If you want to build wealth, the two main things you can control are your income and the amount of it that you spend. You might be making smart spending decisions, but you should also take steps to increase your pay.
This is especially true for women, who tend to earn less than their male counterparts. Because of this, women may have less money to put aside for retirement.
While some research suggests that women experience more negative consequences for negotiating their salaries than men do, asking for a raise usually works. In a 2014 survey of more than 31,000 employees, PayScale.com found that 75% of people who asked for a raise got at least a small increase, even if it wasn’t the amount they requested. Many people who were denied the first time they attempted to negotiate salary learned ways to increase the effectiveness of their ask, simply by virtue of making the attempt and bringing the issue to the forefront.
If you’re looking for tips for women asking for a raise, here are a few that can help.
1. ASK ABOUT RAISES BEFORE YOU’RE HIRED.
It’s important to ask about the compensation review philosophy, and how it’s applied across the workforce, early in the hiring process. Discuss it when you review the package presented in your offer. It’s easier to ask for a raise if you already know your company’s policy.
- Will you receive cost-of-living increases or merit-based raises, or do pay bumps come only with promotions?
- How frequent are salary reviews, and what’s the methodology behind them?
2. TIME YOUR REQUEST RIGHT.
Don’t spring the salary conversation on your boss during your annual review. If you didn’t ask about raises when you were first hired, open the dialogue earlier in the year. Use check-in meetings to establish shared expectations, so there are no surprises when the review comes up.
When you do ask for a raise, keep in mind that your boss has to divide his or her attention between you and your colleagues. Consider your timing:
WHEN TO ASK:
- Before your annual review
- When you’ve successfully navigated additional responsibility
- In preparation for a position change — but make sure you cover it early on
WHEN NOT TO ASK:
- When you’ve had a bad review
- When the company’s finances are under great strain
3. BE SPECIFIC ABOUT YOUR VALUE.
To prove that you deserve a raise, you’ll need to be able to talk specifically about your achievements. Try to calculate the value of your accomplishments.
- How much additional revenue was a result of projects you worked on?
- How much did your efforts save the company?
4. BE CLEAR ABOUT WHAT YOU WANT.
Don’t focus only on what you want in the near term; consider where you want to go with your career. What steps will you take to get there, and how will your salary change? Consult with a mentor if need be.
Sometimes it’s easiest to discuss your end goal, getting your boss to buy into the long-term vision, and then co-create your salary changes along the way.
5. MAKE SURE YOUR REQUEST IS REASONABLE.
Do your homework. Compare salaries using websites such as Salary.com or Glassdoor.com, and ask recruiters about the going rate for your position and experience. If your boss counters, it can be appropriate to negotiate.
6. DON’T BE AFRAID TO ASK.
Because you probably don’t ask for a raise very often, it can be intimidating. But you won’t get what you don’t ask for. And in some companies, it’s incumbent upon the employee to make a case for an increase.
Remember that even if you don’t receive a raise immediately, that doesn’t mean you won’t get one. Sometimes you have to be patient.
OTHER STEPS YOU CAN TAKE TOWARD FINANCIAL SECURITY
Taking the initiative to ask for a raise is great way for women to be proactive about their financial situation.
- Don’t forget to celebrate your win. Do something fun and in line with your budget to congratulate yourself.
- Once you receive the raise, adjust your financial plan accordingly. Determine the tax impact, and then ask yourself: Can you increase your retirement contributions? Add to your savings goals?