Last week, I wrote about building wealth, and how Mr. ThreeYear and I began saving and investing.
I would be remiss if I didn’t discuss one of the major ways we’ve been able to save: our incomes. Mr. ThreeYear has worked hard to increase his earnings over the years and now earns a very competitive salary for his field.
While I work part-time (as a teacher no less), I have increased my hourly wage with my job so that were I to work full-time, I would earn a very competitive salary (higher than the average teacher salary).
Mr. ThreeYear and I have worked hard to rock our jobs, and this is one of the key ways we’ve been able to pay off debt, invest, and increase our net worth.
ESI Money (which stands for earn, save, invest) discusses earning as one of the keys to increasing your income, and has some great posts on the subject, like how to ask for a raise.
Earning more during your working years is one of the fastest ways you can increase your savings, especially if you’ve developed the discipline of banking your raises.
Many financial bloggers talk about side hustles, building your own business, or buying real estate as a way to increase your income. These are fantastic ways to earn more money, but today I’m going to focus on increasing your wages as an employee (or a contractor–we’ll get to that).
The Low-Wage Earner’s Conundrum
When you’re just starting out, or earning lower-than-average wages, it’s extremely hard to save, as every spare penny goes toward paying your bills. While it’s possible to save money on a tight salary (like Mrs. Frugalwoods did while earning $10,000 in NYC), in my experience you need to have: 1. extremely frugal ways already firmly established to do so, 2. an outside support system, and/or 3. a short window of time you’re earning so little and need to be so austere.
In other words, it’s possible to be extremely frugal and save money when earning small amounts of money, but it’s much harder to do so, especially over many years. If you’re able to increase your income, then you can increase your standard-of-living in ways that make your life much better (like having a place to live with a washer and dryer so you don’t have to walk to the laundromat), and also save money. Once you get to a standard of living that’s comfortable and safe, then, in my opinion, it’s easier to forgo the extras for saving. But while you’re hauling your laundry to the laundromat each week, all you want to do is move to a place that has a washer and dryer right there (by the way, Paula from Afford Anything and Liz from The Frugalwoods were discussing that very phenomenom on Paula’s podcast the other day–it’s a great listen).
When Mr. ThreeYear and I were first starting out, we lived in an apartment complex with no washer and dryer, and I remember the hours spent waiting for my wash to be done (and yes, in Atlanta, people would steal your clothes if you left them). One of the first big purchases we made was a washer and dryer for our apartment (there was a hookup, but no machines). They were reserviced (meaning used), and definitely the old-style Kenmores, but they were guaranteed, and they worked like a charm. I believe we spent $350 on both the washer and the dryer, so we saved a bundle.
Once we moved to our first house, we didn’t have any more must-have purchases, so if we were smart, we would have banked every single pay increase we received (we weren’t; we didn’t). Luckily, we learned our lesson, and now that we know we’re happy eating in, driving older cars, and living in less house than we can afford, we bank every extra cent of our raises.
But how have we increased our incomes over the years so that we can bank them?
I believe these have been the most effective ways we’ve been able to earn more. Some are clear-cut ways to increase your income and some are long-term ways to build your professional reputation. Because there’s so much to say on this topic, I’ll offer a few ideas today and more next week in Part II. Here we go:
Take 100% responsibility
This is my mantra in life. Take 100% responsibility for your life. Look, we all know that you are not responsible for everything that happens to you in life. Things happen that really suck. But you are responsible for how you respond to those events.
Does that sound harsh? Unfair? If you think about it, it’s really empowering. You got hit by a bus (this really happened to someone I know). How are you going to face the rest of your life? Are you going to lie in bed and think about the unfairness of it? (My friend did this for a while). Are you going to go to physical therapy, learn to walk again, and be determined to make something of yourself? (My friend decided, after a few days, that this was how she would live).
You got an unfair break at work. You got passed over for a promotion you deserved. Your brother married into a rich family. These types of situations happen to all of us. We get to decide how we’re going to frame those occurrences. Can we learn from them? Can we see them as just another part of life? Can we realize that bad things happen to all of us, and we’re not being singled out?
