Want a Bigger Paycheck in 2021? Here’s How to Get One

Author: Christy Bieber | December 03, 2020

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Higher compensation is within reach

Increasing the income you have coming in is one of the best ways to accomplish your financial goals. After all, the more money you make, the more there is to save, invest, and spend.

The good news is, there are many ways you can increase your paychecks in 2021. In fact, here are 15 of them to consider trying out.

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1. Adjust your tax withholding

If you got a tax refund last year, you lent the government money interest-free and you shrunk your paychecks in the process. There's no reason to tie up your money all year and wait to get it back in one big lump sum.

If you want to make your paycheck bigger, the easiest and fastest way to do it is to adjust the amount of taxes being withheld from your check so the correct amount is taken out and refunds become a thing of the past. You can ask your employer for a new W-4 form to make the fix.

When you have access to your money all year long, you can invest it for yourself, use it to pay down debt, or accomplish other things with it over time rather than waiting months to get back your own cash.

ALSO READ: The Bidens Made a Common Tax Mistake and You Might Be Making It, Too

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2. Negotiate for a salary bump

When was the last time you asked your employer to pay you more? Chances are good it was never. Far too many people don't negotiate for regular salary increases, which is a major missed opportunity.

If you have an annual performance review, that's an ideal time to ask for more money -- especially if you have ample proof of solid performance over the course of the year. But even if you don't have this type of meeting on the schedule, it doesn't hurt to sit down with your boss, show off what you've accomplished, and ask for some additional compensation.

If you are going to request a raise, make sure you go in prepared. Proof of what you've done is important, but you may also want to bring in supporting evidence if salary data shows that you should be making more.

If your company offers you a raise without your prompting, you also don't just have to accept the number offered. Aim to negotiate a higher increase if you feel you've gone the extra mile.

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3. Ask about advancement opportunities

Depending on your job, there's a good chance you'll eventually max out your potential salary in your current position. That means you may need to move up in your company if you really want to boost your paycheck.

If you're serious about making more, talk to your boss about any advancement opportunities that exist at your company. They may be able to point you toward training programs, suggest positions that are opening up, or even work with you to create a higher-tiered position that comes with more responsibility and a bigger paycheck.

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4. Request new responsibilities at work

While there may not be a new position you can move into immediately, you can offer to take on more responsibilities at your current job. This may not lead to a salary increase right away, but becoming indispensable to your boss could give you more leverage when negotiating a raise and likely put you first in line for a promotion.

Taking on new responsibilities also gives you a chance to flesh out your resume, which could come in handy.

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5. Offer to do overtime

If you aren't in a salaried position, one of the easiest ways to make more money is to work more hours. This can really boost the amount you earn, not just because you'll log more time but also because you usually get paid at a higher rate for overtime work.

Make sure to let your boss know that you're eager and willing to clock in some more hours, so you can get yourself on the list of employees they turn to when extra work needs to be done.

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6. Improve your skills

The more tasks you can do in your industry or at your place of work, the greater the chances you'll be given more money and responsibility. So make 2021 the year you improve your skills.

If your company offers training programs, taking part in one can be one of the best and easiest ways to develop the knowledge needed to advance. But you can also look for online learning opportunities, check for classes at your local community college, or find a mentor willing to offer help in building your knowledge base.

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7. Get a new credential

If you want to go beyond just learning new skills, you can actually take courses that will provide you with a new degree or certification.

By earning a new credential, you can show you've advanced professionally and are deserving of more money at your current job -- or you can make it more likely you'll be hired in the future at a higher pay rate.

ALSO READ: How to Cut Down on Financial Anxiety, No Matter Your Situation

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8. Consider a job hunt

If you don't have advancement opportunities at your current workplace and your employer rebuffs efforts to negotiate your salary, it may be time to start looking elsewhere.

Finding a new job could help you to raise your salary substantially -- especially if you've also earned new credentials or developed your skills and expanded your resume since you last hunted for a position.

