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 five smart ideas to consider on this work anniversary.
Splitting your Raise into threes. Your work anniversary often is when you get that raise you have been working hard to earn. Most people don’t deploy the important rule of threes. What this means is that at least one third of the raise you get every year at work should be immediately and automatically put into some form of savings/investing/retirement. This should be your top priority. So, if you got a $10,000 pay raise, 3250 dollars is likely to go to taxes, 3500 should go to some type of savings, and the last 3250 should be spent on something you enjoy, like a vacation where you can build memories that last a life time. This will prevent you from lifestyle creep. According to Investopedia, a situation where people's lifestyle or standard of living improves as their discretionary income rises either through an increase in income or decrease in costs. As lifestyle creep occurs, and more money is spent on lifestyle, former luxuries are now considered necessities.
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 total portfolio. Non-qualified stock options typically only last 10 years and 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 and how to find 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/liquidate to make sure you are taxed as low as possible.
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 not been recognized how you should, or you have a lack of pride. You don’t 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. That effort may not get the recognition it deserves. But it could bring the satisfaction back of doing important work, and doing it well. At the very least it will set you up for a better position at a wiser organization.
Maybe it’s time to switch jobs. Asking your employer for a raise or a promotion is for the most part, extremely difficult to do, but remember, you earned it, and you deserve it. You should be looking at your position on indeed.com or www.payscale.com to see if you are in the range from an perspective with other people in a similar career with similar experience as you. If you aren’t, then it’s time for you to ask your boss for that raise, or consider updating your resume, and starting 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.
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 investment needs to be made in yourself 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 that you may have not realizes you could take advantage of 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/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… while receiving well-deserved wishes on each work anniversary. Remember, you control your future.