Considering getting a second job? You're certainly not alone. When budgets get tight and expenses start to creep up, sometimes seeking additional income is the only way to make ends meet. But are a few extra bucks really worth the time and effort you're going to spend moonlighting at a part-time position?
While a second job can dramatically help you increase your monthly income, it can also deplete your energy, destroy relationships, and leave you feeling downright grouchy. Here's what you'll want to consider before scanning the classifieds for career openings...
Get serious about your bad financial habits
Making more money won't help you spend less. As such, it's important that you tackle any bad financial habits prior to pursuing a second career. This will help you to better manage the income that you already have, which in turn will make it easier to reduce your expenses.
But what if you're still struggling, even after you've gotten a handle on your spending? Then might be a good time to consider additional income.
Reasons for taking a second job
Taking a second job will mean less time with family, increased physical and mental demands, and large amounts of sleep deprivation. As such, it's important that you have a convincing reason for putting yourself through the pain. Here are a few potential reasons to consider a second job...
- Reduce debt
Not surprisingly, this is the most popular reason for picking up a second job. However, bringing in additional income will only benefit your debt reduction efforts if you actually put your earnings towards your outstanding loans.
- Build an emergency fund
Emergency funds provide you with a financial buffer between life's uncertainties. If you don't have a comfortable amount of cash put away, you may want to consider picking up a part-time job in order to build up some savings. A solid emergency fund should be large enough to cover upwards of 6 months worth of expenses.
- Increase wealth
Temporarily taking on a second job can help you to kick start your savings, putting you in a better position to invest well, now and in the future.
The dark side of working more
It's worth keeping in mind that working a second job should only be a temporary financial fix.
Your health and relationships simply cannot sustain the strain of working 10+ hours a day. If you find that you cannot manage on the income from your full-time job for an extended period of time, it might be best to start looking for a new career entirely.
Indeed, additional income can come with a hefty price tag. Here are some costs to consider...
- Opportunity costs
Opportunity costs represent the non-financial things that you give up in order to take on a second job. This includes spending less time with your family, physical exhaustion, and less free time. Consider this example:
You decide to take a second job for $12 an hour for a total of eight additional hours a week. The job's starting time is just 50 minutes after you clock out at your full-time job. This means that you have to rush home, quickly eat something, and hit the road again in order to make it to work on time.
There are a number of opportunity costs in this scenario. First, you're sacrificing your health by eating quick and unhealthy meals. You're also sacrificing time with your spouse or family because you're constantly rushing around. Is $96 a week really worth the added stress and frustration that this situation will ultimately create? This is a question you'll have to answer if you're going to work longer hours.
- Transportation Costs
How long will it take you to commute to your new job? Will you need to factor additional fuel costs into your monthly budget? If you find that you spend an hour or more commuting for a low-paying part-time job, ask yourself if the additional expense is really worth the extra few bucks you're bringing in.
- Childcare costs
If taking on a second job requires you to hire a babysitter or budget for additional childcare expenses, be careful! These expenditures can quickly eat through the profits of your second job. For example, if your goal is to bring in an extra $1,500 a month, but you have to spend $750 on childcare, is it really worth killing yourself at a second job?
- Bumping up your tax bracket
Sometimes, making more money can actually end up costing you more in the long run. If the income from your second job manages to push your total income into the next tax bracket, you could end up with an unpleasant surprise come tax-return time. If you're considering taking on a second position, take the time to talk with a financial advisor first. He or she will be able to help you identify any taxable considerations before they have the chance to cost you money.
- Decreased productivity at your current job
Before you start handing out resumes, remember to review your contract with your current employer. Many companies have policies in place that prevent employees from moonlighting, and for good reason. Managing two jobs can be difficult to juggle; more often than not, the stress of the situation will become evident in your everyday work. The last thing you want to do is put your main source of income at risk in exchange for a few extra bucks.
Is it worth it?
While working a second job can bring in more money, the costs can quickly add up. Before you accept a second position, sit down with your friends and family and seriously discuss the various pros and cons of the situation. After all, money may be important — but it certainly isn't everything.
GoldenGirlFinance.ca is a free personal finance and education site for women.