It may seem difficult to look for a job in the middle of a pandemic, but there are companies hiring and you may find you're the right fit for one that is willing to pay you much more than your current employer.

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9. Contribute to your workplace 401(k)

If you aren't already contributing enough money to your workplace 401(k) to earn the maximum employer match, you should aim to start doing so ASAP in 2021.

Putting more money in your 401(k) will make your monthly paychecks a bit smaller, but it will increase your total compensation since you'll be able to claim the full amount of employer matching funds for your investment.

Tax breaks also ensure contributing to a 401(k) effectively increases your income. Say you contribute $5,000 to a 401(k) and are in the 22% tax bracket. You'll save $1,100 in taxes -- so although you'll end up with $5,000 invested for your future, you'd have reduced your take-home income by just $3,900. The government is basically giving you $1,100 in free money to save for your later years.

ALSO READ: Up to $9,620 in Free Retirement Money Could Be Yours for the Taking, if You Act

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10. Take advantage of the saver's credit

Depending on your income, you may also be eligible for even more free money to save for retirement.

In fact, you could score free money worth up to $2,000 as a married couple or $1,000 as a single filer by investing for your future.

You can do this by claiming the saver's credit. Depending on income, this provides a tax credit equal to either 10%, 20%, or 50% of the first $2,000 in retirement account contributions you make.

And tax credits reduce your income on a dollar-for-dollar basis, so if you'd previously have owed $3,000 in taxes and get a $2,000 credit, you'd now owe just $1,000.

And that's a de facto paycheck increase, since you're receiving money to invest to build your net worth.

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11. Claim all the employee benefits you're eligible for

Many companies offer a variety of perks, from paid time off to health insurance to discounts on certain products.

You'll want to make sure you're taking full advantage of any benefits available to you so you can get the most value from your job. If you signed up for benefits long ago and haven't kept up with updates, the start of 2021 is a great time to check what kinds of additional perks you could be eligible for.

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12. Shop carefully for insurance coverage

You'll also want to make sure you have the right insurance so you aren't paying too much for the healthcare services you're getting during the year.

Chances are good you're signed up for insurance through work, if your employer offers a policy. When open enrollment comes, make sure you're still satisfied with the coverage you have.

If you aren't using your coverage much, changing to a plan with cheaper premiums but a higher deductible could potentially give you more money in your paycheck. On the other hand, if you expect to need expensive medical services, it may be beneficial to upgrade to a costlier plan with better coverage.

The bottom line is, you'll want to make sure your coverage matches your needs because reducing your out-of-pocket spending on insurance leaves you with more of your take-home pay to use for other purposes.

ALSO READ: Open Enrollment at Work Is Coming. 3 Tips for Choosing Benefits

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13. Consider a side hustle

If you can't increase your income enough at your current job, consider doing a second one on your off time.

There are plenty of opportunities for side hustles, from freelance writing to driving for a ridesharing company to setting up an Etsy or eBay shop.

The benefit of a side hustle is that you can decide how many extra hours you're willing to work and how much extra you want to earn.

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14. Start your own business

If you've got a brilliant idea for a product or service you can offer, consider starting your own business. You can do this on the side of your regular job until you've proven it can be profitable. You can often get started with very little initial investment money.

If you can make your business a success, the increase in your paycheck should be dramatic once you're the CEO.

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15. Invest your money wisely

Finally, you should take some of your money throughout the year and invest it. By doing so, you can start earning a return on the funds.

Investment income you earn not only boosts your annual earnings, but it can help you to build a lot of wealth over time. As your money is invested, the returns can be reinvested and earn money of their own, so your wealth grows exponentially through compounding.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Previous

Next

Bag of money and hourglass illustrate growing investment.

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Make 2021 the year you grow your income

By taking some or all of these steps, you should be able to bring home more money in 2021 -- and hopefully also improve your financial situation for years to come. Get started today.

The Motley Fool has a disclosure policy.

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