This post is by our regular contributor, Erin.
Are you wondering how you can increase your income this year? It’s a goal that seems to be popular with just about everyone who cares about improving their financial situation.
There’s good reason for that: earning more makes it easier to reach your savings and debt payoff goals. You’re essentially getting a two-for-one deal when you grow your income.
One of the most valuable things you can do to work toward that goal this year is to get a raise.
Below are seven steps you can take to make that happen!
1) Research Salary Data
One of the first things you need to do is decide how much you’re going to ask for. It’s great to ask for more, but without a solid number, there’s not much management is going to do for you.
A good starting point is researching salary data available online. That will tell you whether or not you’re getting underpaid, and by how much.
If you find it’s going to take a big increase to get paid the industry average, you might want to consider applying for a position elsewhere. Some employees make lateral moves to other companies willing to pay more as a way to get a raise. However, if you’re generally happy with your job, see what can be worked out before going to the extreme.
Perhaps you already know you’re underpaid because your colleagues have stated what they’re making. While I wouldn’t recommend outright asking people in the office what their salary is, if you overhear a discussion, use it to your advantage.
Don’t openly say to your boss that you know so-and-so is making more than you, but don’t be afraid to ask for it if you know you’ve worked for it (and have the same job).
2) Prove You’re Awesome
Hopefully you’ve been proving that you’re awesome since you got the job, making this step easy.
I highly recommend that everyone (employees and freelancers alike) have an “awesome” folder in their inbox, or something like it, where you save all the praise you receive from coworkers, bosses, and customers/clients. When someone emails you letting you know how awesome you are, save it!
Why? It makes for great leverage when negotiating your raise. It shows the kind of value you bring to the table. And let’s face it, most managers are busy. They may or may not have forgotten about the amazing things you’ve accomplished in the past year. You need to remind them.
3) Quantify the Results
The best advice I can give here is to quantify your achievements. Don’t just say, “This person said I’m awesome!” That’s all well and good, but what made them say that?
Did you handle something difficult in an efficient way? Did you boost their revenue by $X? Make a number of sales in one day? Complete a crazy amount of transactions? Enter data in record time?
Numbers have a huge impact on people. Make sure you have something to show the kind of value you bring. If nothing else, explain in clear terms how you’ve improved your workplace since you’ve been there.
4) Get Over Your Fears
Fear can hold some people back from asking for more. You can’t skirt around the issue or be afraid. Trust me, I know the feeling – I never asked for a raise at one job I had. I regretted it because I ended up feeling resentful that my bosses never recognized the hard work I put in.
You need to realize this is on you. It’s not guaranteed you’ll ever be handed a raise. Sometimes you are, sometimes you aren’t. If you want to earn more, you need to be tenacious about it.
If you have to, make it a habit to tell yourself you deserve it. Do you have that list of what makes you awesome? Keep reviewing it until you believe it. Some people have difficulty taking credit for their accomplishments (I’m one of them), but if you don’t, no one is going to do it for you.
5) Schedule Your Meeting
Once you feel confident (and confidence makes a world of difference here), approach your manager and ask them for a review. If it’s easier, ask via email. You don’t want to give yourself any excuses for putting it off.
If you can, schedule it as soon as possible so you get it over with. You don’t want anxiety interfering with your ability to work in the meantime.
You can say something as simple as, “Do you have a half hour free sometime this week to discuss the progress I’ve made in my position since I’ve been hired?” You don’t need to directly ask, “Hey, can you hook me up with a raise? Thanks!” (Some tact is nice.)
6) Have a Plan to Bring to the Table
You should be prepared to have the meeting right then and there just in case your manager happens to be free when you ask. However, if you have time to prepare, get clear on all the previous steps outlined here. Have a mock meeting with a friend to play it out.
- Print out the salary data you found if it’s in your favor. Use it to show that you’re being underpaid compared to the local industry data you found.
- Make sure you’re crystal clear on how much more you’re asking for. You don’t want to flub this part. I recommend having three tiers of acceptable answers: the absolute minimum you’re willing to accept, the “meet me in the middle” answer, and what you’re going to ask for (and are hoping for). This last one should be realistic, but it doesn’t hurt to aim higher in case they want to negotiate down.
- Have that document or list of praise ready to go. Showing this proof gives you more credibility and also tells your manager you’re taking this seriously.
- Outline exactly how you’ve helped your company. You want to make this about them more than yourself. Yes, you’re asking for a raise, which is beneficial to you, but to do that, you should explain why you’re worth it. Everything you say should tie back to how the company benefits.
- Your manager will want to give you a raise because you make their lives easier in some way, or because you’ve grown an aspect of the business. They don’t care that you’ve put in tons of hours unless you show them how it has made a difference. They want to see results, not fluff.
- Have a plan for the future. Your manager may ask you how you plan to grow in the coming year. Tell them the steps you want to take to get there, or seek guidance from them if you’re not sure. After all, this is a review – you should want to hear what they have to say. Just make it clear you’re looking to learn and do what you can to become a better employee.
7) Pitch Yourself and Evaluate Your Options
You’re essentially “selling” yourself to your manager, just as you did in your first interview to get hired. Be calm, confident, and nice – not demanding.
Follow the steps outlined above and see what happens. You may have to play the waiting game.
If you get the raise, congratulations! Did you discuss what steps you’ll be taking to receive a promotion down the road? Follow those and continue being awesome.
Did you get a “no”? First, it’s not the worst thing in the world. Everyone experiences rejection at some point. You have a few options:
- Work harder: We’re not always objective when it comes to our work. Maybe your manager didn’t think you deserved a raise as much as you thought you did. Meet with them again to discuss what steps you can take moving forward to work toward a raise/promotion. Hopefully they’re willing to help.