When Mr. ThreeYear was laid off twice in one year, he took 100% responsibility for all of it (I don’t know if I would have done as well). It was 2008, the economy was in the tank, but he told me, “I need to earn money for my family, so I am going to do whatever it takes to find a new job.” He wasn’t too proud to tell people he’d been laid off. He sent a massive email to everyone he knew and asked for any leads they might have. In my mind, it’s no coincidence that he found another job within a month, both times he was laid off. Yes, it stunk. But he knew he was the only one who could change his situation and so he took action.
In your job, this can look like:
- taking responsibility when something goes wrong that you’re not really responsible for (a vendor messed up a project, or an intern goofed up an assignment). I will often say, “I am so sorry for XYZ. I take responsibility for it going wrong and here’s how I plan to make it right/make sure it doesn’t happen again.” Nine times out of ten, this will diffuse any anger and people will say, “That’s okay! Mistakes happen,” or, “It wasn’t your fault.” When you’re willing to take the blame and responsibility, people trust you more.
- realizing that if things aren’t going well at work, you can change them. If you feel like your boss doesn’t like you, then you can work to repair that relationship. If you’re in the middle of co-worker drama, you can either get out of it or fix it. If you’re tired of taking low-level projects, figure out a way to build trust or help others with more senior assignments.
If you begin to take responsibility in your job, then you’ll be given more responsibility. People will have more trust in you and you’ll likely do better on performance reviews.
Taking responsibility is the opposite of my least favorite thing at work–being whiny. We all know the person who, when asked why something didn’t get done, responds with, “It’s not my fault… XYZ happened.”
That’s closely related to blaming someone else. Look, your boss is probably going to know who messed up eventually. If it wasn’t you, but you take responsibility anyway, she’s going to respect you more. For example, last year, I wasn’t given an important document at work. Rather than blame someone, I went to my superintendent, explained that I’d just seen the document, and told her, “because of this, I didn’t do XYZ procedure correctly this year. I apologize; I didn’t know I was supposed to do this, but I should have checked. I will make sure that from here on out, it’s done correctly, and here is what I’m doing to remedy the situation.”
I could have thrown someone under the bus, but what would that have served? I would have ruined a relationship and looked whiny. Instead, I decided to suck it up, take the blame, and make it right. My superintendent said, “Thank you so much for coming to tell me. Don’t worry–we all make mistakes. You acted in good faith so it will all be fine.”
Taking 100% responsibility in your job will not give you instant raises. But it will build you a reputation as a mature, reliable employee who can be trusted. That will serve you well at work and in life.
Related Reading:
The Secret to Earning Big Bucks in Education
The History of Our Side Hustles
Go the Contractor Route
One of the specific ways Mr. ThreeYear increased his wages at the beginning of his career was to become a contractor. During the difficult economy of 2008-2009, many companies had implemented hiring freezes. Mr. ThreeYear was able to negotiate contractual work with two companies during this time, by agreeing to work for a set hourly wage and paying his benefits himself. This benefited the companies, because they didn’t have to put another hire on the payroll, with all the requisite benefit costs. It benefitted Mr. ThreeYear, because he was able to negotiate a much higher contractual wage than his previous salary. He increased his earnings by 25% during this time. Later, when he was rehired as an employee, he was then hired at a salary wage even higher than his total earnings as a contractor, so that even though he was laid off twice in a year, his earnings went up during that year by more than 25%.
I am currently a contractor, and my situation is similar. I am able to charge a much higher hourly rate than I would make as a salaried teacher. In fact, I currently earn almost double what I earned in my previous salaried part-time job. Because I work at two schools, I have doubled the number of hours that I can charge each week.
Contractual work allows you to save in an i401k. It also allows you to write off travel miles and related business expenses. In my case, this means my cell phone bill and printer ink. While contractual work has its downsides (you’re not paid if you’re not working, for example–no paid vacation time), you can often be the master of your schedule. I can decide how many hours per week I’d like to work and for how many schools, for example.
I’m also able to raise my rates. When I finish my Master’s Degree this summer, I’ll be able to charge a higher hourly rate, and I can decide what this will be to some extent. When I write new contracts for the schools I work with, I can negotiate the terms (this all comes back to being a trusted a responsible worker so that they want to keep working with you).
