How to Give Yourself a Raise This Year
In a world where we need an income to survive, it is only essential and right to protect our job or business to keep our earnings rolling in. You want to take control of your income in such a way that it becomes adequate, if not more than enough, to cover and sustain your living expenses.
Many of us derive our income out of our jobs and profession. Working some hours each day means you have compensation to expect on your pay schedule. It would be great if your paycheck can put food on the table, pay the bills and afford the little luxuries in life. But if you’ve been in your job for long enough and has given your best in your performance, it may be time to have that talk with your employer regarding a pay raise.
How likely are raises at work?
Most of us commit to long-term work in the expectation that a raise should be just around the corner after putting in a good job consistently. Some companies evaluate pay raises after an employee has been with them for a period of time, while others base it entirely on the employee’s performance. According to Gazette Review, 55% of the Americans think that they’re fairly compensated. However, a raise would certainly come in handy considering inflation and rising cost of commodities.
From 2015 to 2016, the average annual increase in salary is 3%. However, salary increases are not the same across the board. Sandra McLellan, a compensation practice leader, told Kiplinger that top-rated employees get higher than average salary increases, often ranging between 4.5% to 5%, but low-performing employees receive increases from 0.7% to 1%.
Getting a raise from your employer may vary from one company to another. However, if you’d like to check if you’re set for a raise, you may simply ask your boss straightforwardly and nicely. A concise and sincere chat could give way to the raise. All it takes is for you to ask.
In situations wherein a simple conversation about the topic won’t guarantee a raise, you should first try to improve your performance and work ethic to build a stronger case in your favor. It’s also a wise move to keep improving your qualifications, advancing your skills, and becoming an even more valuable part of the company. If your employer doesn’t budge and won’t hint at any promise of a raise after all these efforts, it’s better to explore other employment options where you can be better compensated for your time.
3 Ways to Take Control of Your Income
How you use, spend, and save your money can have a huge impact on your overall finances. Your income, or sources of revenue, sustain your daily living after all. It allows you to afford your needs and wants. However, if you want to take a better control of your income, you need to be conscious about your financial decisions.
Create a Budget
First, you need to start off with a monthly budget. It’s the most basic financial plan that maps out how your income is supposed to be used month after month. To begin with a sound budget, write down your income. In another column, write down your monthly expenses. You might also want to separate wants and needs so you know where to trim should you go on a deficit. Sum up all the expenses and deduct the total from your income. The resulting figure tells you if you’re at a positive or negative.
If you get a positive figure, then you can take that as a sign that you’re managing your income fairly well. It means you still have some surplus money to use for some luxuries, emergencies and investments. If it’s negative, you need to keep tweaking your budget to minimize the negative figure. The goal of the budget is to ensure that all your expenses are covered without going into a deficit.
Trim Out the Fat
If you find out that you’re spending more than you earn, you need to do something. Take another long hard look at your budget and see where you might be able to make adjustments without compromising your priority expenses.
Begin with your wants. Maybe you can skip shopping and entertainment this month to free up some cash and use that money to fill up the deficit. Keep eliminating wants out of your budget until you’re able to neutralize the amount or arrive at a positive figure. It is not advised to pass up on your monthly obligations like credit card bills and consumer loans because you’ll suffer from late penalties and heightened interests. Focus on expenses that won’t hurt as much if you don’t spend for them, even temporarily.
Put Up an Emergency Fund
Emergencies will happen no matter how careful you are with budgeting. Some things are beyond anyone’s control and the best that we can do is to prepare for them, financially.
An emergency fund protects your budget and savings from unexpected expenses. If you suddenly need $500 for urgent car repairs, you wouldn’t have to deduct $500 from your grocery budget or skip paying your credit card bill this month because you have the money to pull anytime. Your budget remains in-tact and you feel at ease that you can financially meet emergencies without going into debt or making large sacrifices.
HOW TO GIVE YOURSELF A RAISE
In conventional workplace settings, your employer gives you the raise. You can ask or negotiate for them, but there’s never a guarantee that it will happen. The decision will always be up to management. However, you don’t have to wait for your boss to give you a raise. You can start working on your own finances and give yourself a raise with these following steps.
Get A Second Job
Your day job may already give you stable income, but if you want more money, that shouldn’t be your only source for revenue. You can give yourself a raise almost instantly by getting a second job.
The best thing about getting a second job is that it mostly gives you a good amount of flexibility that you don’t get to enjoy in your day job. For instance, if you’re an office staff from 9-5, you can’t escape your responsibilities during work hours. You’ll always be at the mercy of your job until it’s time to go home.
However, you can pick up a second job that gives you more freedom. You may want to do arts and crafts during the weekends or while watching TV at night and you can sell them online in your free time. There are also a lot of gigs and part-time jobs that you can do like freelance writing, graphic design, transcription, and so much more. You just need to balance your time well so that your performances in your day job and second job do not suffer.
Now consider this: if you make $300-$500 each month on your side gig, multiply that by 12 months, and you get an awesome raise, even without asking your boss!
Tighten Your Budget
The importance of a budget is already covered above, but did you know that can still get a raise even when everything’s “on a budget?” Yes! You just need to tighten it.
