Ask for More – But How Much More? Five financial considerations before asking for a raise
The following is a guest post by Anitra Blue-Francis. Her bio follows.
Here’s a not-so-fun fact: Women today earn just 83 percent of the salary men receive, according to a 2017 Pew Research study. This means that it would take a woman an additional 44 days to earn what a man makes annually.
The reasons for not negotiating a higher salary can be different for every woman. It could be a lack of confidence in initiating the conversation, a fear of rejection or downplaying her own achievements. Whatever the reason, it’s essential for women to feel empowered to ask for more.
But, before scheduling a talk with your supervisor, you should consider how a raise could affect your lifestyle, how much additional compensation you feel you deserve (and gather the facts to back up that figure) and what to do if the answer is “no.”
The questions below will help equip you with the knowledge you need to have the conversation and feel confident asking for more.
Could a raise impact more than my finances?
It’s important to consider the potential career and lifestyle implications that could accompany a salary increase. For instance, will a higher salary mean taking on more responsibilities at work? Could this increase the amount of time spent at the office, thus reducing the amount of time available for family, friends and personal interests?
If the advantages of earning more outweigh the potential implications, outline proof points that include your professional goals and/or accomplishments, as well as additional projects or responsibilities outside your current job description that you handle or are willing to tackle. These proof points will not only help you to make a stronger case, but can also serve as a confidence booster during the conversation.
How will a salary increase directly affect my current financial status?
In addition to the career and lifestyle considerations of a raise, knowing the financial impact is also essential. A financial professional is a great resource to better understand how a raise may affect your larger financial picture. For example, depending on the raise amount, could there be limitations or restrictions associated with entering a higher tax bracket, such as disqualification from certain retirement investments like a Roth IRA? A financial professional from Northwestern Mutual can provide you with these insights and reallocate your assets accordingly, if needed.
Will my increased income still be protected?
According to the U.S. Social Security Administration, one in every four employees will experience a three or more month-long gap in employment due to a variety of factors such as maternity leave, chronic illness, or a sudden event like a car accident or heart attack. This is why it’s essential to have income protections, such as disability and life insurance, in place if the unexpected occurs.
But, it’s important to note that a raise could affect how much of your income is actually protected, especially when participating in an employer-sponsored group plan. Learn what effect an increase in salary might have on your current coverage, knowing that incremental insurance might be necessary to ensure everything you’ve earned is covered.
How much more should I ask for?
With proof points in hand and the right financial knowledge, it’s time to determine how much to ask for. A great first step is to research the average salaries of others in your industry and similar roles, and review how they compare to your salary. This is also when a financial professional can be of assistance. A financial professional from Northwestern Mutual will take into account not only your current financial situation but also your short- and long-term goals to provide an understanding of what salary is needed to achieve those goals.
If my boss can’t offer me a raise, what’s my next step?
Sometimes your employer can’t offer you a monetary raise. Don’t be discouraged!
Come to the table with alternatives. What benefit could your employer offer you in the here and now? Think of it as a lifestyle raise. It could be assistance in paying off your student loan debt, offsetting costs for continuing education or licensing, more vacation time or a flexible work schedule.
Asking for more isn’t easy, but with the above to guide your conversation, you can feel more confident doing so and get one step closer to earning what you deserve.
Anitra Blue-Francis is a financial advisor and focus-driven career woman. During her ten years with Northwestern Mutual, she has remained committed to brining financial literacy to established professionals that appreciate the value of a trusted advisor.