Give Yourself a Raise

Give Yourself A Raise

Give Yourself a RaiseAbout a week ago, my boss came to me to chat. The first thing she said was, “don’t worry, it’s a good thing. It’s about your annual salary increase”. Sweet! I am always thrilled with a salary increase, but having been at the same company for 4 years now, the amount my salary increased was no surprise. Every year, I get 3%, “which is the maximum yearly scheduled increase the company gives out!” So, my salary is a little bit higher and each paycheck gets a tiny little bump.

Currently, I don’t have a lot of leverage to ask for a larger raise as it wasn’t too long ago that I got a promotion that came with another bump (maybe 10% – whoopie!). I could also look at switching companies and getting a raise that way (and perhaps I should). As I thought about it though, I realized that over the past year, I have essentially given MYSELF a couple of raises that far outpace the 3% my company expected me to be ecstatic about.

Passive Income raise

I just recently bought my first real estate investment, a turnkey single family home in Indianapolis. Even after accounting for maintenance/repairs, for a tenant vacancy down the line and all the taxes, insurance, mortgage, and property management fees, I calculate that I’ll be cash flowing $290/month. With that, I just gave myself a $3,480 raise! I understand that thinking this way isn’t perfect. I parted with a down payment as well as closing costs. However, just in terms of my income, it’s essentially a raise.

Frugality raise

I cut down on my expenses over the past year. I took a look at my budget and stopped wasting money in various areas. Early in 2013, I had slipped and was probably eating out too much. I probably spent too much at bars instead of inviting friends over for a cheaper, more delicious craft beer tasting. I developed my wardrobe plan and felt less need to spend money on clothes. I like to think of the money I was able to avoid spending and instead invest as another form of raise. I didn’t track my expenses as carefully early in 2013 as I do now, but I would wager that I cut my expenses by at least $150/month, giving me another $1,800 raise! But wait a minute. That money I saved was AFTER taxes. If I multiply that by 1.2 to estimate the before-tax value (to more accurately compare it to what a raise from work), I am giving myself a $2,160 raise!

My Total Self-Awarded Raise: $5,640

Future Raises

Unlike your corporate job, you are free to give yourself multiple raises per year! I’m not done giving myself raises this year. I plan on purchasing another rental property this year. I am hoping to launch a digital side hustle before the year is up. I plan on moving to a less expensive apartment in the Fall. Of course, I’ll keep you updated as I do all of this.

So give yourself a Raise

The next time you get a small raise at work, do something about it. You can always ask for more or look for a new job, but in addition, look for ways that you can give yourself a raise, whether through generating more income outside of work (investments, side hustles, etc) or by cutting your expenses. There are some amazing benefits of giving yourself a raise:

  • You can give yourself multiple raises each year
  • If you absolutely crush it at work, you may or may not even GET a raise. Your efforts to cut costs or generate side income are more often rewarded with a raise
  • If you lose your 9-5 job, the raise you gave yourself is still in place (eating less into your emergency fund or generating cash flow to help you get through the lean times)

 

How have you given yourself a raise?

 


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14 thoughts on “Give Yourself A Raise

  1. Stefanie @ The Broke and Beautiful Life August 4, 2014 at 2:22 pm

    I just renegotiated all but one of my freelance gigs which came out to a significant raise for myself. I thought I might lose a couple because it would be asking too much, but everyone was willing to work with me to find a solution that worked for both of us.
    Stefanie @ The Broke and Beautiful Life recently posted: Turning 28: Abandoning Self-Imposed DeadlinesMy Profile

    • Mr NYBudget August 5, 2014 at 2:43 pm

      Awesome! You are definitely building quite the empire for yourself!

  2. Aldo@MDN August 4, 2014 at 3:42 pm

    I’m working on getting a new job so I can get a raise that way. I’m also working on a few side projects, which are not producing income right now but hopefully will soon enough. We’ll see if it pays off.
    Aldo@MDN recently posted: 9 Signs You Need A VacationMy Profile

    • Mr NYBudget August 5, 2014 at 1:59 pm

      Nicely done! Yeah, I am in the very beginning stages of a few side projects as well! Fingers crossed for both of us!

  3. Financial Samurai August 5, 2014 at 7:53 pm

    Good luck with your new investment property! I’m in the same boat as well, but busy remodeling and painting the place to make it livable. Painful, but hope it will be good in the long run.

    Sam
    Financial Samurai recently posted: Financial Samurai Passive Income Update 2014-2015My Profile

    • Mr NYBudget August 10, 2014 at 5:07 pm

      Yeah, good luck with that! I’m sure the hard work will pay off!

  4. Even Steven August 6, 2014 at 10:13 am

    I think a lot of corporate america feels that they are stuck earning X and happy to get the 2-3% raise each year, but don’t go out and try to increase their own take home income, cheers for rental property and cutting expenses.
    Even Steven recently posted: The Great Coffee Debate and Little WinsMy Profile

    • Mr NYBudget August 10, 2014 at 5:10 pm

      I completely agree – people definitely feel stuck, for the most part. Who knows what tactics will end up working best for me, but if I keep working at them, the raise I give myself will pay off in the long run!

  5. Ryan @ Impersonal Finance August 6, 2014 at 11:38 am

    Great points Dave. I started investing more in dividend stocks, and although I don’t plan on touching the money, I like to think of all the extra income it’s producing. Additionally, I’m in the same boat as you at work. I just got a promotion and a 14% raise, so I couldn’t do anything abotu my 3% annual scheduled increase. But a penny saved is a penny earned, right?
    Ryan @ Impersonal Finance recently posted: truly passive incomeMy Profile

    • Mr NYBudget August 10, 2014 at 5:07 pm

      Exactly right!

  6. Andrew@LivingRichCheaply August 6, 2014 at 3:07 pm

    Raises are pretty much set for me since I work in government. It’s generally just based on seniority. So I’ll have to give myself a raise. I’m definitely going to look into turnkey rental properties at some point…first we’ll have to close on our co-op before I start working on that.
    Andrew@LivingRichCheaply recently posted: Our “Throw it Away” SocietyMy Profile

    • Mr NYBudget August 10, 2014 at 5:06 pm

      Right – you’ve got a lot going on! All good stuff though!

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