You are, without a doubt, your greatest asset. When looking at your career or financial plans, thinking of yourself as your greatest windfall is just as hair-trigger as selecting the right investments. Investing in yourself unceasingly and with intention can help increase your earning potential and siphon you throughout your life and career. Your “human capital” may include your:
- Unique skills
- Personality traits
And so much more. Investing in yourself can genuinely contribute to your success at work and in life for many reasons. One example might be going when to school to earn your Master’s or a new certification to level up in your career. That said, you can invest in yourself in myriad other ways that protract to pay dividends over time.
Investing in yourself is plane increasingly hair-trigger as a woman in the workplace. It’s no secret that the gender pay gap is significant wideness all industries – plane in 2023. In fact, women who work full-time, year-round, are paid an stereotype of 83.7 cents for every $1 made by men in similar roles. Pay gaps are plane wider for women of color, women with disabilities, and women closer to retirement age.
While we can work toward systemic transpiration to protract making progress, it’s important to embrace your unique power and take violating steps to increase your earnings – and your overall quality of life – by investing in yourself.
If Money Were Easy
Investing in Yourself at Work
As a woman in the workplace, it’s well-spoken just how important investing in yourself can be. Women have historically faced many challenges in the labor gravity and protract to do so in many ways.
Financial Discrepancy for Working Women
Studies show that women are increasingly educated than ever. They have outpaced men in higher enrollment and graduation. They’ve rumored for almost all growth in the higher attainment rate observed in the United States since 1980. They earn higher degrees increasingly than men and have better four-year, five-year, and six-year higher completion rates.
Yet there’s still a disparity in pay. This trend in pay discrepancy plane appears in occupations where women make up the majority of workers, such as the K-12 educator workforce. There, women worth for roughly three-quarters of the teaching workforce but make an unscientific $5,000 less than men annually.
Advocating for Your Financial Wellbeing: How to Grow Your Income
Because there is still such a large pay gap in the workforce today, it’s expressly important for women to well-wisher for themselves to earn their worth. Talking well-nigh your bounty at work may finger uncomfortable, and asking for a raise may bring plane increasingly anxiety. Still, the numbers don’t lie.
For every 100 men who are promoted, only 72 women receive a similar promotion and pay increase. Women of verisimilitude have plane increasingly daunting statistics to consider: 58 Black women and 68 Latina women are promoted to management for every 100 men who rise in the ranks.
Often, there’s a misconception that nonflexible work, acumen, or plane time spent at a visitor will lead to a promotion. This may not be the case, expressly when taking the whilom statistics into account.
So, how can you well-wisher for yourself to increase your earning potential at work? And why does it matter?
How Earning Increasingly Can Make a Difference
The cost of living is steadily increasing wideness the country, and standing to live on your existing salary may finger increasingly difficult as the years wear on. What’s more, a salary increase can self-ruling you up to do multiple things, including:
- Contribute increasingly toward your retirement
- Allow for increasingly wiggle room in your daily budget
- Put increasingly funds toward debt repayment
- Accomplish flipside “big” goal increasingly quickly – like paying for your child’s higher education or completing a substantial home project
With retirement savings, let’s squint at a hypothetical scenario: A 5% raise on a $150,000 salary would increase earnings to $157,500 per year. A tumor like this could make a sizable difference in your retirement investment account. If you started your retirement savings with that $7,500 “extra” from your pay increase, and then unceasingly unfurled to add $1,000 each quarter, you could potentially grow your nest egg to over $435,000 in 30 years (assuming a 7% return on investment). That’s a significant savings and investing win!
How to Ask for a Raise
If you haven’t asked for a raise or promotion in the past – or if you have and you’re feeling yellow-eyed this time virtually as you hit a new level in your career – here are a few steps to take:
- Understand the market value for your role. Trammels out similar positions on Glassdoor or flipside job-search site to largest understand how other companies recoup for your unique skill set and job title.
- Do local research. How are competitors compensating for similar roles at their companies? Do they offer spare benefits your visitor doesn’t?
- List your accomplishments. It can be helpful to alimony a running document of all major tasks you unzip at work as they happen – projects you deliver, the revenue you manage, and team members you squire or lead. These things all add up, and it can be helpful to review your current list of “wins” when asking for a raise or promotion and pull out the most significant or relevant items.
- Know your “why.” It can be helpful to unmistakably outline your financial goals and the reasoning overdue your request. It could be the forfeit of living, a desire to be compensated competitively based on your skillset and time in the role – any number of things.
- Outline why it benefits the company. What will an increase in responsibility for your role, or you particularly, do for your employer?
- Put your request in writing. Make sure you leave a paper trail. Submitting your request in writing surpassing meeting with your manager allows you to follow up with any notes on your conversation.
- Be prepared to negotiate and alimony your motivation in mind. Know that your employer may negotiate with you – and that’s okay. Remembering your motivation and reasons overdue asking for a raise or promotion will help you stay the course. For example, suppose you want a 10% raise to imbricate the increased forfeit of living as well as achieving a personal financial goal (like contributing increasingly to retirement or funding your child’s or grandchild’s education expenses). In that case, you might start by asking for 12% to 15%, with the expectation that you’ll likely be negotiating on the final number.
