Entering into adulthood and having to “make it on your own” can be a daunting undertaking for most of us. Just as we think life couldn’t get any more challenging after completing school or tertiary education, the realisation that we now must forge our own path can come as a bit of a shock to the system.
Job hunting, finding suitable accommodation and learning to manage your money are all important steps we have to take as part of growing up. We know how tough this time can be, so here are a few tips to help you avoid financial pitfalls as you start to build your career path.
- Taking on unnecessary “bad debt”
It can be easy to be caught out by “bad debt” in the early years of your working life. Bad debt is taking on a financial commitment in the form of credit (such as a loan) which does little to improve your long-term financial standing. An example of this type of debt would be taking out credit so that you can purchase a new high-cost item of clothing unnecessarily, just because you think it would look great on you. While you may look great wearing it, you will be eroding your disposable income and potential savings which can help you get through tough financial times when an unexpected expense rears its head.
When considering a purchase on credit, you really need to have an honest conversation with yourself… “Do I really need this item?” – and if it’s not essential for right now, consider trying to put money away into a savings account over the next few months until you have saved up enough money to buy that item outright in cash. After a few months of saving, and you finally have enough money to buy that trendy jacket or pair of shoes, you will likely feel a sense of accomplishment as well as learned a great saving habit.
- Not negotiating your salary
Jobs are hard to come by in our current economic climate, and job hunting or negotiating an increase in salary can be daunting. However, you shouldn’t let this deter you from believing in yourself and the value you bring (or will bring) to the workplace. A common mistake new or recent entrants into the job market is undervaluing themselves, particularly if they have experience in a similar role or have completed post school education in the given field or industry.
Negotiating salary in the interview process:
- Be clear with your potential employer about what your salary expectations are. Many advertised jobs will have a salary range – for example: “R12 000 to R15 000 depending on experience”. You can benchmark salary ranges for roles similar to the one you are interviewing for with online tools such as Paylab and Payscale.
- Once you have established an approximate value of what people in similar roles are earning, negotiation with your potential employer may go a little smoother, as you have some real-world data to back up your request. However, this can be a fine balancing act, particularly early on in your career when you don’t have many years of experience and being overly eager to aim for the high-end of the employer's stated salary range when you don’t have the experience may cost you in the long run.
Asking for a salary increase:
If you already have a job, take a look at the tools previously mentioned to benchmark your salary against. Additionally, if you see similar jobs to yours advertised with higher pay, it may be an indication that you are currently underpaid.
- Create your narrative; Think about the reasons why your employer should be paying you more. These can be reasons such as you have recently taken on more responsibility or learned a new skill. Write these down.
- Be heard; ask your HR representative or your line manager for a meeting and be clear that you’d like to discuss your current salary. If possible, try to arrange to have this discussion face to face. Once in the meeting, highlight the reasons why you believe your time is worth more than what you are currently being paid and also outline what your ideal outcome would be (for example, a 9% increase in salary)
- Be professional; Try not to be pushy or aggressive when asking for a raise. Showing a well-rounded consideration of your employer's financial standing.
There is a chance that your employer will indicate that an increase is not possible at this time, or they will need some time to consider your request. If your salary increase is denied, you can ask for a reason and you can find if there is anything else you should be doing to become eligible for it in the future.