Related Reading:
The i401K: Your Best Friend as an Independent Contractor
Toot Your Own Horn
It’s difficult, for women especially, to talk about what we’ve done well. However, in the work place, if we don’t share what we’ve done, those projects may go unnoticed by the people who provide our compensation.
It’s important to let your boss or supervisor know what you’ve been up to. Mr. ThreeYear does this by sending a weekly email to his boss detailing what he’s accomplished or has been working on that week.
Your boss will not be annoyed with this email. He or she will be grateful to get a weekly missive communicating what you’ve been doing. This will allow him to share that information with his boss about what his team has been doing. You’ll also show that you’re using your time wisely.
If you don’t have a direct boss, per se, you can use other methods to communicate what you’re doing in an organization. In my case, I send out newsletters to my staff with updates from the ESL department (that would be me–I’m a department of one). I send bullet points about how to work with English Language Learner (ELL) students, best practices, how many students are in the school this year, etc. I also angle to lead a professional development session each year, so that I can get in front of the teachers and para-educators to train them in working with ELLs.
Keep a list of your accomplishments and add them to your resume. This is great advice from 99to1Percent. They list ten major accomplishments from each of their jobs on their resumes. People are drawn to results, and listing specific ways you’ve helped your organization with your boss and on your resume will help you remember what you’ve done and show others you get things done.
Don’t think about talking about your accomplishments as bragging. It’s not. It’s communicating. It’s letting people know what you’ve been working on and what you’ve finished. It’s also reminding people in your organization what you do every day.
For more ways to be a rockstar at your job, see Part II of this post, coming next week.
What’s your favorite job tip for becoming a rockstar at your job? Any ideas or topics you’d like to see covered in next week’s post?
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This is an amazing post Laurie! To answer your question – to be a rockstar at work, seek out a mentor and ask them what it takes to be a TOP performer. This has made a ton of difference. My mentor helped me learn about intellectual property and I went on to submit 12 inventions of which 2 are in the process of being filed as patents.
Another lesson learned from this incident – go over and beyond your duties but first make sure you have smashed your duties.
I have a question for you too if you don’t mind. You said that initially you didn’t bank your pay raises. What caused you to change course?:)
Thank you, Jalpan! That is a great tip. Hanging out with people who are “actualizing” at a higher level than you is a fast way to get better, fast. Congrats on finding a mentor who sounds amazing. I agree that it’s important to make sure you’ve done your job well before branching out to other projects.
To answer your question, we started banking our pay raises after we read “The Total Money Makeover” and killed our debt back in 2008. For many years, we thought, “we’re saving 25% of our incomes. We’re fine.” But we had debt, we had no emergency fund, and we were wasting our money on stuff that brought us no discernible happiness. I remember throwing away a box of electronics when we moved that had cost us hundreds, if not thousands, of dollars. And it had all become worthless to us in a matter of a few years. After we paid off our debt and moved to NH, we started being really deliberate about making sure each pay raise counted. At first, we used them to max out Mr. ThreeYear’s 401k, then they went to paying off debt, and now to our savings/investing accounts. And along the way, we’ve been diligent about reducing our monthly expenditures so it feels like we have more money even though we’re spending less.
Fantastic post! We agree that taking personal responsibility for your situation is key!
Eric Thomas says: “It isn’t your fault some things happen to you, but they are still your responsibility!”
I’ve found that making a list of expectations, doing those expectations, and then documenting all the stretch assignments I’ve done has really helped demonstrate the value I add to the companies I’ve worked for. Managers love someone who can take on extra tasks and still get their stuff done, while employees love being compensated for it. If you don’t document it though, no one knows 🙂
Thanks, Chris! That’s so true–documentation is key. I love that quote BTW!
Yeah, we are so on the same page about being a top performer, and adding value. I’ve also gone freelance, which is an ace way to up your income.
Personally I find it really mind-boggling at how low a level some people perform, like they try to do as little as possible.
Ha–I know! As if their jobs are the last thing they want to think about. Well, for some people, that’s probably true! 🙂
I agree, taking responsibility is so important and can really set you apart from others. I’d add that volunteering for additional work if you have the capacity in your schedule can also identify you as a rockstar. I can think of a few other ways but you are probably covering them in your next post. 🙂
That’s another great idea. I also hate being bored at work (especially in my old job when I had set hours) so volunteering to take on more work kept me busy!