Money Minute: Is job hopping a bad idea?

A record 3.1 million people quit their jobs in December. We'd love to chalk this up to stellar job growth and a booming economy. While it's true the U.S. is doing better on both these fronts, many workers quit their jobs because they simply don't have a choice. Contract-based freelance jobs are growing at a rapid clip as firms look to curb the cost of human capital.

By age 24, most of us have changed jobs at least 5 times. Fortunately for young workers, there are actually some pretty great incentives to keep moving. 

It’s a smart way to increase your earnings. Full-time workers earn an average 4.5% more when they switch jobs, compared to 3.9% for workers who stay put. And your 20s and 30s are such a crucial time for building wealth. Most people reach their peak salary by age 40.

It can also be the best way to move up. If you’re feeling stuck at your job, sometimes the best strategy is to get out of there. In an ideal situation, you’ll get the chance to negotiate for higher pay, work somewhere with growth potential and expand your skill set.  

Just be prepared to defend yourself. Hiring managers may not love that you’ve had 3 jobs in the last 5 years. Practice your defense ahead of time. Point out all the new skills you’ve developed and how valuable those skills will make you as a part of their time.

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Mandi Woodruff is a reporter for Yahoo Finance and host of Brown Ambition, a weekly podcast about life, love and money.

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