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How to Appropriately Ask for a Raise

March 23, 2020

So you’ve been taking on more responsibility at work, your boss says you’re a real asset to the company, but your salary hasn’t changed in a few years. If this describes your current work situation, it might be time to ask for a raise. 

 

By Caroline Farhat

 

According to PayScale’s “Raise Anatomy” report, only 37% of workers have asked for a raise. Of those that did ask, 70% received some sort of increase in compensation. Those are pretty good odds so if you’re excelling at your job, you should ask! The average raise in 2019 was 3%, according to the 2020 Compensation Best Practices Report. This means that if you are earning $40,000, your raise would increase your income by $1,200 per year. The amount of a raise depends on the sector of work, location, and demand for the position. Typically, jobs in the private sector usually receive higher raises than jobs in the government. As a best practice, you should usually wait to request a raise after you have worked for the company for at least one year. Additionally, in most cases, you should not ask for a raise more than once a year. 

 

If you feel it is time to ask for a raise, here are some tips on how to appropriately request one.

 

Prepare for a Meeting 

When you are ready to ask for a raise, request a meeting with your boss and let them know you’d like to discuss your salary. 

 

1. Plan your request at the right time

When you want to ask for a raise, pay attention to the timing of the meeting with your boss.

 

An appropriate time for a meeting would be:

  • After you successfully completed a big project that brought value to your company
  • During a performance review meeting when you have exceeded expectations. Performance review meetings are a typical time when companies award raises. Being prepared to ask for a raise during this time could allow you to negotiate for more than the planned raise. 

 

Times to avoid a meeting:

  • During a busy season of work when your boss will not be able to focus on your request 
  • When you are behind on your work. If you are not able to perform your current workload, it will be hard to justify a raise to your boss.

 

2. Prepare talking points

Go into the meeting prepared to advocate for yourself. Although you don’t have to memorize a speech, it’s good to be prepared with the following information: 

  • Specific examples of accomplishments you have achieved at work recently. This could be anything from securing a big client to implementing an idea that brings in extra revenue for your company. 
  • How you have exceeded expectations for your position. 
  • Additional responsibilities you have undertaken. If you have taken on more responsibilities by taking initiative, be sure to highlight those. 
  • The value you will continue to bring to the company in the future and examples of how this will be accomplished. 

 

3. Do your research

It’s important to know that the salary you are requesting is realistic for your position and your location. A great resource is Glassdoor. You can compare salaries for your sector or receive a personalized salary estimate based on your market and position.

 

4. Practice, practice, practice

Asking for a raise can be a nerve-wracking conversation. By preparing and practicing before your meeting, you can walk in confidently and armed with data to back up your request. In addition to practicing your talking points, you will want to be ready for any questions or negotiations that may arise. While it’s good to have a specific salary in mind, you should also be open to other numbers or benefits that your boss may offer. For example, the company may offer you work from home or extra vacation time in place of a salary increase.

 

In the Meeting 

You’ve requested a timely meeting, prepared extensively, and now it’s go-time. Once you’re in the meeting here’s what you should focus on:

 

1. Your Demeanor

Pay attention to your tone and body language when speaking. You want to appear confident in yourself and your abilities. Show a positive attitude about the value you bring to the company, but do not appear arrogant. If you get questioned about why you deserve a raise, keep your cool and answer with the talking points you prepared. 

 

2. Communicate Your Accomplishments

Instead of just rattling off a laundry list of accomplishments, focus on a few incredible examples and, if possible, bring proof of your work. Here are a few ideas of what you can present in the meeting:

  • Two-three examples of big projects you accomplished 
  • Work you did that was beyond the scope of your job
  • Specific examples of when you took the lead and were successful
  • Examples of work brought that brought monetary value to the company
  • Ideas for your future at the company. Companies value loyal workers so be sure to point out how you have demonstrated loyalty and your desire to remain with the company.   

 

3. Explain Why You’ve Earned It

Be sure to avoid talking about why you need the extra money and instead focus on how you have earned a raise. For example, if you are in sales, instead of saying you need the money because of increased living costs, say you have earned this raise because you are the most successful sales associate, have brought in $100,000 in revenue, and receive great reviews. 

 

4. Bring a Specific Number

It’s best to have a specific number you are requesting, according to a study by Columbia Business School, instead of a range. For example, you want to request $55,000 as opposed to saying $52,000 to $57,000. Provide the reasoning for how you arrived at that number and, if applicable, give examples of how it is in line for the type of work you do.  