Not Looking for a Raise?
There are various other ways to invest in yourself and ultimately grow your financial well-being. Let’s explore visitor benefits, probity compensation, and increasingly below.
When Your Job Invests in You: Company Benefits
It’s not just salary increases that can help you proceeds stronger financial footing. You can leverage your career in several ways to increase earning potential and overall quality of life, such as bonuses, employee benefits, and probity compensation.
Investing in Your Skill Set
Whether or not you segregate to go when to school, it can be salubrious to focus on investing in your skill set to increase your earning potential or unshut the door to future opportunities. This might squint like:
- Continuing your education. Going when to school to earn your Master’s or Doctorate stratum can potentially increase your earning potential. Studies show those who hold a Master’s stratum earn approximately 20% increasingly than those with a Bachelor’s degree. Additionally, those who have earned their professional Doctorate earn approximately 25% increasingly than those with a Master’s. Trammels to see if your employer offers tuition reimbursement, which can help defray costs. If not, you can upkeep for standing education as part of your holistic financial plan.
- Gaining a certification. Plane if going when to school and earning a stratum doesn’t interest you, there are plenty of ways to grow and protract your education. For example, gaining certification in your field may help you earn a promotion or salary increase, or plane add clout to your resume when looking for other jobs.
- Asking for skills training from your employer (or pursuing it on your own). Taking a matriculation or online undertow on a specific skill that your job requires can help you increase efficiency at work, and level up your expertise in your unique field.
- Looking for transferable skills. When researching similar roles in your field, it can be useful to read through job descriptions to see what transferable skills you once have. Often, if you’ve been at a visitor or in a specific role for a while, you may not plane realize everything you can do. Jot lanugo skills that resonate with you or variegated job duties you tackle in your day-to-day that you may have overlooked as an asset.
Keep in mind, while many jobs or promotions say they require a unrepealable level of education, job experience, or training, this may not unchangingly be set in stone. Studies show that women are far less likely to wield for a job if they don’t finger they meet well over half the listed requirements. Meanwhile, their male counterparts are well-appointed applying if they meet virtually 52% of the listed requirements.
Getting a job without meeting all an employer’s criteria won’t unchangingly be the case, but it’s important to remember you likely have skill sets for a new job that you may not be considering. Take your time and evaluate what you can do, and gloat your “wins” when hunting for jobs. You can moreover think of a job venery as an opportunity to evaluate any gaps in your skill set, and use that gap sensation to seek remoter training or education that moves you toward your goals.
Whether you’re offered a signing bonus at a new job or a performance bonus at year-end, increasing your bounty through bonuses can be a fantastic way to level up and move toward your lifestyle goals.
Knowing Your Company’s Bonus Structure
Every organization has a variegated type of employee bonus structure, and it may plane transpiration depending on your position in the company. If you haven’t already, it’s worth asking HR or your uncontrived manager for an in-depth subtitle of how bonuses are calculated and distributed at your company. This can help you understand what to personally expect, and can moreover help you negotiate towardly bounty when looking for a promotion within your visitor or at a new job.
Handling the Windfall
While bonuses are a fantastic way to increase earning potential and invest in yourself (all while stuff rewarded for your nonflexible work), it’s prudent to treat them correctly in the broader context of your financial plan.
Counting future or potential bonuses as part of your “expected” bounty may be detrimental if they aren’t a sure thing. What happens if you plan to leverage an predictable bonus to pay off debt, increase your retirement savings, or tackle flipside financial goal (like a lanugo payment on a home), but your visitor ends up having a bad year? Be sure to not get too far superiority of yourself, otherwise you might be in a tough situation or have to segregate between two financial goals considering you didn’t plan accordingly.
Instead, create a plan for how you’d like to use any potential future bonuses so you can have conviction if and when they happen. For example, if you know your visitor offers an yearly bonus, you might decide to put 50% toward travel and the other 50% toward your child’s 529 Plan. But plane if you don’t get an expected bonus, you still have education savings and travel in your financial plan. A bonus would just accelerate you toward your goals.
Organize your personal finances.
How to Review and Maximize Visitor Benefits
As we’ve established, salary isn’t the only way to protract investing in yourself at work. Benefits can play a huge role in boosting your earning potential and move you toward a lifestyle you love. Your benefits might include variegated types of health and life insurance, a 401(k) match, Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), and more.
Why is this so important when it comes to investing in yourself? Considering these benefits offer increasingly than financial stability – they’re directly tied to health and security, which can be invaluable in creating a stronger financial future and a increasingly joyful life.
Before taking a new position, or if you simply want to hoist your financial profile at your current employer, trammels out these potential benefits:
Employer 401(k) and IRA Match
Contributing to your retirement savings account(s) up to your employer match can help ensure you’re maximizing retirement savings. An employer match is substantially receiving self-ruling money from your employer to invest in your future. Plane a few thousand dollars a year can make a significant difference over time.
