Here are some tips for getting by when your expenses go up but your salary doesn't.
When you get promoted at work, there's often a big raise to go along with it. But that's not how cost of living raises work. Many employers uphold the practice of giving out cost of living raises each year, and as the name implies, these are modest, companywide pay boosts that are supposed to help employees maintain their buying power in the face of inflation.
A cost of living raise, for example, might amount to 2% or 3% of an annual salary. So someone earning $50,000 a year gets a $1,000 to $1,500 boost in pay for the year. It's not a life-changing sum, of course, especially when we account for taxes on that increase. But for many people, it's enough of a boost to their bank accounts to help them keep up with their expenses.
This year, however, a lot of companies have cut back due to the coronavirus pandemic, so you may be in the unfortunate situation of having gotten no raise at all. If that's the case, here are a few ways to manage.
1. See if there are any expenses you can cut back on
Some of your living costs, like your mortgage and utility bills, may be non-negotiable. But you may have some expenses in your budget you can trim or unload. For example, if you typically order in a meal once a week, you can switch to ordering every other week if money is tight. Or, you can skip those takeout meals altogether and stick to home-cooked meals instead, which are apt to be much cheaper.
2. Negotiate bills that are going up
Not getting a cost of living raise could really hurt if your bills start increasing. But rather than accept the idea of having to pay more, try negotiating. If your landlord wants to increase your rent by $40 a month at the end of your lease, don't just sign that agreement. Rather, speak up. Tell your landlord you can't afford that increase because your wages didn't go up and see if they'll agree to leave your rent as-is for another 12 months. You may be able to negotiate other increases, too, so make those calls rather than resign yourself to pinching pennies.
3. Get a side job
While you may not get a cost of living raise from your main employer, you can boost your own income by taking on a second job. In this regard, you have some options. If you're only comfortable with work that allows for complete social distancing, you can look into remote options like telemarketing, medical billing (which can often be done from home), or web design (if you have the skills to do that sort of work).
If you're comfortable with some interaction, you can sign up to walk dogs, tutor students, or drive for a rideshare company. And if you feel secure working in a more public setting (perhaps you've already been vaccinated and feel the risk isn't as extreme), you can see about picking up weekend or evening shifts at a supermarket or another business that needs more hands on deck.
Not getting a raise is a bummer -- but it could also leave you struggling to keep up with your basic expenses. If you're denied a cost of living raise this year, take the above steps to compensate. It could end up sparing you a world of financial stress.
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