76: Ways to Earn and Save More Money

 
 
 

As a financial therapist, the two most common financial goals people want to achieve are earning and saving more money. While the side hustle is often praised as the end all be all to making more money, negotiating a raise is one of the best ways to increase your income. Side hustles can be great, but they require time, energy, and often marketing to make work. Instead, I’ll share how to negotiate a raise, how to cope if your boss says no to your request, and some of my favorite tips on saving more money.

How to Get a Pay Increase At Work

Asking for a raise is an important part of work, and in fact, is expected. While many people hope their boss or manager will magically offer them a raise, most of the time, it’s on the employee to advocate for better financial compensation. Negotiating a raise as a member of a marginalized community (e.g., as a woman, BIPOC, disabled person, or member of the queer community) is even more important. There is a huge wealth and income gap between white men and all other groups of people in the United States. Contrary to folklore, women actually do ask for raises as often as men, but are more likely to be told “no.” This makes asking for a raise as a woman, especially if compounded with other marginalized identities, imperative. If you occupy any marginalized identities, negotiating for better pay is not only beneficial for you but leaves the door open for others to have access to better financial opportunities as well. 

Prepare to Negotiate a Raise

Before you ask for a raise, you have to do some preliminary research and prep work. This will help you come to the meeting armed with the data that supports your reason for a pay increase. Carve out some time to ask yourself the following questions:

  1. What value do you bring? Document your praise since your last review or raise. Check your email for client testimonials and positive praise for your work from teammates to help support your value. Get detailed about what specific contributions you’ve made to the company or team. While this isn’t the time to be shy, don’t overstep your work. For example, if you were on a small team that found ways to save 11% on energy expenses, include that. Don’t say, “I found 11% savings on energy expenses.”

  2. What raises have you received? If it’s been 12 months since your last raise, it’s appropriate to ask for a raise. If you’ve been with the company for a while, review your raises. If they’ve only been “cost of living” raises, or raises in the 2.5-3% raise, it’s absolutely time to negotiate better pay. If you’ve been with the company or in your position for less than a year, you can still ask for a raise if you’ve taken on more responsibilities than originally outlined in your job description.

  3. What do other companies pay/what are your colleagues earning? Ask colleagues what they earn or earned when they were in your position. Get on websites like Glassdoor or PayScale to learn more about the market rate for your position. If you feel uncomfortable asking your colleagues for their salary, you can preface it with, “I’m getting ready to negotiate a raise and am planning on asking for a salary in the range of $X-$Y. Is that about what you were making when you were in my position?”

  4. Demonstrate a willingness to learn and show how you’ve taken steps/will continue to take steps to help your team or department. Track the additional responsibilities you’ve taken on, new skills you’ve learned, and share what specific goals you hope to achieve in the coming year. It’s expensive for a company to hire someone new and lose time training someone. If they know you plan to be with them for several years, they may be more likely to grant your raise request.

After you’ve answered the above questions, practice having a conversation with a friend or colleague you trust. Getting comfortable saying the words “I’d like to ask for a raise,” or “I’m asking for my compensation to match my increased efforts” can be helpful to prevent you from stumbling over the words in real-time.

Have The Raise Negotiation Conversation With a Manager

Now that you have your data backing up why it’s time for a raise, it’s time to set aside a meeting with your manager to negotiate a raise. These meetings can be as short as five minutes or run up to 30 minutes. Send a quick note or Slack message (depending on your company culture) requesting to sit down or have a 1:1 Zoom meeting to discuss your compensation and performance. This gives your manager a head’s up that you’ll be asking for a raise, and gives you both appropriate time to have the conversation. While many people ask for raises during their annual review or performance review, you can absolutely ask for a raise outside of that time period.

Here’s how to run the meeting to make the ask:

  • Evidence. Present the evidence you’ve researched. Share what you’ve been working on, the positive outcomes you’ve had, and why you’re a valuable member of the company.

  • Make your ask clear. After you’ve laid out your reasons for a raise, be clear and to the point. Ask, “can we revisit my compensation?” or state, “I’d like to adjust my salary to reflect my performance.”

  • If they say yes. YAY! Cheers to you! Make sure you finalize the details on when the raise will go into place.

  • If they say “no.” If they say no to your request for a pay raise, there are three common reasons. If they give you one of these three reasons, they say you aren’t qualified, they can’t afford it, or now isn’t the time, here are some assertive responses, so all of your hard work prepping for the meeting and making the ask doesn’t go to waste. If they say “no” because you are  . . .

    • Not qualified

      • “What specific things would I need to do/complete to be considered for a raise?”

    • Budget issue  

      • “Are there non-salary benefits we can negotiate?”

      • “When will a budget be made available for this?”

    • Timing issue  

      • “I understand now isn’t the time, can we talk about this again at the end of the quarter/month?”

