It’s a hard reality but for many, there is still pay disparity between genders in the workplace.
And this is terrible, truly. But Equal Pay Day isn’t just about lower pay. The effects of not talking about your salary and negotiating a raise can have even bigger financial ramifications for both women and men. Recent research from Glassdoor estimates the average person leaves $7500 on the table each year from not negotiating their salary.
Take that $7500 and put it into an investment account (and add $7500 to it each year) and you’ve got a substantial sum of money by retirement. For many, this could be the entirety of their retirement income.
But the fear of having that #RealMoneyTalk about your compensation is real. And managing the conversation isn’t a day at the beach. For those who muster up the courage, here are four real ways a frank money discussion can directly increase your income.
1) #RealMoneyTalk: Swapping Salary Information with Peers
How it increases income: It can motivate you to negotiate for how much you’re worth.
Many companies forbid employees from discussing privileged salary information and for good reason. These convos can inspire jealousy and harm company culture.
But there’s nothing that should preclude you from talking to peers in your industry or your old colleagues in order to gain a range of salary information to arm yourself with for your next negotiation. Knowledge is power, and salary numbers are no different.
After I leave a job, I always ask colleagues at my level for a range of what they were making.
And I utilize this information to negotiate the salary in my next role. Most are more than happy to help.
If you feel uncomfortable asking straight up, say “I’m applying for a ‘Director of Such and Such’ position. They want a ballpark of salary. Do you mind sharing a range so I can give them an idea of compensation?”
Even casually asking those in your field how much they make provides tangible proof of your worth. After all, someone in the same industry is currently receiving that amount and this makes your own salary demands not only reasonable but competitive in the market.
2) #RealMoneyTalk: Your Boss Denies Your Raise Request
How it increases income: you find out the steps to take in order to increase your earning potential.
Maybe the answer to your raise request is no. This happens more often than you’d think. But any manager worth their salt should be comfortable telling you why they’re denying the request and clarifying steps for how to help you get there in the future.
And if they don’t, ask.
For example, you could say, “this is the level I’d like to progress to. What’s the best way I can get there?”
Perhaps your manager will recommend courses to take or certifications to receive. Never leave the meeting empty-handed; even if you don’t get the raise, you should leave with a clear plan on how to get one next time.
3) #RealMoneyTalk: Talking Dollars and Cents with Your Squad
How it increases income: You can discover new ways to earn (and save) more.
In the Instagram era we’re living in, it can be intimidating to share money woes with friends. After all, you have the integrity of an Instagram feed to protect. And it can be hard to hear your friend with the great paying gig (or help from their parents) has no trouble while you are barely getting by.
But here’s the thing: Being frank about money (or lack thereof) can open up the opportunity for others to share how they make money. And maybe your perceptions are all wrong. For example, ask a girlfriend how she funded her recent trip to Paris or that $500 coat. Maybe it wasn’t from her job, but a sweet house sitting side hustle.
A trusted friend can also be a safe place where you can ask money-related questions – without fear of judgment or shame. And learning about money is the best way to level up with it.
4) #RealMoneyTalk: Coming Clean About Your Bad Money Behavior
How it increases income: Being real with yourself is the first step to financial success.
One could argue that the most difficult #RealMoneyTalk you’ll ever have is with yourself. Starting from scratch with your finances, or facing up to bad behavior (like chronic overspending, living beyond your means, or lack of savings) may only save you money in the short term.
But once you get good at managing the money you currently earn, you can focus more on ways to increase your income.
And whether you’re earning it or saving it, having more money in your bank account for a rainy day is a win.