I’ve joined over 40 women in a collaboration to inspire and encourage women to take control of their finances. As I learned through the creation of the female finance writers and podcasters blogroll, it’s time to shout from the rooftops that so many of us already are taking that control. It’s time to break that perception and make it clear that women have – and should have – control over their finances.
I want to talk a bit about salaries – and raises – because as much as your savings rate depends on tracking your spending closely and determining the big money wasters in your budget, the income side of the equation is what can really jump start your financial security.
At thirty years old, I make a reasonable salary (our combined household income is now just over the median for our area). However, I can’t take much credit for this salary increase over the years. I’m lucky to work for an employer that does regularly give raises to employees at our annual reviews, so my wage has gone up over the years because of those meetings.
Backtrack to 2009 when I graduated college, and asking for raises wasn’t on my radar in the slightest; I had graduated at the end of the Great Recession and getting a job at all felt like a huge accomplishment. When I finally landed my career job the following year, I was just ecstatic to be working a job in my field doing something I cared about.
However, I had no idea what pay to ask for, and only had my park ranger and pet store salaries to compare to. I was a passive part of the discussion, and accepted 50¢/hour more than my parks job. I was really green and had a lot to learn, so this felt like a fair wage, though looking back it was probably on the low side of reasonable (but again, this was right after the Recession and wages in general were suppressed, once you even did find a job).
As you’ve probably heard again and again, women are less likely to ask for raises, and I’ve been solidly in that group. I may be pretty comfortable these days discussing our monthly expenses and our previously large money drains, but sitting down in a meeting and negotiating a salary is something I’ve never been good at. Actually, it’s something I had never done at all until this past year.
While doing some research for this post, I stumbled on some new studies that suggest though that perhaps more women are actually asking for raises – they just aren’t getting them. I expect the real number is somewhere in the middle – that fewer women ask, and that fewer of those who do ask then get the same raise as their male counterparts. I won’t pretend to be an expert on the topic, but there is plenty of information out there if you want to learn more.
The importance of that starting wage
Circling back to that park ranger job I accepted almost a decade ago, I found out later that a couple of my coworkers made a bit more than I did, even though I was the only one with experience specifically related to the job. How did that happen? Well, they didn’t originally get offered more than I did, but they went back after the job offer and countered that pay.
While the $1/hour they made wasn’t a huge difference in income at that time, it was the launching point for my income after that first job. While there is currently legislation being discussed to restrict the requirement of sharing of your income from previous jobs, this wasn’t the case when I did land my permanent job. Because I hadn’t countered my initial offer and been paid a $1/hour more, I was subsequently paid less at my next job. And from there on out, any raises after that were based, at least to some degree, on that starting salary.
While these starting numbers were small, they compound over time to add up to real money over the course of years and decades. And, if you are looking to financial independence and early retirement, those lost dollars mean additional years before you hit your FI number.
Asking for that raise
It took me seven years at my current job before I finally took the initiative and went into my annual review prepared on the income front. I credit a lot of this change in my deeper immersion into the financial independence community, because this is a topic that is actually discussed.
To be honest, to put forward what I felt was a fair income and compensation in an annual review felt really hard and awkward. While I am generally very straightforward and unafraid about most things, but this was uncomfortable and took a lot of courage in my part to actually bring it up in the end.
However, I didn’t back down, knew my worth, and pushed ahead. And you know what? I was rewarded for it. I’m happy to say that I feel I am fairly compensated for my job and that the raise conversation was quite successful. Thanks in part to that conversation (in combination with our more recent drastically reduced spending), our FI number may be possible before we’re forty, a good five years sooner than I had first projected. I still have no plans to quit my job at that point, but I can’t wait for the day that I can say with certainty that I am there because I want to be, not because I have to.
What I did – and what you can do too
1. Do your research
Step one of preparing for my annual review and my ask for a larger raise was to do a lot of research on the going rate in my area for similar positions to mine. Since I work at a smaller company, my title/job description isn’t something that can easily looked up for comparison’s sake, so I had to dive into a number of different career options to find a range that seemed applicable to what I do in my job.
I then compiled all those numbers and had them accessible for the meeting so I could confidently say what my position was worth. It was the first time I felt I had a real handle of what my position would pay at another company, and it was very empowering to know I’d done a thorough job with my research.
2. Come prepared
Not only did I have salary numbers with me to bring to the meeting, but I also took quite a bit of time to lay out what I had accomplished in the past year as well as what I would like to get done in the next year. By laying out completed tasks, I was able to show that my value was as I was showing on paper.
3. Be confident and just ask
This was the hardest part. Even though I knew I was going to be assertive when it came to the salary part of the discussion, I had to force myself to be confident and actually make the ask. In previous years, I had really skirted the question and simply accepted any salary change offered. This time, I made the offer that I felt was fair, instead of being a passive observer in the discussion. I did ultimately get the raise, and it felt awesome that I had been a part what made it happen. I’d worked hard through the year, but I also worked hard in preparation for the final ask, and it certainly showed.
4. Remember that a job is more than just money
Finally, not everything comes down to income. There are myriad reasons to take a lower paying job -lower stress, more flexible hours, shorter commute, or a passion for the job itself, to name a few. However, just because a job is a passion or has other wonderful perks does not mean that it should pay less what is fair.
A large part of why I never pushed for a raise beyond what offered before this point is that my jobs have been ones I’ve truly enjoyed and felt like the work I was doing really mattered, so it somehow felt wrong to then ask for more money on top of that. I didn’t want to be seen as ungrateful for the position or that I cared about the money more than the purpose. I’ve finally come to accept that that is irrelevant, and there is nothing wrong with asserting fair compensation for a job well done.
Have you had a similar experience with accepting salary offers / negotiating raises? Is there anything you would tell someone who was looking to do something similar?
Now head on over to the #womenrockmoney homepage to read all the other awesome stories written in collaboration for today’s celebration!