Salary Increase When Changing Jobs

If your boss said no to the well-documented reason you asked for a pay raise, it might be time to look for a salary increase by getting a new job. In 2019, the average salary increase for a worker changing jobs was 5.3%. Using some of your prep work from earlier, you can more confidently put yourself on the job market or work with a recruiter for a better salary. Take some of the work you did in researching your responsibilities and positive outcomes and fold them into your cover letter and resume, too.

Remember, if you go the route of changing jobs to get a better salary, it’s illegal in most states for them to ask for your current compensation. This protection helps prevent people who are underpaid from continuing to be underpaid when they change jobs. Don’t feel pressured into telling them what you currently make; get comfortable with the number you want to be compensated. For example, if they ask what you make, you can say, “I’m not comfortable sharing that number, but I will share that I’m looking for compensation in the $X-$Y range.”

Ways to Save More Money

Most of us have a vague idea that we should be saving money. But if we are saving “just because,” it can be hard to maintain any meaningful momentum. Before you tell yourself you want to save more money, ask yourself WHY you want to save, and what you want to use that money for. Label a separate savings account with that financial goal in mind. And get specific, “Paris Vacation 2022” or “New AWD Subaru” are better than savings accounts labeled “travel” and “car.” Now, onto those realistic ways to save money:

  • Look at spending. Cut what isn’t serving you. One of the best ways to save more money (realistically) is by looking at where your money is currently going. Review the last 3-4 months of spending to see trends or patterns in your spending habits. You might find that you’ve been spending more on parking than you thought, or your spending on dry cleaning hasn’t changed even though you’re still wearing sweats from the waist down. Reviewing where you can easily trim is a great way to save money. 

  • Get rid of aspirational spending. Most of us have “aspirational spending.” We spend on things like gym memberships, meditation apps, or meal kits based on the idea that having access to those types of things will make us the type of person who exercises, meditates, or cooks on weeknights. Maybe you are that person, go you! But if you’re anything like me, there might be some expenses that you just aren’t using, or using enough, to be worthwhile. I had to cancel all of my meal kits because I’m not organized enough to meal plan a week in advance and found that I was gifting meals to neighbors and family instead of cooking them. 

  • Autosave. Let the robots do your heavy (financial) lifting. Auto-transfers are a gift; you can set up an auto-transfer from your checking account to a savings account every time you are paid to make saving for a goal as painless as possible.

  • Round up In keeping with the theme of letting robots do the work for you, join an app or enroll specific cards to round up your purchases to the nearest dollar, with the additional change being funneled into a specific savings account. If you regularly swipe, joining something like Digit or Qapital might be worth it.

  • Negotiate your bills. Call utility companies, phone, internet, insurance, and cable companies, to negotiate a more affordable package. It can be as simple as “I’ve been a loyal customer for two years. Do you have any packages that are more affordable than my current one?” or “I’m thinking of switching to X competitor as they are offering a better deal. Do you have anything similar?” I do this about once per year with great success!

  • Negotiate interest rates. Did you know you can negotiate a lower interest rate on your credit cards, auto loans, and sometimes even student loans? Yup! If you’ve got a decent on-time payment history, you can use that to your advantage and call them up (or use their chatbot feature) to share that you’ve been paying on time for X months and you’d like a lower interest rate. You can also do this if you have a mortgage; it’s called “refinancing.” It definitely can be worth it. While it takes more time and paperwork, it can save you money and potentially time left on your mortgage. Last year, my partner and I refinanced our home from a 30-year mortgage to a 20-year mortgage and shaved off seven years of payments!

  • Gamify it. Make saving fun. Get your friends involved, compete with yourself, and make it a challenge to save money.

  • High yield savings account. A high-yield savings account is a savings account that offers a higher interest rate than a plain vanilla savings account. While most banks and credit unions offer them, I’ve found that online banks tend to offer better rates. Check out banks like Ally, Synchrony, or Chime for their HYSA rates.

  • Use cash/debit if you have a tendency to overspend on credit. As my mom used to say, “buying something for 50% off still means your spending 50%.” In other words, if you tend to overspend on credit, put your card on ice and switch to cash or a debit card. Yes, points and rewards on credit cards can be great, but you shouldn’t use them if they are getting you into trouble financially.

Realistic Ways to Earn and Save Money

Now you’ve got tips on how to earn more money by negotiating for a raise with your current employer and what to do if your employer says “no.” You’ve learned how prepping for the raise conversation can prepare you for getting on the job market and some of my favorite tips for saving money.

Earlier in this podcast, I touched base on the intersection of money and gender. You’ve heard women earn less than men, but did you know that Black, Native, and Latinx women don’t have their “equal pay day” until August, September, and October? Equal Pay Day denotes how far into the calendar year women must work to be paid what men were paid the previous year. All the more reason to ask for a raise or raise your prices. Learn more from AAUW on their advocacy for equal pay for all women.

 
Previous
Previous

77: Behind the Scenes of Our Mastermind: An Entrepreneurship Support System

Next
Next

75: Financial Goal Setting → PLUS Tips On Maintaining Financial Momentum