- Look for another job: If pay is holding you back, or you don’t think your managers value you, then look elsewhere. But don’t quit your job before you have another one lined up!
- Side hustle: If you’re in love with your job and pay is the only bad thing about it, look into side hustling as a way to “give yourself a raise.” You can set your own rates as a freelancer and get paid what you’re worth. It also improves your pitching and negotiating skills!
The worst thing you can do is internalize this and think of yourself as a failure. There are a number of reasons a raise may not be feasible. All you can do is focus on what you can control: your work!
_______________
Asking for, and getting a raise, might be one of the tougher things you do as a young adult. A lot might be riding on it. Remember that it’s just business – the situation isn’t exactly fun for managers, either. Do what you can to make it easier on all parties involved by taking these actions.
Check out DC’s new book Hustle Away Debt to learn everything you wanted to know about making money through side hustles!
Do you have a hard time asking for a raise? Does your job conduct yearly reviews? When is the last time you asked for/received a raise?
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My plan to increase my income this year is to take my blog income from $1000/month to $5000/month! :)
Planning on using #3 this week. Fingers crossed…
My old employer conducted annual reviews and gave raises every December. What I hated about it was that everyone got the same raise no matter what. That’s not a great way to motivate people in my opinion!
I always found #3 & #4 to be key when in my day job. It came down to cost so often that you need to be able to quantify why you’re asking for an increase. I don’t know that it made it easier, per se, but at least it helped provide backbone to my argument. :)
I moved jobs when I realized there was no chance of moving up or getting a significant raise without moving my family to a different location. Since that wasn’t an option, I took the scary step to move and I’m so glad I did. I’ve already increased my income, my options for promotions, and have increased my marketable skills so much. Plus I enjoy it way more.
Excellent advice, Erin! I can’t stress enough about quantifying the results. I always tell people who complain that they can’t get ahead at work to do this. No one will likely toot your horn for you, so you’ve got to toot it yourself, so to speak. :-)
Financegirl Nice, I’m sure you’ll get there!
Mark@BareBudgetGuy I hope it goes well for you!
holly@clubthrifty.com Definitely not. That was kind of how my last job was, as it was civil service. We all had the same “step raises” at set times after we were hired.
FrugalRules I do think it makes you sound more prepared. Going into a meeting like that and *not* knowing how much more you want probably isn’t going to get you the best results.
Pretend to Be Poor That’s awesome! Sounds like a win on all fronts. It can be scary, but you have to do what’s best for you. It never hurts to see what other options are available.
Laurie TheFrugalFarmer Thanks, Laurie! Glad you agree. I know quite a few people who complain about not getting paid enough, or not feeling appreciated, but they don’t ever take action on their own to rectify that. You need to – whether it’s fair or not!
I’m very lucky in that my boss regularly gives out raises. So I’ve never had to ask for one.
But I agree that one of the most salient points you need to make is how you’ve brought value to the company. If someone sees that you’re benefiting them in a way that far exceeds the dollar value you’re asking for, it’s a lot harder to say no.
Smart idea about the 3 tiers of options!
Nice article – I especially like the tips about keeping an awesome folder and quantifying what you’ve done for the company. Nothing says “I’m worth it” to companies like the hard facts. I’ll definitely keep these in mind for my next job evaluation.
AbigailP It’s always great to work for an employer who appreciates you!
Exactly. It really does pay to frame it that way. You were hired for a reason – are you fulfilling it? You have to prove it! Having that data during the meeting definitely makes it harder to brush off.
Lindsey at Sense I’m glad you liked it! Another great benefit to having such a folder is that you can look at it when you’re having a bad day. =)
Researching salary data is critical. It’s important to make sure that your expectations are reasonable and supported by industry/company data.
Financial Tour Guide It is! You definitely don’t want to ask for too much and come off as unreasonable, and you don’t want to lowball yourself, either.
I love #2. After having employees for many years, it’s always funny to me how mediocre ones expect and annual raise even if they have done nothing to make the business better. Prove you’re awesome and you can pretty much ask for what you’re worth.
I’m all for maximizing income as much as possible. My goal is to get a promotion AND hustle for extra money to pay off our debt once and for all. I’m hoping to semi-retire in six years, but a promotion means more pay, which will help us meet our goals.
Eyesonthedollar Yikes! That’s not good. I should have mentioned that working at a company doesn’t simply entitle you to a raise – you definitely need to work for it!
Harmony@CreatingMyKaleidoscope Nice! Doubling down on that goal is a great way to go as far as accelerating debt payoff. Semi-retirement is a good goal, too!
The fastest raise I’ve ever gotten was when I told my manager that I was being actively recruited and the salary that I mentioned was 25% above what I was currently earning. 3 days later, HR reached out and told me that they had begun a compensation investigation for me, and just a few weeks later I received an off-cycle raise.
Of course, this is not always going to work out, so if you’re going to use that line its best to be prepared to continue a job search if you’re underpaid.
Hannah UnplannedFinance That’s awesome! I’ve seen mixed results with this strategy (as you said). Some people have actually tried getting a raise by lying about being offered X amount more at another place. That’s definitely not how you want to go about it, but if you want to stay at your current job, it’s good to have that other opportunity to leverage (as well as another job lined up just in case).
Great suggestions. Chief among them in my book is number three, ‘Quantify the Results.’ Being able to attach hard numbers (e.g. money saved, money earned, value of material within your direct control, etc.) to your efforts is a critical component of evaluating your value.
RetirementSavvy It really is. I see a lot of younger people make the mistake of omitting it because they’re not sure how to quantify their work (it can be difficult for certain jobs), but you have to get creative!
I actually received a raise after my 1st 7 months working at my current job. I’m scheduled for another one later this Spring.
Jason @ The Butler Journal Woohoo, it’s always nice to get a raise before your first full year!