 

Bottom Line

If you have been in your role for over a year and are killing it at your job, you should seriously consider asking for a raise. But before you do so, preparation is absolutely critical. Follow the steps above and you’ll be in a great place to have this discussion with your boss. Good luck!

 


 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.

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tax documents
2020-07-06
How Can I Get the Most Out of My Tax Return?

If you haven’t already filed your 2019 taxes, you don’t have much more time. The deadline to file your federal taxes this year has been extended to July 15, 2020, due to the COVID-19 pandemic. So if you still need to file this year, or if you’re looking for ways to maximize your tax return for the future, here are some important things to keep in mind.   By Kat Tretina  

Tax Implications of Student Loans 

If you have student loans that you have been making payments on, there is a major benefit you may be able to take advantage of.  

Student Loan Interest Deduction

Each year you pay back your student loans, you may be eligible to deduct up to $2,500 in interest costs off your taxable income. Here are the important things to know about the deduction:
  • The deduction is only for the interest portion of your loan payment. Your monthly loan payment consists of paying back the principal of the loan and interest, so you will not be able to deduct your entire loan payment. 
  • You can take advantage of the deduction whether you have private student loans or federal student loans. 
  • You do not need to itemize your tax return to take advantage of this deduction. This can be taken in conjunction with the standard deduction on your return. This deduction will lower your income, thereby lowering your tax liability. 
  • You have to meet income requirements. You are eligible for the deduction if your Modified Adjusted Gross Income (MAGI) was below $70,000 ($140,000 for married couples filing jointly) the previous tax year. You may be eligible to deduct a reduced amount if your income is higher, however, the deduction does not apply once your MAGI is over $85,000 or $170,000 for joint filers. 
  • You cannot claim this deduction if someone else claims you as a dependent on their tax return. 
  • The loan must have been taken out for a qualified education expense for you, your spouse, or a person who was a dependent when you borrowed the loan. 
 

How The Tax Deduction Works

A deduction is taken to reduce your income that taxes are assessed on, unlike a credit that reduces your taxes owed. For a simple example of how this works, if your income is $50,000 and you paid $1,000 in student loan interest, you can deduct the full $1,000 and your income would be reduced to $49,000 and taxes would be assessed on that amount. Whereas if you claimed any credits, discussed below, the amount of the credit would be taken off of your taxes owed. If you owe $1,500 in taxes and the credit is $500 you now owe $1,000 in taxes.     It’s important to obtain the tax information from your loan servicer when you are ready to file your return. If you have paid more than $600 in interest, your servicer will most likely automatically provide you the 1098-E form. The form will show the total amount of interest you have paid for the year.     If seeing the amount of interest you have paid gives you a shock, you may want to look into refinancing your student loans. Refinancing is when you obtain a new loan to pay off current student loans and can be a simple process that results in savings. Refinancing may help you obtain a lower interest rate, thereby saving you in interest costs. It can also help you lower your monthly payment. Use our Student Loan Refinance Calculator to see how much you may be able to save.*      

Other Ways to Maximize Your Return

If you are looking for other ways to get the most out of your return, check to see if any of these could apply to you:  

Education Tax Credits 

If you are still in school paying for tuition, you may be eligible to take a tax credit, even if you used student loans to pay the expenses. Here are the two available for 2019 taxes.  

American Opportunity Tax Credit

This allows you to take a credit of up to $2,500 per year for four tax years. You must be enrolled in school at least half time and be working towards a degree. Parents who are paying for the college tuition of their dependents can take this credit or the student themselves can take the credit. Make sure to obtain Form 1098-T from the school to show how much tuition has been paid. This credit is not available for graduate students. In addition, there are income requirements to meet.    

Lifetime Learning Credit

If you are working towards a college degree or enrolled in courses to help with your career, you may be eligible to take a credit of up to $2,000 per tax year for tuition, fees, books, and supplies. There is no limit on how many years this credit can be taken. There are income requirements to meet for this credit as well.    

Save More and Reduce Taxes

If you have an IRA or a Health Savings Account and you did not contribute the maximum amount allowed for the year, the deadline is extended to allow contributions until July 15. The money saved in an IRA and HSA is not subject to federal income taxes. So you are able to save more in these accounts and avoid federal income taxes on your savings.      Hopefully, you can take advantage of some of these savings to get the most out of your tax return. As with any tax advice, make sure to use a reputable program or speak with an experienced tax preparer for your specific situation. The most important thing to remember is to file and pay your federal income taxes by the deadline, July 15, 2020.   
  *Subject to credit approval. Terms and conditions apply.   Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.
Woman checking her finances while wearing mask due to COVID-19
2020-07-01
The 6 Financial Lessons That COVID-19 Has Taught Us

Since March, the nation has been reeling from the impact of the COVID-19 pandemic. Millions of people lost their jobs, had their hours cut, or experienced drops in their income. Many families’ finances have been significantly affected by the coronavirus outbreak and are still struggling to recover.   By Kat Tretina   As the nation starts to rebuild — and businesses begin to reopen — here are six lessons we learned during the pandemic that we should all keep in mind going forward.   

