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Stand up for yourself and your money

When I first moved to Vancouver, I took a job that paid me 15% less than my job in Victoria. It doesn’t seem like a ton, but when you’re making less than $50,000 that’s a huge amount. But I did it because 1) I wanted to move to Vancouver and establish myself with a very reputable organization, and 2) my boss promised me what amounted to a 12% raise after I passed my probation period.

I didn’t stay very long with the organization, but I learned some very important lessons that I still think about today:

1. Get everything in writing

I was young when I took this job, and I believed my boss when he told me that I would get a raise after my probation period ended. He was one of those managers who made a really good first impression, knew exactly what to say, and filled up the room with his energy. I was definitely the opposite of him, and remember timidly asking if we should put that into my formal offer letter. He quickly brushed me off and said that he’d get it done. He told me to trust him. So I did.

2. Nobody cares about your money more than you

Once my 3 month probation period passed and I didn’t notice a difference in my pay cheques, I brought it up with my boss. He assured me he would file the paperwork to make it happen.

The next time we got paid, I still hadn’t seen a change. So I inquired again, and he told me that it “wasn’t high on his priority list.” I thought, okay. No worries. This minor administrative task isn’t as important as other issues we were dealing with, but it was one of the reasons why I accepted the job. 12% may not seem like a big raise to him, but it was huge for me. And as the weeks went by, I got more and more disgruntled.

Related: If you don’t ask, you won’t get

Six weeks after I was supposed to have gotten the raise, I went into his office and asked about my raise again. It was rightfully mine, and I told him that. “Well aren’t you greedy,” he said, and dismissed me from his office.

I was in shock. I was mad, and I wasn’t going to take it. How dare he accuse me of being greedy when all I was asking for was what he promised me!

3. Fight for what’s right

Eventually I realized that he never intended on giving me that raise because he had never gotten it approved and didn’t have the authority to set my salary. But it was what was promised to me, so I kept fighting for it. Every week I would bring it up with him (always politely, never forceful), and each time he would make a comment about me being “bossy” or “aggressive” or his favourite, “greedy.”

Three months later, I finally got my raise. But it was only for 5% – not the 12% I was promised when I accepted the job. He said that it was all he could do for me, and I wasn’t going to be getting anything else. I nodded, thanked him for pushing my “raise” through, and promptly started looking for work elsewhere.

Related: How I landed my first job out of college

Two months after that, I left for a position that paid me a much better salary. But I often look back at that job and think about how much I learned in the 8 months I was there. I learned how to stand up for what I knew was right. I learned how to be assertive (not bossy or greedy), and I learned that the next time I negotiated something with an employer, to get everything promised to me in writing.

Have you ever had to stand up for yourself at work before?

Do you know how much your friends make?

Talking about money and salaries was much more common among my friends when we were just out of college and looking for our first jobs. Perhaps it’s because we were all on equal ground – around same age, student loan debt, and looking for our first jobs – that made it seem less intimidating.

Now that my friends are in their late 20’s and early 30’s and we’ve been in the work force for almost a decade (!), we don’t talk about exact numbers as much as we used to. They’ll say “I make in the range of X” or “I got a 10%” raise” without saying how much they now make. And so in turn, I use vague references about my salary and finances too.

However, since I have this blog, anyone can poke around and see how much money I currently make (and how much I’ve made in the past), as well as pretty much any other financial detail of my life. And I’m okay with that because I’ve always been pretty open when it comes to talking about money with my close friends. If someone asks me a question, I’ll happily answer (and as a PF nerd, I’m always hopeful for an engaging financial conversation). But as a rule, I don’t bring up anything to do with personal finance or salaries unless specifically asked.

Knowledge is power

Simply knowing what a friend or co-worker is earning will not result in a raise for you. That’s not how it works. But it could help you negotiate more confidently during your next performance review or job search if you know what other people with similar experience in similar industries are making. There have been countless instances where I’ve reached out to my friends in marketing to ask about their salary range and responsibilities, and I’ve been approached often as well to provide the same sort of information. Sometimes we don’t talk specific numbers, but just being able to pass along information seems to help.

