How to ask for a raise and what to do with your extra cash

First, a word of warning: the vast majority of employees believe that they deserve a raise. We all want more money!

 

Does that mean you should ask? Maybe. Here’s the homework you’ll want to do before you have that conversation.

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What are you worth?

  • Do your research. What are comparable candidates in your field earning? Be sure you’re looking at the right data, and be able to quote statistics that are detailed and reliable. We suggest Glassdoor and the Bureau of Labor Statistics as a starting point. If you’re well below market rates, you may have a compelling argument. If you’re on par with other professionals in your field, it’s time to look to the next factor: your personal value.
  • What do you bring to the table? Obtaining a raise is most often a question of proving your worth, so make sure you can demonstrate that worth. Have you boosted company sales? Are you responsible for an increase in social media-driven foot traffic, or a process change that has saved money? Write it up and be prepared to discuss in detail. Proven examples of your value are the single best way to justify a raise!

Look into the future

What do you like about this company, and what compels you to remain? Prove to your supervisor that an investment in you is an investment in the organization’s future. It’s all well and good to say “I deserve more money.” It’s another thing altogether to say “Spending a little more on me now is a worthwhile investment.”

Make sure your supervisor is prepared to talk turkey. Don’t blindside her with a surprise conversation about compensation. When you’re ready to talk, send an email that says something like “When you have some time, I’d love the chance to talk to you about my future with the company!” Be excited and positive, not frustrated or obstinate. This is a conversation, not a demand!

You landed a raise – what now?

Getting a raise is exciting, and you may be tempted to celebrate by upping your spending or purchasing something extravagant. Trust us – the best thing you can do with that extra money is use it to reduce debt and create an emergency fund!

Sure, take yourself out to dinner or buy those shoes you’ve been eyeballing. You deserve it! But don’t up your monthly expenses. Chances are, your raise isn’t enough to significantly increase your expenditures without hurting your budget. It is, however, enough to pay down on those loans or save for a rainy day.

Even a few dollars per month towards your student loans can decrease your total repayment time and reduce the total amount you pay in finance charges. And think about the options you will have without that monthly payment to worry about!

If you’re saddled with other debt – from credit cards in particular – pay them down immediately, focusing on your highest interest rate balances first. Credit card debt can sink you financially, and your new raise presents an excellent opportunity to free yourself.

Lastly, make sure you’re socking away any extra dollars into an investment vehicle or, if in doubt, a savings account. Your savings won’t just protect you against emergencies later, it’ll build a foundation for wealth.

Want to save on your student loans? Refinancing may be the key.

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