Another Raise: How Bitersweet It Is
Posted on September 14, 2007 by Him and tagged employment, income
This past month marks the third year I will have been working for my company; it also marks the date of my annual salary adjustment. When I opened up my pay stub I was pleased to note that my salary has been increased by 10.5%. I certainly have nothing to complain, as that is well above inflation and is pretty generous considering I got two raises last year.
I now earn 57.5% more than when I first started my job three years ago. While the per-paycheck net take-home pay increase isn't that significant, if we're careful the extra cash can certainly go a long way.
With this raise, though, comes a saddening realization: I now make what I consider more than an entry-level salary. Why is this sad? Because for the first time in my life, I feel locked in to this one job in one particular niche field for financial security. In the past few months I was lightly considering a career move into a related field, but in order to do that I would have to start at a near entry-level position, presumably with a salary to match. Before this raise, the financial hit, if any, wouldn't have been too severe. What this raise has done has, in effect, limited my career options.
Thankfully, I really do enjoy my job and the people who I work with. My job also doesn't demand too much of me outside of regular work hours. Not to mention the nice perks that we get. My life outside of my job remains fulfilling and joyous.
But now I am beginning to realize the whole depth of the term "financial freedom." It really all boils down to having choices and options. It may take us a long time to truly achieve that freedom, but in the meantime I hope I can have a fulfilling life so that I can be most happy with the options and choices that I'll have when I finally get there.
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BD | Sep 14, 2007
You're no more locked in here now than you were before the raise. The trick is to keep your lifestyle the same, and then the "financial hit" from switching fields will be exactly NOTHING. Your company can't lock you in unless you let them!
Catherine | Sep 14, 2007
Here's a great tip that I picked up from David Bach's book Automatic Millionaire:
When you get a raise, increase the money that you are putting towards retirement and/or debt reduction the same amount. This way, you are using the "raise money" in a very productive manner and you are maintaining your current standard of living.
That's not to say that you shouldn't splurge a little.
Unless you've taken out massive debt that requires this raise to pay it off, you are no less free than you were before. A raise is a good thing.
MVP | Sep 14, 2007
Fasciating post. I've felt the same way for a few years. It wasn't until I finally paid off the debt that I felt free to pursue other career options, which may require a smaller paycheck and/or longer hours to get started. Until we got rid of the debt ball and chain, I felt I couldn't afford to leave - I was literally a slave to the debt and my unfulfilling job situation.
I agree with the others who say that this raise if far from locking you in. If anything, it is the debt that keeps you locked in to a particular job/industry. However, the good news here is that more pay = more money to pay off that debt.
Couple of other notes: I love the new format. Very professional looking. The old burgundy background hurt my eyes. Also, phenomenal job on the total net worth number. I remember when you were at a negative six figures! Wow, nice job.
If you're starting to feel trapped by the position maybe you're at the point where you've outgrown it and the challenge is no longer there. If thats the case be careful about not getting into a rut and stuck in a job you might grow to hate.
Either way, congrats on the raise.
Hi, great blog! Want to exchange links? I already added you to my blog, here is my link: http://mymoneystory.blogspot.com/
Thanks!
Congrats on the raise. I have had a similar growth phase the last 3-4 years changing jobs and increasing my salary significantly. The thing I have tried to keep in mind is just not raising my standard of living too dramatically, as other commenters have suggested. Not to mention when you get a raise to me it is always less per paycheck than I expect no matter what the percentage is.
Ariella | Sep 17, 2007
Congratulations on your raise. I would say you're not "locked in" at your job, because even if you want to change fields, if it's related to your current one in some way, you'll still have applicable experience. Thus, you should be able to command a higher salary. Maybe you won't make exactly what you're currently making, but it might be close.
The other thing is that if you really want to change fields and you were able to live on the lower salary, then there's no reason not to do it. Yes, you won't have the extra money... but you'll eventually get there.
djc | Sep 17, 2007
To LAMoneyGuy - it's not obvious from the new layout, but the net worth figure is still in the negative. Him - you might want to tweak that layout a bit.
I think he is aware that it is still in the negative, it's just that now it's less in the negative than before. Instead of being in the negative six figures, we're now only in the negative five figures. We'll keep giving ourselves hi-fives.
Jack | Sep 28, 2007
funny you mention this... A couple of years ago I got a cost of living raise (COLA) of 2%... Hey, 2% is two percent, no?
Well, no, it isn't. In short, it took me $22 over the threshold for my health insurance premium basis which raised my rate per month and the difference at e more from my take home than the raise gave me.
Damn.
Jack
Janice | Sep 14, 2007
Just remember, "Freedom's just another word for nothing left to lose." So, while you had more financial freedom before, it really wasn't worth all that much.
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