Get a Raise: How to give your self a raise without switching jobs or getting promoted!
If you want to get a raise, you have to be creative in your thought process. It pays to think outside of the box. Most people think the solution to not having enough money is finding a better paying job, getting promoted, or finding a side hustle to bring in extra money. I love to compare personal finance with business finance because the fundamentals are interchangeable. When you ask a person to look at their finances like a business you are asking them to be professional in their money management rather than freestyle. Let’s look at the following statements, one is a business goal the other is a personal finance goal.
Personal finance goal “Start saving money each pay period.”
Business goal “Find solutions that maximize profits for each month this fiscal year.”
How would a business reach this aggressive goal? If you are a business operator, you know that the best way to make a difference is to cut unnecessary expenditures. Each time you reduce a cost as a business owner you gain that amount in potential profit. If we take the same philosophy and apply a business outlook on ourselves as income earners, it would be life changing.
If you applied business operation goals to your personal finances you would be in a great place to win with money. Many people start with the assumption they don’t earn enough money; the truth is they probably don’t understand money. If you earn $50,000 a year, and at the end of that year your savings are still at ground zero, money isn’t the problem…. YOU ARE THE PROBLEM! You don’t need a new job, you don’t need a side hustle, and you don’t need a promotion! What you would best benefit from would be improving your money management skills.
How I gave myself a raise
Three and a half years ago, my wife and I were planning to welcome our first child Gabriella into the world. This special time in our lives made me question how we were using the large income that we earned. My wife and I started the, “what can we do to bring more income into this house” conversation. It was at that point that we began to analyze our finances like a business. I read several books on personal finance so that I could begin a plan to improve our financial acumen and make better decisions for my family. We began using Dave Ramsey’s “7 Baby Steps”, and at that time we had $2300 being mailed out as payments. These payments were for credit cards, furniture, cars, etc. We used the debt snowball method to pay off our debts and increase our disposable income. Today that amount has been lowered to $350, which disappears in 4 months. That means we gave ourselves a $2300 monthly raise in three years!
So how can you get a raise without switching jobs or getting promoted?
Cut frivolous expenses. We questioned every expense that was not a need or important to our lifestyle. Luxuries such as cable television, subscription services, nail salons, barber’s visits, salon visits, Starbucks, shopping, and eating out at restaurants. I even taught myself how to cut my own hair. Each dollar that you save is one dollar of profit. Challenge yourself to free up as much cash flow as possible.
Add money-saving activities to your lifestyle. Begin researching frugal tips on saving money and you will find tons of resources. The biggest saver I believe can be done to see a huge swing in reducing expenses is bringing your lunch to work every day. Stock up on Sunday’s and plan your lunches, this can save you $300 to $500 per month.
Get rid of debt payments forever. You can also get a raise by cutting the ball-and-chain of monthly debt payments. If you have not heard of Dave Ramsey I suggest buying his book that is listed under my recommendation tab of the home page. This book gives you a plan that works! Each time you pay off a debt you gain that payment as income, this is how you give yourself a raise. I still remember writing a check to pay off my car, the next month I had a $500 monthly raise. Add up what your monthly payments are, this is the raise you gave away. Get rid of the ball and chain, become debt free!
Educate yourself about money. The number one indicator of wealth and success will always be the investment within yourself. It makes no sense to be ignorant in our culture today. Any question can be answered in less than a minute, and you don’t even have to type. We are all just one “Hey Siri” or “Okay google” away from a credible answer to any question. How does this give you a raise? Well, when you manage money properly, it seems to stick around. Here is a free online course that will help you master finances Click Here.
You must budget. It is not optional, you have to budget for next month’s bills/expenses/savings/spending this month. You should only be spending money that you have planned to spend. The budget is what gives you permission to spend without worry or guilt. It is the #1 monetary tool to build wealth. When you build and stick to a budget, it will be the easiest way to get a raise.
Adjust your withholding at your employer. If you get large tax refunds, it means you are paying more than your share of taxes. Don’t give the IRS a 0% interest loan for 12 months, wouldn’t it better serve you monthly? If you received a $1,200 tax refund and you adjust your withholding properly you would earn an additional $50 per paycheck. Use the IRS Withholding Calculator to verify what you should be claiming.
Act your wage. If you are worried about appearances and keeping up with the Jones’s you will never build wealth. It takes no true wealth to appear wealthy. I can renovate my entire home, purchase a 2017 Range Rover, buy my wife a new $10,000 ring and appear to be doing well. The truth would be that those purchases were financed and placed me over $200,000 in debt. I would be broke from the monthly payments, but I sure look like a successful person. This is the biggest problem in our culture, attempting to find happiness by spending money on “stuff”, even when we can’t afford it. You should drive a car that is less than 50% of annual salary and should target a home with a mortgage payment that is no more than 30% of your take home pay.
So the true key to increasing your income is to cut cost and become a better manager of money. This can be achieved by budgeting, reducing debt payments, having a modest lifestyle, and pursuing a basic education of understanding how to win with money. These are the most effective ways to get a raise without getting promoted or switching jobs.