1. You need a larger emergency fund

Before the pandemic, many financial experts said that an emergency fund of $1,000 was sufficient for most individuals. Others said that saving three months’ worth of expenses was enough.    If you followed that advice, you may have realized that the guidance left you unprepared to deal with such a serious catastrophe. If you lost your entire income overnight, you quickly exhausted your savings and were unable to pay your bills.    If the pandemic drained your savings account or if you never had an emergency fund in the first place, focus on building one from scratch once you’re steadily employed again. Aim to save at least six months’ worth of living expenses. That may sound impossible right now, but the important thing is to start saving and tuck money away consistently. Over time, you can achieve your goal.   

2. Understand your loan protections

As we found out during the past few months, not all creditors are equal. While some creditors were willing to work with people struggling with their finances during the pandemic, others were not.    Federal student loans were eligible for the
CARES Act, including 0% interest and automatic payment suspensions. Unfortunately, private student loans did not qualify for those benefits.    Some private student loan lenders workers with borrowers and allowed them to postpone their payments, but not all lenders were willing to do so.    The experience highlights how important it is to shop around and choose a lender that offers hardship programs and forbearance options. With ELFI, you may be eligible for up to 12 months of forbearance if you experience a financial hardship, such as a job loss or medical emergency.   

3. Avoid the lifestyle creep

Before the pandemic hit, the economy was strong. Unemployment numbers were very low and credit was easy to get, so many people were inflating their lifestyle. Even high-earners were living paycheck to paycheck to live more lavish lifestyles than they could really afford. When things went south, people were left scrambling to make ends meet.    Living well within your means protects you from a recession and a bad economy. When you spend less than you make, you have more breathing room in your budget, and can weather bad times until things improve.    To avoid lifestyle inflation, create a budget and stick to it. When you get a raise, automatically deposit the difference in your paycheck into your savings account or make extra payments toward your student loans. That way, you won’t notice the extra money, but you’ll improve your net worth. Learn how to avoid the lifestyle creep here.  

4. It’s wise to have multiple income streams

Many people lost their jobs, were furloughed, or had their hours reduced during the pandemic. With unemployment rates skyrocketing and many businesses shutting down, having multiple income streams is more important than ever.    When you have more than one source of income, you’re better able to handle emergencies. Even if you lose your job, you’ll at least have some money coming in to cover your most important bills. Having a side hustle can also help diversify your skill-set, making it easier to find another full-time job later on.    If you can, look for another source of income. You can pick up a side hustle, such as delivering groceries, pet-sitting, or renting out extra space. You can also offer freelancing or consulting services in your field.   

5. Don’t try and time the market

When the pandemic occurred, the stock market plummeted. Many people panicked and sold their investments or raided their retirement plans. It turned out to be a costly mistake, as the stock market rebounded. It’s a key lesson: Don’t try and time the market.   The stock market has natural ebbs and flows, and will experience sharp periods of growth and recessions. Don’t panic and sell during those declines, and don’t try to buy only when you think it’s at its lowest.    Instead, keep your investments where they are, and continue making consistent contributions if you can. Over time, your money will steadily grow, and your patience will pay off. If you're new to investing, you may want to check out these apps to get started..   

6. Pay down high-interest debt

Having high-interest debt can be one of the biggest stressors when the economy is in decline. When your job is at risk and money is tight, your student loans and credit cards are the last thing you want to worry about when you need to pay rent and groceries.    To eliminate that stress, focus on paying down high-interest debt when things are relatively good. By paying off your debt, you’ll save money over time, and you’ll reduce your monthly expenses.   If you want to accelerate your student loan repayment, consider student loan refinancing. Especially if you have private student loans, refinancing your loans can help you get a lower interest rate and save money over time.   Use the student loan refinance calculator to find out how much you can save over the life of your repayment term.*  
  *Subject to credit approval. Terms and conditions apply.   Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.
Woman dealing with financial stress in healthy way
2020-06-29
7 Healthy Ways to Deal With Financial Stress

