Did you negotiate your salary in your first job? If so, congrats! Nice work. But if not, it looks like you might come up short the rest of your career. Research shows that failing to negotiate your salary at your first position could cost you up to $500,000 over the course of your career. Say what? That’s half a million dollars! But, it’s not that simple.
You likely didn’t negotiate because you just felt lucky enough to have a job. No one can blame you there; graduating into the recession, with limited job prospects, will do that to a young professional. But, the only way to achieve true financial freedom is by earning more. Living a frugal lifestyle helps as well, but you’ll never become a millionaire with the savings from grocery store coupons.
If you didn’t negotiate and you’re not at the number you’d like to be at salary-wise, follow these steps to play catch up:
- Ask for more during your review: It’s a general understanding that the days of 10-15% annual increases are gone, but that doesn’t mean nobody gets a bigger raise than 1-3%. Try making a list of the awesome things you’ve done over the past year, but make sure the contributions you include in this list have a meaningful context to your company’s bottom line. Then, make your case and practice asking for more.
- Take on extra projects at work: Even if you don’t love your job, you still must make the most of it. Part of that is becoming an asset to the company by getting involved with projects outside of your normal job description. Whether it’s volunteering at a service project or coordinating company events, show how much you care. Not only will it boost your leverage in negotiating for more money, but you could also learn a new skill that will help you out one day.
- Take up a side-hustle: Everyone has a unique, marketable skill, but not everyone makes the most of that. Passionate about writing? Contribute for a blog in your industry (like me!) to earn money on the side. Interested in coding and tech? Take some Skillshare classes and learn how to code basic websites, or how to design front-end work. Who knows—it could pay off huge for you eventually!
- Invest extra earnings: If you develop a steady income from your side-work, try putting your money to work in some investments. Have an IRA? Great, plop it in there. Up your 401(K) deductions. Or, try your hand at buying your own stocks. The first two options are certainly the safest, but if you have any questions, talk to a financial adviser at your credit union. It’s certainly better to make your money work for you than to let it just sit in a low-yield savings account!
None of these tips are earth-shattering, but many people don’t exactly go out of their way to do them either. Taking control of your financial future means taking ownership of your earnings. If you can’t earn more at work, earn more on your own. Your future self will thank you.
Have any tips for increasing your earnings? Tweet them to us at @moneymix!