How time flies! It’s another work anniversary, and with that, a good time to reflect on where you are in your career both professionally and financially. It couldn’t be a better time to also take a look where your overall financial plan is currently, and whether you are on track to make work optional. Here are 5 smart ideas to consider on this work anniversary.
1. Splitting your raise into 3s.
Your work anniversary is often the time when you get that raise you have been working hard for. When most people get this raise they often squander it on useless stuff. You could do better. You could enact the little-known rule of the three 3s.
Simply put, this means that at least one-third of your raise goes immediately into some form of savings or investing. You could also put it towards your retirement. Investing should be your top priority. So, if you got a $10,000 pay raise, $3250 is likely to go to taxes, $3500 should go to some type of savings.
The last $3250 should be spent on something you enjoy, such as a vacation where you can build memories that last a life time. This will prevent you from experiencing lifestyle creep. According to Investopedia, this is a situation where people’s lifestyle or standard of living improves as their discretionary income rises. This income could rise from either an increase in salary or decrease in costs. As lifestyle creep occurs, and more money is spent on lifestyle, former luxuries are now considered necessities.
2. Time to review your stock options and vesting schedule.
First, you should be able to have access to your financial picture in one easy to access place. This is the one time per year that you should really be looking closely at your stock options to determine what the best exit strategy is for that part of your portfolio.
Non-qualified stock options typically only last 10 years. You may be increasing your risk by waiting until the last possible minute. If you get Incentive Stock Options or Restricted Stock Units, you should be paying close attention to vesting schedules. The key is finding the best way to keep your tax liability as low as possible. You should work with your advisor and CPA to figure out when is the best possible time to diversify or liquidate to make sure you are taxed as low as possible.
3. Don’t fall into day prison.
After you hit that five-year mark with the same company, things may start to get mundane. You may feel you are doing the same things day in and day out. You have probably not been appreciated how you deserve to have been, or perhaps you have low self-esteem.
Your role might not feel like you are being challenged anymore. You can try to pull yourself out of the career ditch by shifting the burden from the organization to raising the bar on your own efforts. If the organization won’t help you do it, use your own initiative. Whatever effort you make might not get the recognition it deserves. Nevertheless, it could bring you the satisfaction of doing important work, and do it well. At the very least it will set you up for a better position at a competing organization.
4. Consider switching jobs.
Asking your employer for a raise or a promotion is, for the most part, extremely difficult to do. You must remember that you have earned it. You deserve it. Have a look at your position on salary sites, such as Indeed or Payscale to see if you are earning your worth.
If you aren’t, then it’s time for you to ask your boss for that raise. Alternatively, you could consider updating your resume and start putting feelers out to see if you can move to a better opportunity. Remember, there’s nothing wrong with getting paid what you are worth.
5. Skills and continuing education.
If you love what you are doing, and if you want your job to be your career, you should consider what self-investment needs to be made to increase your skills. You should consider investing 1% to 3% of your income into yourself to help you improve your long term earning potential every year.
Most large companies also have tuition reimbursement programs as well. This may range from something as simple as getting a certificate to going back to college to get your MBA. This is the one real way you can grow your income potential long term, and make sure you are on the top of your career.
Are you clear on the value you deliver? Are you feeling appreciated? What qualities do your colleagues recognize you for? Are you visible within the organization or industry?
Taking a pause to check on these points is very important in today’s age of increasing global competitiveness and unstable job markets. It’s important also since we want to make a difference through our work whilst receiving well-deserved wishes on each work anniversary. Remember, you control your future.