A classic question vexes many of us at our workplaces: Am I being paid what I should be paid? We wonder what the fellow in the cubicle across the hall earns. We wonder what those doing our job at the company across the street make. We wonder just how good -- or bad -- a deal we're getting.
Fortunately, the Internet age has ushered in not only online auction houses where you can buy "Munsters" lunchboxes, but also websites where you can compare your salary with those of your peers. This can be a very illuminating -- and profitable -- thing to do.
Let's say that you're a beginning accountant in New York City. Click over to Salary.com
Or, you're a teacher in a public school earning the national average salary of $47,674 per year. If you're willing to move to make more money, a little digging around might land you at the National Education Association's listing of teacher salaries by state. You'll see there that the District of Columbia offers the highest average pay: $58,456. That might be enticing, but remember to factor location into any salary. The Washington, D.C., area isn't a cheap place to live. Neither are most of the rest of the top six states:
- California: $57,876
- Connecticut: $57,737
- Michigan: $56,973
- New Jersey: $56,682
- New York: $56,200
When you know you want to try for a higher income, how should you go about it? Well, here are a few suggestions:
- Use the data you collect online to make your case. Show that your salary is out of line with the norm.
- Bring to the table other factors such as your education, skills, and past experience. You might be entry-level, but you may also bring valuable talents to the job that other entry-level accountants don't.
- Compare your job description with the tasks you actually do in your job. If you do project management or computer programming for the company as well as accounting, you can use those performances to argue for higher pay.
- Don't be combative about it. Being respectful and confident is more likely to get positive results.
- Keep in mind that you may also bargain with and about other compensation besides salary. For example, you could negotiate to keep your current salary but work four days a week instead of five. You might negotiate an extra week off per year. Creativity and flexibility can pay off.
Make the most of it
Once you get that increase, make the most of it -- sock some away for your golden years. This is good to do even if we're talking about your expected 4% annual increase. If you're suddenly making 4% more than you had, and you managed to eke out a living on that income, then you can afford to take half of that increase -- or more, if you'd like to save aggressively -- and invest it for your retirement. With the rest, enjoy and live it up. But pay down your high-interest-rate debts, of course, before you start investing or measuring your living room for a large-screen HDTV.
When you've got that out of the way, aim higher by seeking out some top-notch mutual funds. I invite you to sign up for a free trial of our Motley Fool Champion Funds newsletter, which offers some terrific fund recommendations monthly in an easy-to-digest format. (I've found a bunch of winners there myself.) A free trial will give you full access to all past issues, so you can read about each recommendation in detail.