What this means is to keep cutting back on costs in order to make way for some money. Evaluate the things that you spend on a regular basis, say gym memberships, cable subscriptions, and weekly restaurant dinners and so on. Even your daily $5 coffee can add up.
Next, begin eliminating them one after the other. You don’t have to quit everything cold turkey, but you can always minimize them over time. You can bring down frequency of restaurant dinners to just one to two each month and probably just cancel your membership if you’re barely using it. You could even skip the expensive coffee and brew your own at home and at work.
There are several areas in your budget that you can adjust to increase your revenue. You just need to try giving them up. You might even realize that some of them are trivial expenses. Eliminating some or most of these expenses will improve your monthly cash flow and give you more money to use for more valuable expenses.
Pay Off Your Debts
Debts eat away at your income. Instead of having the extra $300 to use for a vacation or funding for emergency, you need to fork that amount plus interest into paying your debts. Debts diminish your buying power and limit your financial options. They keep you from building wealth.
What hurts more about having debt is the interest. Apart from having to pay the principal amount, you also need to shell out a few more dollars in interest. Imagine having to pay $80 in interest for your loans? That would have amounted to almost $1000 in twelve months! What you pay for in interests could have been used on other bills or put into your savings.
Now, this does not mean that you can erase all of your debts in one sitting, but you should make it a goal to crush your debts one by one. The debt snowball method, for instance, allows you to tackle debts according to size. Start settling the smaller debts then move on to the bigger ones.
You just need to keep going at it until those debts are gone. And try not to go into debts anymore to attain more flexibility with your income.
Cut Out A Bill Or Three
We all have bills but we could live quite comfortably without some of them. Take a look around the house and see what you are paying for that you don’t use regularly. That would probably include your cable TV, expensive internet plan (if you’re a light user), magazines, and others.
It probably wouldn’t hurt if you could stream TV shows and movies via your internet connection so you can get rid of your cable bill. Most magazines have online portals now too. You might even want to downgrade your phone plan to one that’s more suitable to your use and needs.
Cutting out a bill or two, or three, from your expenses could add up to something big. That would also mean fewer financial obligations to meet each month.
Change Your Tax Withholding
There are 80% of Americans who get tax refunds on a yearly basis. Most of them are happy to receive thousands of dollars in tax refund, but that also means one thing: they’re lending money to the government tax free.
You don’t have to wait till its tax refund season to get your raise. You just need to make sure that your tax withholding is properly computed and adjusted. Instead of letting the government use your money for free, you’ll be the one to get and use it as you please.
Plus, reducing your withholding tax accordingly also means increasing your monthly paycheck.
Get A Roommate
If the cost of your rent or mortgage is already bearing down on you and you don’t mind taking in another person into your home, getting a roommate will certainly help reduce your housing expenses. You could get another person to live in your spare room and the monthly rent could go towards your mortgage. You may also rent out your room to vacationers via AirBnB and similar service platforms. Simply list your property on these sites and earn more money with little effort.
Refinance Your Mortgage
Like many people, housing is also probably one of your biggest expenses. If you haven’t explored the idea of refinancing your mortgage yet, you’re also probably missing out on hundreds of dollars in savings.
When done right, refinancing your mortgage could even reduce your interest rate for the whole term of the loan. Consider this: if you refinance your 30-year mortgage of $150,000 at a 6%, you could potentially save around $200 per month (around $2,400 annually) throughout the loan term! You’ll also save around $65,000 in interest along the way.
Work From Home
Whether you can arrange to telecommute to work or start a work-from-home job or business, this type of arrangement could prove to be a money-saver for you. Working from partially or totally from home could help you reduce cost in several aspects. First off, you wouldn’t have to spend as much in transportation. You’ll save more money in gas, toll, and parking fees working from home.
There’s also great possibility that you’ll eat healthier at home too. Since you work from home, you could afford the time to cook healthier meals, and reduce the risks of lifestyle-related diseases.
You also wouldn’t have to spend as much on corporate clothes and night-outs with the colleagues. Sure, there are trade-offs in this set-up, but when you look at it in a financial perspective, working from home certainly will certainly help improve your cash flow by eliminating some expenses.
Give Up Your Vices
Are you shopping addict? Do you gamble a lot? Are you spending way too much on cigarettes and alcohol? These vices don’t just reduce your income; you’re also putting yourself at risk for serious health complications. Too much alcohol can damage your liver and excessive smoking can cause lung cancer. Even vices like gambling and shopping may require psychiatric intervention.
At a glance, these vices may not mean so much to you. It only costs a small amount of money to buy lottery tickets, a pack of cigarettes or a bottle of cheap alcohol. However, the long-term effects are what will affect your financial future the most.
GET YOUR RAISE NOW!
It’s true that there are things that we can’t control. When your boss tells you he can’t give you a raise, there’s nothing much you can do about that. However, there are several aspects in your financial life where you have full control of. If you come to think of it, making those changes is even worth than the average 3% raise.
What you need to do to get your raise is to start following these steps. Begin with a budget, then cut back on your expenses. You then need to consider your financial set-up with regards to housing, tax and work arrangements. When you put them all together, you’ll see a dramatic decrease from your expenses and increase in your savings.
It’s all about taking charge of what you can control. You can take matters into your own hands and make smart financial decisions without having to be at the mercy of your employer.