Common financial mistakes series, part ten
Mistake #10: Not asking for regular raises. No matter who you are, not asking for raises on a regular basis is a mistake if you work for a company that does not schedule them automatically. Why is this a mistake? You could be losing out on many years of increased income. Generally speaking, if a company doesn’t have a review process in place, they’ll assume that you are happy with (and worth) your current pay unless you make the effort to prove that you deserve more. It may also just plain not even cross their mind — after all, they have their own problems to worry about.
How much money could you lose by not asking? Suppose you make $35,000 per year. Over a five year period, without any raises, you’ll have made $175,000. With at least a 3% annual cost of living increase, that number jumps to $185,819.78 over the 5 year period– nearly an extra $11,000. Even if your company offers you a $5000 raise in the 5th year, it’s not going to make up for what you would have made had you had the much smaller raises all along. You’ll actually earn nearly $6000 less that way. Raises compound too, and compounding is your friend.
Solution: Go ask for a raise. This week. Have a list of reasons why your performance merits it, and ask if they would be open to an annual review policy. Check out job boards to see what comparable positions to yours are paying in your area. Mention the possibility of at least implementing cost of living raises if you feel they would be open to that. Just take a deep breath and do it, because you DO deserve a raise. All you have to do is knock on the door of your boss and ask them if you could set up a time to meet to discuss some things. Make your case in your meeting, and explain the benefits that you bring to the company.
The worst your boss could do is say no, and even if that happens you won’t be any worse off than you were before. In fact, you’ll be better off, because you’ll then know that maybe it’s time to start looking for a better job. Chances are actually good that they’ll say yes. I’ve asked for many raises over the years, and only one person has ever said no. But if I hadn’t asked, I doubt that any of them would have offered.
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