Why you can’t always bank the increase in your salary

Over the last couple of years I’ve read a lot on the FI approach. I mean… a LOT! There is always a constant challenge of reducing expenses and increasing earnings. I went for increasing my earnings, but not by a side hustle, but by investing in myself.

I’ve put in the work, learnt stuff, pushed to go on courses and get professional qualifications and built up as much as I can to be an expert in my field (non financial services before you ask). This has meant that over the years my salary has continued to trend upwards which has been great, although I haven’t done so well at keeping my lifestyle inflation in check.

A lot of what I have read out there is as soon as the pay rise comes in, it’s immediately banked into the savings collection somewhere. I have even done that myself over the last few years which is helping, but I have found there are challenges in banking 100% of any increases. I am fully expecting a whole bunch of comments (assuming people still visit!) rubbishing this post and saying of course you can bank it all, but it’s simply not my experience, and I will explain why. I could argue that this is investing in myself for all of them, and to a degree this is true, but it is what it is.

One of the key things for me is networking – basically going down to the pub / coffee shop / a meal out etc. with current and former colleagues and friends you know and catching up. It may seem odd that you end up spending a few rounds of beer, and nothing much happens, however you never know. I haven’t had to look for a job in years, they have all come via my contacts, so in a sense it works very well compared to the effort of updating a CV, dealing with headhunters etc.

On a reasonably regular basis then I often find myself stumping up some cash for a round or three with people, but it is worth it. If you are just starting out in the work, and your aim is more career than side hustles, the one piece of advice I will give is this…. Network. Network, network network. People get to know you, and you become front of mind for things. I’ll do a whole post on networking at some point!

The second challenge is the inevitable team drinks. It is not only expected that I will go out with the teams, but that I will also always buy the first round, regardless of if I can expense it or not as a thank you for the team and the work they have done. You always expect the most senior person to pick up the tab, and these days that is normally me. It’s great if I can put things on my reward credit cards as I get something back, but there are things I can’t claim back (e.g. a tip) and sometimes not even the round of drinks, it comes out of my own pocket. As such, especially in a fast paced environment, compared to years ago, I couldn’t bank everything.

Sure – I could not go or not buy the first round, but that would impact on me professionally. You get far more out of people if you can build that relationship, reward them for the work they have done. I do know people who take the approach of not ever going out, but then you find people won’t want to work for that person or be part of their team, it makes it much harder for the day job.

Have you been able to bank all of every pay rise you have received?

Advertisements

Investing in myself

So, a little while ago, I mentioned that I wanted to position myself to get promoted by 2020.

I have continued to put my hand up for “extra curricular” activities at work, and making sure I do more than just the day job. In effect this means that as an absolute minimum I have worked 50 hours per week, the normal is probably close to 60 or 70 (not including checking emails on my phone) – plus some weekend working. In fact this bank holiday, for the third time, I am checking in on some of the stuff that is going on and did some more work this morning as well as various calls.

I say this not because I want your sympathy, but to demonstrate that to get ahead in work, life or anything, you need to put the effort in. I could easily have sat back, done my contractual hours, and waited, but that is not me either. I know had I taken that approach, then I wouldn’t progress.

I also think because of this, I have the opportunity that I have now taken. A little while ago my boss called me up, and we had a good chat about a potential opportunity for me. It requires me to put my head above the proverbial parapet, be seen and a lot of visibility. Would he have thought of me or called me had I not always put my hand up? No – I am sure of that.

Naturally, I jumped at it! I’ve been doing it now for a little while, and slowly more and more things are coming my way which I am having to learn fast. My aim is to do as good a job of it as I can and show what I can do and make it my own. It’s a steep learning curve as I go on, but fortunately I have a great boss who is also very supportive. There is limited handover it feels more a case of throw things at me and see how I cope and would I ask if required.

Will it guarantee me a promotion? Hell no. In fact, if I don’t do a good job, it will probably make it impossible for me to get a promotion. Basically, screw it up and I have had it. That said – if I make a good job of it then I will be really laying down the foundations to support promotion. If I can make it my own then hopefully I can keep the role ongoing and set myself up.

What was interesting was the reaction of some people outside of work. I am taking on a much bigger role, with much more scrutiny and visibility. A number of friends asked if I got the pay rise to go with it. Of course I didn’t. They then very helpfully shared their thoughts that it was a stupid idea to take it without the pay rise.

Thanks. Whilst I understand the view, I also live in the real world 🙂 For what I do, you don’t get the promotion, title or pay rise until you have shown you can do the job. If I had said I want a pay rise to go with it, then I have no doubt I would have been told to b*gger off and no doubt never give another opportunity.

I also think there was a large chunk of luck involved in this – being in the right place at the right time, and being able to take the opportunity. Having said that, even if all those happened again and I hadn’t worked hard and shown what I can do, then I may not have been thought of.

As always – I do believe hard work and a level of luck are important, hopefully this will go well and set me up nicely – I hope. Always put in your best and full effort regardless of what it is you are doing – it’s worth doing it to the best of your ability.

All the promotions over the years have added to my remuneration which in turn has helped to keep driving up my savings rate – so investing in myself has generated the biggest returns!