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Five Ways to Give Yourself a Raise
If you got a huge raise at the end of the year, consider yourself lucky. A deluge of data both new and old show that annual raises have mostly fallen flat, barely keeping up with inflation in some cases.
The Society for Human Resources Management reports it plainly. Their stats show that, in 2016, most U.S. firms handed out raises equal to 3% of their employees’ salaries. For 2017, companies are planning to do much of the same. Considering the fact that the Consumer Price Index (CPI) (which serves as a measure of inflation) rose 2.1% in 2016, a 3% raise isn’t going to give a very big boost to your buying power.
So, what’s a girl or guy to do? Work hard and hope for a promotion? Yes, but in jobs with little upward mobility, moving up the ranks is a long shot at best. At worst, it’s hopeless.
Here’s what I think: Instead of waiting for your boss to give you a raise, you should take one for yourself.
No, I’m not talking about raiding the work cash register or altering your paycheck; I’m talking about figuring out a way to boost your bottom line by either a) spending less, b) earning more, or c) both.
Don’t Wait Around for a Raise
Sometimes you have to take what you want, and that’s true when it comes to securing the paycheck you deserve. If you’re tired of waiting around for more pay, it might be time to take the bull by the horns. Here are five ways to give yourself a raise without asking for permission or begging your boss.
#1: Hustle on the side.
While nobody loves the idea of doing more work on the side, finding a way to earn money in your spare time is probably the best way to give yourself a raise. If you have any type of skill or talent at all, it’s usually possible to find somebody who will pay you.
Don’t think you have any talents? Think again. If you can babysit, mow lawns, or pick up someone’s dry cleaning, it’s possible to earn extra money with a little effort and time. A few initial ideas:
- Set up a profile on Care.com: With Care.com, you can find babysitting and housesitting jobs.
- Walk or watch dogs with Rover.com: If you’re an animal lover with a safe place for pets to stay, it’s easy to make money watching and walking other people’s dogs while they go on vacation or travel for work.
- Sign up for TaskRabbit: On TaskRabbit, you can connect with people willing to pay you to run errands or perform basic household tasks.
- Drive for Uber. If you have a smartphone, a reliable vehicle, and a clean driving record, you can earn extra cash driving people around.
Obviously, there are plenty of other ways to make money during your hours away from work. The best “side hustle” for you really depends on your level of skill, how much time you can commit, and what you hope to gain.
If you’re smart in a specific academic subject, you can start tutoring kids on nights and weekends. If you have a green thumb and a knack for lawn care, pass out and hang up flyers and post free ads online until you find someone willing to pay you to lay mulch, mow their lawn, or pull weeds. The sky is the limit on how much you can earn if you’re willing to hustle on the side.
#2: Get a part-time job.
Not everyone wants the hassle or stress that comes with hustling on the side. Instead, they’re better off pursuing traditional part-time employment – the kind with stable wages and predictable hours.
A part-time job may not be your idea of fun, but it can help you earn extra cash that could change your life. Whether you’re simply tired of subsisting on your 9-5 income or you want extra money to pay down debt or save for a specific goal, a part-time job might be the temporary solution you’ve been looking for.
Part-time jobs come in all forms, but some of the easiest to get are in retail and service industries. If you want to benefit even more from your extra work, you could look for a part-time gig in a store where you spend a lot. By working at a grocery store, for example, you could earn extra money and get a 10% discount on your food bill.
#3: Spend less.
You don’t need to earn more money to give yourself a de facto raise. By spending less, you can keep more of your hard-earned dollars in your pocket. That may not sound as sexy as scoring an extra paycheck, but the impact on your wallet works the same.
There are a ton of ways to spend less and keep more of your money. The best one for you depends on what you’re willing to give up. Since food and entertainment spending are some of the biggest discretionary components of anyone’s budget, those two categories are a good place to start. By not dining out as often and choosing to have fun on the cheap, you may be able to cut your spending substantially. But you won’t know unless you try.
The best way to spend less is, unfortunately, the most painful way. To figure out a way to cut your spending, you must know where you’re at. This usually involves tracking your spending for a while, and could require using a budget – especially at first.
Once you find your biggest spending weaknesses and money leaks, you can decide what and how much to give up. Then keep those savings for yourself.
#4: Pay off debt (and quit paying interest!)
Debt is by far the biggest enemy of our paychecks. When you owe money to someone else, you must fork over a monthly payment plus interest every month. Those payments eat away at our incomes and demolish our buying power, not to mention the fact they make it harder to save.
Can you give yourself a raise by paying off debt? Absolutely. Will it happen overnight? Unfortunately, no, unless you’ve got a chunk of savings you’re willing to throw toward a particular debt. This wealth-building strategy does take time, but the payoff will be worth it.
Let’s say you’ve been carrying a credit card balance of about $5,000 at a 20% APR, paying off only about as much as you charge each month. You may not be getting any deeper in debt, but that balance is costing you $83 each month, every month, in interest.
Depending on how aggressively you pay it down, it might take a few months or a few years; but as soon as you pay it off, you’ll have $83 more to spend each month – equivalent to a $1,000 raise in take-home pay. The same idea applies to personal loans, student loans, and your car payments, too.
- Related: In What Order Should I Pay Off My Debts?
#5: Save money on your regular bills.
Another way to give yourself a raise is to cut down waste on your regular, essential monthly bills. This can include anything from your house payment to your utility bills, cable bill, or the bill for your phone.
We’ve written about the art of negotiating your bills before. Basically, you should take every monthly bill you have and see if there’s a way you could pay less. Call your cable television provider, for example, and ask them if there’s any way to reduce your bill. You can even threaten to cancel or leave if you want. That may or may not sway them to offer a better rate, but it’s worth a try!
Call your homeowners and car insurance provider to see if they have any discounts you can apply for. Sometimes, they’ll cut your rates if you’re willing to pay your annual bill at once instead of monthly, or if you’re willing to raise your deductible.
Some of your bigger bills can be negotiated down if you’re willing to do some work. If you’re paying a high interest rate on your mortgage, you may be able to refinance to a lower rate and potentially lower both your monthly payment and total interest due. If you’re sick of paying high interest rates on credit card bills, you could transfer your balances to a 0% card, save money, and pay down debt faster.
When it comes to regular, ongoing expenses, any bit you can shave off becomes a permanent raise you can reap the rewards of month after month.
The Bottom Line
Getting a 3% raise at work is great, but what if you want more? I say, figure out a way to cut your spending or increase your income. Heck, why not try both?
If you’re frustrated with your financial situation, something has to give. In lieu of a raise, spending less or earning more might be the solution you need. It may not be the easiest raise you’ll ever get, but it might be the most satisfying. Because, when you put in the effort to fix your finances, you get all the rewards.
Now, that’s something your employer can never take away from you.
- How to Make Extra Money
- Spend Less? Earn More? Which is the Best Path?
- Nine Strategies to Earn More Money in the Coming Year
Have you ever “given yourself a raise” before? Did you do it through earning more or spending less?