Do you have debt? If so, you are not alone. More than 74% of Americans have debt of some kind. We know how stressful dealing with debt can be. It can often feel like there is no end to debt payments in sight and can consume your thoughts more than it should. But there are healthy ways to deal with financial stress that can help you pay down debt faster. Read on for some innovative ways to curb financial stress and crush your debt.     According to a Northwestern Mutual 2020 Planning & Progress Study, the average debt for Americans in 2020, just before the COVID-19 impact, was $26,621 per person carrying debt. The debt consists mainly of credit card debt and mortgages, followed by personal student loans and car loans. It should come as no surprise that millennials are feeling the strain of debt as well, with the average debt for millennials being $27,900 in 2019, excluding mortgage debt. Millennials cite credit cards and student loans as their major debt sources. Among all those with debt, 67% have a specific plan to pay it off. While that’s great, that means that three in 10 debt holders have no plan for how they’ll pay off their debt. A plan is a great way to feel more in control and stress less about your debt. With a little bit of strategic planning, it can also help you pay down your debt faster.  

Healthy Ways to Deal With Financial Stress

If you have been reading about debt tackling strategies, you have probably heard of the debt snowball and debt avalanche methods. Those are great strategies, but if you are looking for new and creative (and possibly even fun) ways to deal with financial stress here are some ideas to try out:   

Side Hustle

In 2019, 45% of Americans reported having a side hustle. A side hustle is a great way to earn extra money outside of your day job. The money earned can be extremely helpful to make extra payments on your debt and pay off your debt faster. A side hustle could be a driver for ride sharing, grocery shopping for others, selling items on eBay, tutoring, or dog walking, among many other options. Your side hustle might even be an enjoyable hobby you can start making money from like photography or writing a blog. Doing an activity you enjoy and making money on the side is sure to help ease some stress.    

Dollar for Dollar

For every dollar you spend on non-essential purchases, you spend the same amount on an extra debt payment. Think you want new wireless headphones? Take the same amount you will spend and make an extra debt payment. This method may also help you curb some spending on wants versus needs.    

Sign-Up Bonuses

Looking for a new checking or savings account? Take advantage of banks with sign-up bonuses for opening a new account and use the bonus money to fund your next financial goal.   

Save with Apps

If you like paying with plastic, there are some apps that you can use to help you save for specific financial goals. Some will round up your purchase price to the nearest dollar and deposit the difference into a savings account, one example is the app Acorns. Another app, Qoins, will take the difference and make a debt payment on your behalf. Or use the app, Digit, that will monitor your income and spending habits to determine if there is extra money that can be moved from your checking account into your Digit account. These little amounts can add up quickly to help you meet a savings goal.   

Found Money

According to a 2019 report, 92% of millennials use coupons, whether paper coupons or digital coupons on their phone or online. These coupon savings can then be turned into extra debt payments. Found a coupon that saves you $10 on a purchase you were already going to make? Put that money aside to make an extra payment on your debt. You might also find money from your credit card cash back programs. If you are not carrying any credit card debt, using credit cards to earn cash back is a great way to earn money for purchases you were already making. Instead of using the cash back on a frivolous purchase, turn it into an extra debt payment or the beginning of an emergency fund. If you are shopping online, use a cash back shopping site to earn additional money that can be turned into another debt payment.    

Color Away

Looking to calm your anxiety and see the light at the end of the debt tunnel? Try debt repayment coloring pages. A study in the journal Art Therapy found coloring can reduce anxiety and improve mindfulness. A debt repayment coloring sheet allows you to color a section of the page for each new debt milestone met. They can be a great visual reminder of how far you have come in your debt paying journey and great motivation to make little extra payments when you can. A quick search will show you free ready made pages to start coloring.  

No Spend Challenge

Make a commitment to not spend any unnecessary money for a certain length of time. You could start with a couple of weeks and work your way up to a month long challenge. Set the rules of what you can spend on, but remember it’s supposed to be a challenge. For example you could decide to only spend money on rent or mortgage, utilities, transportation, and food from grocery stores. Any other expenses outside of those categories you don’t spend for two weeks. All the extra money you would normally spend on unnecessary items goes straight to debt payments, emergency fund or any other financial goal you have.      If student loans are one source of financial stress, check to see if student loan refinancing is a good fit for you.* For many people, refinancing is a beneficial way to cut expenses and save in interest costs.    

Conclusion

Debt may be a part of your finances right now, but won’t always be. Make a plan and try to incorporate some of these methods to help make the debt payoff journey easier. Before you know it, you will have your next debt payoff milestone met and will be on your way to a debt-free life. Good luck!  
  *Subject to credit approval. Terms and conditions apply.   Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.