow us to be better off. My husband works full time, and also earns side income! We gotta do it while we are young and don't have any other responsibilities. The goal is to be financially independent!
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I agree! And yes, the goal is definitely financial Independence.
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I am mostly trying to increase my "side hustle". How much I earn isn't much, but it's better than nothing. 🙂
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It's always better than nothing 🙂
My recent post Negotiate for a Raise or Work on Side Income?
I say focus on both if you can. If you have a job you enjoy and the place you like working keep working and growing that income. As well as doing the same for your side hustle. In the end if you can do both great. Personally I have been able to grow my side hustle at the same rate as my job income but I have changed jobs every year and its getting old. Making a lot doesn't mean much if I don't have time to enjoy being with my family which is why I rather focus on my side hustle.
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I agree! Work life balance is very important as well.
My recent post Negotiate for a Raise or Work on Side Income?
I don't think it has to be an either/or situation. I am currently working on both! I have been told that I should be getting a raise in July, but it probably won't be life changing. At the same time, I am trying to learn and create side income as well. I want to get to the point where my side income is at least as much as 50% of my current yearly salary.
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You are correct, it doesn't have to be an either/or situation! I am working on both 🙂
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I'm more interested in raises, but I think it's also because it falls into line with also becoming more interested in a promotion and wanting the next step in my career goals. I'm always so impressed with people who can manage a job and side hustles!
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That is good, and you are right. It is about career goals as well.
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I'm working on my side hustles at the moment. I could in theory get a promotion at my job within the next few months if I play my cards right, but it could also mean a lot more stress then my current position. I'm trying to focus on side hustles that I like, so getting a bigger income through things I like seems more enticing at the moment then the promotion.
I know exactly what you mean, as for me it would be the same – a lot of added stress. I don't want that!
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Well, the only way for me to get a raise is either to get promoted to full prof (which will take another 4-6 years minimum) or to go on the job market and get an outside offer. I may do the latter in a year or two depending on DH's situation. However, if I get grants, that can give me up to 3 months additional summer salary, so that's what I've been working on most (now that DH has left his job… I used to take grant money just to pay for research assistance). My career focus is more on output and less on compensation, though if I ever do go on the job market, the output will be important for my compensation numbers!
Side hustles I take when they're offered to me, but I do not actively seek them out. I generally make several hundred to a few thousand each year.
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I'm hoping to change my career focus to more about passion instead of compensation as well. Thanks again for stopping by. Always enjoy your comments 🙂
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For me I would have to say it would be increasing my side hustle. I'm fairly limited to increasing my pay and working more hours. On top of that I would actually rather put more time into my side hustle because I enjoy doing that far more than my job.
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I definitely agree with you! I enjoy my side hustles so much more.
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I actively go for both. Sometimes I put too much on my plate as far as side jobs are concerned. The nice thing is that most of them can be scaled back when necessary to make time for the regular job and my family. The job can hardly ever be scaled back. So it is a balancing act for me.
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I know how you feel. I feel very overwhelmed most of the time!
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Hi Michelle
Thank you for posting this – I've had this thought rolling around in my brain for awhile!
I had two goals this year and they involved both, I think: I started my blog this year as a side-hustle but I hope to grow this over time and I also applied to social work school so I can increase my career opportunities and salary potential. So I guess both are important to me!
Like Scott H. mentioned in the above comment, it's a balancing act!
Thanks
Lindsey
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I agree, it is a balancing act! Thanks for stopping by Lindsey.
My recent post Happy Memorial Day and $1,582 in Extra Income
I'd go for making sure that the career is going well before being too engrossed in side income. For many people, there is a reason why it's called side income, in that it's not the primary source of income. I'd focus on raises moreso, but this doesn't have to be mutually exclusive.
I agree. Thanks for your input.
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I work for myself, so obviously….no raises. 🙂 But $50 every other week, post tax, isn't small at all. That's $2,600 per year, post-tax, which at a marginal tax rate of 15% with a state income tax of 5% plus 7.65% payroll tax and 10% retirement is $4,170. At 25% marginal tax rate, it's about $5,000. If you're making $60,000 to start with, $5,000 is substantial. In fact, it's quite a good raise if you have an income up to $100,000.
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In my line of work, there really are no raises. I work for a public library, and last year our operating budget was cut by $100,000. The staff agreed (though I voted against it) to sacrifice our 401k matching for the year, otherwise the libraries would have had to close for three weeks. This year, we're looking at being level funded at that -$100,000 amount. No one has had a COLA in five years, let alone a raise. So, my answer to your question is side hustle income! This is something I'm trying to get better at, but am having a hard time gaining momentum, which is why I really appreciate all the posting you've done about it!
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