Group Life Insurance
Does your employer offer some form of group life insurance? If so, this can be a huge wholesomeness for your manor plan. Considering your employer is purchasing plans at a group rate which is heavily discounted, life insurance offered through your employer is often less expensive than a private policy. Take wholesomeness of life insurance offered through your workplace to get increasingly coverage for your family.
Health Insurance Coverage
The same is true with health insurance coverage offered through your employer. Although many options exist in the healthcare marketplace, you may be worldly-wise to get less expensive (and/or better) coverage through your employer’s group policy.
FSA and HSA
If your employer offers a Flexible Spending Worth (FSA) or a Health Savings Worth (HSA), you may be worldly-wise to defer a portion of your income to save for qualifying medical expenses while lowering your taxable income.
Want to invest in yourself plane more? Going when to school may be an option and your employer may be worldly-wise to help you imbricate the expenses. Whether you want to get your Master’s stratum or doctorate, tuition reimbursement programs are a fantastic way to increase your earning potential at little to no cost.
Of course, part of investing in yourself goes vastitude reducing your taxes or increasing your earning potential. Your employer may offer fringe benefits that lead to a increasingly fulfilling lifestyle. For example, you may be worldly-wise to wangle discounted mental health services, gym memberships, meditation apps, or plane receive discounts from other large companies (think utilization purchases, etc.). Ask your employer what benefits are misogynist to you and how it can positively impact your life.
Expand what's possible with money.
Equity compensation is an employee goody that gives you an ownership stake in the visitor once you meet internal vesting requirements; this may include stock options, Restricted Stock Units (RSUs), and employee stock purchase plans.
Currently, equity bounty makes up nearly a third of employees’ net worth on average; for Millennials, it makes up 43% of their net worth.
Leveraging probity bounty in your financial plan, or asking to be compensated in equity, lets you diversify your finances and reach financial goals increasingly quickly – all while having the emotional goody of seeing your nonflexible work link directly to your employer’s success and your financial gain.
When navigating probity compensation, you must understand several hair-trigger areas:
- What type of probity bounty do you have? In general, you may have either Restricted Stock Units (RSUs), Incentive Stock Options (ISOs), or Non-Qualified Stock Options (NQSOs). Each type of probity bounty is taxed differently and potentially impacts your financial situation when you’re granted the stock options and when they vest.
- When do your options vest? Understanding when your stock options vest (i.e. wilt misogynist to you), can help you make the weightier strategic decisions from a tax planning and investing perspective.
- Do your stock options positively impact your earning potential? In most cases, receiving probity bounty positively impacts your future earning potential. However, it’s wise to consider whether sticking it out at your current visitor until your options vest makes more sense than “jumping ship” to flipside employer who is willing to increase your bounty and potentially provide other benefits – like stock options or increasingly flexible work schedules. Planning for stock options is a long-term game, but exploring all options may be plane increasingly salubrious surpassing locking into your current job with your current employer.
If probity bounty is part of your bounty plan, or if you want to negotiate for probity bounty in the future, our Abacus team has several fantastic guides and resources to help you – just click here to get started.
When You Invest in You: Saving for Retirement when You’re Self-Employed
We’ve covered various benefits offered by employers, but what happens if your work doesn’t offer any benefits or you work for yourself?
If your employer doesn’t offer a retirement plan, or if you’re self-employed, you may not have the luxury of employer-sponsored plans with cushy matches or pension plans. When you work for yourself, saving for retirement falls entirely on your shoulders. Luckily, there are several ways to save proactively for retirement.
First, since you can’t count on money in your paycheck stuff diverted by your employer to a particular worth like a visitor 401(k), you must be scrupulous well-nigh your saving habits. You can leverage a Traditional IRA, Roth IRA, Simplified Employee Pension (SEP), or Simple IRA to start saving if you’re self-employed. These can help you divert a portion of your revenue to your retirement savings and reduce your taxable income (in the specimen of a Traditional, SEP, or Simple IRA).
You might moreover squint into a Solo 401(k). This specific worth is for merchantry owners with no employees and they have a total contribution limit of up to $66,000 in 2023 (with an spare catch-up contribution of $7,500 for those 50 or older).
Taking the reins to invest in your future is empowering, so don’t limit yourself. Plane if you don’t have employer-provided benefits, you can still save toward a future retirement you’re excited about.
Investing in Yourself and the Future
Every woman has a endangerment to help unravel barriers, tropical the pay gap and to pave the way for future generations of women. Investing in yourself ultimately ways maintaining a holistic view of your values, and how your career and finances can move you toward your ultimate goals. Focusing on increasing your earning potential by asking for raises and promotions based on your worth, boosting your savings and investments, and leveraging all aspects of your employee benefits can be worthwhile endeavors that honor what’s most important to you.
At Abacus, we take pride in guiding people through the path of investing in themselves. Reach out today to talk with a financial counselor who can share the options misogynist for you.
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