Managing Finances and Insurance When You Have More Than One Job
Working two jobs or running multiple income streams can feel like a financial power move. More money, more options, faster savings—what’s not to love?
But once the deposits start hitting your account, a bigger question comes up: How do you manage this money responsibly? And what about taxes, insurance, and financial risk?
Overemployment and multi-income setups can be rewarding, but they come with complexity. Here’s how to handle the financial side of the equation so that there are no surprises come tax season.
Separate Your Income Streams
Start by separating your income sources into different accounts or at least tracking them clearly. You want to be able to answer questions like:
- How much is the second job really adding to my savings?
- How stable is each income stream?
- How much am I setting aside from each?
If you want to get granular, tools like QuickBooks, YNAB, or even a good spreadsheet can help you stay organized if you’re into budgeting.
Stay Ahead of Taxes
This is where many overemployed or multi-income earners get tripped up.
- If both jobs issue W-2s (or T4s if you’re Canadian), you may be under-withholding. Use the IRS/CRA withholding calculator or speak with a tax advisor to adjust your withholdings accordingly.
- If you receive 1099 income, you are responsible for self-employment taxes. Set aside a portion immediately (ideally in a high-yield savings account) and make estimated quarterly payments.
- Track deductions related to home office use, software, equipment, and health insurance if you pay out of pocket, for either job.
Do not wait until tax season to find out you owe thousands – if you’re used to getting a tax refund each year, chances are you will owe a surprising amount during your first income tax filing after overemployment.
Insurance: Make the Most of Your Coverage(s)
If both jobs offer health insurance, choose one as your primary. Consider:
- Which plan belongs to the employer that you will likely stay with if things go south
- Which plan covers your preferred providers
- Which offers better out-of-pocket maximums
Use both insurance coverages to cover out-of-pocket expenses. This is called coordination-of-benefits. For example, if you have coverage for registered massage therapy at 80% from both insurers, you can file 80% of each massage expense with the first insurer, then file the remainder 20% with the second insurer, thus covering 100% of each massage expense until the limits are reached.
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