One of the most crucial and influential aspects to overall financial well-being is earning enough money to achieve your financial goals. By financial goals, I don’t necessarily mean be a bazillionaire… but something just a tad more realistic (like pay off your debt, save X% every month/year, go on one…two… three super
extravagant trip(s) a year, buy that fancy-shmancy bag you’ve been coveting for.EVER… for example).
We’ve talked about the basics of living within your means – having fewer expenses than your after tax salary. You can be very proactive about your outgoing expenses, but what about your incoming salary? Is your salary enough? Are you being paid at the market level? Should you be earning more?
Start by comparing your salary to that of people in similar situations. You can try to get salary information out of your colleagues but this can be delicate and political, especially if there is any huge discrepancy between salaries. So if you want to avoid office politics, there are tons of websites out there that will help you calculate average salaries for professions across a variety of experience levels and locations. Try these:
- Glass Door – Glass Door also has extensive reviews of companies (working environment, interview process, etc.)
- LinkedIn Salary – don’t forget that LinkedIn has job listings as well as being a great way to network
- Indeed Salaries – Indeed is known primarily for their job listings
- SalaryExpert – SalaryExpert also has extensive cost of living data for a variety of locations
- Bureau of Labor Statistics
- CollegeGrad Salaries
You can also try to reach out to your network of friends, family and professional contacts at similar companies, in comparable positions to try and get an indication of what people are making elsewhere. Unfortunately, it is difficult to precisely determine exactly how much money you should be earning given your experience, education, location, previous performance, company, title, responsibilities, gender (umm…. how is this still an issue in 2017?), skill set, etc., etc., etc. (unless you are a BigLaw attorney with publicly available salary and bonus information – congrats… you are making enough money).
There are so many different factors that contribute to salary and bonus levels. Consequently, use the above resources to figure out a salary range for your type of role, experience, education and responsibilities. This range could be pretty large, but having this range will give you a general indication of where you fall in comparison to other people in similar positions
If you fall above the range:
You’re a rock star. You may pass Go and collect all your money… good news all around.
If you fall within the range:
This is a good start… it means you are not being (blatantly) undervalued and underpaid, which would be a much bigger issue (see below).
Doesn’t mean there isn’t room for improvement. Make sure you are proactive in getting the raise, bonus and benefits you deserve. Your salary is a moving target – as you gain experience, take on responsibilities, become more qualified, your value (and therefore salary) will also increase! Keep a running tab of your responsibilities, achievements, projects and objectives so that when the time comes to ask for more or better, you are prepared with concrete examples of how amazingly awesome you are.
If you fall below the range:
Ugh – the worst, I am sorry. But there is good news! You have some serious room for growth… potentially significant growth! When you are being underpaid (by a lot or by a little), you essentially have three options.
Option #1: Suck it up buttercup
This is the first and only time you will ever hear me say that this is an “option”… because really, it isn’t. This is even less of a viable option if you are struggling at all financially. You deserve better – you can find better… don’t settle (for anything in life). Time to move to (Real) Option #2.
Option #2: Find a new job
Finding a new job with a better compensation package is something to seriously consider. This requires some time and energy (dusting off the old CV, thinking strategically about any updates required, applying for jobs, interviewing, etc.). Keep in mind that it can take anywhere from a couple weeks to a year to go through the process of applying for a job, interviewing and receiving an offer, so don’t quit your job just yet! There are hundreds of websites out there with general and specialized job listings, and don’t forget to check out recruitment agencies (which can sometimes facilitate your search, particularly in certain fields). If you need a place to start, try Snagajob.
Option #3: Negotiate
Another option is negotiating a higher salary – I will do a full series on negotiation techniques but a strong starting point is knowing what you should be paid, what you would be willing to accept and whether you would leave if you aren’t able to achieve that. If you can, never be the first person to put a number on the table – you may end up low-balling yourself and not even know it. Go into negotiations fully prepared to explain in great detail why you deserve more – make a list of all of your achievements, experience, responsibilities, times when you went above and beyond, unpaid overtime, involvement in the company’s culture and development outside of your actual role/responsibilities, and finally, don’t let them forget that you are willing to take on even more work and responsibility. Asking for a raise goes hand in hand with asking for a promotion.
Option #4: Leverage
This is my favorite option because it is the one that guarantees you get what you want – it is also the one that requires the most work… but that is the price you pay for success! This option entails applying for your job (current or envisioned promotion) at another company, interviewing with the new company, killing the interview and hiring process like a boss, getting an offer for more money (or a better compensation package) and using that offer as leverage to negotiate something better at your current company.
Now – you have to be willing to walk away and take that new role if your current company isn’t able to step it up. But this is a much better option than quitting your job with nothing lined up or merely just looking for new jobs. I realize that this is a tad idealistic, but you can do it… I believe in you!
Also – as an aside – keep in mind that compensation isn’t just measured in the after-tax deposit you receive from your employer. Compensation also includes benefits: medical insurance, medical savings plans, retirement savings (matching contributions from the company), paid overtime, sick days, paid time off, etc., etc. Some of these benefits are equivalent to sweet cash money in your pocket (particularly retirement matching programs or pre-tax medical savings accounts). I am working on posts all about deciphering your benefits packages, so stay tuned for more money matters!
Sincerely yours in harmonious fun and fiscal responsibility,