If you’re not comfortable talking about money with your friends just yet, at least be sure to check out websites like Glassdoor, which can help you see what others are making in similar jobs within your city. I just pulled the below screenshot from Glassdoor after searching for Marketing Manager salaries in Vancouver. Now, that’s not my exact job title, but it’s close enough. And I feel good knowing that my salary falls comfortably within the range below.

glassdoor

But there are other benefits to knowing what your friends make besides helping each other with job searches and raise negotiations. It can also give us each other a greater understanding of how much to spend when going out to restaurants or traveling. If my friend knows what I make, perhaps she will understand my budget and how much I’m comfortable spending when we are together.

Honesty has consequences

While talking about salaries with close friends can be a good decision, it can also have negative effects as well. Depending on what your relationship is with someone, finding out how much they make might bring on feelings of jealousy. It could also inspire resentment within the friendship when you start to notice small examples of what one person has that the other person doesn’t (like a designer purse, or dining in fancier restaurants, etc.) – a “keeping up with the Joneses” mentality.

I wouldn’t be comfortable talking about my salary or details about my finances with people I’m not close to. But I do think it’s beneficial to have open discussions about salary ranges, responsibilities, negotiation strategies, promotions, etc. with people you trust who are doing similar work or are within the same industry as you.

Do you know how much money your friends are making?

 

It’s not how much you make, it’s how much you save

2013-05-03 09.09.21Recently a friend and I were chatting over coffee about a mutual acquaintance who just got married. “She’s so rich now – combined her and her husband make over $240,000 a year,” my friend told me.

This bothered me. Not because I was jealous of our acquaintance’s healthy household income, but because my friend automatically assumed that because of the salary they were making, they were automatically rich. If there’s one thing I’ve learned since I started this personal finance journey, is that when it comes to money, you can’t judge how financially savvy someone is by their salary or their appearance.

The definition of the word “rich” means to have a great deal of money or assets. Well, if our acquaintance is making $240,000, but also spending $240,000, then she isn’t rich – she’s just living a $240,000 lifestyle. A big pay cheque doesn’t mean a thing if you have nothing to show for it, and we just didn’t know what their financial situation is to know if they are actually “rich.”

From 2006 to 2011 (5 years) I grew my net worth from -$20,000 to +$63,000. That’s a difference of $83,000 (or an average of $16,600 per year)! And I did that all on an average annual salary of $44,000. My salary was quite low, but my savings rate made me feel rich.

Now that my income is higher (I’ll earn around $85,000 to 90,000 this year), I’m trying really hard to curb lifestyle inflation. Because let’s be real, the more money you make, the more you have to spend (and the more you likely will spend). More money equals upgrading your housing, buying nicer clothing, more frequent Starbucks trips, and more vacations. I’m guilty of some of those things, but I’m trying the best I can. :)

Below is a chart based on an average month of spending for me in 2007, 2013, and 2016:

lifestyle_inflation2016

Related: Can lifestyle inflation be avoided?

Let me be the first to tell you that I’m not rich. I do not earn large pay cheques, and my net worth is only about $120,000. But my monthly expenses (as shown above) aren’t that much different than they were 9 or 10 years ago. My rent has only gone up by $100, and I feel like my groceries and entertainment budget have increased by a normal amount.

So while my $120,000 net worth isn’t much to celebrate now, that number will continue to increase every month. And 2016 could turn out to be a great year for me, as I have the ability to save nearly $40,000 if I stick to my budget.

I’ve blogged about it before, but I no longer aspire to earn more money. If it happens, it’ll be due to working hard at my full-time job or becoming more strategic with my freelancing. But I’m not going to sacrifice my lifestyle in pursuit of more dollars. :) So that means I’m never going to have a enviable salary that my friends can talk about behind my back. I’ll never wear high fashion brand name clothes, or fly first class, or hire house cleaners (but actually that’s mostly because RD refuses to let me). I just want to be comfortable.

My method of getting rich is by being smart with the money that I already earn. I want to save at least 50% of my net income this year, curb lifestyle inflation as best I can, and grow my wealth in a healthy and sustainable way. To me, this seems like a way better plan than trying to figure out a way to earn millions of dollars, or buying Lotto Max tickets in the hope of striking rich. :)

So whenever you hear of someone who earns the kind of salary you could only dream of, just remember that comparing yourself to others (while tempting to do) is never a good idea. There are always going to be people who make more money than you, but you can live a fulfilling life on your own terms by keeping lifestyle inflation in check and saving your money.

What are your savings goals for 2016?

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